Orders of the Day — Finance Bill.

Part of the debate – in the House of Commons on 16th July 1937.

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Photo of Mr George Strauss Mr George Strauss , Lambeth North

I was coming to that very point. The degree of prosperity is dependent to some considerable extent upon the time at which the various countries de-valued. This country de-valued in 1931, and a short time after that benefited very considerably in trade. But we cannot thank the Government for that. The Government seized power for the very purpose of keeping on the Gold Standard, and as far as additional prosperity arising from the departure from the Gold Standard is concerned, it has come not from the policy of the Government but from the abandonment of the policy for which the Government seized power. There has been a measure of increased prosperity as the result of the vast expenditure on armaments in this country and the Government are quite entitled to say that large numbers of people have been put into work as a result of that expenditure. Be it noted that they would never dream of spending anything like the same amount of money upon work of a socially useful nature.

It is only when Imperialist interests are at stake, as a result, largely of their own foreign policy, that armament expenditure has entered into it, and they can in that connection claim to some extent to be responsible for increasing employment and better trade, but, generally speaking, I maintain that they have no ground for that claim. Prosperity has been world-wide, and as far as the abandonment of the Gold Standard is concerned, which was such a major factor in restoring our foreign trade, we certainly cannot thank the Government.

Reference has been made in various parts of the House to the serious position at which this country may arrive in a few years' time as a result of the present financial policy of the Government. It has been assumed that we may expect the next trade slump in three or four years' time provided we have not had a European war before then. I believe that these forebodings are based upon sound facts, and that the position into which this country is being driven, and which the whole country will have to face in a few years' time, is very serious indeed. We have to face inevitably a period in which trade will slacken, and the armaments boom will come to an end—at least we are told by the Government that it will come to an end. There will be increased unemployment, and at the same time additional burdens to bear because of that increased unemployment. The revenue of the country will be contracted. There will be an expanding demand for more money and a contracting revenue.

We have been told to-day that this year we have been able to pay our way so easily because there was an increase of £23,500,000 in the annual revenue of the country. We shall have not increases but decreases of that and similar amounts in the future. On the top of that the burden of interest will be more severe because of the immense borrowings which are being made for armament purposes. We shall have to pay additional interest on £400,000,000. Indeed there is likely to be—and it is agreed by Members on all sides of the House—a very severe crisis within a measurable number of years. It will be a financial crisis, in my view, more severe than that of 1931, because it will not be a currency crisis as the last one very largely was. Moreover, the last crisis, while it was there, was very considerably exaggerated and exploited for political purposes. It was made to appear for political purposes very much worse than it was. The only consolation that one will have will be that when that crisis occurs, and if the present Government are still in power, the people who will get the opprobrium for the crisis and the suffering it will bring will be the people who themselves are responsible for the crisis. It will not fall as in 1931. At that time the Government in power were opposed to the capitalist system and had to take the blame for the crisis that arose, but the next crisis will have this satisfactory feature that the Govern- ment in power will be composed of people who support and defend the capitalist system, and they will have to take the national opprobrium and criticism for all the suffering that the crisis will bring.

My last words are in regard to the social services. The Financial Secretary to the Treasury told us of the wonderful things the Government have done in increasing the social services, and he gave us the idea, as Conservative spokesmen inside and outside the House are constantly giving us, that the Conservative Government are doing great things for the people of the country, that they are taking taxation from the wealthy section of the community and giving it to the social services and the poorer section of the community, for which measure of justice we have to thank the National Government. Nothing is further from the truth. The measures of the social services are those of unemployment, health and insurance benefits, old age and widows' pensions, public assistance, education, health and housing. I have spread the net very wide. Examinations based on the Colwyn Committee's Report, which have been brought out by a professional statistician, Mr. Colin Clark, show that 79 per cent, of the expenditure on these social services is borne by the people who benefit from those services, and only 21 per cent, comes from taxation of the wealthy section of the community. Therefore, it is ridiculous to say that in regard to social services the Government are doing a great, noble and equitable thing as between one section of the community and another in providing these benefits for the poorer section, when, in fact, the poorer section of the community pays for four-fifths of them.

It has been said that the social services are becoming such a burden on the general community that we may have to restrict them, particularly if a great crisis comes. Articles on the subject have recently appeared in the financial columns of the "Evening Standard," suggesting that the social services should be restricted already in order to provide money for armaments. It is ridiculous to suggest that the social services should be restricted. It has been stated that a section of the community which has to depend on the social services, old age pensioners and the unemployed, is growing, and it is asked how we are going to provide for these people unless we restrict the social ser- vices in another way. While there may be an initial truth in that statement with industry organised as it is to-day, there would be no force in the argument if industry were organised on a rational basis. Production is rising immensely. In the coal mining industry it has increased in the last 10 years by 25 per cent. per man. If we take industry as a whole, I think that figure will be found to apply to most industries and we shall find that productivity has increased by 25 per cent. in 10 years. In these circumstances is there any force in the argument that we shall have to restrict the social services? In view of the increasing productivity that has taken place there are very good grounds for increasing the social services to a very much greater extent than at the present time. Moreover, if on the top of that natural increase in productivity the 1,500,000 people who are out of work could be employed and help to contribute to the productivity of the country, the wealth of the country would be vastly greater, and there would be even better reasons for increasing and not reducing the social services.

In view of the facts which I have put forward, the heavier burden which is being put on the poorer section of the community in that they are being forced to pay a higher proportion of national taxation than 10 years ago, in view of the fact that the poorer section of the community are receiving a smaller proportion of the national wealth than five years ago—I admit that the dates are not exactly comparable—there is every reason for saying that the Budget is unsatisfactory in that it does not provide for a greater proportion of expenditure on the social services, and that it puts an undue proportion of the burden of taxation on the poorer section of the community. There is no case whatsoever for suggesting that the social services should be curtailed, but there is ample evidence to show that if our industrial and social systems were properly organised, if the labour-saving machinery that is being installed were being properly used for the benefit of the people and allowed to be a boon instead of a curse, as it is so often to-day, if the 1,500,000 people who are unemployed were able to be employed and so to help to increase the wealth of the country, we should be able to give social services out of all proportion to their present scope. We should be able to do away with a great part, if not the whole, of the malnutrition that exists, to do away with a great deal of unnecessary suffering and of social injustice; it would be possible by an equitable distribution of the national income to do away, to a large measure, with the poverty and insecurity that abounds in the country to-day.