Debate on the Address

Part of the debate – in the House of Commons at 12:00 am on 6th November 1951.

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Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill 12:00 am, 6th November 1951

Whatever our differences in this House may be, we can all agree that one of the circumstances that make today historic is that it sees the right hon. Gentleman the Prime Minister make his first speech as Prime Minister in peace-time. We all join in wishing him good health during his tenure of office.

The right hon. Gentleman has shown in the past a liking for compendious titles to describe Administrations or Governments. It seems to me that the appropriate compendious title by which this Government can best be described is, "The Government of the Co-ordinating Peers." Many of us feel that that development has its very serious side. In the last Parliament, many of us felt considerably handicapped when attempting to put Questions to the Minister of Transport because of the limitations which are imposed upon the Questions which can properly be put to him in this House. Now the position is made even more difficult, because the effective Minister in Transport matters, co-ordinating transport with fuel, is in another place. An answer to these Questions becomes very much more difficult to get than ever it was before.

The country will also be shocked to hear of the proposed adjournment of the House from a date early in December until February. We have come here for this debate on the Address expecting to hear of a great number of important and drastic measures being taken, only to learn that the Administration will require so long a period of Recess in order, as it has been expressed, to arrive at precise decisions upon what shall be done. There is no doubt that the main problem with which this Parliament is faced is an extremely serious financial and economic crisis. It is quite wrong, in my belief, to allege that there has been any concealment by the party on this side of the House that such a crisis was developing.

The position was made plain by the Chancellor of the Exchequer of the late Government. A remarkable feature of the election campaign was the failure of the Conservative Party to emphasise the seriousness of the economic crisis and to make any of the adjustments of their policy which the existence of that crisis demanded. I should have thought it would have been agreed by hon. Members in all parts of the House that, at a time of economic and financial crisis like this, to incorporate in a programme a target of 300,000 houses was precious near irresponsibility. It would have been an indication at the General Election that they recognised the fact that an economic and financial crisis was imminent if the Conservative Party had made an express modification of that proposal. Nothing of that kind has occurred.

The Government now in power are confronted by a state of economic crisis. The remedy for it is that which Sir Stafford Cripps applied when he was Chancellor of the Exchequer, to bring into effect disinflationary measures which—for this is the demand which we make from this side of the House—do not cause unnecessary harm or hardship upon the underpaid sections of the community. It is often said that it is impossible to apply effective disinflationary measures without causing hardship to all sections of the community, but on this side of the House we believe that there are very substantial disinflationary measures which can be taken which would not cause such hardship.

There is monetary policy. I do not conceive that an increase in the Bank rate which would have the advantage of stemming off certain types of undesirable and unprofitable investment, and would have the result of reducing security values and the effective consumer demands out of capital gains, need have any serious effect upon the standard of living of great numbers of our people. If it be said that an increase in the Bank rate may have an unwelcome effect upon local government and upon housing authorities, there does not seem any reason why there should not be a preferential rate in respect of loans to bodies of that kind. The reduction in the flow of credit which may be desired in present circumstances may surely be effected in substantial measure without doing harm to the standard of life of the lowest paid income groups.

That will be one of the vital distinctions between the two parties in this Parliament. It is agreed by all that disinflation as a remedy is necessary, but the Opposition believe that they are more determined than the Government are to require and ensure that disinflationary measures shall not be of a kind and character to lower the standard of life of the masses of the wage earners.

It may well be that we shall hear that further substantial restrictions have to be imposed upon imports from dollar countries. I do not conceive it likely that resistance Ito that policy will be strong from these benches, because there are undoubtedly still substantial imports from dollar countries upon which savings can be made without really affecting the standard of life of the wage earners. We have always felt that these disinflationary measures can be put into effect in a manner which will maintain the minimum standard of life that we have established. I should have thought that another type of disinflationary measure which could be put into effect and which might have the most valuable consequences would be legislation drastically altering the law in respect of expense accounts entitling persons to deductions from Income Tax. Surely there is here a substantial field for disinflation which has not yet been sufficiently tapped.

By all means the Opposition would welcome the most earnest endeavours to discover methods of economising in the administration of Government Departments. It is easier to talk about this in Opposition than it was when one was a back bencher on the Government side. Those who served in the Forces in the last war, will agree that it is simply unthinkable that today there is not vast scope for saving upon the Defence Estimates without reducing in the slightest degree the effectiveness of our defence preparations and our re-armament. I know—every ex-Service man knows it—that at the most critical periods in our history during the last war many of the formations were grossly over-established and very substantial wastes were occurring and, although we have not got the, evidence immediately available, we can have very little doubt indeed that that is happening now.

The Opposition—nothing is gained by attempting to dodge this—suspect the Government of desiring to put into effect disinflationary measures other than those which I have described. We suspect them of having their eyes set upon reducing the food subsidies and of wanting to tamper with rent control. Both these measures would indeed be disinflationary steps, but we are opposed to them because they would entail hardship for the lower paid groups whom we are so much concerned to protect.

We are sometimes told by spokesmen for the Government that the hardship entailed by dearer food can be avoided by a collateral increase in the rates of pension or National Assistance payments to offset the effect of removing or reducing food subsidies in the hardest cases. We are also told that these hardships can be modified or removed by increases in the rate of family allowances and the payment of family allowance in respect of the eldest child.

But we are not satisfied with that. We are conscious that if any kind of adjustment of that sort were made there would be extremely hard cases left, such as the case of the single man or the childless man in the low wage groups who is not yet approaching qualification for pension.

If there is any attempt to put into effect a disinflationary policy by reducing food subsidies there will immediately occur serious resistance from the Opposition. It may be a sad thing that these suspicions exist, but they do exist in the minds of the Opposition. They are well founded, well established and historical, and we believe that if there was not an immensely strong Labour Party and Opposition a Conservative Government would in this economic situation have resort without hesitation to the most drastic deflationary measures against wage, pensions and benefit levels and the rest. [HON. MEMBERS: "Nonsense."] That is what we believe. They have done it before. What will prevent it and what is making them so cautious is the existence of a very strong Opposition.

Apart from the constructive thinking in which we hope to indulge while we are in Opposition upon a whole series of problems which undoubtedly need our attention, we are here in this Parliament mainly to defend the Welfare State. I conceive that to be in large measure our purpose in this Parliament. Conceding all the time that there is a serious financial and economic situation and a need for great disinflationary measures, we nonetheless believe that these can be put into effect to get us over this crisis by the same methods that Sir Stafford Cripps employed and that we can do that without taking away any part of the structure of the Welfare State which we have created. We have created it.

There were social services on a large scale before the war, we know that. But nobody ever thought of describing Great Britain before 1939 as a Welfare State, because the expression would have been patently inapt. In the last five or six years the phrase has become apt. It means something which is understood and recognised to be a fact, and we are here to make sure that, if we can help it, no legislation shall be passed, with the economic crisis as an excuse, which will diminish the extent or scale of the Welfare State and the social services that we have established.

These seem to me to be the main issues with which this Parliament will be concerned.