HOUR IS GRAVE FOR BRITAIN, CHURCHILL SAYS

Greymouth Evening Star, 29 September 1949, Page 5

HOUR IS GRAVE FOR BRITAIN, CHURCHILL SAYS

‘‘Brought To Verge Of j Bankruptcy”

LONDON, September 28 (Rec 10. a.m.) .-—“We are now brought to the verge of national and international bankruptcy,” said Mr Churchill in moving the Conservative amendment to the Government’s confidence motion in the House of Commons debate on devaluation today. He said the Socialist Government had exacted more than £16,000,000,000 from the people and spent it in the past four years, had used up every national asset it could lay its hands on and had taken 40 per cent, of the national income for Governmental administration.

Mr Churchill dropped election hints to the Governments when he said: “Most of us agree that it is high time for another Parliament and that all our difficulties will have a better chance of being solved in a new House of Commons.”

Mr Churchill resumed the debate before a crowded house. Moving the official Opposition’s amendment, he said: “We have reached a point in our post-war story and fortunes which is both serious and strange. There lies before us a general election and overall there looms and broods the atomic bomb.”

“Most of us agree that it is high time for another Parliament and that all our difficulties will have a better chance of being solved in a new House of Commons. “It looks as if the election will be fought with a more fundamental divergence at every grade and in every part of our society than has been the case in our lifetime. “Four Lavish Years” “If you take these three factors together—the financial crisis, party conflict' and the atom bomb—it will generally be agreed that the hour is grave. In the last four lavish years the Socialist Government has exacted upwards of £16,000,000,000 and spent them—over four times as much every year as was the cost of running the country in our richer days before the war. They have taken up to 40 per cent, of the national income for purposes of Governmental administration and our taxation has been the highest in the world. Every capital reserve we had has been gobbled up. “It is because we are now brought to the verge of national and international bankruptcy after the dissipation of all this wealth; that this emergency session has been called.” The House burst into laughter when Mr Churchill, replying to a Labour interjection of “Sell your horse,” said: “I could sell it for a great deal more than I paid for it, but I am trying to rise above profit motives.” “Where Are We?” Referring to the help Britain had received from other countries, Mr Churchill said no country in history had been helped artti kept by gratuitous aid to anything approaching the degree Britain had been helped. Mr Churchill asked: “Where are we at the end of it? The reduction of the rate of dollar exchange means that, subject to certain minor abatements, we may have to pay up to nearly half as much again for what we buy—much of it necessaries without which we cannot live—(from the dollar areas. We might have, to pay up to half as much again over an area of almost one-fifth of our imports.” “Enemy Of Plenty” Mr Churchill said: “Devaluation draws a further draught in the life blood and initial energy, not only from our earning masses but from all that constitutes the productive fertility of Britain. Devaluation is a hard and heavy blow, however necessary it may be at the point to which we have been led. Abundance or plenty is the aim of mankind. Restriction is inevitably the enemy of plenty.” Mr Churchill said he could not believe that American manufacturers would immediately reduce their own highly protective tariffs.

“The true exchange value between the pound and the dollar is one at which we ought to aim,” he said. “If in the present circumstances the Chancellor felt it necessary to devalue the pound to a fixed figure, I think it was right to go the whole hog.

“I am all for a free market. A sham market can no more escape a black market than a man can escape his shadow. Therefore I should have been more inclined to set the pound free under regular and necessary safeguards and controls :and accept the results, rather than adopt the present rigid method of .pegging the exchange at the very lowest rate anyone could possibly conceive. “Socialist Mess” “That is what we did in 1931, the last time we had to clear up the Socialist mess.” Mr Churchill said the idea of liberation of the pound should not be ruled out by any Government which could command confidence abroad. A free pound would impose a less severe drain upon their conditions of life and labour. A free pound would afford a girdle for Europe and the sterling area and would give an effective sense of economic as well as political association. Mr Churchill was interrupted by Labour shouts several times during his speech. When he spoke of the need for reducing Government expenditure, Government supporters shouted, “On what?” Mr Churchill retorted: “Ask the Chancellor of the Exchequer.” “Deplorable Management” Mr Churchill said that, judged by results, the management of the nation’s finances had been deplorable. If devaluation had become necessary as a result, it should have been taken as a part of a general policy, of setting their finances in order. Taxation relief, the relaxation of needless controls, the lifting of the shadow of further nationalisation and the return of a Government commanding confidence who had created and might still create conditions in which a free pound would have a good chance of opening the doors of prosperity. Chancellor’s Blunder Mr Churchill said it was not easy to palliate the Chancellor’s blunder in not introducing devaluation until the crisis broke. The Chancellor’s admission of “resorting to one temporary expedient after another” largely explained the nation’s continued drift and slide downhill. The drastic alteration of the exchange rate should not have been left until the crisis broke. The Chancellor should have taken the decision in good time before Britain’s gold reserves had drained away.