State of the Nation

Part of Order of the Day – in the House of Commons at 12:00 am on 6th August 1947.

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Photo of Mr Nigel Birch Mr Nigel Birch , Flintshire 12:00 am, 6th August 1947

I have not got it, but that is what the right hon. Gentleman said. He has said the same sort of thing many times. The explanation is difficult to find. It may be that all hon. Gentlemen opposite suffer from that chronic malady of politicians of the Left described by the great Lord Salisbury as "the essential cowardliness of optimism."

It was not difficult to tell what was going to happen. The cause was staring us in the face. We have been living a lie for the last two years. As the Prime Minister pointed out, we lost 25 per cent. of our wealth during the war and we were faced with the task of rebuilding our wealth at the end of the war in a world which was politically and economically distracted. In spite of all that we have behaved as if we were far richer than we were before the war. That is the answer to the hon. Member for North West Hull (Mr. R. Mackay). In spite of that we have said that we will have shorter hours and higher wages, put up our exports by 75 per cent., have a larger building industry than before the war, make good the whole of the war damage, make good our arrears of maintenance, and have great schemes of colonial development. The House must reckon that these great schemes of colonial development have to be financed in the short run out of the resources available to the people of this country. We also said that we would have vast capital schemes for the re-equipment of our industries. It is these capital items which are the most important of all. On top of that, entirely wantonly, the Chancellor has imposed his absurd monetary policy. All these things do not add up. How can they possibly add up? What we have seen is a massive refusal to live within our means. That was bound to result in a foreign exchange crisis. There is nothing new in a country living beyond its means. It has often happened before, but it has always resulted in a foreign exchange crisis, and that is a basic fact which I hope the House will bear in mind.

There are many things with which one can distract attention from this fact. We can talk about everything since the Fall of Man having been the fault of the Tories, we can talk of Eve being the first member of the Housewives' League, and by such means we can distract attention from what is going on. We can do it also by this double attitude towards America. We get the Foreign Secretary calling them moneylenders, and, at the same time, hon. Gentlemen opposite saying that they have a moral duty to support our prewar standard of living. We can go on distracting attention like that. Then, there is Article IX. It will be a heavy burden, it was a hard condition when it was imposed, as my right hon. Friend the Member for Woodford (Mr. Churchill) said, but I, personally, doubt very much if, so far, it has had a great effect either on the sources from which we buy our imports or on the destination to which we send our exports. Whether, in the future, we have special arrangements with the Empire or with the Western bloc or with Eastern Europe, the fact we have to remember is that these countries will have an understandable preference for being paid for the goods they sell, and being paid in goods at the right price and of the right quality. There is no easy way out.

On convertibility, I would say this. Obviously, it has been responsible for part of the acceleration of our loss of dollars in the last month or so, and it may well be that the Government have shown their usual level of competence in dealing with this problem. The point I would like to make is that, basically, what is going on now is something very old-fashioned and very familiar—a flight from sterling. The world is trying to sell our currency, which they believe to be overvalued and unsound. That is what is going on now. We have to reckon that no system, whether multilateral, regional or bilateral, can work if we are inefficient, high-cost producers and if our trade is so unbalanced as it is now. Hon. Gentlemen opposite have preached on this subject for many years. They have preached the doctrine that "all men are paid for existing, and no man must pay for his sins." That is a Hubris, which is always followed by Nemesis.

We have tried to hold on to an untenable position, and we are now seeing a series of disorderly retreats to unprepared positions. First, we get the 48 hour retreat on conscription, and now, the Prime Minister gets up at three minutes to 12, only three weeks after the last Debate, and announces another disorderly retreat. I would say that the Prime Minister's speech showed every sign of haste in preparation and disagreement behind the scenes. It was vague; we never got down to any details, and, though the speech contained a cer- tain number of figures, none of the figures were added up so that the people of this country could see where they were. We were told that £144 million worth of food from the hard currency areas per annum would be cut, but we were not told what this was going to mean in rations, which is precisely what the people want to know. Surely, it should be possible to tell us what it is going to mean? Then as far as the actual cuts in imports were concerned again the figures are difficult to add up, because the £144 million cut from hard currency areas may possibly be balanced by imports from soft currency areas. It seemed to me, adding them up in the best way I could, that the conclusion was that the total of these cuts was less than one-quarter of our visible adverse balance. That is not counting invisible imports, and not counting our special difficulties over hard currency. Therefore, the conclusion the country will draw is that we are still leaning very heavily indeed on American support, and if we do not get that support we shall be in a desperate position. On the question of raising targets I would say this: if we cannot hit the target at 100 yards it is not likely that we shall hit it in 200 yards. I think that is a perfectly adequate comment.

I wish to make comment on that direction of labour. We are told it is to be a limited direction of labour. Possibly I do not carry the whole of my hon. Friends with me, but I am passionately opposed to the direction of labour. I believe it is slavery. How many hon. Members opposite said during the conscription Debate that it would lead to industrial conscription? It is all very well to say that it is only limited direction—that we have slaves in this country, but there are not such a lot of them. That is an argument which goes very ill with the Prime Minister's peroration, when he said that what he was standing for was moral values.

The Prime Minister made an appeal to trade unions for longer hours and not to press for wage increases. I have a good deal of sympathy with trade union officials on this matter. Trade union officials have a tremendous negative power, but their positive power is not so great. The trade union official is paid to get better conditions for his men, paid to fight for them. If you put all the aces into the hands of the trade union official and say, "You must not play them," a very dangerous position is produced. A senior official may say, "I am all right, because if I succeed I will get my garter and a seat on the gas board and all will be well," but whether he will carry his men with him I am more doubtful. I believe that this is breaking up yet another valuable British institution. On the things that really count, on the Budget and capital expenditure the Prime Minister was vague, and I defy anyone to understand what he meant. I do not think that he understood himself. As for saying that what will be reduced is the number of "spivs," that must be wrong, because there are to be a great many more controls, and the one thing on which "spivs" will thrive is controls.

What we are seeing is Socialism working out in precisely the way my hon. Friends have always predicted it would work out. There are three stages we have always predicted. First, the honeymoon, then the stage of increasing muddle, frustration, multiplication of controls and increasing poverty, and the third stage is the stage of extra-Parliamentary Government, and the loss of civil liberty. During the honeymoon period you spend your money, and what you can borrow as well. That is what we have done, and that stage is over. Now we are trying to escape the consequences by the second stage, the multiplying of controls and the employing of large numbers of people to prevent other people from making things. We are gradually becoming a coupon State, a ration-book State and a permit and docket State. In addition, we are threatened with differential rationing.

The real danger of all these things is that they kill the monetary incentive. We have seen in Germany precisely what occurs when that is done, when one's docket, one's ration card is worth more than one's wages. Whatever the damage may be in our zone in Germany, it is still one of the richest parts of Europe. It is prostrate and starving, for the very reason that the monetary incentive has been completely killed. The other day, the Minister of Health said, very rightly, that if one is trying to get someone to work ideology is not enough. The 20 million people in the concentration camps in Siberia, and the timber camps in the Arctic are dying witnesses to that. It is very true. Ideology is not enough, and we are killing the monetary incentive.

That brings us inevitably to the third stage, the stage of direction of labour and the abolition of civil rights. What I would like to know about this direction of labour is, What sanctions are to be applied to someone who either does not go where he is directed or does not do any work when he gets there? What is to happen, because it is no use having the direction unless there is some sanction? That takes us straight on to the slave State.