Debate on the Address

Part of Orders of the Day — King's Speech – in the House of Commons at 12:00 am on 21st August 1945.

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Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham East 12:00 am, 21st August 1945

The right hon. Gentleman must really learn to take the come and go of debate. I wish, without presumption, to express my warm appreciation of the attitude of the right hon. Gentleman, but he must not take it amiss if, from time to time, he is reminded of some of these broadcast observations—it is inevitable. I think the right hon. Gentleman the Member for Aldershot showed a less patriotic attitude. I had to make an observation during his speech that I thought some of his utterances on the attitude of the U.S. towards our general policy were mischievous, and I think they were. I do not think they were calculated to be helpful. He said in the course of his observations—I think I have got the words correctly but this, at any rate, was the effect: "If we want the United States to be helpful, we had better be careful about private enterprise." And he referred to—this was also about private enterprise—"figure skating on the thin ice of international confidence." Nothing could be worse for the relationships of this country and the United States than that either the Governments or Congress or Parliament should appeal to be entering into the internal economic affairs of the other country. I am perfectly sure that neither the administration of the United States nor Congress would presume in any way to seek to control, or dictate, to this Parliament, or this Government, on economic policy.

The country has made a pronouncement on policy, and this Government will act in accordance with the will of the nation expressed in the General Election. We understand perfectly well that there are differences of outlook between the two countries—that our institutions work differently, and that the economic thought of the two countries is different—but if the right hon. and gallant Member for Alder-shot suggests that if we do not mind our P's and Q's we shall earn dislike in the United States, then I think his was an unjustifiable observation that had better not have been made. [Hon. Members: "Why?"] It is too much like encouragement of the view that the internal affairs of this country, its politics and its economic policy are going to be influenced or determined by conscious action from outside. I am perfectly sure that nothing of the kind would be true, and I am perfectly sure that this country and that great country, the United States, with their differences in policy and outlook, are most anxious to co-operate together for their own good and the good of the world. The right hon. Gentleman referred to a number of other matters including the manufacture of electrical apparatus.

If I may say so, I entirely agree with him. There is a field for consideration there which is not unconnected with the future organisation of the British electricity supply industry. What is quite clear is that electrical manufacturers cannot do their best with the numerous standards of voltages and frequencies which have been a nuisance to them for years past.

Coming to more general matters, the House has, I think, shown its sense of the urgency and difficulty of the problems that face us, some of which have been made the more difficult for the time being because of the happily and unexpectedly early end of the Japanese war. There has, so to speak, been a sudden outbreak of peace, which has presented us with urgent economic problems somewhat different from those we would have faced if that war had lasted longer. I am no pessimist, and I am confident not only that we can pull through, but I believe that, with care and determination, we can pull through the period of transition from war to peace triumphantly. I do, however, suggest that it is essential that Parliament and the nation should clearly face the facts which are involved in this transition.

There are, I suggest, six major economic problems in the immediate economic period which now faces the nation. There is, first of all, the difficult and serious problem of man-power. It is still the case, and it will still be the case for some time to come, that there is and will be a general overall shortage, and the total demand on our resources in man-power is such that this shortage must inevitably continue for some time to come, but, side by side with that, there is the problem of re-conversion and the consequent possibility of unemployment. The early ending of the Japanese war necessitates a far speedier re-conversion of our economy than was required, I think, in any single year of the actual mobilisation for war of our military and economic effort, great as that mobilisation was. One consequence will be that, in the process, there will be inevitable pockets of unemployment which will involve us in difficulties, and these pockets of unemployment will recur from time to time and will crop up here and there side by side with the general overall shortage of man-power during this limited period of transition.

As has been quite rightly said by the Chancellor of the Exchequer and the right hon. Gentleman the Member for Aldershot and others, our overseas economic situation, as has been realised in all parts of the House is both grave and difficult, and let us not underestimate it. We have very large sterling debts accumulated during the war. We are, even at this time, and it has, of course, been so for most of the war, very far from paying our way. We must, therefore, give a high priority to exports and we must economise—I quite agree with the right hon. Gentleman—in imports as much as we reasonably can to save foreign exchange, even when overseas supplies are available for purchase. All this will inevitably necessitate a continued, and, possibly, in some respects, an intensified, austerity in consumption, though the Government will be on the lookout to introduce elements of variety which will, we hope, help the country to tolerate the necessary restriction of consumption that must arise. We are faced with the need for increasing our exports as far as possible, and not less with the need for keeping down our imports to the minimum necessary for our internal economy.

Next, there is a grave world food shortage. It arises from difficulties of production and transport in various parts of the world, and from an increase in demand partly as the result of the liberation of various European countries. The problem of relieving our friends, the victims of Japanese aggression, in the Far East, has also arisen, and will mean an additional tax on the food supplies of the world. If widespread starvation is to be avoided there and in Europe the strain upon the limited and hard-pressed food supplies of the world will be very great, and, consequently, it will take longer to restore our own standards as we would wish. There is, moreover, a serious coal shortage here, and throughout Europe. It is among the major obstacles to economic rehabilitation here and on the Continent.

In these circumstances some domestic shortage is inevitable and will continue for the time being. There is another aspect which also must be kept in mind, and it is important. With purchasing power plentiful, on the one hand—and it is more plentiful than it was before the war—and the demands of consumers high on the other, there is a risk of serious inflation unless sufficient controls are maintained to prevent excessive inflation arising. I am perfectly certain that, if the policy of scattering controls that was advocated in many quarters had been approved by the country, and carried out by a Government, we could not have avoided drifting into inflation and into a temporary boom followed by a depression and collapse like those which succeeded the temporary boom after the last war. Therefore, in the view of the Government, controls must be maintained wherever it is appropriate. A general inflation, like that which took place after the war of 1914–18, would inevitably lead to serious economic collapse, and the Government are determined not to allow history to repeat itself. I think one of the decisions of the electorate firmly and undoubtedly was that they were not going to have 1918 all over again.

That is the sad side, the factual side of the picture with which we are faced, but it is worth while going through this difficult period—this first period of transition—in straightened circumstances, even with some austerity, even if it means that we shall not get many things which we like. It is worth while going through this first period with care, order and system, and then developing and expanding and building up afterwards, far better than to have an artificial" Piccadilly Circus," "Brighter London" sort of boom, for about 18 months and then a smash and collapse afterwards. That is the view we take, and I am appealing to the nation, and the Government appeals to the nation, as I hope Parliament does, to realise that we have got to maintain during this complicated and difficult period of transition the same high level of public spirit, order, system, and, if need be, discipline, as carried us with success through the European war.

If we conform to that spirit during this first period of transition, then we shall be in a far better position to develop, expand and have a better time in the months thereafter. Therefore, it is not the case that, as the poet said, "There is a good time coming, though you'll never live to see it." The real thing is that the good time can only come if we restrain ourselves and discipline ourselves in public spirit during this first period of transition.

Thereafter what is the problem? What is the fundamental economic problem? During the Election speeches were made by the Opposition leaders and others promising all sorts of extensions of the social services at great cost. I am not complaining about that, because we wish the same thing and perhaps a little more so, but it is no good promising bold and dashing experiments in the development of the social services—[Laughter]—unless at the same time we make provision in the economic and industrial life of the nation, whereby these developments in the social services can be carried out. [Hon. Members: "Hear, hear."] I think the laughter was a little premature and the cheers are very welcome. It is all a question of keeping production marching with consumption, and, let me add, keeping consumption marching with production. If, as I believe, production is to go up, the old doctrine—which obtains sometimes on both sides of industry in periods of slump—that slumps can only be cured by the economics of scarcity, by producing less, by making restrictive covenants among the producers—is wrong. That is a suicidal economic policy. It is not the way in which to build a prosperous nation.

Therefore, our outlook is that we want production to advance, and at no time is that going to be more important than in this period of transition, especially at the beginning. Let us produce all we can, but if production advances, and we take no steps to see that the power of consuming the increased production does not advance with it, all we shall get is so-called over-production again. If the Opposition had been able to pursue their policy of increasing by many millions a year expenditure on the social services—whether the cost fell upon the Exchequer or on compulsory contributions does not much matter from this point of view—whilst at the same time flatly refusing, as they did flatly refuse, to consider public direction in the reorganisation of industry for public needs, I believe that policy would lead to a financial crisis, to another 1931. None of us want that again. [Interruption.] The right hon. Gentleman is bursting to have an argument about something. I am sure he will get it, but after all he should not laugh at 1931 because it was he—[Interruption]—who after the Election referred to the Labour Government having been the victim of a world economic blizzard. I do not want another 1931, not only for political reasons but for the good of the country as well.