Orders of the Day — Financial and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 31st January 1952.

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Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough 12:00 am, 31st January 1952

We have heard a very eloquent speech from the right hon. Member for Llanelly (Mr. J. Griffiths), but of course we have strayed rather a long way from the fundamental cause of this debate, which is the grave economic situation in which we are.

Before I continue with my remarks, I am sure it would be everybody's desire that I should congratulate the two hon. Gentlemen who have taken the plunge today and made their maiden speeches. I am sorry that I did not hear my hon. Friend the Member for Norfolk, South-West (Mr. Bullard), because I had the privilege of hearing him in his constituency in the late campaign, and from the way he spoke there I have every confidence in believing that he will be a good contributor to our debates in the House. My hon. Friend the Member for Epping (Mr. Finlay) has also partaken for the first time of the pleasures of discussion in this House. He sits for a constituency the name of which became famous until Woodford superseded it. I have no doubt that he will see that its high traditions are maintained.

We had hoped that this two-day debate would have indicated an agreed approach to our troubles, because the situation is so obviously a serious one, and hon. Gentlemen who have taken part in the debate have at times accepted that fact, but not throughout. It is, therefore, a matter for regret that there is to be, as apparently there will be, a Division tonight on an official Opposition Amendment.

What is the objective of the Chancellor? It is that, as part of a great effort by the Commonwealth countries, we should take our own share in restoring the confidence of the world in sterling. This is a joint undertaking with the Commonwealth countries stemming from the recent conference. It is our joint objective to restore confidence in our money and to pay our way in the world. The speech which my right hon. Friend made on Tuesday contained his proposals which were to be this country's contribution to this great and vitally necessary undertaking.

In order to restore confidence in us, we must prove that we are putting our own house in order by living within our means; and "means" in that context, I would say, refers to the necessity of using our resources to the best purpose in order that, as a result, we may pay for the food and raw materials which we need and without which in full measure we would physically and industrially decay.

The right hon. Member for Leeds, South (Mr. Gaitskell), in a most interesting part of his speech yesterday, was discussing how it was that we had got into this position. It is a nice problem and I should have thought that he knew some of the reasons. But the world outside, whose confidence we must try to regain, is not so much interested in our deficit as in knowing how we are to deal with it. That is the background of the Chancellor's speech, and the short answer is, of course, just four words—buy less, sell more. In order to do this, we have to influence our man-power and our raw materials into making what we need first of all for our own defence, and secondly, into the most profitable lines to develop our export trade.

So there are three stages. The first stage was when we found this crisis on our doorstep in November, when taking over from right hon. Gentlemen opposite. The first step which we took then was the tremendous cuts in imports which were made and the changes in monetary policy which followed. It is true that the effects of what happened in November are by no means apparent in this country, but as the weeks go by they will, alas, inevitably follow more and more. That was the first step.

Then came January and what we are doing now. Further cuts have had to be made in a still deteriorating position and simultaneously, as is shown by the exposition of my right hon. Friend, active steps have had to be taken to re-direct our industrial output and to help our man-power in that direction in order to increase our exports. But that is not the end, because involved in that were what the right hon. Gentleman has largely been discussing—some cuts in Government home expenditure, all devoted to the same purpose of restoring the confidence of the world in the determination of this country to pay its way.

But in March there will be the third step; first November, then January, and then March, because a Budget is necessary to round off the whole picture. Only after that shall be we able to see the thing as a whole, because obviously what has been done in November and what is being done now does raise budgetary issues. It is for that reason that my right hon. Friend proposes to take the very unusual step of advancing the date of his Budget statement in order that the world and our own country may see exactly the path we have to tread in the coming months.

I make no recriminations. I am not dealing with any party issues at the moment, although perhaps one could. I make no comment as to why we are in this position. I merely note the fact that the causative period was long before the Government of my right hon. Friend had any responsibility for the administration. Faced with the situation in which we now are in the last day of January, 1952, any Government which was in office would have had to take either these or very similar steps to deal with it.

I remember someone once using the phrase that we must pay for history. Well, the history of the last six years has been written by right hon. Gentlemen opposite, and we may find ourselves now, all of us, having to pay for it. I did notice this morning a comment in the Labour newspaper that we had no mandate for what we were doing. I would say in return that we certainly have no mandate to sit here and see the country slip into bankruptcy. We are convinced that the sort of action which is necessary now, and which we are about to take, is needed to stop that drift.

It is necessary to turn to what the Amendment calls the "attacks on the social services" or what, after the right hon. Gentleman's speech, we would not any longer call cuts but modifications. It is no pleasure to call upon people to make sacrifices or to bear additional burdens, and only a consciousness that those sacrifices and those burdens are necessary to avert far greater sacrifices and burdens makes my task tolerable."—[OFFICIAL REPORT, 10th September, 1931; Vol. 256, c. 297.] Those words were used from this Box 21 years ago, and they are equally true now. Nobody wants to exact sacrifices or to place burdens, but the country was warned that this might be necessary. This morning I re-read the broadcast speech which my right hon. Friend the Prime Minister made in opening the recent election campaign. "We make no promises" said the right hon. Gentleman—[Interruption.] I am quoting the right hon. Gentleman's broadcast. He said: We make no promises of easier conditions in the immediate future. And certainly January is the immediate future from the last week in October. Too much money has been spent to avoid another financial crisis. That is the situation. As usual, my right hon. Friend was right, but it is possible so to make inevitable modifications—I was going to say cuts—and economies as to make a more coherent theme in the social services affected. That is true of some of our proposals.

The Amendment talks about "attacks on the social services." What is the argument? Is it that never must a figure of expenditure which has once been reached in this field be either held or reduced? Is that the argument? No, of course it is not, because the Labour Party did it themselves. They put a ceiling on the Health Service. We are keeping that ceiling and, what is more, the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) accepted that ceiling.