Oral Answers to Questions — Industrial Production

– in the House of Commons at 12:00 am on 30th October 1952.

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Mr. Lee:

asked the Chancellor of the Exchequer from which industries he plans to obtain the increased production necessary to secure the 3 per cent. extra output upon which he based his Budget.

Photo of Sir Arthur Salter Sir Arthur Salter , Ormskirk

In the statements my right hon. Friend made last March he made it clear that we were faced with a difficult export task in that we had to obtain an increase in the total of our exports at the same time as obtaining a change in their composition and in the markets in which we sold them. He said that if we did not succeed in expanding our exports we would be faced with lower production and more unemployment than any of us would wish to see.

As it turns out our export prospects have worsened since March and it now appears unlikely that production will rise as had been hoped, though there may be some expansion in production in the metal and metal-using industries, particularly in steel; in capital goods, for which there is still a big export demand; in aircraft: in building and building materials; and in coal.

Mr. Lee:

Would not the right hon. Gentleman agree that he has not answered the point in my Question? I asked from what industries the Chancellor expects to get his increased production. Would the right hon. Gentleman not agree that there has now been a recession in the productive level we are now achieving, that we have recently had information that we cannot now export the same number of cars, that industrial coal is to be diverted from industry because the momentum is going down, that unemployment among dockers is increasing, and that the number of bankrupts is also increasing? In view of this, would he not draw the conclusion that we may well go into roaring deflation unless the policy of the Government is changed at once?

Photo of Sir Arthur Salter Sir Arthur Salter , Ormskirk

No, I certainly would not draw that conclusion. There has been some flagging in production not only in this country but elsewhere——

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent South

There will be until the engineers get justice.

Photo of Sir Arthur Salter Sir Arthur Salter , Ormskirk

—but the suggestion of the hon. Gentleman is quite unfounded on anything that has happened or is in prospect.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

Would not the right hon. Gentleman agree that the decline in production in the last eight months is a very serious matter, and will he not give the House an indication of the steps the Government are proposing to take to arrest this decline and to restore the increasing production which took place continuously under a Labour Government?

Photo of Sir Arthur Salter Sir Arthur Salter , Ormskirk

A high level of production and employment is, of course, extremely important, but it is not the only thing that is important. We have not only to produce but also to sell, in particular to the countries from which we have to buy our raw materials.

Mr. H. Wilson:

Is the right hon. Gentleman aware that production in manufacturing industries is running at a rate of something like 10 per cent. below what it was in the same period of last year? Since that means that the whole basis of the Chancellor's financial and economic policy is knocked away, when will the Government produce a scheme for resuming increased production?

Photo of Sir Arthur Salter Sir Arthur Salter , Ormskirk

One would have to make a speech, rather than answer a supplementary question, to cover the whole of this case. However, I think I am entitled to say that the great danger with which this country was faced a year ago as regards production and unemployment was that the reserves would be exhausted. They were running out at a rate which would have exhausted them completely by the end of this year. Had that happened there would have been an enormous fall in production and a great rise in unemployment.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

Would the right hon. Gentleman please address his mind to the Question? What we want to know is what steps the Government are taking to stimulate export demands, if that is the cause of the decline in production?

Photo of Sir Arthur Salter Sir Arthur Salter , Ormskirk

I do not read the Question as being that, Mr. Speaker. I was asked from which industries it is planned to obtain increased production. I have answered that Question.

Hon. Members:

No.

Several Hon. Members:

rose——

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

This is a very large subject. I do not know that we can carry it further now.