Orders of the Day — Sterling Exchange Rate

Part of the debate – in the House of Commons at 12:00 am on 28th September 1949.

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Photo of Mr Thomas Hubbard Mr Thomas Hubbard , Kirkcaldy District of Burghs 12:00 am, 28th September 1949

We are repidly drawing to the end of the second day's Debate on this economic crisis. We have heard many speeches from right hon. and hon. Members who claim to be experts on economic affairs. Many, indeed, have proved themselves to be very knowledgeable on these matters, but the speeches of some have convinced me that they are not nearly as knowledgeable as they think. I make no such claim; I am not an expert on economics at all. Perhaps my reason for intervening in this Debate is that I have been a victim of the economists in the past. Maybe that is as good a reason as any for intervening in this Debate. I say quite frankly that the problem now facing us is not one which can be solved by the economists; it can only be solved by the producers of this country.

One would almost be led to believe that this is the first time there has been such a crisis in this country, but other Governments have been confronted with the same crisis. It is true that there has been a difference. The crisis which stands out most in my mind is the economic crisis which arose not because of shortages but because of abundance. That was a time, indeed, when miners and others were induced to produce at a greater rate by the threat of unemployment and lowering of wages, knowing at the same time that the quicker they increased production the quicker they would be unemployed. As a man made mountains of coal round the pithead, the quicker he became unemployed. The quicker an engineer produced his motor car, the quicker he became unemployed. The same thing applied to the shipbuilders and, indeed, to engineers of all descriptions.

It is no use saying that they were dealt with kindly. Any miner will remember, as most people engaged in industry will remember, how the position was dealt with at that time. We remember the slash in wages of 1921 from 21s. 6d. a shift down to 12s. a shift. Keeping in mind the present criticisms of the railway services, and the suggestion that they are losing £5 million, it is extraordinary to remember that at the same time as the drastic slash in wages, a subsidy was paid to the then railway owners of round about £40 million, in 1919 to 1920 In 1920 to 1921 a further subsidy was paid, not of £5 million but of about £51 million. As far as the producers are concerned—the only people who can save our country today—there was a slash in wages in the mining industry from 21s. 6d. to 12s. a shift, with a further slash, in wages in the intervening years after 1926 of from 12s. to 8s.

Part of the trouble in the economy of this country has been that in this great industry—the only mineral we have in this country in any workable amount—men have been chased away from the pits through the line which has been followed by so-called economists. I always like to pay tribute to Adam Smith; my constituency always pays tribute to him and will always remember him, and we remember his words on the problem of productivity. At that time we thought he had solved it, but we found that increased productivity meant increased unemployment.

I want to suggest to my right hon. and learned Friend, as a very small but perhaps a very important contribution, that the one way we shall solve this problem is to get closer to the only people who will be able to help us. We shall, perhaps, have to get down to the method that was adopted during the war. The Chancellor has asked those engaged particularly in the exporting industries to accept responsibilities. He must also give them an opportunity of exercising those responsibilities, getting closer to them, finding in the industry itself where improvements in productivity can be made.

The miners of this country are doing a good job of work, but they are beginning to think that there are far too many clean faces at the pithead today. They want to know whether they are all necessary. If, indeed, there is redundancy, they want to know where it lies. These are the people who can give the best advice to the Chancellor of the Exchequer when he sets out to reorganise industry, as he must reorganise industry.

I feel very hard about the speeches we have heard today from the other side, complaining so bitterly about the increased Profits Tax, which my right hon. and learned Friend intimated to this House yesterday. Hon. Members opposite are very disappointed about it, but they are not so disappointed about the fact that still further restraint has been requested from these people whose increased productivity may solve our problems. There could be increases in wages so long as they are bound up with increased productivity, and at no time have I heard anyone say anything other than that increased productivity is the only way in which higher wages would be justified.

I indeed feel at the moment very disturbed about the people on the low, fixed incomes, particularly the old age pensioners. It is not enough to say to the old people that we cannot afford to give them anything extra. None of us in this country, even before the crisis descended upon us, could have lived on 26s. a week as a single person, and no man and his wife on 42s. The Government themselves have accepted that in the regulations for supplementary pensions. However, if the old age pensioners are to have any hope of an increase at all, it lies in an increased productivity in industry, and it is only the workers of this country who can make possible increases in the pension rates.

No matter how we approach this problem, we always come to the same point, that while we certainly need administrators in industry, and although experts in the economy of the country are necessary, ultimately we depend upon the workers who make the goods to be exported, and they are the people who, for far too long, have been too little consulted. I want to suggest very seriously to my right hon. and learned Friend that it is no good to approach problems in industry merely through consultations at the top. We have had increased production in the past, as I have said. On this occasion we have given the producers a guarantee that increased production will not cause them unemployment. At the same time we have to see to it that not only will an increase in production result in higher profits for those who run the industries but will also result in some reward for the workers.

Some good contributions have been made to the Debate, and more will be made tomorrow, but I hope that many of the statements that have been made on the other side of the House will not be taken too seriously, and, indeed, I hope that some on this side of the House will not be taken too seriously. I say that advisedly because today we have this difference, that the people of this country are asked to produce for their own good. We have to emphasise that. They are asked now to produce for their own good, not, as in the past, for the good of those whose only god was profit and whose only country was profit. We have to say to the people today, "You are not producing only for one group but for the good of the country." Let us remember this: we have bought time with devaluation; and if that fails, it will not be only the Government of this country that will fall, but this country that will fall, and all the people in it.