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National Finance

Volume 487: debated on Tuesday 1 May 1951

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Imports And Exports

60.

asked the Chancellor of the Exchequer if he is aware that imports in March were nearly £96 million in excess of exports and that with the February excess of £64 million and the January excess of £75 million constitute a trade deficit for the quarter of £235 million; and how much of this he estimates will be covered by increased exports; and how much he expects to be reflected in a lower standard of living.

Yes, Sir. While these developments are not necessarily inconsistent with those foreshadowed in the Economic Survey, it is clear that the volume of our exports will have to be increased if our objectives are to be reached. On the prospects for the standard of living, I would refer the hon. Member to the Survey.

Is not the Chancellor aware that our visible deficit is now running at the rate of £940 million a year and must that not eventually involve a very serious lowering of our standard of living?

Perhaps the hon. Member has overlooked the fact that the imports are valued c.i.f. and the exports f.o.b. That correction has to be made and allowance has to be made for invisible exports.

Allowing for those corrections, does not the right hon. Gentleman admit that there is still an enormous adverse balance which we have to overcome unless there is to be a very heavy lowering of our standard of life?

No, I certainly would not agree that there is an enormous adverse balance. There is a slight adverse balance on the first quarter, when the corrections I have mentioned are taken into account.

62.

asked the Chancellor of the Exchequer on what considerations as to prices or to the volume imported he bases his calculation that imports are likely to be £3,200 million this year; and, in view of the importance of maintaining supplies to industry, if he will make a further statement.

It was estimated that the volume of imports, excluding purchases for stockpiling, would be about five per cent. higher in 1951 than in 1950, and that import prices would on the average be about 30 per cent. higher. As the Economic Survey points out, both these estimates are inevitably very uncertain. The Government are fully aware of the importance of maintaining supplies to industry, and are taking all possible steps to this end, but I have no further statement to make at present.

What degree of error has there been in estimating the prices of imports in view of the fact that the first quarter's imports are running at the rate of nearly £4,000 million a year as against the statement of the Chancellor of expected imports of only £3,200 million a year?

I would advise the hon. Member not to draw too many conclusions from one quarter's imports. They are not so badly out of scale as he seems to imagine.

Does the Chancellor expect the imports for the next three quarters to be at a lesser rate than those of the first quarter of this year.

When the necessary corrections have been made, that is, C.I.F. and F.O.B., the rate of imports is about in line with what we said in the Survey it would be.

Stabilisation Board (Outstanding Claims)

61.

asked the Chancellor of the Exchequer when it is proposed to carry out the liquidation and final settlement of the affairs of the Stabilisation Board set up by the United States of America, the Government of China and His Majesty's Government under the agreement of 1st April, 1941, made in Washington.

When the Board was dissolved on 31st March, 1944, a sum to meet outstanding claims was entrusted to the Central Bank of China. I regret, however, that despite numerous representations to the Chinese authorities, the claims of certain British banks have not yet been met.

Will the right hon. Gentleman bear in mind that this handing over of the sum was done without the knowledge and consent of those concerned, and will he ensure that the settlement of this very important claim is carried out in a way which will not bring the whole structure of British credit, including that of the Treasury, into discredit in the Far East?

I do not think I can be held responsible for something done in 1944. As regards the settlement, it is a question of whether or not the money will be forthcoming from the Chinese.