Orders of the Day — Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 10 November 1952.

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Photo of Mr George Thomson Mr George Thomson , Dundee East 12:00, 10 November 1952

I feel keenly conscious of how much I shall require the traditional indulgence of this House for a new speaker, rising as I do after two Front Bench speakers. The by-election in Dundee that brought me here now seems a long distance away, because the Recess has intervened and our minds are very much more preoccupied with more recent elections, like that of Wycombe and in the United States of America.

If I may, I should like to discuss very shortly some of the economic implications for Her Majesty's Government of last week's Presidential Election in America. In passing, I should like to say that the wide reaction to the election in America showed the growth in this country of our consciousness of world citizenship. I was fascinated by the number of people who said how passionately interested they were in what was going on in these elections, and I think it was well summed up by a cartoon in one of the newspapers, which showed a couple of Americans standing among the skyscrapers of an American city, and one saying to the other, "Say, buddy, have you heard the result in High Wycombe?"

This consciousness that the election results in America are just as important to our economic welfare in many ways as elections are on this side of the Atlantic is very necessary, and I greatly regret that the Gracious Speech contains no signs in its economic proposals that it has taken any cognisance of the impact that the American elections are likely to make on our economy. Nobody can foretell what changes the results will have within the United States of America, but it is very necessary, as my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) said, that the Government economic adviser should be working very hard indeed looking to the future and laying plans for possible economic developments on the other side of the Atlantic.

From my observations in America during recent months, I should like to say it does not seem to me that the American vote is a vote against the economic policies associated with the New Deal and the Fair Deal in America. I found there were a very large number of people there who, like hon. and right hon. Gentlemen opposite, seemed very much under the influence of the myth of uncontrolled private enterprise, but whenever the Government showed any signs of interfering with agricultural planning and of putting the citizens of America at the mercy of the free play of the laws of supply and demand, in that particular sector of the economy, they showed signs of violent panic.

I think the vote for General Eisenhower was much more because of his offer to go to Korea. My general impression was that everywhere in America there was a very desperate desire for peace in Korea, and many millions of ordinary, decent peaceable American citizens felt throughout the Korean war that they did not fully understand the nature of the United Nations action, that they understood even less why their sons should continue to stay there, for the consciousness of world citizenship, which I have just been talking about, is only painfully breaking upon them.

These people lived for generations in the middle of a country which was immersed in its own affairs and which was fairly remote from the troubles of the rest of the world. In these circumstances they feel acutely that there ought somehow or other to be some sort of magic process to bring peace in Korea and their own soldiers back home. I found that some of them were inclined to think that a magic shortcut might be a military knockout blow against China. I did all I could at that time to emphasise to them that I thought many people in this country had different points of view and would feel that that short cut was much more likely to be a short cut to world war than to world peace.

In this Election, the American citizens have felt that perhaps General Eisenhower offers that sort of short cut. I hope sincerely—I say this without irony at all, though I think it is much more difficult than it was presented to be in the American Election—that General Eisenhower is successful in his expedition to Korea. I hope also that Her Majesty's Government are laying diplomatic plans in the event of his failure to produce immediate peace in Korea, and that they will bring their influence to bear to prevent any sort of drastic military extension of the war through feelings of frustration and disillusionment in America.

I hope, also, that Her Majesty's Government are looking to the future and are laying economic plans in case President Eisenhower, as he will then be, or the United Nations as a collective body, are able to bring peace in Korea. All over the world people want a settlement of the fighting there, and while a settlement would push further back the final horror of a third world war, it would also mean that the countries of the West would face the danger of a world slump unless economic steps were taken to prevent it.

When that happens, the big question that will face American citizens and the citizens of this country, linked, as we are so closely to America, will be whether the Fair Deal and New Deal policies of successive American Administrations have become sufficiently accepted as the ordinary techniques of American economic practice to be put into operation by a Republican Administration.

I do not think that the American vote was a vote against those economic techniques but, because of the complexities of the American political system, there is now an Administration in America which is very critical of New Deal economic policies. It is the important duty of Her Majesty's Government, of which no evidence is given in the course of the Gracious Speech, to take all possible steps to safeguard the economy of this country against that sort of development in the United States of America.

This means that we shall require within this country to seek as high a degree of economic independence as we can get. I do not believe that we can insulate ourselves from the American economy, but we should do the best we can. That means that a Government in this country must seek the highest degree of economic planning with the other countries of the Commonwealth. I trust that the coming Commonwealth conference will show that the present Government are more successful in that sphere of economic planning than was the case following their last Commonwealth Conference.

It also means that we must face major changes in this country in the pattern of our economic activities. We must face a really imaginative attempt to apply scientific methods of using resources and towards saving our scarce materials. All these things imply that we need a Government which will do more economic planning and not less, and that will engage in more public control and not less. It means that Britain today needs a Government, if we are to ensure her economic solvency, that will engage in more Socialism rather than less.

Now I would like to turn to the impact that the economic developments that we face today are making on the constituency which I now have the honour to represent. It would not be fitting if I were to deal with the economic problems of Dundee without mentioning my predecessor in this seat. He will always be associated in Dundee, particularly during his term of office in the Board of Trade, with the work of building up in the constituency one of the most successful industrial estates in the country. Dundee is a fairly good example of the kind of city and community for which the Distribution of Industry Act was designed.

This city has depended mainly upon the jute industry and was deplorably and tragically depressed in the years between the wars when up to one-third of Dundee's workers were unemployed. We had a large female labour force because women were cheaper, and we had the situation in Dundee of the menfolk staying at home, looking after the children, boiling the tea and preparing the meals while the women did the work. During the by-election in Dundee we found that these memories of unemployment were very easily stirred.

I noticed that the newspapers devoted a great deal of space, as they are entitled to do, to telling us the significance of the High Wycombe by-election because it showed a swing of 0.37 per cent. towards the party opposite. I did not notice that the newspapers devoted very much space to the Dundee by-election, which showed a swing of 7.39 per cent. to the party on this side of the House. One of the main reasons for the size of that swing was the fact that we had very severe local unemployment in Dundee. It rose to over 9,000 in the month of June, with as many more people on part-time work.

The Minister of Labour has been mentioning a definition of full employment, or, rather, the percentage of unemployment al which drastic action is necessary. I think that was the way he was putting it—but that was, I am sure the way in which my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) meant it to be implied—and he mentioned 3 per cent. At that period in Dundee we had 10 per cent. of unemployment. During the last eight months we have never dropped beneath 3 per cent. The situation in Dundee has improved since the peak in the summer, but it is still very serious indeed.

There is now very great anxiety in the city, and in many other areas in the country, at the recent announcement by the President of the Board of Trade that he would consider de-scheduling certain Development Areas. In Dundee, we welcome his announcement that other areas of the country are to receive the same sort of benefits as we have been receiving, but we feel very strongly that there is no case at the moment for de-scheduling our own area. I would certainly ask that the President of the Board of Trade, if he is to speak later in the debate, gives us an assurance that no such action in Dundee is intended in present circumstances.

There would be a catastrophic situation in the City of Dundee today if Development Area techniques were not working there. We have depended mainly on the jute industry, but the labour force in that industry has dropped from about 30,000 before the war to about 18,000 today. As far as I can foresee the level of employment in the jute industry is likely to settle finally at about 15,000. Development Area techniques have helped to fill that gap at the moment, and we have been working, in Dundee, to have the ban lifted that at present exists on the coming of new industries into the city. We feel, because of the present situation, that it is time that new industries came to the city.

But now the situation has worsened still further. We are having in the face of the economic policies of Her Majesty's Government the withdrawal of two of the factories on our industrial estate to their English headquarters. Now we are working urgently to try to find replacements for these factories. It should be astonishing that in those circumstances we are at the moment worried lest the development area facilities be withdrawn from this part of Scotland.

The real economic problems we are facing are those of unemployment and of falling production and exports. When a community faces these problems it is the Development Areas that are the hardest hit. I do not feel that at present any case can be made out for de-scheduling any of the Development Areas. The Gracious Speech mentioned economies in Government expenditure. I hope that Her Majesty's Government will not make those at the expense of the Development Areas. The money that is spent by the Government in creating employment under present circumstances is the most essential of national investments, and to stop spending that money now in the interests of saving Government expenditure would be a betrayal of all the hard-won achievements of the British people since the end of the war.