Government Policy

Part of the debate – in the House of Commons at 12:00 am on 28th October 1947.

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Photo of Mr Winston Churchill Mr Winston Churchill , Woodford 12:00 am, 28th October 1947

I beg to move, at the end of the Question, to add: But humbly regret that the Gracious Speech, while clearly revealing the intention of Your Majesty's Government to continue their partisan policies, gives no assurance of the national leadership, the administrative competence, or the measures necessary to meet the economic crisis and so give relief to Your people from their ever increasing hardships. Last week the Minister for Economic Affairs made an important and courageous speech. In it he proclaimed the complete failure of the whole policy of State planning and management of industry in time of peace, of which he has long been the leading exponent and, lately, an important executive Minister. He also confessed to some of the grave miscalculations and wrong estimates made by himself and by the Government of which he is still a member. He revealed with more precision than any of his colleagues has yet done the depth of misfortune into which we have been led since this new Parliament was elected two and a quarter years ago upon a flood of high hopes and promises. He called for perseverance in his policy of restrictions, controls and arbitrary direction from Whitehall. He read out a further list of pains and penalties to be inflicted upon the British public, and he called for a spirit of unity from the whole nation in bearing these new sacrifices so that he could continue with ever greater vigour the experiments in Socialism which have already made what he described as "our economic survival" a matter of uncertainty. In the same week the Prime Minister announced the Government's intention to nationalise the iron and steel industry as a contribution to our industrial recovery, and his intention to establish what is virtually single-chamber Government as a stimulus to national unity.

These various declarations taken together constitute in themselves, apart from all other facts and arguments, the fullest justification for the Amendment to the Address in reply to the King's Speech which we have placed on the Paper. Let us, therefore, examine these issues with attention. The need to increase our export trade is, of course, paramount. We shall do our best to help the Minister for Economic Affairs to reach the targets for export at which he is aiming. It is the duty of all parties to promote by every means in their power the productivity of our country. However, it is most important that the people should not be misled. Nationalisation has proved a failure. Dear coal and, soon, dearer transport gravely weaken our competitive powers in foreign markets. It is more in the interests of the wage earners to work for private employers than to be the servants of an all-powerful but ill-instructed State machine. This they are finding out for themselves. Nationalisation, so far as it has proceeded, has had at any rate a definite though limited educative value.

The speech of the Minister for Economic Affairs, with its long series of damaging admissions, was in fact a confession of fundamental error. Confession is good for the soul, but after confession should come penance, not praise. I would not therefore attempt to occupy the time of the House with eulogies of the right hon. and learned Gentleman. While giving full support to the export drive, I cannot bring myself to believe that the course upon which the Minister for Economic Affairs urged the country to embark on a voyage of several years—even if no other industry is to be nationalised—I cannot believe that this voyage can bring us out of our misfortunes and difficulties, and the right hon. and learned Gentleman certainly gave no undertakings that it would do so. No one can say he encouraged false hopes in his speech the other day. I feel myself a strong conviction that he is leading us down the wrong road and that at the end of all his efforts and our privations, we shall in a year or two be worse off than we are now.

I will venture to give two main reasons for my anxiety. The first is that I do not believe that a successful export trade can be founded upon a starved home market. I pointed this out two years ago when I asked how we could suppose that a fertile and healthy export trade could be maintained, except on the overspill of a very much larger internal and domestic trade. The President of the Board of Trade, which was the position the right hon. and learned Gentleman then occupied, I said, was under the profound delusion that he could build up an immense and profitable trade while keeping everything on a minimum here at home. No doubt it is right to put all possible emphasis upon the export trade, and, as I have said, we shall assist him in every way possible, but exports are only the steam over the boiling water in the kettle. They are only that part of the iceberg that glitters above the surface of the ocean. No long-term scheme for keeping a vast community alive can be based on an export trade alone. Down this path we shall only get into ever-narrowing situations. At any moment foreign price movements or our own rising costs of production may vitiate and overthrow all our carefully worked out calculations.

The United States, from an immense volume of home production, throws down its surplus of exports. How can we compete with that in any neutral market? The conception that any community can make its living without a healthy and vigorous home market and strong domestic consuming power is a fallacy condemned by every one of the great economists of the past. There was indeed an interval after the victory when there was what is called a "sellers' market," of which a temporary advantage could be taken and was to some extent taken. I supported the American Loan because I hoped that with this external aid and the sellers' market we might revive our normal peacetime fertile activities here. But the sellers' market is departing, and the American Loan has gone. Meanwhile we have not been able to create free thriving business and productive activity at home. The right hon. and learned Gentleman and the Government are now inviting us to follow them further into a dark and narrowing tunnel at the end of which there may be no daylight.

My second reason for differing from the Minister for Economic Affairs lies even deeper. I do not believe in the capacity of the State to plan and enforce an active high-grade economic productivity upon its members or subjects. No matter how numerous are the committees they set up, or the ever-growing hordes of officials they employ, or the severity of the punishments they inflict or threaten, they cannot approach the high level of internal economic production which, under free enterprise, personal initiative, competitive selection, the profit motive corrected by failure, and the infinite processes of good housekeeping and personal ingenuity, constitutes the life of a free society.

It is, no doubt, true that the State can always present large projects to the public gaze; large projects can be unfolded. The difference between what is seen and what is not seen was often noticed by the old economists. What is not seen is the infinite variety of individual transactions and decisions which, in a civilised society, within the framework of just and well-known laws, inure to the advantage not only of the individual concerned, but of the community, and provide that general body of well-being constituting the wealth of nations. All this is blotted out by an overriding State control, however imposing some of its manifestations may be. It is this vital creative impulse that I deeply fear the doctrines and policy of the Socialist Government have destroyed, or are rapidly destroying, in our national life. Nothing that they can plan and order and rush around enforcing will take its place. They have broken the mainspring, and until we get a new one the watch will not go.

If these general ideas applied to any country in the world, they would apply to this island, where we cannot grow much more than half the food we need, and where we have to purchase the rest of it and many raw materials by selling goods or rendering services to foreign countries. We have never been unable to do this before. A vast population grew up here under free enterprise and the capitalist system. Immense investments were made in foreign countries which refreshed and stimulated our home market with imports. Half of these have now gone in the war in the common cause, but half remain. The loss of half of our foreign investments is no sufficient explanation of our plight. We could certainly by a united effort fill that gap.

Why is it then that suddenly we should have to be told that the system by which we lived at a higher standard than any other country in Europe has come to an end? This is an important question for the House coldly and deliberately to consider. What is the new factor that has intervened to ruin our affairs, and to prevent us from holding our place in the world? I would only attempt to answer such a question after many heart-searchings and with many misgivings about my power to do so, having regard to the fallibility of human judgment. All the same, I will venture to give to the House my opinion for what it is worth. The reason why we are not able to earn our living and make our way in the world as a vast, complex, civilised community is because we are not allowed to do so. The whole enterprise, initiative, contrivance, and genius, of the British nation is being increasingly paralysed by the restrictions which are imposed upon it in the name of a mistaken political philosophy and a largely obsolete mode of thought. I am sure that if Parliament set the nation free it would be able to earn its own living in the world. I am sure that this policy of equalising misery and organising scarcity, instead of allowing diligence, self-interest and ingenuity to produce abundance, has only to be prolonged to kill this British Island stone dead.

We are told, and I am told, that we Conservatives have no policy. Hon. Members say that we complain of the hard times, we criticise the Government, who are doing their best according to their lights, but that we have no positive policy of our own. Here is the policy: Establish a basic standard of life and labour and provide the necessary basic foods for all. Once that is done, set the people free— get out of the way, and let them all make the best of themselves, and win whatever prizes they can for their families and for their country. Only in this way will Britain be able to keep alive and feed its disproportionate population, who were all brought into existence here upon the tides of freedom, and will all be left stranded and gasping by the Socialist ebb. Only in this way will an active, independent, property-owning democracy be established. I repeat, therefore, that our policy is an adequate basic standard, and above that, within just and well-known laws, let the best man win—[Laughter.] The crackling of thorns under a pot does not deter me. Ministers may not agree with this, and their followers still cling to the shibboleths which they have learned to substitute for any other more ameliorative mental process, but at least they must admit that here is a policy, a theme, a proposition, a method which reaches into every sphere of human thought and action, and constitutes the division between us, which will be brought one day to the decision of a country far better instructed upon these matters than it was on the last occasion.

It is not nature which has failed us. It is not nature which has failed mankind. It is Governments, which, misled and steeped in folly or perversity, have rejected and squandered the fruits of nature, endeavouring to prevent the normal working of its processes, even though those fruits are presented by the ever more efficient servitors of an ever-widening science. The true path is still open if we could only have the wisdom and the courage to enter it. But we shall never enter it by substituting Whitehall planning on anything but the highest and most general level for the native genius and infinitely varied capabilities of our race.

At this point I must turn to the United States with whom our fortunes and interests are intertwined. I was sorry that the hon. Member for Nelson and Colne (Mr. S. Silverman), whom I see in his place, said some weeks ago that they were "shabby moneylenders." That is no service to our country nor is it true. The Americans took but little when they emigrated from Europe except what they stood up in and what they had in their souls. They came through, they tamed the wilderness, they became what old John Bright called: A refuge for the oppressed from every land and clime. They have become today the greatest State and power in the world, speaking our own language, cherishing our common law, and pursuing, like our great Dominions, in broad principle, the same ideals. And the hon. Member for Nelson and Colne calls them "shabby moneylenders." It is true that they have lent us a great deal of money. They lent us £1,000 million in the first World War, a debt which we solemnly confirmed after the war, in time of peace. But all that they let drop. Then there was Lend-Lease, before they came into the second war, in all about £7,000 million.