Debate on the Address

Part of Orders of the Day — King's Speech – in the House of Commons at 12:00 am on 23rd October 1947.

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Photo of Sir Walter Fletcher Sir Walter Fletcher , Bury 12:00 am, 23rd October 1947

The hon. Member for South-West Norfolk (Mr. Dye) made one extremely interesting remark in the course of his speech. He said that as a result of hearing the Minister for Economic Affairs this afternoon he and his Friends at last realised what the results of the war were upon the economic situation of this country. Why do they only "at last" realise it this afternoon? Have they not for months, for nearly two years, had put before them with the utmost gravity and force what was coming to this country under their administration? Have they not, all through this summer and last winter, had the true coal position put at them until they realised it at last, but too late? Have they not, in the matter of the use of dollars, had put before them the danger in relation to convertability and sterling balances of this country? Have not all these things been brushed aside by His Majesty's Government in a spirit of unjustified optimism, largely by the architect of this crisis, the Chancellor of the Exchequer?

I will turn to the speech made by the Minister for Economic Affairs. It was the first straightforward, honest statement, full of good sense, clarity and objective-ness that we have heard from the other side of the House. It was, at the same time, the greatest indictment of his colleagues on the Front Bench that it was possible to hear. Hardly a pate remains uncracked by it, and, but for his resilience and thick skin, the Minister of Health, after the revelation of the shortcomings in houses—did he not say that he would stand or fall by whether the houses were produced or not?—would disappear quietly and quickly, leaving no trace behind him.

Look at the Ministry of Supply. What did we hear about steel this afternoon? A meed of honest praise to steel production which had come up to expectations in every way and a rather strong condemnation of steel control, which is a Government control, for its complete inefficiency in making a mistake of some 2,000,000 tons in the licences issued. From that no doubt one could say with pure and perfect logic that it is a very good thing to nationalise it in order that the ratio of Government control should be increased and mistakes increased pari passu. That is a perfect case in every way.

There is also the Chancellor with his £600 million. We did have an honest confession this afternoon that the £600 million was not a private "perk" but was held by the country in escrow as trustees for the whole of the sterling area, and we could not possibly use it for ourselves; it was an iron ration which could only be used with the consent of those who had an interest in it. That £600 million is really like the last five lb. tin of bully beef the wife has in the cupboard. Once it is opened it is finished. We could never put the lid on it again. It is rather terrifying, in view of the extreme culpability of the Chancellor of the Exchequer, to think that this country in its moment of deep crisis depends for its economic and financial salvation on a "marriage of inconvenience" between the Chancellor of the Exchequer and the Minister for Economic Affairs. I do not know how long that marriage will last or how happy it will be, but I make reservations with regard to it.

I would like to point out that while the right hon. and learned Gentleman did make a clear and honest picture, like a doctor analysing the symptoms of the patient, he may have come to the wrong conclusion regarding the disease. I fear that he looked at it from rather a short-term point of view and referred to it most inconclusively as being a dollar crisis. I do not believe that is correct. The reason he arrived at that conclusion is that the area in which he wishes to sell his goods and from which he wishes to draw most of his food and raw materials has become so constricted recently and is almost entirely confined to those who will only accept dollars or deal in dollars, whether that is their national currency or not. From that he has drawn the conclusion that this is a dollar crisis, but it is not. It is a crisis of confidence, a crisis due to the fact that sterling, instead of being a currency of confidence, has become a currency of doubt.

People who were previously willing to deal in sterling and to carry out international transactions in sterling are no longer willing to do so. It is, indeed, sad to think that this country is being put back on a "cash-and-carry" basis. We are being put back to short-term expedients and barter instead of long-term multilateral international trade We are back in the Neolithic Age of economics under the guidance of the most forward-locking Government this country has ever seen. Until we have restored confidence in sterling and it is again an international money acceptable to everybody, we shall not begin to solve this crisis. The crisis is not even capable of being solved by production. Even if we achieve production in the best possible conditions and with the good will of everybody—I am certain Members on all sides of the House will contribute in this—it is not possible to think that we can build up this country again to its previous standard of living and to a prominent leadership in world affairs and remain a great nation on a cash-and-carry basis, with a doubt in people's minds about sterling.

Before the war we had some £3,000 million of overseas investments. Those were dissipated in the war effort. If we are again to have a cushion of that magnitude which would help to meet the economic hurricanes that come to the world fairly regularly, it cannot be built up on a basis of cash-and-carry. We have to restore confidence, and one of the ways that can be done is by the greater use of invisible exports. It is a most significant thing that about the last export which is ever mentioned—and it is only done in a perfunctory way usually—is the invisible export. The advantage of starting up again and regaining, the world's market in shipping, the marketing of commodities, insurance, banking and the many ancillary trades attached, is that it helps to restore confidence. It puts us at the place which we deserve through our knowledge, and the honest way in which we deal. It has the advantage that it does not draw upon the great pool of skilled labour which is needed for the industrial effort.

It is true that there has been rather a tendency to laugh at anybody who is not a manual worker. The "manual worker" has his great value—he is certainly better than Emmanuel Talker—but there are those who can make a very valuable contribution through the knowledge they have outside of direct manual work. If right hon. Gentlemen opposite would refrain a little more from using those easy words which have been invented recently, such as "spiv," "butterfly," "eel"—I presume I qualify for "butterfly"—and would devote their minds to learning a little more the value of the black-coated worker, the man of knowledge in the bank or brokerage firm or in the commodity market, and what he can give to this country, it would help a great deal. Until we get back these markets, neither will our ports prosper, nor shall we get the enormous revenue in hard foreign currency that must necessarily flow from the re-opening to this country of the world's markets through the drawing up of the economic iron curtain behind which we are living at the moment.

Another thing that does not get anything like sufficient mention is the craft and art of salesmanship. The right hon. and learned Gentleman this afternoon paid a very honest tribute, which will be greatly appreciated in this country, to the difficulty which confronts those who have to carry out the ultimate phase of the export drive, and that is the selling of the goods throughout the world. It is one of the activites in which I, personally, am engaged in many parts of the world, and I have a certain knowledge of it. It is becoming more difficult daily. The competition is becoming more severe.

In textiles there is an American textile drive that is making our Far Eastern and African business in textiles considerably more difficult. The same is true of engineering, light and heavy. The same is true of competition from countries which enjoy the benefit, such as Switzerland and Belgium, of being able to deal very much more freely in dollars and in nearly every other currency. I would certainly hope that where the direction of labour is being carried out, full consideration will be given to the need of those who are engaged in salesmanship not being cut off and deprived of the highly skilled people whom they must have or, for that matter, the facilities in foreign exchange and travel that they must have. They are rather frustrated at the moment by getting not sufficient priority in travel and not sufficient currency when they want to go abroad.

It is quite possible that if there is an economic storm in America, if the recession which has been anticipated and has not, thank goodness, come to pass so far, should suddenly arise overnight, there will be this same forced selling in markets: in the long-term view that means that other countries with cheaper labour, such as Japan and India, must start to flood the world with goods which will be a dangerous source of competition to our export drive in this country. Therefore, not only the manufacturing side should be emphasised but the salesmanship side as well. Coming to the manufacturing side, the production side, I entirely share the views expressed by the right hon. and learned Gentleman as to the necessity for creating unity and understanding in all parts of production.

I will be quite frank in saying from this side of the House that the right hon. and learned Gentleman's speech this afternoon may do a vast amount of good in that direction, but that it must be followed up in various ways. First, it must be followed up by the cessation of attempts made in the last two years to create disunity in industry, and the dragging up of the faults of the past which existed on both sides. We shall not beat this demon which is upon us by bringing up instances of things which have gone wrong in the past, but only by making quite certain of working together in the future.

On the practical side, one of the difficulties in production is that every firm, business, company or individual in business in any way has had thrust upon it or him in the last two years a whole number of new partners or co-directors not qualified in any way for that job, unwanted, unskilled, but, unfortunately, not unpaid, because the whole country pays for them. In nearly every business those new partners are the representative of the Minister of Labour, in the local employment exchange, the representative of the Board of Trade or the Minister of Food, the representative of the Minister of Fuel and Power, or some other Ministry, some official, usually not on a very high level, who has more to say in the policy and direction of the business than those who have spent the whole of their lives running it, and know it to their finger tips.

I am not saying that there is not a great need for a considerable measure of temporary control, but in carrying out these measures on the lower levels we get exactly those things which are bound to ruin the export production drive. Last week I had an instance of this in my own constituency. There is a new business being started and a special licence is given for the machinery. It is a business where 80 per cent. of the production goes for export to hard currency countries. An allocation for raw materials and for fuel and power is given, and a minute drop of petrol is even allowed so that the owner does not waste half the day in getting to and from the business. But, when it comes to labour, he is up against a snag because the priority of his business is not sufficiently high in the hierarchy of the Ministry of Labour.

In areas such as that which I represent, there are a whole multitude of industries of great variety. How could one expect a minor official, however hard working, to have the knowledge and competency to judge where labour should be directed there? Unless the greatest possible latitude of judgment is allowed at that level with the quickest possible appeal to the regional level, then the task of synchronising the allocation of raw material, fuel and labour is going to be very difficult. Unless the arrangements are made at about that level in an ordinary industrial town, with a possible appeal to the regional level, however good the planning may be on the higher level, it will break down. Industry in this country is so complex and spread over such wide areas that unless those things are capable of being adjusted reasonably and practicably on the spot, the new direction of labour will not increase output but will slow down production very considerably. I strongly recommend that the Government should consider it, not only from the stratosphere of policy in which they live, but on the more mundane level where the decision has to be taken which affects business itself.

The vital thing is that everybody in this country is asked for a special effort, and I think that everybody in this country is willing to make it. They have seen a change of heart in the Government; they have seen that the words of warning which have been put forward from this side of the House, and from outside as well, are at last beginning to be appreciated by one man of courage on the other side. But they are far from being persuaded as yet that there is a sufficient level of efficiency in Government administration to persuade them that the extra effort asked for will not be wasted. The whole of this scheme and the future of this country is bound up with the efficient administration, from the short-term aspect, of the production drive; but the importance of the production drive is not only what it produces over the next 18 months, but whether it will restore the confidence of the United States and other countries throughout the world, not only countries which want to lend us money, but countries which would be willing to accept our currency in immediate exchange.

I would like to finish on the note of urging the Government to devote themselves to the immediate efficiency of supplying at the same time raw materials, labour and their fuel. On the question of fuel applications, I have seen a good many in the North-West area turned down on totally insufficient grounds. When a business man asks for a certain amount of petrol he should not be treated with suspicion. I had a case of an application for four gallons of petrol a month with which the applicant can get to his office in a quarter of an hour and get on Change and do his business. If he is told that there are alternative means of transport, what is to happen? He will have to change his 'bus twice, and he will get to his office in 55 minutes, if he finds room to get on each 'bus immediately. Congestion will be caused through bad management and waste of time if it is not realised that such a man is making a genuine application which should be met as a genuine demand, and there will be so much loss of efficiency in the management of industry that no amount of increase will ever make up for it.

Let me return to the question of efficiency. It has not only to be efficiency but to be visible efficiency, sufficient to dispel the feeling in the mind of almost everybody in this country that bureaucracy has run mad, and that we are being run by people who do not know our business, who do not care about our business and are simply clockwork robots. I am not saying all bureaucrats are of that kind. During the war I was a bureaucrat—I have been decontaminated since. I remember seeing on the desk of one humorous colleague of mine "It might be difficult, but with a little patience it can be impossible." I am not certain that there are not a good number of people who have that quality. Efficiency in dealing with a huge number of problems must be visible to somebody with sufficient authority to reverse a local decision that is wrong. Unless there is that efficiency, no amount of goodwill which has been recreated, possibly partly by danger, partly by other reasons, will serve to make this complicated machine work.

I would recommend finally to the Government the dropping of recriminations, Dot only by the Government, but by its supporters. If a large fine were imposed upon anybody who indulged in quite useless recriminations, and did not look to the past simply as an area where he could gain really good knowledge for work in the future, the Exchequer might benefit, but infinitely greater benefit would be reaped by the country because we would gain by what is the last chance of our becoming united in the enormous effort we have to make to survive. Hon. Members should not forget that this crisis may be solved on the short-term basis by production, by borrowing dollars, by being worthy of credit, but the long-term process cannot be solved until we have restored once more the real and justified confidence in what was the symbol of the greatness of this country—the £ sterling.