Debate on the Address

Orders of the Day — Queen's Speech – in the House of Commons at 12:00 am on 7th December 1954.

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[SIXTH DAY]

Order read for resuming adjourned debate on Question [30th November]: That an humble Address be presented to Her Majesty, as followeth:Most Gracious Sovereign,We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. J. N. Browne.]

Question again proposed.

3.44 p.m.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

I beg to move, at the end of the Question, to add: but humbly regret that the Gracious Speech displays an unwarrantable complacency towards the continued existence of social injustice and a doctrinaire determination to abandon public enterprise, essential controls and other forms of intervention by the community designed to check inflation, protect consumers and encourage economic expansion. We are all extremely sorry to learn that the Chancellor of the Exchequer will not able to take part in our debate this afternoon, and we greatly regret the reason for it. I am sure that I speak for the whole House when I say that we have the deepest sympathy for him at the present time.

The Foreign Secretary, last Tuesday, in an unusual excursion into economic affairs, provoked a certain amount of comment on this side of the House. I listened to what the right hon. Gentleman said and have since read it. I wish that my comments upon his economics could be favourable, because only last night the right hon. Gentleman was complimentary about something which I said in the Foreign Affairs debate. I must say that in the compliment he paid me his motives were suspect, but, all the same, he seemed to agree with what I had said. However, I am afraid that I cannot repay him the compliment.

I felt that the right hon. Gentleman had dashed into this field without adequate preparation, and that he probably ought to have consulted the Economic Secretary who, if I remember aright, used to advise the whole Conservative Party on economic policy. The Foreign Secretary spoke of production being at an all-time high level, and this, he thought, was an extraordinarily important point in favour of the Government. But I think that the Economic Secretary, in view of what he has said in reply to Questions this afternoon, would be inclined to say to his right hon. Friend, "Well, what do you expect?" Do we not expect an advancing economy in which production is going up every year? It would be a very serious thing indeed if production were not at an all-time high level, because it would indicate either that it had stopped rising or that it was actually falling.

I think that the Foreign Secretary was taking a rather old-fashioned view, thinking, perhaps, of the days before the war when the Tories were in power, or perhaps just thinking back to 1952 when, of course, production was falling. He had evidently overlooked the fact that under the Labour Government production was at an all time high level every year that we were in power. He had obviously failed to grasp the speech of the Chancellor of the Exchequer, who recently held out the hope to the whole country that we might possibly double our standard of living within 25 years.

I think that the right hon. Gentleman was a little unwise in referring to production, because, if we compare the record of the Labour Government with the record of the Conservative Government, we find a rather interesting situation. Between 1946 and 1951, industrial production in this country went up by 30 per cent., that is, at an average increase of 6 per cent. a year. In the three years of the Conservative Government—assuming that this year, 1954, the increase is 6 per cent., which, I think, is the highest it is likely to be—the average increase has been not 6 per cent. per year, but 3 per cent, per year, exactly half what it was under the Labour Government.

The Chancellor of the Exchequer, in what, I think, must have been an interview to the "New York Herald Tribune" which was published a little time ago, said, in a flash of wisdom, some rather sensible things. He said: Economic analysis shows us that since 1945 production has risen much faster than consumption because of the exceptional burdens on the economy in the post-war years. Between 1945 and 1950, the largest part of the increase in production"— that, of course, is all under the Labour Government— went into exports. Since 1950, rearmament has absorbed nearly half the increase in national output, and the housing programme a good deal of the remainder. That is a sensible observation which is devoid, one must admit, of any party politics, and one which does emphasise the point that, first, we expect production to go up and that, if it does not continue to go up under a Government, something is wrong; secondly, that we should judge a Government very much on the basis at which the rate of production expands, and, thirdly, that any Government is liable to be faced with burdens of one kind or another which eat into the increment of production which is added each year to our national income. That was our experience, and, of course, to some extent, it has been the experience of the present Government.

The Foreign Secretary made great play with the fact that in the early part of this Government's period of office they were engaged in a salvage operation. The trouble is that there was no question of salvage, and certainly no operation. That becomes very clear if we compare the balance of payments this year—which is what the Foreign Secretary was referring to—with that in 1951. There has been an improvement, of course, but what was the cause of this improvement?

Was it, for instance, due to an increase in the volume of exports? The volume of exports has gone up very slightly since 1951. I think that it will be about 2 per cent. this year above the 1951 level, but we cannot really suppose that that tiny change—after a fall in 1952 and 1953 below the 1951 level—has been materially responsible for the improvement in the balance of payments.

Was it a decline in the volume of imports? Were we able to manage with fewer imports than before? I think that there is some truth in that, and I shall have something to say about it in a moment or two. But if we take the figures as they are now, the volume of imports is also just a shade above what it was in 1951. There is, therefore, no change, beyond, as I say, about 2 per cent., in the volume of exports or imports. Were we helped by a rise in export prices? No. There has again been no change. The level of export prices is just about the same this year as in 1951.

We come, therefore, to the last of the possible changes—the prices of imports. We find, in fact, that those have fallen by about 16 per cent. since 1951. This has saved us about £500 million and is, overwhelmingly, the main reason for the improvement in the balance of payments. The real truth about this so-called salvage operation is well known. We have discussed it here. The Economic Secretary is quite familiar with it, and I only ask him to pass on to the Foreign Secretary the very brief summary which I shall give.

In 1951, there was a tremendous increase in world prices. In one year, the prices of imports rose by one-third, and in that year we also added to our stocks by about £600 million. That, of course, gave rise to the famous phrase of the Lord Privy Seal about the skeletons hanging from the chandeliers and the cupboard being bare! Since the autumn of 1951—because the fall in prices had really begun before we left office—there has been a great improvement in the terms of trade, and, consequently, a recovery in the balance of payments position. Nor has it been necessary since then, because of the very large increase in stocks in 1951, to accumulate them at the same rate.

The truth is that, in so far as the improvement in the balance of payments position is not due to the chance of more favourable terms of trade, it is due, first, to the tremendous—and successful—efforts made under the Labour Government to build up our export trade; and secondly, to substantial savings in imports. Neither of those could have been carried out had it not been for the Labour Government's austerity programme.

At this point, I cannot help remarking that, had hon. Members opposite had their way when they were in opposition and when they were continually attacking Sir Stafford Cripps for keeping down consumption, this country would not be in its present fortunate position. It is those things plus, as I say, the improved terms of trade—and despite a poor production record—that gives us a relatively favourable position.

While all this has been going on, we have to ask ourselves what the Government have done to try to increase productivity and improve distribution. After all, these are the things by which we should judge a Government. What have they done to help production? How have they secured, or are they securing, a fair distribution of what is produced? Those are the two tests we should apply.

I should like to turn at once to one of the points mentioned in our Amendment, which is the determination of the Government to restore so-called private enterprise and to abandon public enterprise. It is true that they have, in a sense, limited their policy here. They have not denationalised coal, gas, electricity, the railways or the airways. Now, at least, we can say that all the silly talk that used to be heard about nationalisation being inevitably inefficient is, by the Government's own action, shown to be complete nonsense. If anybody has any doubt about that he had better read the speeches of the Ministers now responsible for the nationalised industries.

There are, however, two spheres in which the doctrinaire Tories have triumphed; and it was, I think, very much due to the doctrinaire Tories on the back benches that this has happened. They have denationalised road haulage and steel. I propose to leave the subject of road haulage to my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), who will be speaking later in the debate, but I should like to say something about the denationalisation of the steel industry.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

I am happy to say that steel production went up when the industry was threatened with nationalisation, that it continued to go up—extremely fast—under nationalisation, and has not, I am also happy to say, yet been completely ruined by denationalisation.

What, after all, was the case for the nationalisation of the steel industry? I suggest that it was based on three points. First—and I do not think that anybody would deny this—there already existed in this industry an extremely tight monopoly. It was one of the closest monopoly organisations in the country. Secondly, we believed that, although a good deal of rationalisation had been carried out in the past 20 years there still remained a certain amount of concentration to be done. This concentration inevitably creates serious problems for the areas affected. We also believed that steel is an industry so vital to the whole of the rest of the economy that the country, through the Government, cannot be indifferent to its rate of development.

Thirdly, we believed that, through public ownership, we could achieve not only by far the most satisfactory way of dealing with this monopoly situation—because we would remove the profit incentive which is the dangerous feature of it—not only could we also carry out, in a sensible and planned way, further measures of rationalisation, but we could also secure considerable economies in the charges to be met for capital. It must be remembered that this is an industry which requires a great deal of capital.

We did not make any substantial changes in the structure of the industry. We set up a holding company—that is really what it amounted to—the Iron and Steel Corporation of Great Britain which took over the shares of the companies, and, for the time being, largely left the individual units intact. We were prepared to wait to carry out the structural changes necessary in due course. I think that that, as a matter of fact, is one of the reasons why the output has gone so steadily upwards.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

The right hon. Gentleman's party left it as it was.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

We left it for the time being so that we could carry out the structural changes as and when they became necessary. The trouble about denationalisation is that, under it, it will not be possible to carry out those structural changes.

A very much more important point is the damage done by denationalisation to the financial side of the industry. This handing over to private shareholders will cost the industry a great deal of money. There is a very real sense in which denationalisation has been bought at very high cost to the industry. Let me give the hon. Gentleman opposite the figures.

We now know that roughly half—the best half—of the industry has been sold back. About £72 million of equity capital has been issued, and the average yield on this capital is between 7 and 7½ per cent. per annum. That is what is offered to the shareholders to induce them to take up the shares. They will expect to be paid that.

In contrast to that, when the industry was nationalised the previous shareholders, who had become stockholders and bondholders, were receiving 3½ per cent. per annum. Now they receive 7, 7½ or 8 per cent. I reckon that already the amount of denationalisation which has taken place involves an increased payment to shareholders, as compared with what was happening under nationalisation, of about £2½ million a year. If we continue with the sales on the present basis, it follows that the equity capital alone will be carrying an increase charge of something like £5 million a year, but that is not the end of it.

In addition, we can be quite sure that when the disposal agency begins to sell off the debenture and preference stocks, it will also have to offer a return of 4, 4½ or 5 per cent., the latter is the most likely figure; about 1½ per cent. above what otherwise would have been paid.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

I will give way in a moment.

There is a third point. This is an industry which needs a lot of extra capital. We know that Dorman Long wished to borrow another £37 million. Under nationalisation, they would have, got it, with a Government guarantee at the gilt-edged rate, but they will not get that now. I venture to say to the House—and I ask the Minister to correct me if I am wrong, because he must have knowledge of these figures—that the result of the whole of this operation, so far as the finances of the industry are concerned, is simply this: the industry will be paying to outside shareholders and bondholders between £6 million and £9 million a year more than they would have done under nationalisation.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

I thank the right hon. Gentleman for giving way, because I want to make sure that he is comparing like with like. When he says that the shares were taken over at 3½ per cent., does he say that 3½ per cent. is equity, because he is comparing 7½ per cent. as equity? Was it 3½ per cent. before?

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

I believe I am comparing like with like, but if the Government say that they really believe that offering a 7 or 7½ per cent. dividend is cheaper than offering 3½ per cent. I stand to be corrected, but I do think that is very good arithmetic.

I turn to the question of controls. Our view on controls of the economy is not that we believe in controls for their own sake. [HON. MEMBERS: "Oh."] Hon. Members opposite have very short memories if they forget that we did, in fact, get rid of a very large number of controls during our period of office. What we do believe is that a return to complete laissez faire is bad for production, especially in certain fields, bad for consumers, bad for fair distribution and dangerous for full-employment.

I should like to illustrate some of those points. We had a debate last week on agriculture. Here, of course, is one sphere where we believe that the Government's policy of going back to a much greater degree of free enterprise is an especially bad one. This point was made again and again during that debate, particularly by my right hon. Friend the Member for Don Valley (Mr. T. Williams) and my right hon. Friend the Member for Belper (Mr. G. Brown). Experience surely does show that in this field—and I ask hon. Members opposite, many of whom sit for agricultural constituencies to think this over—we really do need to replace the free market mechanism with some kind of production guarantee, certainty—call it what one likes—to farmers. This is the view of the farming community. We must, I believe, if we are to get an expansion in agricultural production, which we, at any rate, believe vital to this country, provide some degree of certainty—a buffer between the uncertainties of the market and the ordinary farmer.

The Minister of Agriculture says that the farmers must get used to judging the market and judging prices. That is all very well for large farmers who may have the skill, ability and experience to do it, but it seems to me to be exactly what is not wanted for the small farmers. I should have thought that it was those farmers particularly who needed help, and their efficiency that we were so particularly anxious to raise. We believe that this degree of certainty can only be given by Government purchases for most agricultural products. We see no reason whatever why this should preclude freedom of choice for the consumer.

Of course, in reply the Minister of Agriculture says this: … during the past year or two we have moved … from a situation of food shortages to one of relative sufficiency."—[OFFICIAL REPORT, 2nd December, 1954; Vol. 535, c, 331.] That is a rather astonishing remark to make, if he was referring, as I believe he was, to the food situation here at home. It seems to suggest that everyone has all the food he wants, and that there is no shortage or balance of payments problem, either now or in the future. I must say that he was supported by the Chancellor of the Exchequer in a very remarkable statement which was not much noticed in the Press, and which he made at Blackpool. This is what the Chancellor said: The real truth about the cost of living is this, in quite simple English. When things are scarce we tend to spend less, arid when there is plenty we tend to spend more. The real truth is that we are suffering now, as is reflected in the cost-of-living index, by great plenty and by the success of our policy. It is rather a poor look-out if, the more successful the policies are, the more we have to suffer! The hon. Member for Louth (Mr. Osborne) will recall that he asked the Chancellor a Question the other day—we are all familiar with it. I hope that I shall not get him into trouble by quoting him. He asked: How much of the increase in the national expenditure on food from £2,949 million in 1951 to £3,549 million in 1953 was due to higher prices, and how much to a greater volume of consumption. The Chancellor's answer was: Of the increase of £600 million in consumer expenditure on food between 1951 and 1953, approximately £75 million represented an increase in the volume of consumption at 1951 prices and £525 million was due to the increase priccs."—[OFFICIAL REPORT, 16th November, 1954; Vol. 533, c. 200–1.]

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

In the same two years, wages and salaries had gone up by no less than £1,625 million, so that the £525 million extra cost of food was easily met by the increase in wages and salaries.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

The hon. Member does not quite see the point. What we are discussing is whether there is a relative sufficiency of food or not, and whether we are all embarrassed by the flood that is pouring in upon us, as the Chancellor suggested at Blackpool. When we go into it, we find that seven-eighths of the increase in expenditure is due to high prices and one-eighth due to more food. If the hon. Member for Louth goes into a shop and buys his groceries, he finds that he pays 4s. in the £ more in total. and 3s. 6d. of it is higher prices. Sixpence of it is for extra food, if he can afford to pay for it.

The real truth of the matter is expressed extremely well in these figures. What has happened, as we all knew would happen, is that the Government have carried out a policy of subsidy cutting and derationing. That squeezes people out by simply allowing the law of supply and demand to work and prices to go up. That is all that happens. That is what derationing has meant. The same familiar point is shown by the relative movement of prices in the last few years.

If I may go back for a moment, I would point out that under the Labour Government, between 1945 and 1951, this was the position. Retail prices went up by 34 per cent., or about one-third. But import prices, which we cannot control during the period of the Labour Government, went up by 120 per cent.—over three times as fast as the price level at home. The fact that we were able to keep prices down or to keep the rise at a so much slower rate than world prices was the reflection of our policy at the time. Since 1951, import prices have fallen by 16 per cent., retail prices at home have risen by 10 per cent., and food prices by 20 per cent.

I noticed today at Question Time that a reference was made to the rise in the price of tea. I do not know what the Economic Secretary will say about it. I think he suggested that this was a subject that he might say something about. We should all be very interested to know whether there is any price of tea, whether it is 10s., 15s. or 20s. a lb., at which the Government really will intervene and do something about it.

In the very sober and cautious words of the London and Cambridge Economic Survey, which I expect the Economic Secretary has read, which appeared a day or two ago, the whole process is described like this: At the beginning of 1952 the highest price increases from 1938 were for clothing and household goods, and for drink and tobacco. These are the items which have remained steady or declined in price in the last three years, and the first two are more important in middle-class than in working-class consumption. On the other hand, items which bulk large in the working-class budget—food, fuel, rents and such services as bus fares and cinema admissions—were kept down (by controls or otherwise) in the early post-war years. It is these items which have risen most in price in recent years. The general effect has been to remove some of the price distortions"— I have no doubt that that gladdens the hearts of the Front Bench opposite— and, at the same time, to eradicate part of the gains registered by working-class as opposed to middle-class families in the war and early post-war period. There it is. I could not describe it better, and I do not think that anybody can deny the facts.

I turn to another control—building. The Government, of course, pride themselves on having brought building licensing to an end. "Freedom for all," they say. "Anybody can build what he likes, when he likes and where he likes." Is it freedom for all? It is certainly freedom for private building, but if any hon. Member supposes that it is freedom for council building I must tell him that he is dead wrong. One can build a cinema or a garage or a shop or offices or private houses, but if a council wants to carry out a job of slum clearance, it finds itself up against the Ministry of Housing and Local Government.

If anybody doubts my word, I should like to mention what has just happened in a city, a part of which I represent. I have here a letter from the Town Clerk of Leeds. Many of my hon. Friends and the right hon. Member for Leeds, North (Mr. Peake), the Minister of Pensions and National Insurance, will have received this letter. The council had asked the Minister to be allowed to let contracts for 3,008 dwellings during 1955. What was the Ministry's reply? "Too much," they said, "2,042 is enough"—a cut to two-thirds of what was asked for. The housing committee say that they want all the 3,008 to carry out their slum clearance programme.

This will not be the end of the matter. The Minister of Housing and Local Government is probably aware that we, accompanied, I hope, by the Minister of Pensions and National Insurance, propose to see him and tell him that we are not having this. That is a very good illustration of what I know to be happening in many other places throughout the country.

I dare say that my hon. Friends will say that the Government have abandoned priorities in this field. That is not true. They have reversed the priorities. They have given complete freedom, the green light, to every kind of building except municipal houses for the poorest tenants. That is what the end of control means. It will mean to all of us that we shall have more people than otherwise would have been the case coming to us asking for houses, and we know the kind of ghastly conditions in which, unfortunately, some of them are still living.

There is another aspect of this end of building licensing which causes us a lot of concern. During our period of office we paid special attention to the Development Areas, and I am glad to say that since the war about 2,000 factories have been built in those areas. Its consequence in terms of employment and happiness in South Wales, the North-East Coast, Scotland and Lancashire are obvious to all of us, but I want to make it plain that the instrument we used to ensure that industrialists went to those areas and built their factories there was building licensing.

That was how we kept people out of so-called red areas where there was a shortage of labour, and induced them to go to the areas where there was enough labour. There were, of course, other inducements, but that negative control was essential. Now it has gone, and apparently the Government propose to rely entirely on the Town and Country Planning Acts. I should like to know whether they really think it is possible to do this. Do they really think it is going to be possible to prevent industrialists setting up business in congested areas, and congested in relation to the rest of the country, not only in relation to the immediate locality?

I pass to the wider aspects of controls. Our view is that to preserve full employment without inflation, it is necessary to use both the so-called indirect controls—budgetary and credit controls—and direct controls at certain points of shortage—industrial building, imports and foreign exchange—and we also believe that the Government have to intervene at specific points to stimulate production. Agriculture is one example.

The fact is that this Government's policy is to abandon everything but indirect controls, and that means that if they want to vary those controls they must be general in character. The Economic Secretary was talking at Question time today about the possible inflationary position. What is he going to do about it? What can he do about it if he comes to the conclusion that the position is inflationary? He can put up the Bank rate and discourage investment everywhere, even though there may be machine tool works which can fulfil orders and even though there may be all kinds of factories where there is no shortage at all.

If, as may well happen, the terms of trade turn against us and we have balance of payments difficulties, what are the Government going to do? They have committed themselves not to permit quantitative restrictions except for a limited period. Their whole philosophy, so I understand from the President of the Board of Trade, is to get away from these quantitative restrictions. In that case, one falls back on these general measures, and one is driven to cutting down incomes and employment in order to get the balance of payments right. I regard that as profoundly dangerous, but I think we shall soon see the situation developing in the direction where the Government will have to use these general controls because they have no others.

There is another obviously dangerous aspect of the situation. We are all familiar with the possibility of a cost inflation, of the wage-price spiral as we call it. From time to time we have had discussions on that subject. We know, too, that that is very much linked up with the question of dividends. We have asked for and obtained wage restraint; after the devaluation of the £ in 1949 we also asked for, and in the main obtained, dividend restraint.

What is happening? I do not think that the Economic Secretary will deny these facts. Since the beginning of this year wages and prices have both gone up by about the same amount, somewhat below 5 per cent.—3 per cent. or 4 per cent.; about 1s. in the £ or less. Profits, which the Economic Secretary was defending so recently, have gone up just twice as fast as wages—10 per cent., or 2s. in the £. Dividends have gone up twice as fast as profits—20 per cent. or 4s. in the £. Share values have risen by just under 40 per cent. in the last 10 months. The "Financial Times" index has risen from 131 to 180. That is an increase, in 10 months, of 8s. in the £.

We must really ask the Government to make their position in the matter clear. Are they prepared to defend this? Is their view on dividend restraint so extraordinary that they think that this is a restrained increase in dividends? What did the Chancellor mean when he said, at the Chamber of Shipping, on 14th October: In my opinion, this country still lags far behind in the general industrial outlook of its companies in the proportion it puts to reserve. The degree of investment in comparison with European countries is far too low, and, in my opinion, companies should pay far more attention to equipping ourselves to meet the severe and fierce competition which we are about to face than to distributing awards to shareholders or anyone else. Did he mean that? If so, what does he intend to do about it?

I know that the argument which the hon. Member will present will be, "Oh, well, that is the total increase in dividends. If you measure it against the increase in capital it is much less." As a matter of fact, it is still about 12 per cent. If the hon. Gentleman really thinks that we can tolerate the proposition that there must be an exactly proportionate increase in dividends to the increase in capital, I would ask him to consider this. Capital is increasing far more rapidly than national income, at about 10 per cent. a year according to his own figures. If that is the case, in comparison with a rise in the national income of, say, 11 per cent. a year, what he really says is that the distribution of income, on his own assumption, is bound to become more and more unequal and that the return to capital will get larger and larger in comparison with the return to labour.

There is a final point that I would put to him. If he really presses that argument, what will he say to the trade unions when they say, "We are in a difficulty if you urge restraint upon us. If we forgo a wage increase now, we forgo it for good, but you have arranged that the shareholders only forgo it for the time being, because they are going to get their increased dividend a little later because of the money put to reserve. The capital is increased, and then they get their increased dividends on the capital." It is impossible to pursuade the workers to accept restraint on that proposition. I hope very much that we shall not have any more of it from the hon. Gentleman this afternoon.

I beg the hon. Gentleman also to consider this point. The situation, as we must surely all be aware, is creating increasing difficulties for the responsible leaders in the trade union movement. It is not their fault that they have to deal with this situation. Fundamentally, it is the Government's fault for having allowed the whole situation affecting dividends to get out of hand.

We all know, of course, that the people who have suffered most in this period are those with the small fixed incomes, and we know that the biggest group are those who are dependent upon National Insurance and similar benefits. We shall be discussing the Government's proposals in this respect tomorrow, but I should just like to say now that every shred of an excuse for not raising the pensions and the other benefits earlier has completely disappeared. The fact that the Government have acted before the Phillips Report could be seen and immediately after the Government Actuary's Report shows that it was a completely bogus excuse which should never have been put forward.

The Minister of Defence, in winding up a recent debate on pensions, made great play with something that I said during my Budget speech in 1951. He said that we then found £39 million for the increases in pensions and he poured scorn upon us. He said, "That is all they could afford," and he kept on repeating it as though it was an enormously impressive argument. I agree that at that time I thought it was all we could afford, because in one year we had an immense increase in defence expenditure to meet, but at least we can say that when we had to offset the increased expenditure on pensions and other benefits as a result of the measures of 1951, we found the money entirely out of general taxation.

What do we have now? We have a scheme costing altogether about £134 million, of which the Government are paying £25 million. Indeed, if we exclude the £15 million for war pensions, and if we are talking about National Insurance and National Assistance only, the Government are paying only £10 million and the contributors themselves are finding £100 million.

We are entitled to ask the Government "Is that all they can afford?" Is that all they can afford this year when the defence bill seems far more likely to be down than up, when the Chancellor has told us, in the interview to which I referred, that our external burdens are much smaller and when he holds out hopes of a rapid increase in income? I will tell the hon. Gentleman what I think, and that is that the Government's proposals are a deliberate attempt to keep down to the bare minimum what the Exchequer has to pay to pave the way far a General Election Budget. The Amendment

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

I dislike very much having to interrupt the right hon. Gentleman, but I am sure he will be aware of our rule not to anticipate the debate on a Bill. I hope that what he has said will not tempt other hon. Members to anticipate tomorrow's discussion.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

I am very sorry, Mr. Speaker. I was concerned to reply to something which the Minister of Defence said in an earlier debate. Otherwise, I should not have mentioned the subject.

Photo of Mr Charles Pannell Mr Charles Pannell , Leeds West

On a point of order, Mr. Speaker. Does not the Queen's Speech mention a Bill? We are debating the Queen's Speech today.

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

That is true, but the right hon. Member for Leeds, South (Mr. Gaitskell) was proposing an Amendment to the Address.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

I had finished what I proposed to say on that subject, Mr. Speaker. In the Amendment

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

Might I add to what I have said, for the sake of clarity, that once a Bill has been introduced, as has hap- pened in this instance, hon. Members cannot debate it even on the Queen's Speech. The House cannot debate it until the Bill itself is before it.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

In our Amendment we speak of the Government's complacency about social injustice. We make no apology for that. To protest against social injustice, to try to diminish it and to hope to abolish it has always been the deepest inspiration of the Labour Party. The central feature of social injustice is social inequality, indefensible differences between groups and persons, differences of status, income and class which still disfigure our society. We know that over the years these differences have diminished, and we are proud that the Labour Party has played such a leading role in helping to diminish them.

We do not in the least regret it that the force of public opinion to some extent restrains hon. Members opposite, because we have roused that public opinion. But we also know that very much remains to be done. Wealth is still concentrated in far too few hands. The latest figures still show that 1 per cent. of the population owns half the wealth in the country. Great capital gains still accumulate day after day and week after week, not in the hands of the community but in the hands of private individuals. [HON. MEMBERS: "Football pools."] The Stock Exchange is very much better as a method of capital accumulation, but the difference is that it is limited to those who can afford to own shares.

No one can say that we have yet achieved an educational system which gives every child equal opportunity. We realise, of course, that in our democratic society we can advance only slowly towards our Socialist ideals. But we do wish to advance, and in the last three years there has been a retreat. Inequality has increased again. The shares have become less, not more, equal. This is the logic of a return to a free-for-all economy and Tory fiscal policy.

It is against these things that we make our protest in our Amendment. We oppose them as we oppose the Government which carries them out, because in our view they are against the true interests of the nation and contrary to the ideals in which we believe.

4.31 p.m.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I appear here this afternoon as a substitute for the Chancellor of the Exchequer, in sad circumstances. I believe that the House as a whole is already aware that Mrs. Butler has been seriously ill for some time. Now she has become critically ill and, in those circumstances, my right hon. Friend is not able to be here. I know that he will be grateful to the right hon. Member for Leeds, South (Mr. Gaitskell) for his comments this afternoon.

Until a very late hour yesterday the Chancellor had intended to speak today, and he had, therefore, prepared his speech. I am sure that, in these circumstances, the House will forgive me if I follow the prepared text a little more closely than usual, although I will permit myself a few comments on the speech of the right hon. Member for Leeds, South, and on the Amendment. The right hon. Member made a vigorous and effective party speech. I thought he made the very best of a bad job, at which he is getting quite adept.

The Amendment with which we are dealing is fairly specific and contains a number of criticisms of Her Majesty's present Government. It starts by accusing us of complacency. That comes a little odd from some right hon. Members opposite, particularly the right hon. Member for Lewisham, South (Mr. H. Morrison) who, I believe, will wind up the debate for the Opposition today. In 1950, that right hon. Member said: We are rounding recovery corner. In 1946, he said: We have turned our back on economic scarcity …

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham South

Where does the hon. Gentleman think this Government would have been now if it were not for the work of the Labour Government, compared with the mess up after the First World War?

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I was just reflecting that the corner we were rounding in 1950 led to the economic crisis of 1951. In 1946, the right hon. Member also said: We are determined that we are not going to be caught unawares by blind economic forces … Yet the burden of the speech of the right hon. Member for Leeds, South was that the crises which the former Government had to face in 1947 and 1951 were not their fault, but should be attributed to "blind economic forces," like world prices. I do not think that the accusation of complacency is necessarily one-sided. Then we are told in the Amendment that we are complacent about the continued existence of social injustice. I am not quite sure what is meant by the word "continued." I would have expected that we would be accused of creating social injustice, but I have not heard any evidence of that in the speech of the right hon. Member nor seen it in the Amendment.

When we come to the economic part of the Amendment we find that it is said that by abandoning nationalisation controls and State interference generally we have been failing to check inflation, have been allowing consumers to be exploited and failed to encourage economic expansion. I cannot think of a more adequate description of the opposite of the truth. There is no mention in the Amendment of the international financial situation which we encountered when we took up office, although there was some mention of it in the speech of the right hon. Member.

He was comparing 1954 with 1951, which is a very interesting comparison, but what matters is what happened during the year 1951, because, by the latter half of that year, when we took up office, our reserves were running out at the rate of 10 million dollars a day—faster than they had ever run out before. That was the situation we inherited, a situation of imminent crisis in external affairs and, incidentally, of developing depression in the textile industries of the world.

The right hon. Member still argues—I am rather surprised that he should—that the change in the balance of payments is solely due to the change in import prices.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I agree that export prices have not changed much. Does the right hon. Member still think that our policy has no effect on import prices? If he thinks that he cannot understand the position of the United Kingdom as the world's biggest purchaser outside the dollar area. Our policy on the international wheat agreement, our policy of imposing restrictions which should have been imposed by the right hon. Member before the General Election—all these policies contributed to the change in the terms of trade, from which, I agree, we have largely benefited.

Photo of Mr Richard Acland Mr Richard Acland , Gravesend

Does the hon. Gentleman mean that this Government are responsible for creating changes in the terms of trade which create great difficulties for many countries, much poorer than ours, which depend on sterling prices?

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I was merely trying to argue that the prices we pay for our imports are not entirely without relation to the policy we adopt as a country, and I think that that is not unfair.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

What does, "not entirely without relation to" mean?

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I think the hon. Member is astute enough to work that out for himself.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I would rather the hon. Gentleman told us.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

Before the hon. Gentleman leaves the point about the responsibility of the Government for lower import prices, would he not concede that the commodity that fell most between 1951 and 1953 was wool, and that the price fall had already begun before the present Government came into power? So far from that being a changeover from public to private purchase, it had been in private hands since 1946.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I was saying that the textile crisis had been apparent in 1951.

To turn to the internal economic situation, we are accused on a number of points. We are told that we have not been encouraging economic expansion, but what, in fact, has taken place? In the first 10 months of this year production was between 5 per cent. and 6 per cent. up on the previous year. The right hon. Member for Leeds, South does not seem to think much of that. He seems to think that we should always have an increase of production year by year. That was exactly the trouble with the policy of his Government. It is not good enough for a country like ours, depending on world trade, to produce something; we must produce the right things and must sell them.

The trouble in 1945 to 1951 was that, although production was always rising, our balance of payments did not necessarily benefit therefrom. Now we are getting increased production and an improvement in the balance of payments. In the first six months of this year engineering output was 6½ per cent. up on last year. In eight months paper and printing was up 19 per cent. Vehicles were up 13 per cent. Those are all examples of the considerable increase which has been achieved in production.

Exports in the first half of the year were 9 per cent. up on last year. Employment is at record levels; the latest figure gives 22,600,000 employed. I would have thought that that was economic expansion—record figures of production, employment and productivity. What more evidence do hon. Members opposite want? Surely those are examples of economic expansion. How can they say that we have failed to encourage economic expansion?

I turn to the position of the consumer. We are told by the Amendment that we have failed to protect consumers, but consumption, like production, is at record levels. Between 1952 and 1953 consumption in Britain measured over the whole range of goods and services rose by 4 per cent. In 1954, this rise has continued and in the first half of the year food consumption was up by 3·8 per cent. and clothing consumption by 4·7 per cent. I do not see much evidence in those figures of failure to protect the consumer. I am not surprised that the right hon. Member for Ebbw Vale (Mr. Bevan), I gather, complained recently in his weekly publication that it was a little difficult to awaken any revolutionary urge among the electors of West Derby.

Then we come to the question of homes, which, after all, is a form of consumption. In the first 10 months of this year, 287,000 permanent houses were completed, which is an increase of 12½ per cent. above last year's corresponding figure. Of these, 73,000 were completed by private enterprise, which, I think, is an extremely good thing for the social and economic health of the country. The right hon. Gentleman said something about the level of council house building which is permitted. I should like to make a comparison with the level that was achieved under his own Government. Deducting the number of houses built by private enterprise, my calculation is that in the first 10 months this year, 210,000 permanent houses were built not by private enterprise, which is 10 per cent. more than the target of 200,000 houses which the party opposite accepted in 1951 as being the optimum at which they could aim.

The party opposite seems to me to be in a little difficulty about the housing target. When we originally mentioned our figure of 300,000 houses, first of all hon. Members opposite said that it could not be done. When we started to do it, they said that it should not be done because it interfered with factories and schools. When we proved that that was nonsense, they said that they would have done it themselves anyway.

The next complaint is that we are failing to check inflation. That is a remarkable case of Satan rebuking sin. I do not see the right hon. Member for Bishop Auckland (Mr. Dalton) in the House. He, after all, was the most efficient exponent of the policy, which is a recognised and acceptable enough policy, that a steady and persistent monetary inflation should be kept in check by physical controls. That was the policy of right hon. Gentlemen opposite, as a result of which the value of the £ fell during their period of Government from 20s. to 14s. 2d. and we had a series of crises in our balance of payments. Surely, if we have learnt one lesson in the years since the war, we have learnt that with a domestic monetary inflation there will inevitably be a crisis on the balance of payments also. The two cannot be kept in entirely separate compartments.

My right hon. Friend's object in raising the Bank rate and taking his other measures to restrict credit was to deal with the internal inflationary situation and thereby, at the same time, to put right the balance of payments situation, to restore the monetary reserves, and to restore the proper international value of sterling. His policy was dramatically and completely justified by the facts of 1951 and 1952.

Since then, we have been re-expanding our production and now have reached record levels of output and of employment; but we have reached them on a sound financial basis. We have been able to combine a vigorous flat-out expansion of our economy with the continuing international strength of sterling and a continuing satisfactory position on our balance of payments.

I know that there are people at present who say that there is a danger of inflation, and the hon. Member for Stechford (Mr. Roy Jenkins) referred to it in his Question this afternoon. Of course, there is a danger of inflation. Any country pursuing a policy of full employment and economic expansion faces a constant danger of inflation. But that is exactly why the Government exists. Their purpose is to make sure that that danger of inflation does not transmute itself into a reality of inflation.

After all, when driving a motor car along a road, there is always a danger of collision with a telegraph post or something else if the driver does not steer straight, but that is not an argument for not driving down the road. It emphasises the need for keeping an eye on the road. Therefore, we should not be frightened by prosperity. Let us beware of the people who say that because things are going well the success cannot endure. That is not the basis on which we can build and expand our economic policy.

The next accusation was that of social injustice, on which I should like to make one or two comments. In the last year of office of the Labour Government real wages were moving downwards; that is a point which we should remember. Since October, 1951, wages have risen by 17 per cent. and earnings by 20 per cent. Prices have risen by 11½ per cent. If my calculations are correct, the effect of that is that real earnings have gone up by 81 per cent., or about 1s. 8d. in the £. That is in contrast with a declining curve of real earnings during the last year of the Labour Government. And these calculations do not take into account the tax reductions which we have been able to put into force nor the increases in family allowances.

Now, I come to the question of dividends, on which the right hon. Gentleman addressed some serious remarks and comments.

Photo of Mr Ivor Thomas Mr Ivor Thomas , The Wrekin

Will the hon. Gentleman give way?

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I am sorry, I have given way too often.

Hon. Members:

Order.

Photo of Sir Rhys Morris Sir Rhys Morris , Carmarthen

If the Economic Secretary does not give way, the hon. Member must resume his seat.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I was hoping to come to the subject of dividends, on which I am not the least afraid.

A good deal has been said about the increase in dividends in 1954 compared with 1953. I was interested in the right hon. Gentleman's remarks about the calculation of dividends as a percentage of capital employed. I agree that it is an interesting problem, which we could argue at length, but in considering the level of dividends it is just as relevant to take account of the amount of capital employed as it is in considering the level of wages to take into account the number of people employed.

Dividends are a return on capital, as wages are the reward for labour. [Interruption.] Hon. Members opposite do not appear to like this argument, possibly because it is not convenient, but it is accurate. Taking into account the return on capital employed, and comparing 1953 with 1954, the gross return has risen from 5·2 to 5·9 per cent. and the net return from 2·8 to 3·2 per cent. That, I agree, is a substantial rise; I am not in any way denying it. But it is not as dramatic, exciting or melodramatic a rise as is sometimes suggested by hon. Members opposite in their speeches. We must look at these figures in that background. It is misleading to take short-term movements without considering the long-term background into which they must be fitted.

By comparing 1953 with 1938, one finds that dividends have risen by 50 per cent., prices have doubled, and wages have trebled. That is a quite important consideration. I do not suggest that anyone wants to put back the clock to 1938, but when regarding a short movement over a period of a few months it is not sensible to disregard a big movement over a period of 15 years.

The right hon. Gentleman referred to the policy, introduced by Sir Stafford Cripps, of the voluntary restraint on personal incomes. It is interesting that the figures since that was introduced show that wages have risen by 39 per cent. and dividends and interest of companies have risen by 37 per cent. Therefore, it does not seem to me that the two sides have been getting very much out of line since that time.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

Up to now, yes.

In trying to calculate the actual effect of these movements in dividends and wages upon the economy, and in the light of the argument as to the share of increased production which goes to various recipients within the economy, the best calculation I can make—I agree that it is subject to a margin of error—is that this year gross dividends are unlikely to rise by more than £100 million, whereas wages and salaries are likely to rise by £600 million. That is an interesting measure of the difference within the economy and is an answer to the argument, which I see in some newspapers, that all the benefit of the great increase in production has gone to the terrible shareholders.

But we must look at the problem of dividends in the light of the requirements of an economy that is, and will remain, predominantly a private enterprise economy. There are two sources for the expansion of our industry. There is the ploughing back of profits within a company, and there is the raising of new money on the market by new or existing ventures. I am quite certain of this, that firms cannot engage in healthy development without the provision of fresh capital for industrial expansion. It cannot be confined solely to the ploughing back of the profits of existing companies. We must ensure a proper, healthy flow of new capital from private investors for new ventures and new expansions, and we cannot do that unless the investors can expect a reasonable return upon the capital they invest.

Therefore, in the long-term interests of the country I am quite sure that it is desirable not only on the one hand that reasonable restraint should be exercised in the distribution of dividends, as it is in all other personal incomes, but that, on the other hand, the person who invests his own capital in a risky venture should be able to expect a reasonable return on the capital he invests.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I shall have a word to say on steel a little later. Indeed, I will mention it now, as the hon. and learned Gentleman has mentioned it.

It seemed to me that the right hon. Gentleman the Member for Leeds, South was of the opinion that by nationalisation we eliminated not only the private shareholder but all the risks of commercial operation, which is far from being the truth. All we do is to transfer the risk from the shareholder to the taxpayer. The Amendment refers to the abandonment of public enterprise as though it were a protection to the consumer. From the letters I have received from my constituents about the price of coal and the price of transport, I must say that I do not think that they share the view that nationalisation was a very good protection for the consumer.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I do not find that electricity is any cheaper than it was a few years ago.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham South

The hon. Gentleman must not rely too much on the Tory Central Office.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

The Central Office, at least, is usually accurate.

To sum up, the argument I have been trying to deploy in reply to the Amendment is this, that we have, since we were elected, dealt with the balance of payments crisis which was bequeathed to us, and that we have restored the international value of the £; we have dealt with the legacy of inflation which was handed over to us; we are achieving a record level of output and productivity on a sound financial basis; and we have been able to achieve great social advances both in house building and now in pensions. In the light of these facts this Amendment makes absolutely no sense-whatever.

I should like to turn to some of the difficulties that we are still facing, because although we have made a great deal of progress we should be falling into precisely the error of which the Opposition accuse us if we should become complacent about the prospects this country is facing. The balance of payments has been recently encouraging; the achievements of British industry have been encouraging; but there is, no doubt, a tendency for imports to rise rather faster than exports. The great expansion of our industrial activity is calling for a very large expansion in the imports of raw materials, which cannot be avoided, and imports of coal, which, perhaps, we ought to hope to avoid. I must say it is disappointing that we cannot get the increase of coal output to keep pace with the marked increase in the rate of industrial production.

Let us look at some of the figures. In 1953, the United Kingdom had a surplus on current account of £211 million. In the first half of this year it was £178 million; that is, an annual rate of £350 million, which, I should say, was an extremely healthy figure. In the second half of this year it will probably not reach quite that level, partly because imports are rising, as I have been explaining, and partly because of the effect of the wet weather on the grain requirements of this country and also on the grain requirements of Europe, which tend to bear on our own balance of payments. Nevertheless, we are achieving a very substantial surplus in our balance of payments.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading South

Since the hon. Gentleman is claiming credit for the Government for the improvement of our balance of payments position, may I ask how he accounts for the fact that since 1953 the improvement in the reserve position of sterling is less great proportionately than the corresponding improvement in the reserve position of the currencies of almost all other Western European countries?

Photo of Mr Ivor Thomas Mr Ivor Thomas , The Wrekin

On a point of order, Mr. Deputy-Speaker. Would it be possible for the Minister to explain to your satisfaction and to hon. Members generally why, on this occasion, he has chosen to give way—[HON. MEMBERS: "Oh."]—despite the fact that he did not give way just now to me?

Photo of Sir Rhys Morris Sir Rhys Morris , Carmarthen

That is not a point of order.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I like to give way as much as possible if I can do so without breaking up the sequence of an argument, which is probably not to the advantage of anyone.

I think that if the hon. Member for Reading. South (Mr. Mikardo) will study the answer I gave a little while ago on the comparative figures for the reserves of this country and of Western Europe he will find that the facts on which his intervention was based are far from being accurate. The United Kingdom's balance on current account is healthy, though it is true that on non-sterling account it is showing a definite tendency to decline. That, of course, is largely associated with the reduction in aid from the United States, which we expected to see, and which in many ways is inevitable and natural.

Turning to the sterling area as a whole, whose trading experience, of course, has an effect on our own reserve position, we see that those other countries are also finding that their imports are tending to increase, whereas on the other hand the exports of the rest of the sterling area are not showing the same buoyancy as the exports of the United Kingdom, particularly wool and cocoa, which are very important products in commanding good prices and returns in world markets. Therefore, we have a tendency which we must watch very carefully because it bears very particularly on our reserves.

The position of our reserves is as follows. In 1953 they increased by £240 million. In the first half of this year they increased by £179 million. In the third quarter of this year there was a decline in our reserves of £42 million, but that was more than accounted for by repayment of debt to the International Monetary Fund and the European Payments Union of £75 million.

So we can see that over the last year the capital position of the United Kingdom has shown a very substantial improvement and very substantial strength. So far as the future is concerned, I think it is fair and right to say that, our reserves having substantially improved, the prospects are still very good for their steady advance.

I would now say a word about the question of Government expenditure and its effect on the internal economy. Defence expenditure is very heavy. We have absorbed by now a doubling of the level of defence costs, but, as the House will have observed from recent speeches by the Prime Minister and the Minister of Defence, we are striving to get defence expenditure on a plateau and, if possible, on declining folds on the plateau.

Agriculture is another big item of expenditure. I could not quite follow the right hon. Gentleman the Member for Leeds, South when he seemed to think there was no guarantee of any kind to the farmers. I found it difficult because on other occasions he has criticised us very severely because of the cost of such guarantees, and so I found him inconsistent. The fact is that, in the case of most commodities, the estimates we made of the cost of our system of guarantees to agriculture are working out as we expected. The cost in respect of pigs is more than was expected.

Although expenditure on single items has increased, the Revenue itself, and the expansion of our economy, is very buoyant. If one wants evidence of the rate of expansion of our economy I suggest one looks at the regular Exchequer returns, which show the buoyancy of the Revenue arising from the buoyancy and the expansion of the economy and show that the Revenue position is very favourable, and has been even during the last year. It is because, despite these burdens, our position is more favourable that we have been able to undertake the new burdens in the shape of pensions and in the rate of expenditure on roads.

I would, I gather, be out of order if I went into detail into the question of the expenditure on pensions, for my hon. Friend the Financial Secretary will, I understand, be dealing with that in the course of a debate later in the week. It is relevant to point out, however, that these increases will benefit seven to eight million people, and that they will restore the purchasing power of the benefits at least to the level which they reached in 1946—not 1951.

I turn, now, to the question of roads. Everyone agrees that it is necessary to increase the rate of expansion of our road system, and I see present today my hon. Friend the Member for Bristol, North-West (Sir G. Braithwaite), who has been active in urging that upon the Govern- ment; but I think it is possible to exaggerate the short-term effect of an expanded road programme upon the Exchequer, because it takes a long time to get a road programme working fully.

The plans have to be worked out and discussed with local authorities, and land has to be acquired, before expenditure reaches a high level. I do not think that the financial burden of our new and forward-looking programme will be very serious in the first year or two, but no doubt as the programme develops, its impact on the Budget will be heavier, and we may then have to review our methods of financing expenditure on roads.

Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Bristol North West

Could my hon. Friend indicate when it is expected that we shall reach the plateau of road expenditure?

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I think I should leave it to my right hon. Friend the Minister of Transport to deal with the character of the road programme. All I was saying was that it takes some years to build it to its maximum rate and if, when it has been built to its maximum rate, it creates a Budgetary problem, we may have to review the method of financing the road expenditure of this country.

Generally speaking, the picture of Government revenue and expenditure is one which should encourage us not to indulge in complacency but certainly to feel a measure of confidence. It is interesting—and hon. Members may have observed that this has just been announced—that in the conversion offer of Exchequer stock maturing next February, out of £734 million worth, no less than £650 million worth has been converted. That is very good evidence of the confidence still felt in the Government, and of the level of the Government's credit.

I come to the question of the policy which we must follow in order to continue the progress which we have been achieving in the expansion of our economy, while maintaining financial soundness, both external and internal. Surely the two things on which we must concentrate are investment and freedom.

The right hon. Gentleman does not seem to like freedom. He dislikes any control for control's sake, but I was not quite sure from what he said which controls he regards as necessary and which as unnecessary. He talked about con- trols over building and controls over imports. Does he consider it necessary to maintain permanently in this country a system of building licensing control and a system of import licensing control? If not, he must be clear in what he means to say.

The right hon. Gentleman talked about our desire to get away from quantitative restrictions and quotas. Of course we want to get away from them, and so does he, for all of us are bound by our international obligations, including G.A.T.T., particularly, but also including many other international obligations to which right hon. Gentlemen opposite, rightly, placed their signatures. It is not good enough for those who have supported a policy of getting away from quantitative restrictions to say, now, that we are reckless and foolish in trying to get away from them, and in trying to get back to a less restrictive system of international trade.

I will say a word about investment. In his recent financial policies, my right hon. Friend has aimed at increasing the level of investment in this country. It is difficult to get exact statistics of comparative levels of investment between different countries, because a basis of comparison is not always easy to find, but we can agree that, compared with our competitors of America and Germany, in particular, we must, if we are to be happy about our economic development, increase the rate of investment in our factories, in our machine tools, and in equipment, generally, for production. That is what my right hon. Friend has been aiming at in his recent policy, and those policies are now beginning to show results.

In the first half of 1954—and I think these figures will interest the House—14·8 million square feet of factory building was approved, compared with 8·3 million in the same period last year. That is a very big increase indeed—from 8 million to 14 million—and it is the first concrete evidence of significant improvement in the investment situation arising from my right hon. Friend's policy.

After all, these things take a little time. One does not expect to get an immediate result, in the form of factories shooting up all over the place, because of the financial measures one adopts. It takes time for companies and businesses to work out their plans. Here, however, is concrete evidence of a substantial 'increase in the desire and in plans to increase factory building. This goes together with definite signs of a healthy improvement in the rate of new orders to the machine tool industry for machine tools to put into those factories. On the physical side of investment, we are beginning to get results from my right hon. Friend's deliberate policies.

Of course, apart from the physical side of investment there is the human side. Just as it could be argued that we are falling behind competitors in the level of physical investment, so it could be argued that we are falling behind what should be our target in the level of investment in engineering and technical skill in this country; and I want to make some comments about technical education. My right hon. Friend, who is sorry that he cannot be here, has been giving special attention to that problem, and there were a number of developments, as a result of the studies which he has been making, about which he wished to inform the House. I hope the House will bear with me if I tell them what the position is.

My right hon. Friend has been giving particular study to the question of technical education, and he has very much valued the far-sighted advice which he has received from the University Grants Committee and their Technological Sub-Committee. His plans provide for the massive expansion of the Imperial College, South Kensington. They also provide for major development at Glasgow, Manchester, Leeds and Birmingham—as announced in July—and they include developments on a fairly large scale at Cambridge and Sheffield, and specialised developments at other centres in the country, including, as Welsh Members have asked, the Principality.

Some are financed by industry and some by Treasury grant. The more notable are at Edinburgh, Newcastle, Southampton, Nottingham, and Swansea. We are trying to steer an effective middle course between excessive centralisation and undue dispersal of our efforts, and we are concentrating on those institutions which are already receiving Treasury grants.

In the Government's view, higher technological education must be closely linked with other university studies. We must make sure that those studying technology will work closely with those who are occupied with the more fundamental problems of science, and with its application in other fields. I think it is increasingly realised on the Continent, in America, and in this country that men who are to hold positions of the highest responsibility in industry need a broader education than could be given in institutions devoted entirely to technology, or even to science.

The problems of industry are human problems—problems of human relations—as well as problems of science, and in training for industry the humanities, in our opinion, have an important pant to play. We felt that where a technological institution and a university were at the same place and associated together, as in London and Glasgow, this linking of studies could be achieved, but that if new universities were to be established in other centres by upgrading technical colleges, it would be necessary to provide these new universities, in addition, with departments of pure science and the arts, which is a burden in terms of teachers, buildings, and money which we could not afford.

The Government consider that we should make the best progress by building on what is already there, and by linking the technological development with existing university institutions, rather than by starting entirely new technological institutions. We also seek a close association between the universities and industry in this field, and I think we should particularly stress that.

My right hon. Friend has been encouraged to hear recently of the founding of new chairs in technological subjects, with funds raised from industry, in the universities of Durham, Edinburgh, Nottingham and Wales, and in many other forms industry gives valuable financial support. The universities, for their part, for example, by designing post-graduate courses, and by asking industry to help with instruction, are becoming more quickly responsive to industrial needs to meet particular local requirements of industry.

Perhaps I may give some financial figures. First let me mention recurrent expenditure—teaching staffs, laboratory running costs, and so on. About one- eighth of the total recurrent grants to the universities are used for technology, and that is about £3 million a year. We are now making additional recurrent grants for technology of £196,000 for the academic year which has just begun, £404,000 for the next year, and £704,000 for the academic year 1956–57. In the next two years, there will thus be a growth of recurrent expenditure of about 25 per cent. in special extra grants alone, in addition, of course, to the extra cost of salaries which was announced last month.

For building and equipment, the capital expenditure and liabilities against public funds which have already been incurred in recent years—again on a very narrow definition of technology, excluding all pure science—amount to about £10 million, including the work now in progress at Imperial College, at the Royal Technical College at Glasgow, and the Manchester College of Technology. That includes a number of projects which were authorised last July.

My right hon. Friend has just authorised further buildings of £1 million, in addition to the normal university building programme to be started in the financial year 1955–56, and he will be prepared to consider, for starts in the following year, other technological projects included in the University Grants Committee's plans for development, beginning in the quinquennium. Finally, in regard to the Imperial College, I am circulating a written answer in today's OFFICIAL REPORT to describe the progress we are making.

The total capital cost of this project over a period of 10 years or more may well be about £15 million. Certainly the universities are getting ahead very fast with the expansion of higher technological education, and the figures show that very substantial resources are being devoted to this work. While this investment cannot give quick results, I am sure the House will recognise that, just as much as investment in plant and machinery, it is a really valuable investment for the future prosperity of this country, and for the development of its industry.

I was saying that the things on which we must concentrate are investment and freedom, and I should like to say one word about the question of world trade and our international trading policy. I

believe this country depends fundamentally upon the expansion of world trade, the reduction of barriers, and the freer movement of trade payments. We need the things we import a great deal more than many of our customers need the things we export.

We import essential foodstuffs and raw materials. Many of the things which we export are essential, but many of them, while they are not luxuries, are amenities of life. So, when the total volume of world trade falls, the weight of that fall descends more heavily on us than it does upon our customers, who can at a pinch do without many of the things which we have to sell. For that fundamental reason our policy must be to expand the volume of world trade, and to remove the barriers that still get in the way of trade and of international payment.

We have tried to proceed steadily along that road of the removal of barriers, particularly licensing restrictions and import restrictions—restrictions which the right hon. Gentleman seems to gather close to his heart. We have deliberately been trying to get away from them because we believe that is the right policy. We have been doing it as fast as we are permitted by the strength of our reserves and economy; as fast as we are permitted by the development of our technical and organisational plans, particularly in Europe; and as fast as we are permitted by the prospects of a dependable balance between the dollar and sterling areas.

The Government feel it would be wrong to go the whole way to freedom and convertibility unless we can see a balanced trade between the dollar area and the rest of the world, based on factors which are not transient, like aid, but are of a permanent nature. Aid to this country has been dwindling, and has become a very minor factor. I understand that the United States Administration are turning their thoughts to a substantial degree to South-East Asia. I am sure the whole House will welcome that as an imaginative and forward-looking step, but we must recognise that so far as we are concerned aid is now a minimal factor, and I am glad that it is.

If we are to pursue this policy of freeing trade and removing restrictions, we must have the means of earning dollars to finance the things we want to buy when restrictions are removed. That depends partly on our own efforts and efficiency, and also on the policy of our friends and allies in giving us the opportunity to earn the dollars that we must acquire.

We are encouraged by the policy statements of the President of the United States who on more than one occasion has clearly declared his interest in, and adherence to, these forward-looking international policies. We certainly intend to proceed along those lines of removing the barriers on trade and payment and increasing the total volume of world trade so far as our resources, position, and prospects of world payment permit us to proceed. I have transgressed too long on the time of the House.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

Before the hon. Gentleman leaves that question of trade, there are a number of points which have been raised, both in the speech of my right hon. Friend the Member for Leeds, South (Mr. Gaitskell), and also by others of my hon. Friends during the course of this debate on the Address, to which we hoped there might be some answers. We understand the hon. Gentleman's difficulties this afternoon, but the President of the Board of Trade did not speak the other day, and we had hoped to get replies this evening. I am not going to press the hon. Gentleman for information about the distribution of industry policy, something about which we have asked many questions, or building licences, and so on, but we should like answers to some of the questions we put about the removing of restrictions on world trade. We hope that the hon. Gentleman will say something about the questions put to his right hon. Friend the President of the Board of Trade last Wednesday night on the subject of East-West trade and trade with China.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

I have been endeavouring to deal, in the first place, with the Amendment on the Order Paper, and I have strayed a little on these questions of trade and quota restrictions, partly in line with what the right hon. Gentleman has said. I do not think there is much doubt about the position of the Government on the subject of East-West trade. We believe in the expansion of that trade in peaceful goods, and I do not think there is anything more I can usefully add on that subject.

I have endeavoured to deal with the Amendment. As I have said, it accuses us of complacency—a strange accusation. It accuses us of failing to do all these things by way of public interference in private business, which, under the previous Administration, nearly brought this country to the edge of ruin. If that is the accusation I do not think it is a very damaging one. We are also accused of social injustice, but I think we can take courage from the voice of the electors. If we look back over this century, we find it is unprecedented for a Government to hold their position between Elections, let alone improve it. The party opposite have been saying how well they did between 1945 and 1950. They did do well, but we have done a great deal better. Not only have we held our position, but what is unprecedented, we have improved our position, and the latest results have tended to show that that improvement is continuing.

On the general issue I have done my best to show why I do not think that this Amendment should be accepted. As to the general sentiment of the country on the matter of social injustice, and the performance of our respective Administrations, I am quite content to accept the verdict so recently expressed by those who have the best cause to express their feelings.

5.19 p.m.

Photo of Miss Peggy Herbison Miss Peggy Herbison , Lanarkshire North

I am very surprised indeed at the speech which we have just heard from the Economic Secretary to the Treasury. I was not at all surprised at the statement of the Foreign Secretary, since in my nine years in this House it is the first time that I have heard the right hon. Gentleman speak on domestic matters, But for the Economic Secretary to make the claim that the present Government, in the past three years, have brought this country from the verge of ruin, was just nonsense, and no one knows it better than the hon. Gentleman himself.

The Foreign Secretary said that perhaps he could speak with less responsibility when he was speaking on domestic matters than when he was dealing with his own Department. After having listened to his speech on domestic matters, I feel that it was not just a case of irresponsibility, but a case of gross ignorance. As for the final words of the Economic Secretary to the Treasury, I cannot say that it was a case of gross ignorance, for he knows the facts. It was a case of trying to get over to the country Tory propaganda with very little truth behind it.

I want to deal with the two statements: first, the Foreign Secretary's statement that the Government had been engaged on what was mainly a salvage operation, and secondly, the Economic Secretary's statement that the Government have brought us from the verge of ruin. If either Minister had been describing the position of the country in 1945 both statements would have been apposite. But when applied to the country in 1951 both statements are completely irrelevant to the situation as it was when the party opposite took office.

Every hon. Member opposite who thinks at all and tries to be honest in these matters knows perfectly well that the position which we found in 1945 was a much more difficult and serious position economically and financially than was the position of the country in 1951.

Photo of Lieut-Colonel Sir Thomas Moore Lieut-Colonel Sir Thomas Moore , Ayr

If the economic Utopia which the hon. Lady and her hon. Friends describe existed in 1951, I wonder why they ran away from it. Was it to seek shelter from the gathering storm?

Photo of Miss Peggy Herbison Miss Peggy Herbison , Lanarkshire North

The hon. Member's interjection is one that I would expect from him.

Photo of Lieut-Colonel Sir Thomas Moore Lieut-Colonel Sir Thomas Moore , Ayr

The hon. Lady should answer it.

Photo of Dr Hyacinth Morgan Dr Hyacinth Morgan , Warrington

There is nothing to answer.

Photo of Miss Peggy Herbison Miss Peggy Herbison , Lanarkshire North

The hon. Member for Ayr (Sir T. Moore) demands an answer. He will get it. The hon. Member talked about the situation being as wonderful as we said it was, but the Labour Government never went to the country and said that we were prosperous and that things were easy or would be easy. We put to the country the facts of the situation. We who are now on these benches were never afraid to say to our people exactly what was the position, and during the 1951 General Election my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) made a clear statement on the financial and economic situation. In no way at any time during the period when we were in office did we ever try to hide from the people the economic and financial facts.

The hon. Member asked why we ran away. We did not run away at all. We went to the people to give them the chance of deciding whether or not they wanted the policies which we felt were essential.

Photo of Miss Peggy Herbison Miss Peggy Herbison , Lanarkshire North

More people voted for the policies which we put to the country than voted for the policies put forward by the Tory Party. Not only did more people vote for us, but many people voted for the Tory Party because of the propaganda which they put over and the fulsome promises which they made. It cannot be refuted that in that propaganda there were two distinct sets of promises. I am glad that the majority of the people realised that if the present Government carried out one of those sets of promises it was inevitable that they should break the other set. That is exactly what has happened in the last three years.

In 1945, 4,683,000 of our men were in uniform and our industries were devoted to wartime production. There were shortages of almost all materials and, in addition, there was much war damage to industry and houses. There were shortages of manpower. That was the serious position which we had to face in 1945. The Tories now claim at by-elections and in their propaganda generally that they have created prosperity for the country in the last three years. The claim was made again today by the Economic Secretary. He has claimed that the country has an outstanding record in production and exports. The party opposite calls it an all-time record.

Even if production had been increased by only ½ per cent. the party opposite could still claim that we had an all-time record, because when we on this side of the House left office in 1951 both production and exports were at an all-time record. Therefore, merely to say now that we have an all-time record does not mean anything. When we were in office we had an average increase in industrial production of 6 per cent. The present Government can claim an increase of only 3 per cent. It is not much to boast about, yet the Economic Secretary, who knows better, did a great deal of boasting about it.

Even when he was dealing with the balance of payments position the Economic Secretary tried to make some case that the policies of this country had had an effect on import prices. It was almost a bald statement. He was able to give no detail of the policy of the present Government which had had an effect on import prices while in terms of trade the Government were benefiting to the tune of £500 million.

Another claim which has been made during the debates on the Address in reply to the Gracious Speech is that more people are working. It is true that more are working today than were working in 1951, but, just as we have more working, we have more unemployed today than were unemployed in 1951. I quote from the Government's own figures. The unemployment figure in 1951 was 185,000. The unemployment figure in the same month of 1954 was 220,000.

Photo of Lieut-Colonel Sir Thomas Moore Lieut-Colonel Sir Thomas Moore , Ayr

What are the comparable percentage increases?

Photo of Miss Peggy Herbison Miss Peggy Herbison , Lanarkshire North

An hon. Member like the hon. Member for Ayr would want percentages, but what we on this side of the House think about is the effect of unemployment on our people. Under a Tory Government 35,000 more people in Britain are suffering all the ills, evils and tragedies that unemployment brings to them. We find that the unemployment figures for Scotland are higher in 1954 than they were in 1951. It is obvious, therefore, that this claim about increased employment which the Government are making is one which should be examined and one in relation to which the real facts should be given to the people.

I will leave the general position and come to a particular position as it applies to certain parts of Scotland. I make no apology for raising a matter which I have raised time and time again. We had a two-day debate on industry and employment in July of this year. Many important matters were raised by the Front Bench and by back-bench Labour Members during that debate. We found, at the end of that two-day debate, that no answers were given to many of these questions that are vital to the present and to the future prosperity of Scotland.

When I was preparing for this speech, I read again the reply of the Joint Under-Secretary, whom I am glad to see in his seat. That reply, from beginning to end, showed his complacency and that of the Scottish Ministers about the real problems that are facing us. One could have termed it a slick, smart Alec approach. I can assure him that many people read his reply, particularly those for whom I am speaking, and that they did not like it.

They felt that the problems that have so often forcibly been brought to his notice, and that of the other Scottish and United Kingdom Ministers, were problems getting no attention whatever. This problem is not confined to Lanark-shire. It is being found in Durham and in certain places in South Wales, in areas where in the past few years quite a number of pits have closed and where, in a few years, many more closures are forecast.

I and many other hon. Members have raised this matter by Question and in debate in the House and by deputation to the Minister. Only a fortnight ago four Lanarkshire Members of Parliament met local authority representatives from Coatbridge and Airdrie, to discuss this problem not only as it faces my part of Lanarkshire, but also as it faces the Whole of Lanarkshire, which has the second biggest population of any place in Scotland.

Last week I put down a number of Questions to the Secretary of State and to the President of the Board of Trade, The Secretary of State has told us on a number of occasions that his Department is continually bringing the area to the attention of industrialists looking for new factory space. I put down a Question to the Minister to try to find out—since no factory has been built and there is no sign of any industrialists coming to the area—what the trouble was. I was given this answer—it was transferred to the Board of Trade: The Board of Trade brings the possibilities of North Lanatkshire to the attention of industrialists in all appropriate cases. I could not undertake to disclose the names or the course of the discussions."—[OFFICIAL REPORT, 3rd December, 1954; Vol. 534, c. 13.] That does not satisfy me or the people in Lanarkshire. We wonder whether industrialists have had this area brought to their notice. We have the right to know why it is that during these years, when it has been brought to the notice of the Government, no industrialist has chosen to start in that area.

I put a Question to the Secretary of State, but he gave the usual answer—that consultation does take place between Ministers and the Board of Trade on attracting new industries, but he went no further to indicate Government policy.

Then I asked the President of the Board of Trade if he would build advance factories in Lanarkshire. He replied: I do not consider that the building of Government-financed factories in advance of demand is justified in present circumstances."—[OFFICIAL REPORT, 3rd December, 1954; Vol. 534, c. 14.] Can the circumstances be worse than they are now in the area? Let us look at what was done under the Labour Government, which was faced with all the stringencies that I pointed out at the beginning of my speech.

Under the Distribution of Industries Act there were approved between 1945 and 1951 for Scotland alone 1,004 factories. By the end of 1951, 662 of those factories had been completed and in the Development Areas, where there were 661 factories, 370 had been completed. Those factories have brought work to many thousands of our people If this Government really believe, in spite of evidence to the contrary, that they have made this country so prosperous, why is it that the President of the Board of Trade thinks that it would not be good policy to build advance factories?

That is one of the reasons I asked that Question. If the notice of industrialists has been brought to this area and they have chosen not to go there, surely it would be an incentive to industrialists to find a factory built ready to enter, instead of having to wait two years to get it. It was the policy of the Labour Government to build factories in advance. In this area, where it is not just a case of a few unemployed, but where in a short time the whole area will be derelict, only by building advance factories will there be any future.

When the President of the Board of Trade said, "justified in present circumstances" I did not know what that meant. The people in my area and the other areas concerned have the right to know exactly what that does mean. Does it mean we cannot afford it? Our people should know. Is this prosperity about which the Government are always talking just a myth? My people want to know, because they see no signs of it in my area. Or did it mean that the President of the Board of Trade and all the galaxy of Scottish Ministers have not given any thought to this matter which has been raised so often. The Joint Under-Secretary indicates that they have given thought to it. Do they not, then, have the intelligence to find a solution to this problem?

Photo of Sir James Henderson-Stewart Sir James Henderson-Stewart , Fife East

As the hon. Lady knows very well, not everybody even in the area would agree with her that the solution—and it is the only solution she has offered—is the building of advance factories. That is not the whole solution.

Photo of Miss Peggy Herbison Miss Peggy Herbison , Lanarkshire North

I do not know what the Minister is referring to. The only other thing that has been put forward for this area is the de-watering of the Lanarkshire coalfield. I would welcome a promise that that is to happen for this area. No, the hon. Gentleman does not give the promise, although that is the only alternative which has ever been put forward by any hon. Member.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham East

Mr. Stewart indicated dissent.

Photo of Miss Peggy Herbison Miss Peggy Herbison , Lanarkshire North

If the hon. Gentleman shakes his head again to indicate that that is not an alternative, then the only other possible alternative is to bring new industries to this area.

The real reason is not that the Government have not thought about the problem, or have not the intelligence to deal with it, but that they have no desire to take the necessary action to bring about some hope of security for my people, just as previous Tory Governments had no desire to do anything to prevent the depopulation of the Highlands. Those of us who have examined this problem believe that one way in which the Government could show an earnest of their desire to cope with the problem is by deciding to build some advance factories and, in that way, ensure that industrialists who are looking for a place in which to expand will settle there.

I stress this point because of something which has been said on many occasions. The Chancellor of the Exchequer said that during last year there was not sufficient investment in industry, and in our last debate upon the subject the Secretary of State for Scotland said that it was clear that we did not invest enough with manufacturing industries. In this case, the Government can give the lead. Let them invest money in advance factories. In doing that they would be increasing the economic and industrial potential of a very important part of Scotland, whose interests they are supposed to safeguard. The hon. Member for Govan (Mr. J. N. Browne) spoke of the Government's increasing emphasis upon Scottish needs, but I fail to notice it, and I am certain that most of my Scottish hon. Friends have the same feeling.

I have shown that the future of industry in quite an important part of Scotland is a very black one. The policy of the Labour Government has been reversed by that of this Government, and social distress has been brought to quite a number of our people. The hon. Member for Govan also said that most of us could buy more than we did in 1946. He did not seem to have read the reply given in this connection by the Chancellor of the Exchequer. I shall not quote it; it has already been quoted today. The hon. Member for Govan did not seem to know that food alone had risen in price by 20 per cent., or that since the beginning of the year there has been a 2s. per lb. increase in the price of tea.

When I read of these increases in the price of tea, one after another, I am reminded of another propaganda statement of the Tories, when they were seeking power. They said, "Return us to power and we will set the people free." My word—they have set some people free; they have set the profiteers free to make the biggest profits they can out of the ordinary people. [Laughter.] It is no use hon. Members opposite trying to laugh it off.

The figures given by my right hon. Friend the Member for Leeds, South, show that the increases in workers' remuneration amount to 1s. in the £; for the profiteers it is 2s. in the £, and for the dividend earners 4s. in the £. This shows a reversal of the distribution of wealth, and that reversal is hitting very severely the worse-off part of our community.

No matter which part of the Amendment one looks at one realises that the criticism contained in it is correct, and it is criticism to which the Economic Secretary to the Treasury had no answer and no constructive policy to offer in place of that of my right hon. Friend.

5.46 p.m.

Photo of Sir Lionel Heald Sir Lionel Heald , Chertsey

As this is the first time that I have had the honour of being called to speak as a private Member since 1950, perhaps I may be allowed to begin with a purely personal word. During the past three years I have thought it more in keeping with the office that I had the great honour to hold to abstain from acute party conflict so far as I possibly could.

Some right hon. and hon. Gentlemen opposite have been good enough to express their approval of this course. In turn, I should like to thank them and the whole House for the invariable courtesy and consideration with which I have been treated in all my various and multifarious dealings with hon. Members. During those years I made many good friends in all parts of the House, and, whatever our political differences may be—and they certainly exist, as I hope to show in a few moments—I shall hope always to preserve and strengthen those friendships in accordance with the spirit and traditions of this place.

But in this process of bi-partisanship some of my constituents may have almost begun to wonder whether I still represent them, or at least whether I have become, perhaps, an independent Member of some kind, with no party views. Thanks to your calling me, Mr. Deputy-Speaker, and thanks to the action of the Opposition in putting down this period-piece of an Amendment, I hope that my constituents will not be left in any doubt as to my political position.

My first objection to the Amendment is very simple and obvious, but it goes beyond any mere party debating point. It arises from the entire inconsistency of the Amendment and of the speech with which it was introduced this afternoon by the right hon. Member for Leeds, South (Mr. Gaitskell) with any concern for the rights of the private citizen as against the State. I welcome and support the whole of the Gracious Speech, especially its reference to social policies directed to the happiness and well-being of all My People but I should have liked to see that accompanied by a positive assurance of the Government's views and intentions on this question of individual liberty and personal independence, which involves a fundamental distinction between our views and those of the Opposition.

I was greatly struck the other day by an article in a weekly periodical by the Bishop of Fulham, who was writing in an entirely independent and non-party spirit, and I believe that his views are worthy of the close attention of this House today. The bishop there referred to the deep concern and dismay with which thinking people all over the country remember the names of Crichel Down and Mr. Pilgrim, and their anxiety lest these might be only two of many more similar but anonymous cases. The bishop also spoke of the dangerous trend towards de-personalising human beings by State standardisation and mass control, and he ended by saying this, which, I think, is worth repeating: There is no security without freedom, and no freedom without respect for human personality. What that means in terms of politics —and I am afraid that I shall annoy the hon. Lady opposite by saying so—is that by 1951 the virus of Socialism had already penetrated so far and so deeply into our body politic that we should certainly be guilty of complacency today if we said that in the last three years the poison had been completely eliminated. As was said on a similar subject a long time ago: This kind will not go out but by prayer and fasting. Arbitrary power is a very tidy and convenient thing to have in a Government Department, and I believe myself that the country would welcome today an assurance on behalf of the Government, when my right hon. Friend replies to the debate—certainly, a number of hon. Members on this side of the House would welcome it—that the Government fully recognise this public concern and are determined to insist on the rule of law, on complete access to the courts for everyone stating, also their determination to root out from Whitehall every petty tyranny, every unfairness, every interference with the individual, every abandonment or evasion of Government responsibility towards the private citizen.

I hope, too, that they will agree that the private citizen must remain, at all costs, the master and not the servant, the employer and not the victim, of State machinery, whether we are talking about economic controls, statutory regulations, compulsory purchase orders, administrative tribunals, or anything else where Ministers have arbitrary powers.

May I make it perfectly plain, in that connection, that I am not making any attack of any kind whatever on civil servants? Far from it. In my experience, when a Minister is impugned for something that has happened, civil servants are attacked, but almost invariably the civil servants concerned were doing what they thought was the policy of the Minister and what he would like to have done. The remedy for bureaucratic control lies in the hands of the Minister himself who possesses the arbitrary powers. It is the Minister's responsibility, and his alone, to look after the rights of the individual, and I believe that a reiteration of that principle would be welcomed in all parts of the House today.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

As the Minister responsible for or in charge of the interpretation of the law for the Government for the last three years, is not this an indictment of himself when he held an offioial position?

Photo of Sir Lionel Heald Sir Lionel Heald , Chertsey

I do not agree with the hon. Gentleman at all. The Law Officers are not concerned with matters of administration, but with the interpretation of the law. If the hon. Gentleman thought that that was what I was talking about, then I fear that he has not been following my argument very closely.

All that I have been saying is entirely inconsistent with the letter and spirit of the Amendment, and with the speeches which we have heard from the other side of the House. It is, of course, entirely inconsistent with the whole spirit and outlook of Socialism, because the attitude of Socialism towards the individual is just the same as the attitude of George Stephenson when he was asked what was to happen to animals when his trains began running. I understand that he replied that it would be very bad for the cow. [Interruption.] Yes, it was also very bad for a certain Cabinet Minister who got out of the wrong side of one of those trains one day.

Another point upon which we should like to be assured, and I am sure this ought to be stated, relates to the concern of the Government for the middle classes and the professional people, who have a very difficult time today. In case any hon. Members opposite may draw some comfort from that, I should like to quote what was said by Mr. Francis Williams, who, in the palmy days of Socialism, was Chief Adviser on Public Relations to the Prime Minister, so that he ought to know something about the matter on which he was writing. On page 126 of his book "The Triple Challenge" he says this: It is, indeed, a fair criticism of the Socialist Government that, although in its philosophy the value and importance of the middle classes and of the managerial and professional groups is fully recognised, in its administration of policy insufficient attention has been paid to their difficulties in a period of great social adjustment. This is a defect that will have to be put right. Do not let us have any suggestion that the Opposition have any solicitude for these people. I am asking the Government to make quite clear what their view is on this matter.

The great problem of government today is that of how to reconcile the freedom of the individual with that degree of interference by the State which is, at all events, necessary at any given time. We cannot expect any real assistance in that direction from Socialism, but we do expect it from a Conservative Government, and I hope that it will be considered possible to make some firm and clear declaration on that subject at the end of this debate.

Looking at the actual wording of the Amendment, I wonder whether some hon. Members opposite were not rather disappointed when they saw it on the Order Paper. After all, it was heralded, not perhaps by a blast of trumpets, but by the right hon. Gentleman the Member for Easington (Mr. Shinwell) who, in the course of the debate on 1st December, said this: … we propose, in the course of this debate on the Address, to challenge the whole range of Government policy. We propose to do more than that. We propose to challenge the Tory Party conception of the organisation of society—of its conception of the right social order. That is our intention—let it face that challenge."—[OFFICIAL REPORT, 1st December, 1954; Vol. 535. c. 169.] After the mountain has been in labour, it has produced this small Socialist mouse. Not only is the right hon. Gentleman who heralded this Amendment not here today, but his name is not even to be seen in support of the Amendment, so that, when it came to be drafted, it looks as though he was not very pleased with it. I found that it was published in every newspaper except one—the "Daily Herald" never even mentioned it at all, so that indicates what they thought about it.

Coming to the actual wording of the Amendment, I will not deal with its details, because it would be mere impertinence for me to add anything to what was said so completely by my hon. Friend the Economic Secretary. I am not going to say a word about the details except that I should have thought that if any example were needed of a display of complacency, it was that shown by the right hon. Member for Leeds, South, in his account of what the last Government had done.

Hon. Members may be interested to consider very briefly the real origin and explanation of this Amendment. It is obviously not electioneering. After all, the right hon. Member for Lewisham, South (Mr. H. Morrison) who, I am sorry to say, is not present—though we are to hear from him later—is far too skilled a tactician in politics to think that he will get anything out of this Amendment in a General Election. There is nothing in it to attract the floating vote or to retain the old faithfuls either.

It is the same old material. We had it at the last General Election, it was put out at Croydon—where I was interested to spend a day learning what people were thinking about there—and it is the same stuff that was put forward at West Derby. There is nothing here for which Labour supporters will go to the stake. Indeed, we heard from Mr. Morgan Phillips, the great expert, that they would not even go through the fog for it.

Why, then, does the right hon. Gentleman agree to this kind of thing? It certainly cannot be because he thinks that it will help his party to win the next General Election, because this is what he said in his famous speech at Bradford, in 1953, about the five essentials for winning the next election: The first essential for success in the next election is a policy which is bold and constructive in relation to facts which the people can undersand and accept, sensible and relevant to the problems of our times. The right hon. Gentleman, I think, would hardly say that that fitted the Amendment today. Indeed, I could almost see his difficulty of refraining from smiling when the terms of the Amendment were read out this afternoon by the right hon. Member for Leeds, South.

I think that the right hon. Member for Lewisham, South would much rather describe this Amendment in the terms he used when making a speech about Labour propaganda, which, I think, was a very valuable and very remarkable speech, just before Christmas last year, when he said: We must not assume that public expenditure comes from some inexhaustible Father Christmas. We must remember that today a very substantial number of manual workers are much better off. They pay Income Tax. So the general level of tax is a matter of direct interest to them. That is a very cynical observation for a member of the Labour Party to make, but nevertheless a very revealing one.

What the right hon. Gentleman meant was that they may have been able to fool the people to vote Socialist in the past by promising them this and that—the soaking of the rich, and all that sort of thing—but that today under the "wicked Tory system of misrule" the workers are too intelligent and, in many cases, are doing too well to stand for that sort of nonsense.

If that is the position, how can this Amendment be explained? I think that it can be explained quite simply. In 1845, Disraeli accused Sir Robert Peel of catching the Whigs bathing and of walking away with their clothes. The right hon. Member for Lewisham, South is not at all afraid of taking a leaf out of the book of his political opponents, past or present. He is quite prepared to make use of any machinery that comes to hand.

In this matter, the right hon. Gentleman acted with characteristic speed, because there were two articles in two Left-wing publications in the last week. This is what the "New Statesman" said on 27th November last: If the shadow Cabinet is so bankrupt of leadership, it is the bounden duty of the Left-wing critics to show that a practical alternative to Butskellism exists. That is what has driven them into this. Six days later, the "Tribune" had this to say: What is the common factor which Labour people share and which sharply distinguishes them from the Tories? It is Socialism. If it is not that, it is nothing at all, at least nothing worth bothering about. The fight for Socialism will unite and excite the party. So, today, there is a united and excited Socialist Party.

That is the origin of the Amendment, and in putting it forward the right hon. Gentleman has, if I may use a pun, out-peeled Peel himself, because what he has done is this. He has skinned the Left-wing alive and has dressed up his right hon. Friends in their pelts. One or two of the right hon. Gentlemen, perhaps, look slightly sheepish in their unaccustomed clothing. But at any rate one who has just come in, and who has now gone out again, and who, after all, was once a member of the pack, may feel a bit more comfortable about it.

That is the position. It has been described as "muscling in on the Left." It may have been successful from the point of view of mere party manœuvring and discipline, but it certainly will not have any effect in the country, except to increase the certainty that the Labour Party has now little or no hope of even attempting to win the next General Election. I hope I have succeeded in showing that I have not become a Socialist since 1950.

6.8 p.m.

Photo of Mr Jo Grimond Mr Jo Grimond , Orkney and Shetland

I am sure that the right hon. and learned Member for Chertsey (Sir L. Heald) has convinced the House that he is not a Socialist, and I think that he has also convinced his constituents that his muscles have not become too closely bound—atrophied—in the service of the Government. He led off, I thought, with a smart tap on the nose for his colleagues. He accused them of disregarding the individual and of perpetrating such things as Crichel Down.

I thought that one of the curious features of Crichel Down was that the Minister of Agriculture and Fisheries was advised by his legal advisers that he had no right to part with the property. I may be wrong about that, but it is certainly what I thought. I hope that the right hon. and learned Gentleman will have a look at the legal set-up of the Government to see whether he cannot get it put right and to get the watchdogs of the law brought to bear in the interests of the unfortunate down-trodden populace.

The right hon. and learned Gentleman told us the origin of this Amendment. I hope that I shall not be considered presumptuous if I return to its terms. It seems to me that the guts of the matter are in its last three words where it talks about encouraging economic expansion. That, surely, is what this country has to do.

The question before the House is, I think, this: will the suggestions in the rest of the Amendment lead to such an expansion? I must say that I have my doubts about that. The Amendment mentions social injustice, which is a conveniently vague phrase. If it means that the poor are too poor and the rich too rich, then maybe that is so, but it is quite certain that the gap between the two has been rapidly closing in the last 50 years, and is still closing.

Indeed, the process has reached a point—of which I do not at all disapprove—where the whole thing has led to certain difficulties. For instance skilled workers and the professional people are complaining that the differential between themselves and unskilled workers is not sufficient. Quite apart from their personal feelings it is surely in the interests of the community to reward people who are prepared to take responsibility who are trained, and who are able to exercise superior skills.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

Surely the hon. Gentleman is aware that the skilled worker is not saying that the unskilled worker is getting too much but that he, the skilled worker, is not getting enough?

Photo of Mr Jo Grimond Mr Jo Grimond , Orkney and Shetland

The skilled worker says that the differential is too small. The engine driver says that the porters' remuneration is getting very close to his.

Furthermore, it is not, apparently, the view of the Labour Party that everyone is to be paid the same. That was proved by the rate which they agreed to pay to the people who run the nationalised industries. They rewarded those men, quite rightly, with adequate salaries. If it means that the wrong people make money in society today, there is, again, something in that, but we know that, during the period of controls from 1945 to 1951, the result was often to penalise enterprising people and to safeguard those already established and in comparatively comfortable circumstances.

The Amendment goes on with some adjectives with which we are all familiar. Nationalisation and denationalisation are always doctrinaire in the view of their opponents. Controls are always essential in the eyes of those who want to impose them. And what some of us would call the intervention of the gentlemen in Whitehall is called the intervention of the community.

The question we should ask ourselves is not whether we are to have more or less nationalisation but how the existing amount of nationalisation can be made to work better. There are still problems in the nationalised industries to which we have not found the answers. The same is true of planning. We are all agreed, I think, that we must have a considerable degree of planning, but we have learned in the last six or seven years—and I blame no one for this—that it is an extremely difficult matter. Even in its comparatively simple forms of town and country planning we have run into every conceivable form of difficulty. We can well spend some time in improving the present machinery without embarking on new schemes.

What really faces us is the need to encourage economic expansion. I do not believe that that will be achieved by a fresh bout of controls and Government intervention. We have to check inflation, of course, but there, too, we have had some experience of attempts to check inflation by physical controls. The result has been rather like putting a fat lady in stays. One reduces the bulge in one place and it comes out in places where it is even less becoming. In the same way, if one controls certain parts of the economy by trying to hold the prices there, one may, in an inflationary situation, find prices rising elsewhere.

The fact is that if this country is to maintain—and improve—its standard of life, and if it is to provide adequate social services, we have to undertake a very large programme of saving and investment. We all know the size to which the social services will grow. In 20 years' time pensions alone will cost £800 million or more a year. The cost of the social services today is over £1,300 million, and that has to be found out of the pockets of the people.

I would have no objection, nor, I am sure, would anyone else, to a certain amount of inequality—to people earning good rewards for their work—if we could be assured that the poorer and the more unfortunate people are safeguarded by a really adequate system of social service. If we are to provide that we must have the money to do it, and we must maintain the value of that money, otherwise any system of social services will be defeated.

It is no use our complaining of the size of the American economy and of the amount of capital the American people can put into their industry. Nor, on the other hand, does any good come from complaining of cheap labour in the East which enables the countries there to compete with our exports. We must put ourselves in a position equally to compete with both. We must do that by increasing the rate of capital investment. That means not only savings, but also directing those savings into the most economically worth-while projects.

The problem today is not that all companies lack money or reserves. On the contrary, some of the biggest companies have very large reserves. To me the difficulty seems to be that new enterprises still find it difficult to raise capital. That is one reason I am not convinced that it would be right to limit dividends. Nor am I convinced that the solution is to put heavier taxation on distributed company profits. The only result of that would be to supply more and more capital, as the Economic Secretary himself said, for existing companies, and to remove that capital from the general market where it might be more usefully employed by smaller or newer companies.

Even if more and more profits are distributed, as the right hon. Member for Leeds, South (Mr. Gaitskell) said, when one looks at the amount of capital employed the amount of dividend is not great. But it is rising, and if the rise is to continue we must try to see that a percentage of the distributed profits is saved.

One of the most welcome features of the past year has been the rise in personal savings, but is there adequate machinery for mobilising savings for risk investment? The National Savings movement has, apparently, been impressing on factories where there are savings schemes the importance of productivity, but, while the National Savings movement does excellent work in encouraging savings, it puts them, of course, into Government loans. I wonder whether the Chancellor of the Exchequer is satisfied that there is adequate machinery for directing savings into risk investment?

No doubt the ideal would be something on the lines of the investment trusts run by private enterprise, and so spreading the risk to safeguard the small investor. Or perhaps there might be the sort of scheme which has been tried in America. If these developments are not enough, I would like to know whether the Government have any views on the matter, and whether they regard the rate of savings as sufficient and going to the right places.

It does not seem to me that we have yet any adequate method of deciding between the various directions in which investments should go. There are the private industries, the public industries, and overseas investment. I make the calculation that the nationalised fuel industries alone, including atomic power, have been entitled to borrow up to £3,500 million—though not at once. It is suggested that, over the years, they may do that. They will do so at a low rate of interest and with a guarantee. Haw has it been decided that we can afford that for these nationalised industries without starving, for instance, the roads, or private industry, or overseas investment? I should like information on that.

If we are to have a high rate of investment, and if a high rate of dividends is to be acceptable, we must obviously have the co-operation of the workers, and while, on the whole, I think that the economic and financial policies of the Government have been reasonably successful, I regret that they have taken little action to spread the ownership of industry more widely. It is still true to say that the private companies are owned by fewer than 3 million people. Statistics have been given of the accumulation of wealth there is in comparatively few hands.

I am not satisfied that the Chancellor cannot do mare to encourage profit-sharing and co-partnership schemes. The Associated Electrical Industries scheme was killed, I think, because the Treasury would have taxed the capital gains which had been made by the workers. In America, 12,000 companies now have profit-sharing schemes as against only 750 at the end of the war. During the past year several big companies in this country have gone in for such schemes, and I should like the Chancellor to encourage them in any way that he can, by tax remissions or any other method, because I believe that in that direction progress lies. We should bring the workers in and let them share in the profits of the industries in which they are engaged.

If we are to get savings, if we are to get political and economic progress in this country, we must have the good will of the people who work in industry. As I say, it will be impossible to maintain the welfare services if we have inflation and discontent. It is for the Government to check inflation by their financial policy and by necessary controls, but I feel that it is regrettable that, while profits have been rising and dividends have been increasing, there has been so little reduction in prices.

I know that the amount which has gone in extra profits is very small and, no doubt, would have allowed a very small reduction in prices, but we cannot accept it as the normal thing in this country that every year there should be a run of wage and price increases. If private enterprise and competition are to work, there must be falls in prices occasionally. There are too many price rings. There must be times when companies bring down the prices of their products at a cost of some reduction in profits and to the inconvenience of their competitors.

I noticed that the Economic Secretary who, like all those who are learned in economics, seems to me to take on the role of the Almighty from time to time, claimed that he had played a substantial part in the reducing prices of imports into this country. That is a bold claim, and a dangerous one. If he claims the credit for reducing some, he must, I suppose, take the blame for increasing others. If he could reduce the price of wheat, why does he not reduce the price of oil? [HON. MEMBERS: "And tea.'"] Yes, and tea.

The truth of the matter is that this country depends far more on the maintenance of peace in the world and on scientific progress than it does on the activities of the Chancellor of the Exchequer, saving the presence even of the right hon. Member for Leeds, South. Nevertheless, he can and does have a very considerable influence on financial and banking circles, and I would beg him to use that influence and get the companies to show the way even in the smallest reduction in prices. Otherwise we cannot hope to hold a stable cost of living, without which we shall make our progress and social services impossible to maintain.

6.23 p.m.

Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Bristol North West

I think it will be agreed on both sides of the House that on these occasions, when we spend a day debating the economic situation, we can properly spare a few minutes for consideration of the problem of communications. I notice in the Gracious Speech a paragraph, which I greatly welcome, dealing with road construction, and I rise briefly to interrogate the Government and invite them to amplify that paragraph in the Gracious Speech.

The Foreign Secretary, at the commencement of the debate on the Address, referred to the Government's policy in this field, and his reference was important for two reasons. First, my right hon. Friend made a specific announcement regarding new construction and major improvements, separating these activities completely from ordinary road maintenance. Secondly, he mentioned annual expenditure as rising, under the new Government plan, by two or three times the £14 million or £15 million expected by 1957–58 under the programme which my right hon. Friend the Secretary of State for the Colonies, the former Minister of Transport, announced some months ago.

Therefore, it seems to me that, leaving maintenance entirely on one side, the amount to be spent on new construction is apparently to be increased by two or three times the plateau level expected to be reached in 1957–58 under the £50 million programme of 1953. I made an intervention during the speech of the Economic Secretary in the hope of elucidating this point, but I repeat it now in the hope that possibly my right hon. Friend the Lord Privy Seal can obtain the information for us by the time he winds up the debate tonight.

As I see it, at its peak the programme outlined by the Foreign Secretary a week ago will devote between £30 million and £45 million to new construction, which will be about the same, in terms of real money, as was spent in the years immediately prior to the outbreak of war in 1939. But the Economic Secretary's statement did not make it clear whether the peak of the new programme will, in fact, be reached in 1957–58, and I must put this question to the Government: has the new programme the same plateau date as its predecessor, which was announced a few months ago?

Surely it will be agreed on both sides of the House—happily this is not a party question, like so many others that we have been debating—that the road situation demands that the annual expenditure on physical construction be built up to its plateau level as soon as possible. It seems to me, who spent some time in the Department, that 10 years may elapse before the active annual expenditure reaches the £30 million to £45 million level mentioned by the Foreign Secretary. On that point I should like some information, and I imagine that I am not alone in that.

Moreover, no matter how quickly the new programme reaches its peak—and this point was well made this afternoon by the Economic Secretary—there can be no doubt that the demands on the Exchequer during the next 12 months cannot be much greater than those envisaged before last Tuesday's announcement was made. Some means must be found to ensure that the present Government's instructions are carried out rapidly, economically, and so as to produce the quickest benefits to the community.

From the evidence so far available to us, it would appear to me that progress on the schemes under the 1953 programme has been somewhat erratic. I do not think that is surprising. After all, the machinery of the Ministry of Transport, so far as new construction is concerned, was allowed to rust for some 15 years, during the late war and its aftermath, and much as I learned to admire the personnel of the Highways Department, it must inevitably take time for them to raise full steam.

There is one matter which I confess is causing me some disquiet, and that is the method of financing the Government's new and more rapid programme o; new construction. It is not clear from the Gracious Speech, nor is it clear from the statement of my right hon. Friend the Foreign Secretary the other day, but it would seem to me—I shall be glad to be contradicted—that it is intended to raise the money required out of revenue.

If that is so and I am correct, I am apprehensive, with unhappy memories of the £100 million five-year plan of 1935, and the plan advanced by the right hon. Member for East Ham, South (Mr. Barnes), who was the Minister of Transport in the Socialist Government. Hon. Members will remember that the right hon. Gentleman, in 1946, announced a 10-year plan, a very admirable plan to which I will refer briefly as the Barnes plan. The Barnes plan of 1946 has not yet even started. No start was made at the time, because in 1947 came the convertibility crisis, when Sir Stafford Cripps turned off the tap, and no further road construction was possible during that phase of our economic troubles.

I trust the present Chancellor.

Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Bristol North West

Certainly I do; but, like all humans and all Governments, he is mortal—like the hon. Member for Tradeston (Mr. Rankin), and like myself. We are all born to die; so are Chancellors of the Exchequer, and so are Governments. Some successor to the present Chancellor might arrive on the scene and turn off the tap, as did Sir Stafford Cripps in 1947.

Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Bristol North West

I will not say what type of Chancellor would be likely to do it. I am anxious to keep this topic out of party controversy.

It was the Socialist Government which wrecked the Barnes 10-year plan; that is a matter of history and not a matter of controversy. In 1947 the whole programme came to a standstill, and it has not been restarted. If the hon. Member for Tradeston will give me his attention for just two more minutes I will complete what I have to say. It is very simple, and I hope that he will not dispute it.

If the Government are now prepared to spend up to £45 million a year on new road construction, there can surely be no objection to the proposal which I made last February, that this should be financed by borrowing—by launching a long-term road development loan under arrangements similar to those granted by the House in July to the nationalised gas and electricity industries. I should be far happier if the road scheme could be financed by that method.

Photo of Lieut-Commander Joseph Braithwaite Lieut-Commander Joseph Braithwaite , Bristol North West

At the time one launches the loan one launches it in accordance with the market terms.

What I suggested last February—and I do not think circumstances have altered very much since—was a 30-year loan of £500 million at 3½ per cent., which would have been financed quite comfortably out of 3½d. a gallon of the Petrol Duty. That suggestion was rejected. If the hon. Member asks me the question about the terms of the loan, that is my answer, but of course the circumstances in which the Government can borrow vary according to the economic circumstances of the time.

The only point I am trying to make is this: once a great road scheme is financed by that method, it is removed from the danger of some economic crisis causing the tap to be turned off and no more revenue to be made available; a step which, when it happens, means that we are once more deprived of the progress which all hon. Members on both sides of the House want to see.

I am very glad to see the paragraph in the Gracious Speech to which I have referred, and I am very glad that the Government are anxious to go forward in this matter. I hope that the necessary finance will be forthcoming, although I quite appreciate the point which the Economic Secretary made—that nothing much is likely to happen for 12 months or two years; although there are in the Ministry the 30-year plan and the Barnes 10-year plan of 1946. We have not yet reached the year nought, the starting point. Perhaps this is it. Let us hope so.

In addition, I most cordially welcome the reference in the Gracious Speech to the Road Traffic Bill, I am very glad that a place is to be found for it this Session. It has been on the stocks for the past two years. We have had no such Measure before us for 20 years, and I feel sure that the whole House will co-operate with my right hon. Friend the Minister of Transport and Civil Aviation in passing the remedial legislation so necessary in this sphere of safety on the highways.

6.35 p.m.

Photo of Mr William Coldrick Mr William Coldrick , Bristol North East

I am pleased to be able to follow the hon. Member for Bristol, North-West (Sir G. Braithwaite), bearing in mind that I represent an adjoining constituency, but he will appreciate that for the last three years he has been following "The Right Road for Britain," and that it has apparently landed him in the wrong place. I will give him an assurance that if he will plot away with a campaign to get the Government to do something about road construction, and particularly to build a bridge over the Severn so as to facilitate travel to Bristol, he will have my co-operation.

It is my intention, in this debate, which has roamed over so many subjects, to say a word or two on behalf of the consumers in this country. We have heard a number of learned disquisitions about a large number of subjects, but it has been patent to me that the great mass of the people interpret things very differently from the interpretations which we give. I listened to the Economic Secretary trying to give a complete justification of the policies which the Tory Party has been pursuing, but it was evident that he spoke as the contented chairman of a prosperous joint stock company who was in a position to hand out splendid dividends to the shareholders, regardless of the source from which the dividends had been obtained.

It is obvious to me that, for the producers, the welfare of the consumer is a by-product of competing and conflicting industrial interests, but I suggest that the only rational justification for production is the satisfaction of consumer needs; and the plain fact is that if we spoke to ordinary men and women, both in this country and throughout the world, they would make it abundantly clear to us that, although we might talk about the balance of payments, sterling balances, hard and soft currencies and things of that nature, what they are concerned about is the production of food, clothing, housing and all those other things which administer to a full and free life.

Those are the things they want but it seems to me that, to satisfy these legitimate needs in this strange, irrational society in which we live, we conceal the real purpose of production and we build up all these complex institutions, such as counting houses, finance houses, stock exchanges, and so on, and we talk so much about them that we forget the purpose of production itself.

That is why I think that the fundamental difference between hon. Members on this side of the House and hon. Members opposite is, as my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) said, that we believe, as intelligent people, that we should consciously direct the economic resources of the country to clearly-defined communal needs, instead of allowing ourselves simply to be puppets of these blind sources themselves. Recognising that we have that principal purpose, I think it is about time that we gave much more attention to the protection of the consumers.

We recognise that we have created a number of Ministries to look after the welfare of the productive side. We have created the office of the President of the Board of Trade—I am not minimising the importance of the office—to foster trade and industry; and we have created the office of Minister of Agriculture, quite rightly, to develop agriculture.

We have Ministers for production, for fuel and power, and so forth, but apparently, the Government are very happy to bring the Ministry of Food to an end. It is a strange thing that when the country is confronted with grave danger from an aggressor it immediately realises that it must do something to protect the consumer by giving him a guarantee of a fair share of the goods available at prices that are within his reach, but that during a period when we are constantly confronted with the danger of some people, for their own benefit, taking advantage of the rest of the community, we immediately dissolve these Ministries.

I am not advocating the resuscitation of the Ministry of Food, but now is the time to create a Ministry which would have regard, not merely to food, but to the whole welfare of consumers. In the course of years the House has been compelled to pass various Measures to protect different consuming elements within the community. We have had a pharmacy and poisons Act, in which stringent conditions are laid down in connection with the sale of drugs and poisons. We did that to make it impossible for people to poison us. We proceeded to pass other legislation to prevent the adulteration of food. The very fact that this House has been constrained to do these things is positive proof that within the community there are people who, to gain profit for themselves, are prepared to degrade the quality of things they are selling to the people.

Although hon. Members opposite, particularly the Economic Secretary, are constantly preaching the virtues of competition, we find invariably that people who support them do not carry that preaching into practice, but proceed to combine to form trading associations and industrial monopolies. To restrain them we are compelled to pass a Monopolies and Restrictive Practices Act. We confer on the Board of Trade the responsibility of deciding what matters shall be referred to the Monopolies Commission for investigation. What, in my estimation, is as bad, we allow the President of the Board of Trade to exercise the right to what he will do with the findings of such an inquiry. Judging by what has happened, although we have had faithful and painstaking inquiries, we have had precious little action on the part of the President of the Board of Trade in remedying the defects which the Commission has shown to exist.

Although we have passed a number of Measures of that nature, the powers they confer are scattered throughout various Ministries and Departments, and are treated as quite subsidiary to the main functions of those Ministries. Instead of these duties, designed to protect the consumer, being sometimes administered by the Home Office, at other times toy the Board of Trade, and at other times by the Ministry of Food, the Ministry of Agriculture and Fisheries or the Ministry of Health—I will not weary the House with the whole catalogue of Acts on the Statute Book—I suggest that now is the time, when we are concluding the operations of the Ministry of Food, to take these powers from the different Departments and co-ordinate them in one Ministry.

There should be a Minister responsible for the protection of the consumer. A great deal of our time in the House has been taken up with these questions during the last year or so, and not altogether with matters concerning food. My hon. Friend the Member for Coventry, South (Miss Burton) has demonstrated that in these days of synthetic materials it almost requires a chemist to detect precisely the substances from which articles are made. I think we should charge a Minister with making it obligatory for goods to be clearly marked and labelled so that the consumer should know precisely what he or she is buying and that the goods are what they purport to be on the label or marking.

I do not think it essential to create elaborate machinery to do this. Under the direction of a determined Minister, many of these functions could be operated very effectively through local authorities. All of us who have been connected with local government know perfectly well that local authorities today exercise rights in regard to inspection of shops, rights referring to the clean handling of food, rights dealing with weights and measures and things of that nature. Under the aegis of a Ministry they could use their resources to provide facilities whereby people with legitimate grievances against traders and others who sought to indulge in sharp practice would be able to register those grievances, sort them out and send them to the Ministry with the assurance of effective action being taken.

I suggest that the time has come when we should strive to take fraud and exploitation out of the distributive and retail trades. I do not think that can be done so long as we have Ministers who, primarily, are responsible for productive activity, being entrusted with the safeguarding of consumers' interests. It is consumers who, in the mass, determine the composition of this House. If the House is genuinely interested in the welfare of those people, I believe that the Government can create a Ministry to do the things that they have neglected to do up to the present.

6.48 p.m.

Mr. Hamilton Ken:

The hon. Member for Bristol. North-East (Mr. Coldrick) has pleaded eloquently on behalf of the consumer. I thought his remarks linked naturally to two points made by the hon. Member for Orkney and Shetland (Mr. Grimond) in his admirable speech. The first was the question of production, and the second was, does our present form of economic organisation offer the best chances of expansion in the future?

In the course of this debate the natural divisions in this House have confined themselves to the one point—do we best increase national production, and thereby help the consumer, by a free economy, by a controlled economy, or by a mixed economy as we have at present? I wish to look briefly into the future in connection with that question.

My experience in this House has taught me that prediction in politics and economics is a dangerous pastime. I illustrate that by looking back 20 years. In 1934, my right hon. Friend the Prime Minister sat—a magnificent but lonely figure—where my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman) now sits. Who then could have foretold that my right hon. Friend would be Prime Minister twice in his lifetime, and leader in a great moment of crisis in our national history? In 1934, we were still slowly recovering from a period of grave unemployment— 1½ million or so, if my memory serves me aright.

Who could have foretold that in this year of 1954 we should be in a period of full employment? Who could have foretold, in 1934, that the United States of America, then dominated by the policy of isolationism, would now be maintaining forces in defence of the free world in Europe, in the Mediterranean, and in Asia?

And so tonight, very briefly, I should like to look ahead for 20 years, to see how our various national problems will then relate themselves to the world picture, and to say a brief word, in particular, about the problems of an ageing population. We are told that in 1977 we shall be a very different nation from what we are now.

In 1954, I gather from the few available statistics, about 6½ million of our people are over minimum pensionable age, and about 870,000 still remain at work over that age. In 1977, we shall have an increase in the number of those over the pensionable age of 65 of from 6½ million to 9½ million, an increase equivalent to roughly one-third of the population of the whole of London. We shall have an increase of 500,000 in the working population, and a fall of about 1 million in the child population—-those under 15 years of age.

How will this affect the problem of our production? How will it affect our heavy industries—coalmining, shipbuilding, and engineering—which are so vital for our exports? How will it affect the industries which particularly serve people of older years? Older people, it seems to me, need houses, gas, electricity, and, perhaps, more medical attention. Will this mean a shift to these particular industries? Finally, will fewer children mean that we shall have to build fewer schools and divert our national energies into other channels?

What will then happen with regard to world problems in general? It seems to me that we shall have a number of commitments for a number of years. Unless we reach an agreement with Soviet Russia, we shall have to maintain, as we have promised to do under the London Agreements, four divisions in Europe, supported by a tactical Air Force, and, doubtless, Forces in other parts of the world. We shall find the overriding necessity of an investment programme overseas.

If we are to feed the rising population of the world, we shall have to put sums of money into various parts of the world. We shall have to fulfil our obligations under the Colombo Plan, and we shall have to develop the great new Federation in Central Africa. And, of course, such territories as Canada offer limitless possibilities of expansion. At home, we shall have to maintain the Welfare State and, as my hon. Friend the Member for Bristol, North-West (Sir G. Braithwaite) has just said, we shall have to develop our road system to a far greater degree than we have done up to now.

With all these obligations, shall we in 20 years' time be able to afford a subsistence rate to the growing number of old-age pensioners? I cannot help thinking that, with this variety of obligations which we have to undertake, we should encourage schemes of national savings to supplement the old-age pension. If we could have a new issue of National Savings Certificates, with a ceiling of, perhaps, £1,000 or so, that would permit an old-age pensioner, on reaching the age of 65, to buy an annuity to give him an increased income of about £2 a week. Might this not be a device for supplementing the old-age pension, which will be a severe financial burden on our country in 20 years' time?

But, of course, it may be that we are on the threshold of a great period of prosperity. It may be that the atomic age will soon present us, in fewer years than we possibly think, with the problems of a society cursed, not by poverty, but by plenty—the poverty of leisure, and how our people should use that newly-found leisure.

It may well be, as the hon. Member for Shettleston (Mr. McGovern) said in his eloquent speech yesterday, that the great problem which will then face us will be whether we adapt Christian principles to the new industrial age or surrender ourselves to the doctrines of Karl Marx and dialectical materialism. Whatever may happen in the future I am certain only of one thing: that 20 years from now, hon. Members like myself, on all sides of the House, will probably be sit ting by our firesides, looking through our National Health spectacles, surrounded by National Health bottles, and talking, perhaps, to a bright young thing—

Mr. Ken-:

He will probably still be here, and better than all of us.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Tradeston

He will be leading the Opposition then.

Photo of Sir Hamilton Kerr Sir Hamilton Kerr , Cambridge

Probably we may be talking to a bright young thing who has just nipped over to New York for a cocktail party, or who is planning a week-end trip to the moon. But we shall say to him, "My boy, of one thing I am certain. The Members of the House of Commons now are nothing to what we were in our day."

6.56 p.m.

Photo of Mr Wilfred Fienburgh Mr Wilfred Fienburgh , Islington North

So far in the debate, only two Members on the benches opposite have really referred to the Amendment. Both of them have been extremely revealing, because they have done what, I think, was the proper aim and intention of the Amendment: to focus the attention of the country on the real, fundamental and philosophical differences between the two sides of the House.

We had, first, the speech of the former Attorney-General, the right hon. and learned Member for Chertsey (Sir L. Heald), who treated us to a dissertation on personal freedom after we had had an excursion on Stephenson's "Rocket," the sum total of which was a statement of the right hon. and learned Member's belief that the apotheosis of personal freedom is the unrestricted right of the private owners of land to use that land as they will, without any reference to the needs of the community as a whole. That was one of the startling differences which, I am glad, the debate has so far brought out.

Secondly, we had the contribution of the Economic Secretary to the Treasury, whose speech presented a startling contrast to the speech made by the former Chancellor of the Exchequer, my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). In the speech of my right hon. Friend, we did, at least, begin to glimpse—we more than adequately glimpsed, I think—the framework of the kind of new social order which we on the Socialist benches in the House of Commons seek to build in this country.

From the Economic Secretary to the Treasury, we got a sordid moling and ferreting among irrelevant statistics. I know that the hon. Gentleman had a difficult job—he had to weld together his own speech and that of his right hon. Friend the Chancellor of the Exchequer—and I felt sorry for him. In the result, he deflated us with tedium and he failed lamentably to maintain the standards of accuracy and academic honesty which some of us ascribed to him in the past. We know that the hon. Gentleman's past was in the Conservative Central Office, but some of us assumed that the more tawdry bits of publicity coming out of that office were produced by people of a much lower academic standard than his. Now we know that the hon. Gentleman was producing them all the time, for one of the quotations which he proudly presented as an argument was that of my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), when he said in 1950 that he thought we had turned "Recovery Corner." That, said the Economic Secretary, was unwarrantable complacency in the circumstances of the time.

But it was nothing of the sort, because it can fairly be said that in 1950, after five years of a Labour Government, we were beginning to turn "Recovery Corner." We were beginning to get rid of some of the more irksome and less necessary controls, in a bonfire ignited by my right hon. Friend the Member for Huyton (Mr. H. Wilson). We were relaxing the rationing schemes and there was a very good and real increase in the standard of living of this community.

All that happened by 1950. Then, after that, came the Korean war. After that, came the need to increase our armament expenditure. After that, came the need to intervene on behalf of collective security in Korea. After that, came the startling and catastrophic change in the terms of trade throughout the world. All these things happened after 1950, and it is a measure of the success of the Socialist Government before 1950 that we survived those shocks as well as we did.

Therefore, the Economic Secretary is doubly guilty of complacency, because the major feature of his speech was an aura of placid complacency. He is complacent because, after three years of office by his Government, production has just about staggered back to the limit at which it stood when the Labour Government were in power in 1950.

Photo of Sir John Hall Sir John Hall , Wycombe

Would not the hon. Gentleman agree that in the years to which he is referring, from 1945 to 1950, or nearly to 1950, the Government whom he supported received Marshall Aid on a very considerable scale?

Photo of Mr Wilfred Fienburgh Mr Wilfred Fienburgh , Islington North

Certainly, but if we look at the world disposition of aid we see that we sent to other parts of the world, to the underdeveloped and the war-torn areas, in terms of sterling just as much as we received in terms of dollars.

Let us return to the complacency of the Economic Secretary. He is complacent because production has just about staggered back to 1951 levels. He is complacent because reserves are not quite as high as they were in 1951. He is complacent because full employment, which was handed to the Government, is maintained. He is complacent in a situation in which the real standard of living of the working class section of the community is advancing at a much slower rate than the standard of living of other sections of the community.

There have been significant and startling advances in the social structure of this country in the 50 years since the Labour Party was formed. Example after example has been thrown up during the debate. I think it is fair to say that it has usually been the organised public pressure of the Labour, the Socialist, the trade union, and the Cooperative movements in this country that has provoked hon. and right hon. Gentlemen opposite into taking action which otherwise they would not have taken. There is one classical definition of the Conservative Party, that it has cultivated more than any other political party the art of survival. It is the only reason for its existence, the only reason for its continuance. It has learnt that the way to discourage survival is to fight in the last ditch. It never fights in the last ditch. Its members always hop out of it and find another convenient hole in the ground a little farther on, where they continue to chatter and sneer at the oncoming forces demanding social change.

There have been social changes. The hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond), speaking for his political party, the Liberal Party, and the only representative of that party here to hear his speech, pointed out that there have been advances in co-partnership, to some extent, during the past few years. Let us look at some of the advances in co-partnership, in profit sharing, within the last few years. We find that they are exclusively in major industries which were, it seemed, under the threat of public ownership.

Tate and Lyle, in 1950, when we included them in our programme at the General Election, riposted by introducing a scheme of profit sharing. Imperial Chemical Industries have done the same thing because they feel themselves under the same sort of threat in "Challenge To Britain." So we can go on, not only in terms of profit-sharing and in terms of social service but in terms of the general social climate of this country today. We find that the major advances shown in the acceptance, by the community, of a higher moral principle have always been due, not to the reluctant concessions of the party opposite, but to the organised and determined pressure of the party temporarily on this side of the House.

How secure are the gains made in the last 50 years or so? My fear is that they are extremely insecure. Partly they have come about because we have enjoyed an advance in technology, and partly this has been an advance in the technology of manipulating the economy. We all know now, and hon. and right hon. Gentlemen opposite also know and accept, that it is possible, by manipulating the economy to get rid of some of the major evils of unemployment and poverty which existed even as recently as in the 'thirties. The tragedy, however, of the position of hon. and right hon. Gentlemen opposite is that although they understand and know what steps they could take economically in certain circumstances, they perniciously still go on robbing themselves of the armoury they could have and which they are going to need.

One of the ways in which to maintain full employment when there is a decline of investment is to increase investment in the public sector of industry, and hon. and right hon. Gentlemen opposite are dismantling the publicly-owned sector of industry and dismantling, too, the degree of control over the private sector of industry. The result is that even now, when in terms of the economy we are enjoying a boom period, they find them-selves unable to make their friends in the country, the controllers of private industry, invest sufficient to ensure the future. The only levels of investment which in any way match the need of today and the need of tomorrow, which is even more important, are the rates of investment in public industry.

Hon. Gentlemen opposite who have read Keynes—we are all Keynesians now—understand that if this present prosperity boom, which is not a very secure or safe one, is to be maintained there must be sufficient investment. I say that it is not a very secure or safe one because there are already signs that savings are at a higher level than investment. That is one of the classical signs of the beginning of a deflationary spiral. I shall not prognosticate that this will last or how it will develop. I agree with the hon. Gentleman the Member for Cambridge (Mr. Hamilton Kerr) that it is most unsafe to prognosticate economic developments, either in this House or anywhere else.

However, there are already signs of a deflationary spiral, and the Chancellor of the Exchequer will very much regret the attitude he has taken as the Chancellor in a Conservative Government which has been extremely keen to disarm him, to take away from him the weapons with which he might have fought an incipient depression. So, even to maintain the present standards, tenuous though they be, we must have more public ownership in appropriate sectors. We must have more control over the private sector of industry.

I get rather tired of the way hon. Gentlemen opposite metaphorically hide their eyes and bow their heads whenever they hear mentioned the word "control." I am controlled now every time I drive into London, and rightly so. I am restricted to driving at 30 miles an hour—and am usually passed by Tory Members of Parliament on Constitution Hill. This control is a restriction of my freedom, and when I am in a hurry I resent it, but that control on me is an additional freedom to other people who want to cross the road.

To talk glibly about all controls being restrictive is nonsense. Many controls are not restrictive but, rather, are productive of even greater freedom for other people. Therefore, there must be not only more public ownership, but more control of the private sector of the economy; in other words, more Socialism; and that is the substance of the Amendment.

We members of the Labour Party believe in four main propositions. We want real equality of opportunity in this country for everybody, regardless of background, and we have not got it in this country at the moment, nor are we in any way remotely near it. Despite the fact that some of us happen to sit on these benches, there is no real equality of opportunity in the proper sense of the word. We want greater equality of wealth in this country. That is the second major proposition that we hold.

We hold that it is a moral and Christian duty to look after the sick and the weak in society. That is our third proposition. We demand a creative, a really virile, active democracy, a democracy which is not just a ballot box democracy but is an economic arid industrial democracy as well. Without detaining the House too long I want to comment upon those four main propositions.

First, equality of opportunity. Equality of opportunity is not the erection of a kind of educational greasy pole up which people with superior memories and retentive minds can climb so that a boy from a working-class home can become a bank manager and join the Tory Party and forget all about his background. That is not the real spirit of equality of opportunity. Real equality of opportunity should extend far beyond the mere mechanical framework of education and should exist throughout the whole of life. After many years of educational equality of opportunity we in this country are still stratified in a job structure, a class structure. I am not talking class warfare. It is hon. and right hon. Gentlemen opposite who operate class warfare, and I am not advocating it at the moment.

The London School of Economics has recently published a very erudite work. It has many graphs in it. I cannot expect hon. and right hon. Gentlemen opposite to take it as light bedtime reading, but I do hope that they will just have a glance at it. It shows that after many years of a fair degree of educational opportunity it is still true that a person who wants to become a professional man has to take the elementary precaution of being born the son of a professional man. It is still true that the safest way of ensuring a life as a general labourer is to take the precaution of being born the son of a general labourer. There is a social immobility in this country which is anathema to those of us on these benches who believe in equality of opportunity.

It is still true in industry as a whole that one can get on in the world. A person can go to school and learn, then go to night school and learn some more, can take all the technical degrees and qualifications possible, and, having assembled all this armoury of knowledge, can make himself a competent member of the managerial class and secure his position by marrying the boss's daughter. But it is not everybody who can take the last step.

It is true that, with the exception of some major corporations whose instinct for survival is so strong that they must absorb the best brains irrespective of where they get them, industry, and particularly private enterprise, is riddled and strangled by hereditary management. People are occupying managerial and technical positions not on the basis of their knowledge or capacity, but on the fortuitous circumstances of their birth.

We cannot afford that in this country. We are a population of 50 million people on a tiny island and we have no right to that population. If the Economic Secretary were to blueprint a population for this island, he would provide for a population of 30 million. But we cannot blueprint the kind of population we ought to have. We have a population of 50 million based upon an economy ill provided with raw materials and with an agricultural economy which can at the very best feed only two people out of three. And the third man demands to be fed. We feed him by the exploitation of our inferior resources in raw materials—some very good coal, some indifferent iron ore. For the rest, the only thing we can exploit is the skill ingenuity, craftsmanship and common sense of the people.

Therefore, if there is, anywhere in the community a man in a blind alley occupation who would have the capacity to advance himself, given the chance, if there is a man in a foreman's job who, given the opportunity, could be a good manager, if there is a man frustrated by denial of a chance to exercise his full capacity because of lack of opportunity, then it is not only the man who is suffering; it is the community as a whole which is being robbed by the wastage of one of its prime assets.

There were no adequate proposals from the Economic Secretary on this question. He did suggest certain technological educational facilities, but there were no proposals to deal with the basic problem of equality of opportunity in the managerial field throughout private industry. That leads some of us to say that it would be better to extend public ownership if only for this reason, that it is only in the mines and in certain nationalised industries that we have eradicated the nepotism which so corrupts capitalist industry in Britain. Opportunities are entirely different in private industry from the opportunities which exist in the nationalised industries, where nepotism has been removed.

The second point which I want briefly to expand is that there should be a greater equality of income and wealth. My right hon. Friend the Member for Leeds, South pointed out—and we ought to rub it in—that at present in this Christian community we admit and accept a system whereby 1 per cent, of the people own 50 per cent, of the real wealth, and where, inevitably, 100 per cent. of the real wealth has been produced by the other 99 per cent. of the people by their labour, their ingenuity and their craftsmanship. That is an intolerable situation. There must be greater equality of income and greater equality of wealth.

It is a strange thing that the higher one goes up the income scale in this country, less of the income is directly earned and more of it unearned. I think that is immoral and wrong and it is not the basis on which we can build a really productive economy. We have in this community not only this differential in income but, just as serious, a differential in wealth. Whenever hon. Members opposite think in terms of someone attacking differentials in wealth a sort of wave of moral indignation sweeps over them, and they exclaim, "You are going to attack someone's private property."

Even though a man has inherited a considerable sum of money—and there are some on the benches opposite who have inherited some within recent months—[An HON. MEMBER: "And on the Labour benches, too."] And on these benches, too. That is quite true. But there is an assumption by hon. Gentlemen opposite not shared by anyone on this side of the House, that they have an inalienable right to it and no one should take it from them because it is private property and private property is sacrosanct.

In looking at the morality of the ownership of inherited wealth perhaps I may take as an example—maybe this is an exaggerated example—what happened some time ago in the United States of America. A Senatorial Committee, headed by Senator Kefauver investigated vice and crime there, and it came to the shocking conclusion that many people who had amassed fortunes out of vice and crime were investing those fortunes in private enterprise and becoming responsible and respectable businessmen. That shocked many people in this country. But if we care to look at the origin of some of the fortunes here and investigate the shoddy origins of the system of land ownership and of land tenure which some gentlemen in another place have inherited, we will indeed find some startling and disturbing facts.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

On a point of order. Is it correct to cast reflections on hon. Members in another place and on the way in which they have inherited their wealth, as has been done by the hon. Member for Islington, North (Mr. Fienburgh)?

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

I think it is undesirable to mention Members of another place in this Chamber more than is strictly necessary, but the hon. Member for Islington, North (Mr. Fienburgh) was making a general statement and was not speaking about any particular Member of the other place. But there should be respect shown by each House for the other.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading South

It is all in the history books, anyway.

Photo of Mr Wilfred Fienburgh Mr Wilfred Fienburgh , Islington North

There is nothing of which the hon. and gallant Gentleman ought to be ashamed. What I am saying is well-known. All I am saying—and I am not making a big point of it—is that if anyone suggests that there is nothing immoral in the foundations of large fortunes in this country, then I would refer him to the circumstances surrounding the original amassing of these fortunes, many of which were amassed either by land enclosure, which was, in fact, robbing the people of the common land, or by the closure of the monasteries. Even if we ignore the facts surrounding the origin of inherited wealth, what is even more immoral is that inherited wealth gives an individual a claim on current production in return for which he makes no contribution at all.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Tradeston

How many carry with their wealth the bar sinister?

Photo of Mr Wilfred Fienburgh Mr Wilfred Fienburgh , Islington North

I am not making a great deal of this particular point. All I am saying is that there can be no defence on the grounds of absolute morality of the system of inheritance on which large private fortunes are based, which gives the inheritors a call on the current production of ordinary working men and women in this country without having to make any contribution at all to that current production.

I want to pick up another point, which was made by the hon. Member for Orkney and Shetland when, quite rightly, he said that there must be a vast increase in investment in this country. I agree that there must be. I have constantly argued this in the House, but investment means denying oneself current consumption. One must do without some of the things one would like to enjoy. In other words, investment means a relative sacrifice, and there is no way of having a proper equality of sacrifice while there is basic inequality.

Many of my hon. Friends will remember the 1931 General Election. I was 12 years old at the time, but I remember a cartoon by Horrabin in which he epitomised the whole conception of equality of sacrifice. It was the cry of the National Government in 1931, and Horrabin showed it graphically with a drawing of a flooded basement out of which came a ladder. On the bottom rung was a working man with the water lapping his chin. A prosperous individual with a bowler hat, brief-case and umbrella—I suppose there was no Anthony Eden homburg in those days—stood on the ladder with the water lapping at his knees. At the top of the ladder was the usual cartoon of a wealthy man, and his feet were well above the water level. He was saying, "Let there be equality of sacrifice. All take one step down." The result was that all one could see of the "bloke" at the bottom of the ladder was a series of rising bubbles.

That is no conception of equality of opportunity. If we are to rebuild this country to face the industrial age and new competition throughout the world, if there is to be equality of sacrifice to this end, it can be achieved only by reducing current consumption; and one cannot expect the masses of the people to deny themselves current consumption while they see the ostentatious flaunting of wealth by other people. One of the major crimes of the Government has been their failure to back up the Trades Union Congress when it was willing to accept a proper degree of restraint in income. The Government preferred to allow a grotesque and exaggerated distribution of dividends for personal consumption. In the long term that will be one of the most sorry crimes of the Government in a very long list.

My third proposition is that we must look after the weak and the sick in the community. We on this side of the House and many on the benches opposite accept this as a Christian and moral duty to the community as a whole, but it is significant that since the party opposite have been in power there has been a gradual erosion of public responsibility towards the weaker sections of the community, and a whittling away of provisions designed to look after those who are unfortunate.

Even in this latest prospective increase in old-age pensions this attitude is typified again. It is too little and far too late. If there had been a real will on that side of the House, we know that the decision could have been taken in midsummer and the money could have been in the old people's pockets by this month. That is an illustration of a very strong difference of emphasis and purpose between the two sides of the House.

My last point is that we believe in the creation of a proper sort of democracy, which is more than a ballot box democracy. There must be a ballot box democracy, of course, a democracy based on quinquennial elections to Parliament and elections to local councils, but if we are restricted in the exercise of democracy merely to the election of public representatives and if they, after election, have no control on our behalf over the key economic decisions in the community, our democracy is a hollow mockery. It means that those people who occupy key positions in the economy on an irresponsible basis—and I do not mean that they are personally irresponsible, but that they are answerable to nobody—will make the decisions. They will decide whether investment should be higher or lower, as the Government know to their economic cost, whether there should be employment or unemployment, restrictive cartelism or an expanding economy. We say that it is intolerable that democracy should call itself such if proper control of economic affairs is not exercised by the community as a whole.

This inevitably involves some expansion of public ownership in appropriate sections, and a further assumption of control in other sections. Allied to that there must be an industrial democracy so that in the workshop, the mines and the railways people are given a proper status as individuals and are not regarded merely as turners of wheels and carriers of loads. Man must have his proper dignity, and this must be exercised in the workshop without, of course, destruction of managerial responsibility.

I resent the imputations in the speech of the former Attorney-General, the right hon. and learned Member for Chertsey, that our aim is to restrict freedom and to constrict and tie down the natural genius of the people. Our aim is to create a new and greater freedom. I am not suggesting that some of the ills of the past, which we all inherited, were not at the time inevitable. We owe a great deal to the Industrial Revolution and to the industrial and social capital which was built up in those days. I do not say that it could have been achieved without the rough and tumble of the capitalist economy of that time.

Photo of Mr Wilfred Fienburgh Mr Wilfred Fienburgh , Islington North

A terrible price was paid, but I do not believe that it could have been otherwise in the roaring, snorting capitalism of those days, just as I do not believe that the Sphinx and the pyramids of Egypt could have been built without slave labour. In the conditions which prevailed at the time that was how industrial capital in the shape of mines and railways and workshops were built; but we have moved away from all that.

We, on this side of the House, in our Amendment and in our general social philosophy, seek to move into a new kind of social order in which freedom will not be inhibited but will be enhanced, in which people will have the right and the dignity to live their lives in their own way, to enjoy those things which they want to enjoy and to have the opportunity to exercise freedom of choice as widely as possible.

We say that the chaotic, stupid, ignorant, bitter kind of life which was the byproduct of tine Industrial Revolution is not the sort of life we want today. We do not pretend that we shall recreate humanity but we on this side of the House have a complete belief, if not in the perfectability of man, in the im-provability of man. We believe that in the right kind of atmosphere, in the social climate of advancement and improvement of economic standards, we really can and will produce in this country a finer and nobler race of people who will give a lead to the whole world.

7.29 p.m.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

The hon. Member for Islington, North (Mr. Fienburgh) has given us a vigorous speech. It was not a very accurate one, and I do not know a cliché which he did not employ. During the last 20 years, I have listened to Socialist speeches and the hon. Member seemed to have collected together all the perorations of those speeches and built them up to make his speech tonight. But they are outmoded.

In passing, may I comment that I did not know that a good memory "helped one to climb a greasy pole." I share with the hon. Member his disappointment at not marrying the boss's daughter. The only difference between us there is that I have got over it, because I got something better.

The hon. Member spoke of the new social order which was dealt with in the speech of his right hon. Friend the Member for Leeds, South (Mr. Gaitskell). The only new social order that I recognised in the right hon. Gentleman's speech was that we should have building licences back, and have controls back, which would mean a return to the ration book. It was in keeping with the words used in the Amendment which we are now discussing.

I believe we can say, if we look at the facts as they are today, that in every field in which the Government have any control any impartial examination will clearly show that there have been gratifying improvements all along the line since this Government took office. In some aspects the improvements are so clear and so obvious that people do not want any reminding from either my right hon. Friends or the hon. Members on the other side of the House.

The first I want to mention is housing. I am very surprised that the right hon. Gentleman the Member for Leeds, South, on that particular topic thought fit to spend any time at all in the way of criticism, because one thing which is absolutely clear, and which is recognised by everybody in the country, is that 200,000 houses was the most that he and his friends could promise—they only reached that figure once—and this last year we have actually built 350,000 houses, or more.

The time for the right hon. Gentleman to start criticising will be when the number of houses that we build for renting falls below the figure that was produced by 'him and his friends for about five years. At the moment we are building 210,000 houses for renting by the local authorities every year, and that is a figure that was rarely reached, if at all, by hon. Gentlemen opposite when they had the responsibility of Government.

Photo of Mr Robert Mellish Mr Robert Mellish , Bermondsey

If the hon. Member is going to be fair, he should mention that at the time the present Government started building they closed down all hospital building. I am the chairman of a hospital management committee, and instructions were given that there was to be no building of any kind for a period of six months. There has also been restriction on other building throughout the country.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

I do not know what the hon. Member means about the closing down of hospital buildings. During the whole period of the Labour Government they did not complete one hospital, so how could we have closed down something that they did not start?

The position of schools has been dealt with. We know that for a few months that was used as a delightful red herring to try to cover our success in the housing field. But when one examines industrial development, hospital building or school expansion, it is the fact 'that our return to freedom in the building industry meant more houses and more of those other amenities to cover all other aspects.

From the Chancellor of the Exchequer we have had three Budgets with no new taxes, three Budgets with existing taxes reduced. In this Budgets we saw 16 million workers who previously paid taxes being relieved entirely or partly of that pernicious obligation. People know that for themselves when they find P.A.Y.E. deductions from their wage packets no longer as large as they had been. Sixteen million have benefited from tax reductions brought in by the Chancellor of the Exchequer.

I want now to refer to the general position of freedom. The hon. Member for Islington, North said that the Labour Party wanted to bring back all the great freedoms. What is the fact? Over the last three years we have been the ones who have done away with the identity card, the ration card, and building licences. Those are items on which we need not spend a lot of time, because people know about them from their own personal experiences.

But there are other benefits—and this is tied up with this Amendment—that have been obtained as a result of bold and shrewd Government policies, which, although they are beneficial, are not so easily recognised because of their complexity. It is because of their complexity that they are being twisted by hon. Gentlemen opposite both in this House and when they speak in the country.

Take the question of living standards and costs generally as they affect ordinary people. As an opening statement on this position, I can say with confidence that any fair assessment in this field can only confirm that more people in Britain than ever before are buying and consuming more of the necessities of life. That is a fact. More people in Britain than ever before are buying and employing the so-called luxuries of life. That is a fact. More people in Britain than ever before are saving more in small savings.

More are living longer than ever before. That all flows from the long line of health improvements which have been sponsored by Members of my party in the past. When early next year we get the improvement in the position of the old-age pensioners, then we shall have brought about a transformation which seems really miraculous when one compares it with the austerity-ration-ridden days of the Socialists only three years ago.

I should like to examine each of these propositions and produce evidence in support of them, because they were somewhat denied by the right hon. Member for Leeds, South. The first is that more people are buying the necessities of life. From January to September this year the nation consumed about 3 per cent. more food than in the three previous years. That is reflected in the sales from ordinary shops and from the co-operative societies. The latter had £743 million worth of sales last year, which is about £30 million higher than their best year ever before. It is reflected by the sales from stores like Woolworth's, who sell to the ordinary working people of this country, whom we represent in this House. [An HON. MEMBER: "Price or quantity?"] One can take either price or quantity. So far as the quantity is concerned these are the figures. I have given essentials.

There were 480,000 tons more meat. Is that price or quantity? There were 152,000 tons more bacon; 200,000 tons more sugar than in 1951. That is quantity. Do hon. Members want it in percentages? In the first six months of this year, as compared with 1951, there was 75 per cent. more meat; 30 per cent. more bacon and ham; 20 per cent. more sugar; 20 per cent. more tea, despite the price; 50 per cent. more sweets—the highest consumption in the world. All those are improvements in consumption over 1951 figures.

This consumption has been shared by the ordinary householders and old-age pensioners. I have here the official figures issued by an impartial Department, which are worth keeping in mind. In 1951, in normal households, on average, people were having 5·2 pints of milk, which is down to 51 pints in 1954; tea has gone up from 2·8 ounces in 1951 to 3 in 1954; eggs have gone up from 2·8 to 4·6; margarine from 4·1 to 4·8; meat, including bacon, 26·7 to 33·5 ounces; sugar is up from 11·4 to 16·2; tea has gone up from 2 to 2·8, and butter, as an hon. Member interjected, has gone down from 3·9 to 3·8.

The consumption of all of these necessities, with the exception of two items has gone up. That is recorded in the OFFICIAL REPORT of this House. The point I am making is that of necessities—and these are necessities—we find that people are consuming more, more is going into ordinary homes. So far as an impartial investigation can show anything, it shows just that. If hon. Members are fair, they will know from their experience of visiting friends, relations, and constituents that that reflects what are the facts.

What about so-called luxuries, because we want to have a share of these new ideas and inventions of which we are so proud, and in which we have been the pioneers? One can get a whole list from the official digest, but a fair report of these so-called luxuries shows that 3½ million families have television sets in 1954, compared with 1 million in 1951. That is a fair barometer. It means that 2½ million people have found £80 or £90 to buy a television set. That is a fair reflection of the fact that 1,500,000 families have found themselves in a position to afford this luxury.

During this summer, 25 per cent. more cars and motor bicycles were on the roads than in 1951. They were not used merely by the rich people. Every hon. Member knows dozens of places where ordinary working men have pooled their resources to purchase a motor car to get themselves to their various jobs of work. That fact is reflected in the 25 per cent. increase. Five years ago, only 300,000 washing machines were in use in this country. Today, there are 2 million, and they cannot usually be bought for less than 40 or 50 guineas each.

I suggest that the last three and a half years have shown clearly that more people have more of the necessities of life, and more of the so-called luxuries of life. They have achieved that, not by having to scrape the bottom of the barrel in relation to their incomes. More people are saving more. At the end of October the net savings figure for the first 31 weeks of the year was £52½ million.

Last year, and in other years, there was an excess of withdrawals of about £10 million to £30 million of National Savings—we were taking out more than we put in; but this year we have that excess of £52½ million in ordinary National Savings. The total remaining in National Savings is now £6,038 million, or over £30 million more than was the case last year.

Any of these tests shows that this talk of robbing people of social justice, and not allowing them to share in the benefits which we have brought about by our skill and ingenuity, is stupid and wrong. The point of giving these figures is to show that the cost of living, and especially the cost of food, must have compared favourably with the weekly wage packets. If that had not been the case consumption could not have risen, and, at the same time, small savings increased—as is the fact.

This has been confirmed. On 26th October, the Economic Secretary to the Treasury, in answer to a Question, told us that in the United Kingdom, in 1948, the total amount of wages paid was £4,160 million, and in 1953 it was £5,770 million —which represents an increase of £1,610 million. That is reflected in the figures which I have given.

It is amazing that, despite the very clear and overriding picture of this better living standard, hon. Members opposite are able to cause misunderstanding. For the most part they do it—and none more adeptly than the right hon. Member for Greenock (Mr. McNeil)—by what the "Manchester Guardian" called conjuring up a new mythology. They seize upon any rise in prices and ignore any fall.

If the price of tea goes up by 1s. a lb., and the price of eggs goes down by 1s. a dozen, hon. Members opposite ignore the eggs and concentrate on the tea. If the price of mutton and pork goes down by 3d. a lb. and nothing goes up in price, they invent a scare—such as 'the 1s. egg, or the beef at 7s. a lb., or the butter at 6s. a lb.—or, as suggested by the "Daily Herald," tea at 10s. a lb. That is something which is never likely to happen so long as my right hon. Friend is in charge of affairs. Good, honest people are puzzled, because they are told about the rises, but the falls are covered up by these clichés and phrases.

Photo of Mr Wilfred Fienburgh Mr Wilfred Fienburgh , Islington North

Would the hon. Member call it a cliché, a phrase, or a piece of mythology when his party said, in 1951, "We are going to mend the hole in the purse," instead of which the cost of living has gone up practically every month, and is now considerably higher than it was then?

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

I am trying to demonstrate to the hon. Member that we have patched the hole in the purse, and that if there had been a hole in the purse and the money had gone into the gutter it could not have gone into National Savings. That is as clear a piece of evidence as any reasonable man could desire to prove that a patch has been put upon the purse.

I do not suggest that everything has come down in price. Some things have gone up and others have gone down, but on balance, since 1951, it is a fact that wage increases have more than made up for increases in costs. Any alterations, viewed in relation to the recent wage changes, show that wages have risen to a greater extent than prices. In the past 12 months, the weekly wage rate has risen by 4·3 per cent., compared with an increase of 2–4 per cent. in retail prices.

Mr. Hector McNeil:

Will the hon. Gentleman state the comparative figures of wages as against food prices?

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

Yes, I shall deal with that.

The point is that, in the past 12 months, the weekly wage rate has risen by 4·3 per cent., compared with an increase in retail prices of 2·4 per cent. From the beginning of this year to September, wages have risen by 17 per cent., and prices by 11 per cent. From 1947 to 1951, wages went up by 22 per cent. and prices by 29 per cent. Those figures are on the record.

To sum up our record as compared with that of hon. Members opposite, the position is that, in 1951, the cost of living rose by 12 per cent. and of food by 18 per cent. with a commensurate increase in wages—I am sorry; perhaps I may correct that.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading South

It is a long job, son.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

I should like to correct it, because this matter is so important. In 1951, the last year of office of the right hon. Gentleman opposite, the cost of living went up by 12 per cent. and the cost of food by 18 per cent., and there was no corresponding increase in wages. In 1954, from 1st January to the month of September, the cost of food rose by 4·5 per cent. and the cost of living by 2·4 per cent., but there was a commensurate increase in wages. The result, very clearly, is that we are now eating, wearing and using more of the modern world's goods, and saving more, than has ever been the case in the past.

The important fact is that confirmation of this statement comes from a source quite outside the Government.

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

The logic of the hon. Member's statement—and I accept his figures, because they do not affect some of us—is that he is now indulging in a very severe criticism of those who advocated wage restraint.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

No; I am coming to that point.

I am saying that the last 12 months show that the increase in the cost of food and in the cost of living generally, if looked at in the light of wage increases, cannot be used as an argument for further wage increases. There may be others. It is right that workers and people of this country today share in the extra prosperity of the nation. But I am saying that the impartial Report of the Cost-of-Living Advisory Committee, the authors of the Interim Index of Retail Prices, shows that, whatever grounds there may be for claiming increases, they cannot be claimed on the basis of an increase in the cost of living generally.

I make an appeal to hon. Gentlemen opposite to pay attention to the importance of not undermining the authority of the retail price index. It was set up by a right hon. Gentleman opposite, and it has been working to rules which were laid down by the right hon. Gentleman, and I feel that it is up to all of us to accept the evidence we get from it, and to work on the basis of that evidence being authentic, and not try to undermine it, as so many people do on platforms in the country.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

If the hon. Gentleman is now defending the index, why is it that his hon. Friends have said that we were deliberately rigging the index?

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

That was wrong. If the Cost-of-Living Advisory Committee allowed any Government, of whatever political complexion, to interfere with its impartial work it would be a great mistake. I am arguing that the Advisory Committee, the authors of this index, is an impartial body, and that for the last 10 years it has acted impartially and that therefore, it is the responsibility of hon. Members in this House to face up to that fact.

With all this evidence, why is it that certain people can still be doubtful about the cost of living? The first reason is that there is more for people to buy. Money does not seem to go so far, because there is more to spend it on. The second reason is that the wage increases which the workers have enjoyed, and the reduction in taxation, have not always been passed on to their wives, who pay any cost of living increase. I ask hon. Gentlemen opposite whether their own recent increase has been passed on. [An HON. MEMBER: "Have you? "] If I have not passed on my own increase, when I read my speech tomorrow I shall be constrained to do so. The third reason concerns a small section of the people, the old-age pensioners, though not all of them. About one in four of old-age pensioners were facing real hardship, because they did not have the increase to help them to meet the increase in the cost of living which men earnings wages had.

I believe that, if we want social justice, which is the mainspring of this Amendment, we have ample evidence to show that, during the last three years, what we have done is more likely to spread and extend that social justice than anything that happened in the previous six years. I feel that the vigour with which speeches have been made from the other side today shows that hon. and right hon. Gentlemen opposite have something of an inferiority complex on this matter. It is my belief that they are entitled to have that feeling.

7.54 p.m.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

Having listened to most of this debate, I feel that we are still able to say from this side of the House that the indictment levelled against the Government by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell), in opening the debate, has still not been answered. I felt that my right hon. Friend's speech was one of the finest expositions of the present economic situation, and of the culpability of the Government for it, that we have heard in this Parliament, and I wish that more of my hon. Friends had taken the opportunity of making such speeches in years gone by.

I am concerned with that part of the Gracious Speech which deals with industrial matters, and with two parts of it in particular. We read: My Ministers will continue to encourage the expansion of industry and the full employment of My People. Later, there is this passage in the Gracious Speech: My Government will stimulate the expansion of facilities for higher technological education, so that advances in scientific research may be matched by increased industrial efficiency and production. The Amendment deals with these two issues.

On the first point of expanding industry and full employment, I challenge the right of the present Government to assert that they have done anything at all to encourage such expansion. On the second issue of scientific research, their actions have, in fact, retarded scientific research and its application to industry. In their first full year of office—1952— we saw the first fall in productive levels since the end of the war. During that period, our overseas competitors increased their productive levels, and very much of the strength of our economic position which was achieved under the Labour Government was, in fact, lost. It is true that in 1953, and again in 1954, production has again gone up, but, if we look at the Statistical Bulletin of O.E.E.C, we see that even now we are losing our share of world trade.

Therefore, there is nothing whatever about which the Government should be complacent in the present economic situation. Indeed, when one reviews in perspective the last three years and the things which the present Government inherited, we see that among the skeletons hanging from the candelabra, which the Leader of the House used to tell us about, was an economy on which the basis of full employment was laid, and a higher average increase in productivity per annum than had ever been achieved in our history before or since.

The Economic Secretary to the Treasury was arguing with one of my hon. Friends as to whether there is more full employment than in the days when we were in power. It is rather a ridiculous argument. When we were in power, the fact was that there was a slightly smaller working population, and the number of vacancies which we might have filled ran into almost 750,000. Had there been the physical presence of 750,000 more people, the jobs were there to be taken. To argue that there might have been a few thousand more in employment fails to take into consideration the fact that there are now more people to be employed, and there are certainly not the same number of vacancies in existence today as when we vacated office in 1951. That argument is quite a negative one.

Again, when we look at the issue of the expansion of industry, let us look first at one or two particular industries. Will the Government tell us that they have expanded the agricultural industry, which they found prosperous and contented? Their own policy has caused a contraction of both manpower and capital investment, and we may yet reap quite a harvest, though in another sense, as a result.

Will they tell us that their policies have had a good effect on the railway industry, which is now in dire trouble? Beyond doubt, this trouble is due to the Government's own policy in taking away road transport and putting it in the hands of private enterprise, because it was the only section of the industry from which profits could be obtained, and it has had a most detrimental effect on the whole railway industry.

What about the second point to which I have referred—that concerning advances in scientific research to match increased industrial efficiency? I am not disputing that, as far as actual technological education is concerned, the Government are at last doing something about it, but let us recall that, while the Labour Government were in office, we expanded the Department of Scientific and Industrial Research very considerably indeed. As I pointed out in the debate on science and productivity on 20th July, 1953, in 1944–45 expenditure on toe D.S.I.R. was £913,000. By 1951. when we left office, it had risen to £4,596,000. In early 1952, the present Government slashed the allocation to the D.S.I.R. and deliberately retarded its development.

It was only after we on these benches had exposed the lunacy of this policy that the Government allowed the expansion of the D.S.I.R. to be resumed. But, of course, two vital years had been lost during which our competitors abroad had gone even further ahead of us, and, no matter what the Government do now, it will be quite impossible for us to make good the losses of those two years.

In that debate, I quoted something from the Report of the Department for 1952, and I make no apology for quoting it again. In the preamble to that Report, the Department had this to say: In the economic position which prevailed at the beginning of the year we reluctantly decided that some contribution must be made by the Department to the general economies that were being made in the Government Service as a whole. On page 13 of the Report, we see this: In our last report we expressed considerable anxiety at the delay in giving effect to D.S.I.R.'s post-war plans. We pointed out that they had been approved by Government in 1946 as the minimum necessary to enable D.S.I.R. to play its part in ensuring that science made its full contribution to national problems and particularly to increasing industrial efficiency.We urged that special steps should be taken to remove the obstacles hindering the development of these plans which the economic position of the country and its defence alike required. Nothing has since occurred to mitigate our anxiety. In fact, we find ourselves reviewing the relation between our scientific needs and our scientific resources with steadily deepening concern. What about advances in scientific research matching increasing industrial efficiency? It is humbug to mention such a thing now, but that is something on which everything in industry depends.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

My hon. Friend says that it is actually discouraging.

We now hear from hon. Members opposite that we are enjoying a business boom. What do they mean by the word "boom"? I have already said that the Labour Government created the conditions which brought about full employment and a rapidly expanding production. Coming so soon after the war, that was a remarkable performance. Perhaps of even greater significance was the fact that we disposed of the economic theories about trade cycles, booms and slumps.

I believe that we went far to prove that even with the inadequate controls then at our disposal a planned economy can bring that which mere profit scrambles never can, namely, a busy, expanding economy with maximum employment producing, in the main, the things most needed by the nation. Under those conditions one never heard the word "boom." It was taken for granted that that was the sort of economy into which Britain would continue to go so long as there was a Labour Government in charge.

What, then, is the difference between the conditions I have described and those which we know as boom condition's? I suggest that the difference is expressed in the greater freedom now enjoyed by the Stock Exchange to regulate industrial investment as a vehicle for short-term gambling with a view to irresponsible profit-taking without any consideration of its effect on the particular firm or industry concerned or of any overall national consideration.

I suggest that the more we move into these conditions, the nearer we get to the pre-war situation in which the word "slump," which we learned was complementary to boom, comes into it. On 9th January, 1954, the "Financial Times"—I see that it is represented on the benches opposite—told us that 2,911 companies published reports in 1953 showing that total gross profits fell from £1,528·8 million in 1952 to £1,397·5 million in 1953. In spite of that fall of 8 per cent. in total gross profits, net dividends distributed rose from £130·2 million in 1952 to £143 million in 1953, a rise of 10 per cent.

My right hon. Friend estimated this afternoon that that 10 per cent. has now gone up to 20 per cent. I suggest that that picture typifies the differences between what I have described as a busy, expanding economy in which the well-being of the nation is the prime motive and the beginning of the "spiv" type of economy in which all other considerations must be secondary to the "rake off."

If that development is allowed to continue, it is really difficult to find any difference between it and the pre-war economy which produced the booms and the slumps which became so familiar to those of us in industry in those days. I believe that we shall then hear the old story from the Government's tame economists that these matters are beyond the power of Governments to control. My hon. Friend the Member for Stoke-on-Trent, South and I were victims of the days when they tried to "kid" us that that was the case.

The Chancellor has already refused to condemn these policies, but then, as he is probably their author, it is perhaps hardly surprising that that should be so. So much, then, for the boast in the Gracious Speech that the Government will continue to encourage the expansion of industry and full employment.

I do not claim that the Labour Government during their period of office did more than curb the more highly injurious effects upon our economy of Stock Exchange gambling. The war-time controls which we had at our disposal were not designed for such a purpose. I do not think we can claim that we ever really challenged the powers of the Stock Ex-change in these matters. For instance, we never attempted permanently to transfer those powers to the Government. Yet I believe that this operation is absolutely essential if the Government are to control and plan the British economy.

We have much to do in this field before we can claim adequately to plan the economy of the nation. By our taxation policy in those days we restrained dividend distribution in the hope that more capital investment would take place. We had no power to compel it. Indeed, the accumulated reserves which resulted from our policy are now the basis of the dividend spree about which we complain

I suggest to my hon. Friends that it is necessary for us to have a wide alteration in company law. Alterations should be considered which would relate private ownership of industry to public responsibility for its conduct. At present, the dividend restraint under Labour Govern- ments can only be considered as temporary. What the people concerned can do is to wait for another Tory Government to come along to give the all clear to reduce the Profits Tax and to distribute those reserves at far less cost in taxation than would have been the case had we remained in power.

We claim that we aim to create a planned economy. How does one plan an economy while leaving such powers of distortion in the hands of those whose profit rates increase as chaos prevails over planning? Enormous power for good or ill resides with those who exercise control over these undistributed dividends. No Government can determine the pattern of industrial development unless they have the power to control the uses to which those dividends are put.

I think that it is morally right and economically essential to use them, not for dividend sprees, but in a manner most likely to benefit the nation as a whole. Our thinking on this matter is by no means complete. Just as we have led the way in proving that social disturbances resulting from slumps were quite unnecessary, so, I think, we must now turn our minds to evolving methods by which, for instance, while still retaining full employment we can yet curtail inflation, with all its dangers.

Full employment is something which will need to be worked for it is is to be retained. Today, we see the fear of men like Walter Reuther in the United States, that we are entering a push-button era, in which vast numbers of people can be displaced from industry because of the great degree of mechanisation possible. To those of us who think of these matters that presents enormous problems.

If we wait too long without evolving some method to deal with the problem we shall find a new Luddite mentality will have been generated among the workers. Unless we can determine a broad ratio of the displacement involved in the manufacturing industries by this new push-button age, I am afraid we shall find a great unbalance in many industries. We shall find that, while it is necessary to have thousands of people going out of those industries, in the hand tool industries there will still be the need for systematic overtime to keep the manufacturing industries fully employed. Now is the time—though here I speak to my own party only, because I have no hope of the other side—when we, realising that this is the future economy we shall have to work, should be considering how to deal with such problems.

In the industrial debate which took place on 3rd March, this year, I tried to give my impression of the results on trade union thinking of the policies of the present Government. I remember that, in that debate, I was followed by the hon. Member for Bury and Radcliffe (Sir W. Fletcher), who described my speech as a "wicked analysis." Perhaps even on the other side of the House no one will now describe the life of the Minister of Labour in the nine months which have elapsed since that debate as exactly a bed of roses.

Perhaps the party opposite will take a little more notice of the report of the General Council of the Trades Union Congress than they were, apparently, willing to take of me when I was suggesting what could flow, industrially, from the present Government's policies. In his presidential address, Mr. Jack Tanner said this: I would warn industrialists and the Government that unless by their actions they show that they also are prepared to play their part, then they will be extinguishing the very spirit of trade union co-operation which has made possible the increase of industrial production already achieved. Later in the report, in page 93, there is the following passage: Turning to the economic field, the General Council regret that the Government's economic policy has done so little to tackle the vital problem of increasing industrial investment and to put a brake on the steady me in the prices of so many necessary items "on which workers' families have to spend their incomes. Moreover, the General Council are disturbed that the present policy of the Government has been gradually to reverse the redistribution of income achieved by the Coalition and Labour Governments. This is not in the best interests of the nation. The last quotation I shall make is from page 297 of the report: It is a fact that at present the biggest relative increases in incomes are those going to shareholders. Moreover, since 1951 incomes from rents, dividends and interest have been rising more rapidly than wages and salaries; as we pointed out in our statement on the 1954 Budget, there has been under the present Government a gradual but definite reversal of the redistribution of income achieved by the Coalition and Labour Governments. Trade unionists cannot be expected to stand idly by while improvements they have secured are whittled away by action or inaction on the Government's part, or by attempts by the richer sections of the community to improve their already privileged position.The Chancellor can hardly be satisfied with the response to his appeals for restraint in dividend distribution, but it must be emphasised that these higher dividends have largely resulted from reductions in company taxation and from the general laisser-faire policy of the present Government. Perhaps the chief danger of this policy is that it may induce a sense of false optimism that we are already out of the wood. We are not, and the longer we wander about trusting to luck and to market forces to guide us out the longer it will take us. What is more, if the doctrinaire supporters of free and unfettered enterprise are to be allowed free scope they will have only themselves to blame if trade unionists join in. In particular, increases in dividends are bound to act as a continual irritant and to weaken the influence of those who recognise the often temporary nature of the advantages that money wage increases bring. That is the opinion of the Trades Union Congress. I suggest that we on this side, who have tried to influence Government policy by our warnings that the deliberate class bias which the Government are showing in their financial and economic policies will undoubtedly bring a reaction among the workers themselves, are now justified in saying that very much of the industrial unrest which has been, and still is, evident, has been brought about by the deliberate policies of the Government themselves.

The General Council of the Trades Union Congress will not, I know, be looked upon as a body which makes statements which it cannot substantiate. I believe that the Government, by their desire to recreate the pre-war type of economy, are endangering the living standards and jobs of many millions of people now in industry. I believe that the Government have shown that they are completely unfit to be trusted with the vital problems which concern this great industrial nation, and that the sooner we get rid of them the better.

8.18 p.m.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I should assure the hon. Member for Newton (Mr. Lee) that I shall not refer to his speech, as someone, apparently, did when he last spoke, as a "wicked analysis." He has, however, made some rather remarkable statements, particularly in regard to railways. I think that we are the first Government for a great many years who have produced a completely new plan for railways, and one which far transcends anything done in that industry for well over 100 years, and probably since it first commenced. That, surely, is something of which we should be proud, and for which we should not be subjected to criticism by the hon. Member.

The hon. Member then referred to re serves and capital development, and said that we have been too slow in the private sector. Surely, of all the people who stand to be blamed for slowness, the National Coal Board must be outstanding. I am very glad to see opposite the right hon. Member for Leeds, South (Mr. Gaitskell), who was Minister of Fuel and Power—

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

Let me finish, and I will then give way immediately.

The right hon. Gentleman was Minister of Fuel and Power, and will remember the plan which was set out for capital development. Only this year, for the first time, have we caught up with the plan which was set out five or six years' ago, when the party opposite was in charge of fuel and power.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

The hon. and gallant Member referred to the Coal Board. Will he tell us of any private industry which has gone so far in the last few years in capital investment as has the National Coal Board, and many other of the nationalised industries?

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I was not trying to answer that particular point, and I was taking the point of the nationalised sector.

If we are to be asked—and I think that it would be correct to do so—for the private sector improvement, I immediately quote the oil companies, who have achieved a programme of expansion which is beyond belief. Any hon. Member knows that that is just one, but a very good, example.

Perhaps I might refer to one further matter which the hon. Member mentioned. I think that it is very dangerous to bring the Department of Scientific and Industrial Research into party politics. It has been a very valuable Department. I happen to be on the Public Accounts Committee, and every year we investigate all that that Department has done. I can assure the hon. Gentleman that last year the work that it did outstripped anything that it had thought possible. We ought to pay it a tribute, and we should not try to bring it into party politics.

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

What about the expenditure?

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I am talking about expenditure.

As I said, I was on the Public Accounts Committee. We have been into the Department's expenditure, and we know what it spent. Last year, it spent £50,000 on a new machine—do not ask me how it works, because I do not know—which is designed to pick out nebular bodies in outer space which do not have any light refraction. I do not know why, but apparently it is necessary to pick them out, so that we know where they are.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

What I said was that whereas there had been a continuous expansion under the Labour Government, there was a deliberate reduction in allocations to D.S.I.R. the moment the present Government came into power.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

That is quite true—for a short time. I have never denied it. I was merely saying that the work has gone on.

It is true that there were a number of cuts when this Government came into power, but what I object to is the way in which the right hon. Member for Leeds, South (Mr. Gaitskell) and is supporters behind him have tried to make out, first, that they told the truth to the country about the economic situation in 1951, and, second, that between 1945 and 1951 they set some pattern of economy which was excellent, was vivid in possibility, and which has been destroyed in three years by the Conservative Party. I hope that we may be able once and for all to kill that idea.

The right hon. Gentleman spent some time saying that there was no "salvage operation," that there was no "salvage" and no "operation." I think I am quoting him correctly. He never told the country in that vital period of the General Election what was the drain on the financial reserves. He made a statement at one dinner, but that statement referred to a period at least six weeks prior to the date on which he was speaking.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

The hon. and gallant Gentleman ought to know better than that. The speech was made at the Mansion House dinner in accordance with precedent, and the figure of reserves that I gave related to 30th September, which was four days before.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

It was roughly six weeks prior to the Election.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

The Election was on 16th October, if I remember aright, or at any rate it was in the 20s of that month. It related to three weeks before the Election.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I apologise, and I accept the correction, but it was certainly a considerable period before the actual date of the Election.

I am certain that the right hon. Gentleman will be the first to admit that, as Chancellor of the Exchequer at that time, he had day-to-day knowledge of the state of the gold and dollar reserves of the country. I am assured that that is so, and I should like to have it confirmed whether or not it is the duty of the Treasury to report daily to the Chancellor, and, if not daily, certainly at frequent intervals, as to the exact state of the gold and dollar reserves of the country.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

Certainly not. I was not informed of the exact position from day to day. I was travelling all over the country, as a matter of fact. I gave the fullest possible account I could of the situation. As a matter of fact, to do him justice, the present Chancellor of the Exchequer paid a tribute to my frankness.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I am only asking whether those figures were available to the right hon. Gentleman if he wanted them. It seems strange that the country was never informed that at the time of the General Election the country was losing gold and dollars to the extent of £3 million a day, or 300 million dollars a month.

We were told that many things went wrong when we took office. The facts about what happened in the first nine months alter we took office should be borne in mind. We should remember the drain of 1,268 million dollars that took place between October, when we took office and June, when we said we had staunched the wounds which had been inflicted on the economy.

The right hon. Member for Battersea, South said that in the last two years our reserves have risen much more slowly than in the rest of Western Europe. The fact is that if we allow for those nine months, during which we staunched those wounds, our reserves have risen at the rate of 70 per cent. as against 18 per cent. for the rest of Western Europe. Surely that is something of which we should be proud instead of, like the right hon. Member for Battersea, South, sneering at the effects of what we did.

Photo of Mr Ernest Partridge Mr Ernest Partridge , Battersea South

May I make a correction? The hon. Member for Battersea, South is sitting behind the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre).

Photo of Dr Hyacinth Morgan Dr Hyacinth Morgan , Warrington

Wrong again. Always wrong.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I may be wrong on that point—I was referring, of course, to the right hon. Member for Battersea, North (Mr. Jay)—but I was not wrong about the figures that I quoted.

Let us remember, further, that in the period between 1945 and 1951 the Socialists, who say that they set this pattern of advancement, had to borrow not less than 6,193 million dollars in order to do so. That was the sum that they borrowed on our behalf, and if all goes well, and no further borrowing is necessary, it will not be until 2000 A.D that we shall get out of the debts that they incurred in those six years. Is that what they call a successful financial period?

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I am glad that one hon. Member does. We have pledged our credit to that enormous sum—

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

Somebody has got to pay for it. Hon. Members opposite are saying what an excellent job they did when we are now faced with the job of paying for it.

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South

Would the hon. and gallant Gentleman also state the amount that we invested abroad during that period?

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

The question of the sterling balances, to which I understand the right hon. Gentleman is referring, relates merely to the sums that we released in order to promote our own internal and domestic Empire economy, and we did it for very good reasons. The sums that the right hon. Gentleman borrowed by way of this 6,193 million dollars to which I referred were to finance immediate imports and to secure the day-to-day running of the Socialist Government. The two do not correspond in the least.

It has been urged that we should take into account the sums that hon. Members opposite repaid in return for what was borrowed during the war. It is interesting to note that the total sum expended by hon. Members opposite in relation to war debts incurred during the six years that they were in power amounted to exactly 9 million dollars. On the other hand, in the first six months when we were in office we had to pay 176 million dollars in order to service the debts that they had incurred. It is that sort of figure which shows the difference between the way in which hon. Members opposite squandered their resources and the debts that we now have to pay.

The right hon. Member for Leeds, South talked about commodity prices, but he forgot to mention the very large amounts of commodities bought by his Government at peak prices in 1950–51, which we have had to sell at a loss, because prices have fallen. Had it not been for the unwise commodity buying which took place during that period we should not have had such a heavy bill to face in paying their debt.

Let us remember, too, the amount of overseas investments sold by hon. Members opposite to promote their day-today trade. One example is that of the South American railways, which were sold for less than nine months' supply of meat. That is the type of thing which the planned economy of the Socialists has inflicted upon the country.

We are told that we are distributing too much in dividends. The "Financial Times" has been quoted by hon. Members on both sides of the House, and I hope I may be excused if I give another figure from it. It shows that less than half the profits which could be distributed by companies are being distributed. The figure is 48 per cent. I do not think that any economy is bad where one is distributing less than half one has earned. There cannot be very much wrong with that.

We should remember that these new savings, in the form of distributed dividends, are required to build up our new industries. The trouble under Socialism, with the Capital Issues Committee and all the other rigorous restrictions, was that we could not get a new industry going. We could not get new capital. At the same time, an old industry, however inefficient it was, could get capital, just because it was there, just because it was on a list, just because it appeared in a schedule. One of the best ways of promoting the many new industries and new activities which we must have is by seeing that a proper but not unreasonable share of money is distributed through dividends.

I hope the House will insist that when we talk of dividend distribution we should forget the idea that dividends go only into the hands of a few rich people. That suggestion is absolute nonsense. The late Mr. Hargreaves Parkinson carried out a survey of the leading industrial companies of the country, and found that over 70 per cent. of the shareholding in those companies was at the rate of less than £100 worth of shares per man. I have no reason to think that that is an unfair test, because I did a rapid check with a company in which I am interested and found very few shareholders with large blocks of shares. In the main, they are small people.

The right hon. Member for Leeds, South talked this afternoon, as we have talked from this side of the House, about pensions, and about the need to help various sections of the community. We are apt to forget, and we ought to remember, those on small, fixed incomes—the people who saved and who, by thrift, invested just enough so that when they retired they might, with their dividends, have a life of moderate ease. They have found, particularly since the war, that, instead of giving them that moderate ease, their investments have proved a snare and a delusion, with no return whatever.

Mr. Percy Daises:

Surely the hon. and gallant Member should complete the picture. It is not simply a question of what a man owns in one company; it is a question of what he owns in all the companies with which he is concerned.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I agree, and I wish I could give the figure. I am afraid I cannot. I think it is highly unlikely that anybody who is rich will take the trouble to run round investing £100 in 200 different companies so as to avoid criticism from hon. Members opposite. I think that the average investor invests because he believes in the company, and he could not care less about the criticisms of hon. Members opposite. This innuendo which is made against the small investor should be made only if there is some proof to show that it is reasonable.

Part of the speech of the right hon. Member for Leeds, South was about the inequality of incomes. From this side of the House, we have said that whilst we naturally look at the pattern of 1938 compared with today to see what changes have occurred, we certainly do not want to go back to that particular pattern. But I do think the right hon. Member ought to be careful in what he says, because so much could be taken as a vengeful attack against people who succeed and companies which succeed.

If we are to have productivity, if we are to retain the brains and talent of this country in this country and not see them go abroad to other countries and other companies, it is necessary for us to provide an adequate and proper return for success. The sooner we realise that the sooner and better we shall get on. We talk about a Surtax-payer as though he were some criminal, a map who obviously by nature is undesirable and the sooner he is dispossessed, possibly throttled or strangled, the better. But what a mistake.

What did the right hon. Member say when, as Minister of Fuel and Power, he was introducing the Electricity Bill and the Gas Bill? The first thing he said was, "We must get people who are worth while to run these industries. Therefore we must pay them the money they need for that job." He was Minister of Fuel and Power when the National Coal Board gave itself £10,000 a year by way of expenses. Not one hon. Member opposite raised a sign of disapproval. I quite agree that if one is to run the coal industry one must have salary and expenses to do the job. Why, then, tackle the unfortunate man in the private sector of enterprise and treat him as a criminal?

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

If one is running a company and wishes to make any arrangement for the betterment of one's employees by way of educational facilities, a health or pensions scheme, or for recreation, one may give all that without any trouble to any man in the firm who is not earning £2,000 a year. Try to give it to someone earning more than £2,000 a year, and it is found that he is not allowed to receive it. The Inland Revenue comes down, and it is disallowed to the company as a tax expense. That is stupid. The very fact that a man is paid by a company more than £2,000 a year means, by way of definition, that he is of use to that company, and should be given the reward of his use, not penalised.

Surtax is nothing more than a discriminatory tax; it has never been a revenue tax, and never can be. Its sum last year was about £130 million out of a total Budget of £4,500 million. I am all in favour of that tax so long as it remains a tax merely to take from those who are better off what they can afford to give, but in the hands of hon. Members opposite it becomes a tax merely of spite to dispossess the possessors and I think that is wrong. [An HON. MEMBER: "Come off it."] I suggest as a first step that we should reduce the top level of Surtax to 15s. By doing that we should be doing far less than is done by any other country in Europe, particularly Germany, which will be our great competitor in the next five years.

I went to Germany on a Parliamentary delegation to see the coal and steel industries of the Ruhr. The one thing which struck me more than anything else in Germany was that, whether a man be a director or workman, he has the reward of his effort. It was no exception to see men building at night under are lights. It was nothing unusual to find the average worker in a coal-mine making arrangements with the company to build his house. It was nothing to see new shops, and cinemas, and every form of building going on in a town which, when I was last there, was nothing but a pile of rubble. I say in all humility that when one saw that in the Ruhr, and when one saw what they had achieved, one realised what enterprise and the reward of enterprise can be.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Tradeston

The hon. and gallant Member is painting a rather dismal picture of the position of British industry at present. I have in my hand a list of bonus share issues since 1952. Will he tell me where those are coming from?

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

I do not wish to get involved in that one. [HON. MEMBERS: "Oh, no."] The answer is an easy one. For about 12 years, money has been put back to reserve, ploughed back into the companies, so that now in most companies there is the share capital and the general reserve beneath it, and very often the general reserve outweighs the nominal capital. In these circumstances, all that a bonus issue means is that the company is now giving to the shareholders what was always their right. [An HON. MEMBER: "Tax-free."] No, it is not giving anything tax-free. What a stupid answer.

If I plough back money into a company and then I double the share capital, what advantage do I get? Instead of having one share worth £1, I have two shares worth 10s. each. That is all that happens. [HON. MEMBERS: "Oh."] It is quite simple. One has only to look at any bonus issue to see that that is so. [An HON. MEMBER: "Then why do it?"] The reserves have been ploughed back, and all that is done is to bring the nominal capital into line with the actual capital, and Income Tax has to be paid on top of it.

A point about which I wart to ask my hon. Friend the Economic Secretary is the need for making easier the buying of British goods by the Colonies. I am very perturbed about the present situation with the currency boards that exist in regard to the Colonies. On Friday, my hon. Friend the Under-Secretary of State for Commonwealth Relations said that about £1,450 million of sterling assets owned by the Colonies were now held in London.

As a matter of principle, it must be agreed that for the Colonies to place their sterling assets in this country in short-term loans whilst they themselves are borrowing at long-term rates, is a bad thing. We are not getting the proper exchange, nor are we getting the proper value for the help that we are giving to the Colonies. Above all, we reach the position that if any of the Colonies wants to issue notes, it has to provide 100 per cent. cover by way of sterling in London. This means that the more prosperous a Colony, the more money it has to deposit in London because it wants more currency at home, and it is, therefore, less able to spend in the British markets.

We ought to reduce the amount of cover that is required in London. To suggest a figure, I would ask my hon. Friend to accept 40 per cent. This would enable these funds, which, after all, are earned by the Colonies, to be spent by them in buying from us, instead of having the present absurd position that the more they earn the less they are able to spend.

To sum up. I not only disagree with the Amendment, but, whilst so far we have had only a single dose of this medicine, I hope that we shall now have a double dose, because the more of this medicine that we get, the better our country will prosper.

8.43 p.m.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading South

The hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre), in the course of his short excursion, got into rough water at Leeds, Newton-le-Willows and South Battersea, and received rather a hammering. He had to make one withdrawal on the grounds of chronology and another on the grounds of geography. I do not propose, therefore, to add to his difficulties or embarrassments except to remark that doubtless the old-age pensioners in his constituency will notice that in the contribution which the hon. and gallant Member has made to our proceedings, on the eve of an important debate about pensions, the only plea which he made was on behalf of Surtax payers.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest

The hon. Member will, of course, remember Mr. Speaker's Ruling, earlier today, that any mention of pensions today was out of order in this debate.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading South

That is not the point I was making. I was not condemning the hon. and gallant Member for not men- tioning the pensioners. I was just pointing out to him that the only class in the community for whom he shed a tear and made a moving plea was that of the poor, hard-done-by Surtax payers. The hon. Gentleman's speech illustrates, perhaps better than anything else in the debate, the very sharp division of basic principle that exists between the two sides of the House.

The Amendment refers to the extent to which doctrinaire considerations have influenced the policy of the Government. I want to consider for a moment what are the doctrines which have influenced the Government in the economic and social policies which they have pursued over the last three years. I think it is not unfair to them to sum up their doctrines in this way—and I think they will probably accept the summing up—that if we give individuals an incentive to maximise their own individual welfare that will result in the total welfare of the community being maximised. That is the whole meaning of their constant talk about incentives and exercising initiative and getting people to push along harder.

They visualise society as being a crowd of people trying to cross a bridge or get into a cinema or into a football ground, and their idea is that if we say to each one of those in the crowd, "You move as fast as you can. Get through the crowd as quickly as you can. Elbow your way through, push along, kick your way through, scrum your way through. Never mind who gets elbowed out of the way or who gets trodden on," the whole crowd will move over the bridge or into the cinema or into the football ground with the maximum speed.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading South

I should be delighted to give way to any hon. Member who has been present for the major part of the debate.

That theory of the party opposite is an attractive theory on the face of it—the idea that if everybody tries to grab for himself a bit when the going is good, then the community as a whole will be benefited. As a theory it has its attractions, especially, of course, for the people who succeed in grabbing a bit. I observed in the Press a little while ago that even the Church authorities have now made usury respectable by claiming that they managed to grab a bit for themselves out of their investments while the going was good.

I would only say, with my hon. Friend the Member for Newton (Mr. Lee), that the Government must not be surprised or disappointed if the workers say, "O.K. What is good for others is good for us." If it is good for shareholders in tea companies to see their income more than trebled in a year, it may be good for railwaymen, bus drivers, dockers or engineers.

If in the next few months the Minister of Labour finds himself with an unusual amount of labour trouble on his hands he will not have to look far to find somebody to blame. He will only have to look down the Treasury Bench, and point an accusing finger at the Chancellor of the Exchequer, who has spent the last three years, with the enthusiastic support of his colleagues, trying to inculcate into this country the philosophy, "I am all right, Jack. To hell with you," trying to inculcate in this country the philosophy of "Every man for himself and devil take the hindmost"; every man for himself, even if it leads to the old and the sick, the women and the children—[HON. MEMBERS: "Oh."]—being very much worse off. If the workers of the country try to grab their bit, there will be nobody to blame but members of the Government.

What happens in this sort of condition? When we try and run the country on the basis of this sort of philosophy two things go wrong. The first is that in industry itself this is the sort of policy which leads to a short-term view being taken and, therefore, militates against the encouragement of economic expansion, to which the Amendment refers.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading South

The hon. Member comes in, having fed, to interrupt an hon. Gentleman who has not had a cup of tea all day.

The Chancellor of the Exchequer fully understands me when I say that his policy militates against proper industrial expansion, because he takes such a pessimistic view of prospects under the Government of which he is a member. He has told us quite recently that if we continue to follow the policies we are pursuing we might double our national income in 25 years. That is not much of an objective. Indeed, that is a poor objective because it is at the rate cumulatively of 3 per cent. per annum. If we continued the 6 per cent. rate which the Labour Government averaged, or if the Chancellor had any confidence that the current rate of 6 per cent. could be maintained by this Government, then 6 per cent. per annum cumulatively over 25 years would not double our national income; it would multiply it by more than 4¼ times.

It is obvious, therefore, that the Chancellor must realise that his own policy is inhibiting a full measure of industrial expansion. That is not surprising, because in a period when speculation is rife and when commercial "spivery" is the most profitable occupation, people cannot be persuaded to concentrate their efforts on the raising of industrial efficiency. A man who is engaged in an industrial enterprise has to spend a lot of money and time, and give a lot of thought and use a lot of technical skill, to get a few per cent. increase in industrial efficiency. But he could get much more out of a single take-over bid than the products of several years improved efficiency in industry. We are encouraging our people to turn their backs on the solid business of the long-term raising of our industrial effectiveness in order to turn aside to the pleasant paths of financial speculations, turn-over bids, buying futures on the market, and practices of this sort.

The hon. and gallant Gentleman the Member for New Forest who spoke just now but who already, unfortunately, has had to leave us, referred to what he found when he was in Germany. I do not know what consolation he was deriving from that, but what he was doing by implication was to say that industry is much better organised in Western Germany than it is in this country. I do not see why he should think that that reflects any credit on the Government which he supports.

It is a fact that that is so, and if the Economic Secretary would stop being complacent on the grounds that we are doing better now than in 1938 and think about the present and the future instead of the dim and distant past, and if he would consider how well we are making out not by comparison with what we did 15 years ago but by comparison with what is being done now by other countries with whom we have to compete in the export market, he would find much in the scene which would disturb him very considerably indeed.

I would advise the hon. Gentleman to borrow from his right hon. Friend the Minister of Supply the report of the proceedings of the Minister's Engineering Advisory Council at its meeting on 13th October last, when it considered an expert analysis of the effects of German competition on British engineering industries, which examined very closely the reasons German engineering exports are rising at the expense of our own engineering exports. That very careful, closely documented, expert survey makes absolute nonsense of all the mythology which is being built up by employers' organisations and by hon. and right hon. Gentlemen opposite about this position.

That expert survey demonstrates with absolute clarity that increased German competitiveness is not due to Germans working longer or harder than Britons—they do not—or due to their working for less money. They do not. It is not due to German industry buying its raw materials, fuel, transport and credit more cheaply than ours. In fact, on the evidence of this expert document, it does not. The document demonstrates that it is not true that German industry suffers less from the disincentive effects of taxation than our industry does. It demonstrates that their deliveries are not shorter than ours and they do not get orders by extended credits compared with our industries.

All these contentions are examined and dismissed in this document which the Minister of Supply considered. There is left only one single factor, which is that German industrialists are less greedy than British industrialists. They think in the long-term instead of in the short-term. If I may quote from this document, the conclusion to which this expert body comes is: The increase in German productivity must owe a great deal to the rising rate of expenditure on industrial re-equipment … in the last few years … Germany devoted a higher proportion [than Britain] of her national income to industrial development … dividends have been small and a high rate of investment has been achieved by German industry. It is that which goes wrong when one creates this atmosphere of everybody dashing in and grabbing a bit for himself while the going is good.

The second thing which goes wrong is that out of roughly the same global total of national welfare one has a reallocation of welfare on a regressive basis. That is the second great doctrine of the party opposite, that Unto every one that hath shall be given. … What we have seen is very little change in the resources available to the community as a whole but within roughly the same global total a very considerable redistribution in the direction of improving the lot of those who are already fairly well off and worsening the lot of those who are not well off at all.

My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) quoted an answer which was given to the hon. Member for Louth (Mr. Osborne) a week or two ago. If hon. Members would like to make a piece of simple arithmetical calculation, they will find that that answer shows that since the present Government have come into power the increased amount of food available is equal to ld. per head per day for the whole population. There has been virtually no change in global consumption, but we know that some people are eating much better and more varied food than they were eating a few years ago. They write to the papers to say so. If one has approximately the same global total, it can only be because some people are being made to suffer to provide more for others.

It is certainly true that some elements in the community have prospered as a result of this Government's activities. They are speculators of all sorts, purchasers of steel shares, to whom my right hon. Friend the Member for Leeds, South referred, the purchasers of road transport assets, all those with high incomes who have had some substantial tax reliefs, and the landlords who are to benefit under the new legislation on rents.

But if one is to operate the principle of every man for himself and let the crowd all rush to get through the gate at once, who is it that is elbowed aside? It is, of course, always the sick—

Photo of Mr Ian Mikardo Mr Ian Mikardo , Reading South

—the young and the old. That is precisely what has happened in this free-for-all that the present Government have created. The running down of the hospital services, as a result of the cuts in capital expenditure, affected the sick. The overcrowding of schools affects the children and no one needs to say anything about the lot of the old-age pensioners.

That is why I am glad that on this side of the House we have moved an Amendment which makes clear in the sharpest form the doctrinal differences between the two sides of the House. That is why I hope that we shall see tonight a vote which will give the Government and their supporters something to think about.

9.2 p.m.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham South

This debate was opened with a very able, competent, and, I would say, devastating speech by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). It is perfectly true that the Economic Secretary to the Treasury, with his professional propagandist training behind him, did his best to answer, and he usually does a pretty good best.

I did not think he was in his best form this afternoon. I do not blame him. I am not always in the best form myself. One gets on one's feet in this Assembly and is not sure what will happen to one before one sits down. He spent some time resisting my right hon. Friend's allegation that there was any complacency about the Government. If ever I saw a man who looked complacent, sounded complacent, who had complacency all over his face, and spoke complacently all through his speech, it was certainly the Economic Secretary to the Treasury this afternoon.

I begin, as did my right hon. Friend and the Economic Secretary, by expressing my sympathy to the Chancellor of the Exchequer in the anxiety that is in his mind, and say how well we understand that he cannot be with us today. I very much hope that he will have better news.

The Economic Secretary, among other things, said there were certain blind economic forces which have to be taken into account. It is quite true that there sometimes operate world forces which individual Governments cannot control at this point in world organisation. In the days of the Labour Government of 1929–31 the present Prime Minister once referred to the world economic blizzard. We did not get any sympathy about that; the Conservative Party assumed that everything was our fault.

If the world situation, such as at the outbreak of the Korean war, or when world prices are rising, is such that the British Government cannot well control it—something can be done about it, but not everything—if a Labour Government is in office it has to be the Government's fault. On the other hand, if, as was expounded by my right hon. Friend, world prices come down under a Conservative Government—and it should be remembered that they had begun to come down under a Labour Government, partly owing to the international action which we took in regard to the International Materials Conference—in so far as they continue to do so, and redound to the luck of the Conservative Government, the Government say, "Ah, alone we did it." If International forces hit us it is our fault; if international forces give them a bit of benefit, it is owing to their virtue.

The Economic Secretary said that dividends had risen only to the same extent as wages. This statement reveals the Tory state of mind—the scrupulously equal comparison between dividends and wages. There is this material and moral difference between the two, that as regards the great bulk of the recipients of dividends, they have done little or nothing to earn them.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham South

If there is much more provocation I shall give a few personal illustrations. The hon. Member for Louth (Mr. Osborne) has had a good time interrupting everybody today. It is time that he left off doing so.

There is a great moral and material difference between dividends, which in many cases the recipients do not earn, and wages, which everybody earns, although there may be criticisms here and there. The argument of the Economic Secretary that wages and dividends should be treated on the basis of equality is typical of the Conservative frame of mind. The only sign of progress on their part is that 50, or even 30 years ago they would have put an increase in dividends above an increase in wages, and thought that it was a good thing. They have made some progress, but it is not very much.

The Economic Secretary gave us an interesting account of technological educational development, and this subject is important, but I have a feeling that the gentleman in Whitehall who wrote it enjoyed writing it more than the House, as a whole, enjoyed listening to it.

The Amendment starts by condemning the Government for their complacency with regard to continuing social injustice. It is not surprising that they should be complacent about social injustice. It is traditional in the Tory state of mind, and it found expression in the spirit of the speech of the Economic Secretary to the Treasury. Consequently, the Conservatives approach the whole economic and social problem of the community from a position opposite to that of the Socialists, trade unionists, co-operators and the Labour Party.

It is natural that that should be so, because the philosophy of the Conservative Party is based upon the belief that the private ownership of land and capital, and their use for private profit, are essentials which are fundamental to the well being of the nation, whereas we believe that the assertion of the national night to determine the use of our economic resources, including public ownership in all spheres where it is appropriate and useful—

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham South

Hon. Members opposite had better be careful, because I am going to quote some Tory Ministers in a moment. The hon. Member for Kidderminster (Mr. Nabarro) has a loud voice, and a laugh broader than his thinking about these things, and he ought to think a bit more.

That is the fundamental difference which exists between us, and, indeed, it was expressed by the Prime Minister himself on 8th October, 1951, in his election broadcast. This will please hon. Gentlemen opposite, until I come to my second quotation. This is what the Prime Minister said: Nationalisation is now admitted to have been a failure. It has been very costly to the public. It has given a poorer service to the user or consumer, and, except perhaps in the coal mines, it is not popular amongst the employees. This ill-starred experiment has caused immense injury both to our harassed finances and our creative energy. Now, let us see what the Parliamentary Secretary to the Ministry of Fuel and Power said on 25th October, 1954, three years later, and it does not relate to management by this Government, because public corporations manage these concerns. The Parliamentary Secretary said the same thing which had been said by the Minister of Fuel and Power himself. The Government had been asked if they thought nationalisation to be a complete and utter failure, and the Parliamentary Secretary replied: … that is disproved, and certainly we do not consider that the industry for which we are responsible is a 'complete and utter failure.'"—[OFFICIAL REPORT, 25th October, 1954; Vol. 531, c. 1715.] That is a complete contradiction of the Prime Minister. [HON. MEMBERS: "No."] Yes, and let it be remembered that the Ministry of Fuel and Power is responsible for three industries—electricity, gas and coal. After all, if the Government thought that things were as bad as this laughter rather indicates, why have the Government left them in public ownership?

The Government have not hesitated to mess about with commercial road transport, with the British Broadcasting Corporation, or with iron and steel, but they have not dared to touch coal, electricity, and gas, or even the railways, partly because of a sentimental attachment of the Prime Minister to the railways, and partly because they know that if private enterprise took over the railways again, private enterprise would be in an utter mess. They know it perfectly well.

Let us take a look at transport. The declared intention of the Act of last year was to denationalise a large proportion of commercial road transport, to re-introduce wholesale competition into road haulage, and to enable the small man, so it was said, to re-enter the industry. The Government intended to sell off these units as quickly as they could. They have not done so.

They have not been able to sell combinations of vehicles in premises. The sales of the larger units have been difficult, and the smaller units have not gone to the small man so much as they have been added to the fleets of those who wish to have further licences to their credit. As a matter of fact, the Disposal Board is faced with a terribly difficult job, and the time will come when the Government will have to decide whether this farce is to go on or whether, they should stop it, so that we may have some sort of comprehensive road organisation in the public sector, and even some sort the other way.

As it is, we are in danger of getting a bad commercial road service which is insufficient for the needs of British industry. The finances of the public road service have been steadily improving. Incidentally, the profit which was last made by the British Road Services is roughly the same as the sum in dispute between the railwaymen and the British Transport Commission at the present time. Moreover, the element of safety is also a considerable one.

The coal industry has shown great improvement under public ownership. We are now working mines which were started many years ago, particularly difficult mines which are bound to be economically difficult. The Minister has praised the success of the publicly-owned mining industry, and has praised the additional output. Despite all the difficulties—and there are some real difficulties—the coal industry has improved under public ownership.

Is there any sane man in this House who would urge that the coal industry should be denationalised and that we should go back to where we were before the war? If, as it claims to be, the Conservative Party is the steady opponent of nationalisation, why does it not come out and say that it is going to denationalise the mines and hand them back to the coalowners who operated them before nationalisation? Members of the party opposite know that they dare not do that, and that nationalisation is preferable to private ownership.

Civil aviation, which years ago was started on the assumption that it would have to be subsidised for an indefinite period of time, is now reaching the point when it is making ends meet. At any rate, the subsidy has decreased, and, as a whole, civil aviation is successful and has a remarkably fine record as far as deaths and injuries are concerned.

In electricity, the production is up. Its finances are healthy and, compared with pre-war days, its costs are reasonable. If the House could find many industries where charges have increased so little as in British gas and electricity it would be very lucky.

I now come to the controls, to some of which my right lion. Friend has already referred. This is one of the difficulties which we are in about the building industry. The Government say that they have set the building industry free, and that more building of one sort and another is going on than has ever gone on before. Recently "The Builder" published a graph. I have not the time to deal with it in detail. It shows an increase in wages.

There has been an increase in the cost of materials, although that has eased off a little, but building costs generally have considerably increased in recent years. In 1951 they represented an index of about 250 as compared with 100 in 1938. In 1954, they have reached an index of 330, and local authorities are experiencing difficulty in getting deliveries of materials. Prices submitted in tenders are going up, and prices to private individuals who are having houses built for themselves are also going up.

These disadvantages are largely the result of the Government allowing the industry to go to pieces without any reasonable supervision, or insistence on there being some social purpose about it. I venture to say that it will not be very long before the Government find that municipal and private housing will be in difficulties, partly owing to the slowness with which materials are delivered, and partly owing to the price at which things are made.

As another illustration I wish to make some reference to Northern Ireland. I make no apology for a Member representing a London constituency referring to Northern Ireland. Indeed, three of my hon. Friends—my right hon. Friend the Member for Blyth (Mr. Robens), former Minister of Labour, my right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley), former Secretary for Overseas Trade, and my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)—none of them Members for Northern Ireland, have recently been there. Northern Ireland needs some champions in the House of Commons.

The Unionist Party over there is not always understood. It consists partly of Conservatives, partly of Liberals, and partly of trade union officials who, in this country, would undoubtedly be Labour. It is a coalition of people based upon the protection of the border from the Northern Ireland point of view. I am not saying that that is right or wrong. What is unfortunate is that hon. Members representing Northern Ireland in this House are nearly all die-hard Tories of the most reactionary type. They are mere Lobby fodder for the Tory Whips, and take little or no interest in the well being of Northern Ireland.

Unemployment in Northern Ireland is substantial. The percentage is now 6·4; among men it is 7·3 per cent., and among women it is 5 per cent. What is worse is that, in some places, it is particularly heavy. In some places it reaches 25 per cent. It is, undoubtedly, exceedingly serious that those black spots should exist. It may be said in some quarters that it is all the fault of the Northern Ireland Government. I do not accept that view. I think that there is a duty on Her Majesty's Government in the United Kingdom to collaborate with the authorities in Northern Ireland to do the best they can either to solve or to ameliorate the problems which exist in that part of the United Kingdom.

Photo of Mr Lawrence Orr Mr Lawrence Orr , South Down

The right hon. Gentleman has quoted unemployment as running at 6·4 per cent. When I first raised the matter three years ago in this House, it was running at 10·4 per cent. Can the right hon. Gentleman tell me why it was that he did not take an interest in our affairs then?

Hon. Members:

1952.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham South

I gather that that was in 1952, and it is really of no use blaming the Labour Party for 1952. I think that the hon. and gallant Gentleman has landed himself in difficulties.

How many of the hon. Members for Northern Ireland raise their voices in emphatic agitation in the House of Commons? The truth is that they come here systematically for the purpose of voting for the Tory Government. That is the main purpose of their existence in the House of Commons.

I next mention tea. May I remind the House—and here the evidence is on the records of HANSARD—that when, on 9th April, 1952, the Minister of Food dealt with the withdrawal of the subsidy on tea, after it had been announced by the Chancellor of the Exchequer that that was to take effect from 15th June—he said: The trade has undertaken that blends of sound quality tea will be on sale at 3s. 8d. a lb. in sufficient quantities to meet any foreseeable demand. This is the same as the present average price and only 4d. more than the present low priced tea. This means that although the subsidy is withdrawn the existing weekly ration of low priced tea will cost only ½d. more."—[OFFICIAL REPORT, 9th April, 1952; Vol. 498, c. 2738.] That was a clear-cut statement by the then Minister of Food who is now the Home Secretary.

There is another passage that I should like to quote, when my hon. Friend the Member for Faversham (Mr. P. Wells) asked: Will the right hon. Gentleman say what is the price? and the Minister of Food replied: I have mentioned before that the price position is perfectly clear. There will be tea available at a very cheap price. My hon. Friend the Member for Coat-bridge and Airdrie (Mrs. Mann) then asked: What does the right hon. and gallant Gentleman call 'cheap'? and the Minister of Food replied: The hon. Lady knows more about tea than I do. I think that is probably true.

He continued: Of course she does. At the present time there is tea available at all prices and there will be ample tea available at a reasonable price."—[OFFICIAL REPORT, 15th May, 1952; Vol. 500, c. 1653–4.] Plenty of supplies of cheap tea in the foreseeable future, at 3s. 8d. a lb. Where is it now?

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham South

The interjection of the hon. Gentleman, whose name I hope will be recorded, was witty, but it is an illustration of his complete indifference, his blatant, silly indifference to the difficulties which the housewife is experiencing in this matter. The present price of tea, I gather, is somewhere between 6s. and 8s. or more a lb., and there are now prophecies in the newspapers that it will go up to 10s. But that is not the only thing.

The profits of the tea companies have advanced enormously. So the undertaking of the Government that in the foreseeable future there will be adequate supplies of cheap tea at about 3s. 8d. a lb. has been broken. The price has soared, and the profits of the companies have increased. That is what the Conservative Party is for.

So it is with monopolies, to which the Conservative Party is indifferent. They are slowly operating the Monopolies Act. However, an amending Act was passed, but its main purpose was to give the Chairman of the Commission a pension. The Commission has conducted a limited number of inquiries. The trade associations are slow in their observations upon the recommendations, and the Government have let them be slow. The Board of Trade is slow in coming to a decision on these matters, and we are developing in the country monopolies under the auspices of a Government that attacks every public service organisation that it can on the doctrine of monopoly.

The truth is that the Government, again in accordance with strict Conservative principles, are opposed to public service organisations and anything of the nature of a public service and public ownership. Both in Government and in their private lives, many of them are developing private monopoly to the greatest extent they can, and as a Government they are protecting it.

The Government seem to be pretty indifferent to the general interests of the consumer, and I wish they would put before their minds the fact that they have a duty to protect the consumers of the country to the maximum practicable extent. They are forgetting the consumers, and seem to be pretty indifferent to their welfare and their point of view.

We argue that the Amendment is amply justified. We condemn the fundamental approach of the Government to all these things. We think they are actuated by anti-social beliefs, that they put private interests before the public interest, and that they are dogmatic in their approach to public problems and we therefore venture to suggest to the House that the Amendment for which we have argued today is justified, and ought to be carried on the merits of the case, in condemnation of the policy and outlook of Her Majesty's Government.

9.31 p.m.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

This is the end of the annual debate on the Address in reply to the Gracious Speech and it closes with the official Opposition Amendment of condemnation of Her Majesty's Ministers. As usual, the Amendment is an amalgamation of resounding Socialist platitudes and mutually inconsistent verbiage. There is nothing new about that. So little was thought of it in Labour circles, apparently, that the "Daily Herald," spokesman of the party, did not even mention it on the day on which it was tabled.

But, in spite of the final words of the right hon. Member for Lewisham, South (Mr. H. Morrison), it has one strange feature—and this occurred last year, too: the traditional words of the official Amendment are not there, the words which ask the House to express no confidence in the Government. The right hon. Gentleman and his right hon. and hon. Friends dare not put that to the hazard, because they know the growing confidence which exists in the country. We have only to look at the bye-election results.

If I may paraphrase some words which are well known to you, Mr. Speaker, in referring to the right hon. Gentleman's speech, I would say that age cannot wither him, nor custom stale his infinite sameness. This is the sort of speech which we have heard so often before—starting with high-sounding phrases about the Socialist philosophy and being unable to resist the temptation to beat about the bush.

This time the victims are the Northern Ireland Members—only due to the fact that there was an expedition. Some of the Labour ex-Ministers went East during the holidays. Others went West or North-West. Some found themselves in Ulster, others in Pekin or Moscow. The Leader of the Opposition was not quite sure whether he was in Auckland or Wellington.

But the right hon. Member for Lewisham, South, is wrong. The Northern Ireland Members have been persistent ever since there was this resurgence of unemployment two years ago.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

They have been persistent in the unending representations which they have made to Her Majesty's Government, and in fact the figures of unemployment in Northern Ireland have fallen very considerably during the last two years, as my hon. and gallant Friend the Member for Down, South (Captain Orr) pointed out in a speech the other day. The right hon. Gentleman can rest assured, as can my hon. Friends, that this problem is constantly before us and that we are working, together with the Government of Northern Ireland, to see what can be done to deal with this sad and grievous situation.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Lewisham South

If the right hon. Gentleman can get out of his usual winding-up form, with which we are very familiar, will he say whether he is aware that hon. Friends of mine have persistently requested that responsible Ministers in these matters in the United Kingdom Government should meet responsible Ministers of the Northern Ireland Government in conference, with a view to action being taken? We have had no favourable answer yet; can we have a favourable answer?

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

I answered a Question on behalf of the Prime Minister the other day on that subject. I said that constant conferences were going on, but that the idea of having a mass meeting of United Kingdom Ministers and Northern Ireland Ministers and everyone else was not necessarily the best way of dealing with it.

We have had from the right hon. Member all the usual platitudes and everything which has been said before by him on this topic, but the Amendment has the impertinence to complain of alleged complacency on our part. That is one thing from which we do not suffer and the one thing in which right hon. Members opposite were past masters. The right hon. Member had quoted against him today the famous phrase about "rounding recovery corner." He did not like to be reminded of that.

The right hon. Gentleman also said that his Government had left behind the old scarcity economics of the capitalist world. So they did, and in 1946 bread was rationed for the first time in history. In 1947, potatoes were rationed for the first time in history—[HON. MEMBERS: "Why?"]—and in 1948 the bacon ration was reduced—it hardly seems credible today—to one ounce. So much for having left behind the old scarcity economics.

What about the complacency of a predecessor of the right hon. Member, who said: The fear of inflation is diminishing; it has largely passed away. Yet the Opposition have tried to make out that we are complacent about the present situation. What did their complacency lead them into in 1947? We had a coal crisis and 2 million people out of work. In 1949, we had the convertibility crisis and the cost of a great number of our imports automatically went up 40 per cent. In 1951 we had the final crisis, which may have been worth enduring because it had one great redeeming feature—it lead to the resignation of the Labour Government.

We have never shown the slightest sign of complacency; we have always been cautious in our explanations of the improvements that are being made. We have approached these problems—[Interruption.] If the hon. Member has anything to say, I will give way.

Photo of Mr Frank Beswick Mr Frank Beswick , Uxbridge

I thought that possibly the right hon. Gentleman might remember the advice given by the Prime Minister about getting history into its context. If he is giving the figures about 1945 to 1951, let him put that into the context of 1939 to 1945 and what we had to recover from.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

We all admit that the war caused great difficulties, but we also say that while the Leader of the Opposition may have been right in speaking about the salvaging his Government had to do, we had to do plenty of salvaging in 1951.

We have announced various improvements as they came along, but we have never been complacent. We have always been cautious and shown that we were nowhere near the top of the hill. We are nowhere near there yet. [Interruption.] I hope the hon. Member will let me say what I want to say. What a day the Opposition choose to talk about the social injustice about which we are supposed to be complacent when, tomorrow, we are to have the Second Reading of the National Insurance Bill. What a day to choose when one remembers the social injustice 6 million or 7 million people suffered in their day when the value of the 1946 benefit of 26s. dropped to under £1. No wonder the hon. Member for Coventry, East (Mr. Crossman) was saying in the "Sunday Pictorial," less than a month ago, that the pensioners were cheated of the modest slice of national cake which they had been promised. The cheating has not been done by us. We are seeing that that modest slice is restored to them and is added to, and this has been made possible by the increasing national prosperity.

Photo of Mr James Hudson Mr James Hudson , Ealing North

On a point of order. Have you not already ruled, Mr. Speaker, that the fact that a Bill dealing with pensions is down for Second Reading this week makes it impossible for any reference to this matter to be made in the debate on the Queen's Speech? Is the right hon. Gentleman in order in pursuing this matter?

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

It depends how far the matter is pursued. The matter was introduced by the former Chancellor of the Exchequer, the right hon. Member for Leeds, South (Mr. Gaitskell), when he was speaking. I had to intervene on that occasion to ask the right hon. Member not to go too far, and he complied with that request. What I have heard now has not gone as far as the speech of the right hon. Member who opened the matter.

Photo of Mr George Porter Mr George Porter , Leeds Central

Further to that point of order. On the previous occasion, when my right hon. Friend was called to order, you said, Mr. Speaker, that the matter was out of order. I suggest that having given a definite Ruling that a matter is out of order, no matter what latitude was given before your Ruling, you cannot give any latitude to anybody now.

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

The hon. Member is quite wrong. The right hon. Member for Leeds, South, who first referred to this topic and also opened the debate, was going into the relation between the contribution and the benefit. This is a matter for the Bill and goes far further than the Lord Privy Seal has tried to go. Therefore, I think that the hon. Member can leave it to me to see that the debate is kept in order.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

There is a colloquial phrase in this country, "They can't take it."

The Amendment endeavours to censure us for abandoning public enterprise, essential controls and other forms of intervention by the community. All that is being abandoned, apparently, was supposed to be desiged to check inflation, protect consumers and encourage economic expansion. Really! For one thing, we have not abandoned all public enterprise; the right hon. Gentleman pointed that out just now. We have, indeed been the reverse of doctrinaire in these matters. When the right hon. Gentleman mentioned coal, I was reminded that this year the Government have introduced, and Parliament has passed, a great Measure of reform for safety and health in the mines, a topic ignored by right hon. Gentlemen opposite.

When it comes to controls and … intervention by the community. I am not quite sure what "intervention by the community" means. If the community in this sense is the electors, they have intervened all the way from Sunderland to West Derby. But if it means that we have abolished intervention by the community in the sense of intervention by Whitehall, the more we do that the better. We certainly do not agree with the famous dictum, "The gentleman in Whitehall knows best," nor do we believe in the theory of a former Attorney-General the right hon. and learned Member for St. Helens (Sir H. Shawcross), "We are the masters now," not only for the moment, but for a long time to come. That prophecy was not fulfilled.

If we are to be censured for the controls that we have removed, the inference is that the Oppostion will put them back. I am fortified in that thought by the statement in "Challenge to Britain," which says: Labour will restore the powers of control which have been removed by the Tory Government. That is the statement. [HON. MEMBERS: "Read on.''] I will do my own reading.

I want to know whether that means that the right hon. Gentleman and his right hon. and hon. Friends envisage returning to a situation such as that in which there were in the courts 1,700 cases a month of citizens being prosecuted for petty offences, many of which they did not know were offences. Is that the sort of situation into which we are to move? [HON. MEMBERS: "No."] No? All right. Does the restoration of controls removed by Her Majesty's present Ministers in this Parliament mean that we are going straight back to food rationing? [HON. MEMBERS: "No."] What, then, becomes of the statement that these controls are to be restored?

Are they going to take us back to control through building licences? Are we to be taken back to a situation in which 200,000 houses are built in a year? Are they going back to the 34 Statutory Orders to control meat? Or the 16 different kinds of forms and 4 million coupons issued every month to farmers about feedingstuffs? Are we to have no answer? Are we to go back to pool petrol, to pool margarine?

The House is entitled to know and the country is entitled to know because it was the right hon. Gentleman himself who said that the point of this Amendment was to bring into sharp conflict the views of both sides of the House. That is what he said it was for. It was for laying out the philosophy of the Opposition as compared with the alleged complacency and all the rest of it of the Government side, and now, when I ask him, on his own words, lifted out of his own Amendment, what he means by "essential controls" that he and his hon. Friends are going to put on, he does not give me any answer at all. The Amendment says that these controls which have been taken off were … designed to … encourage economic expansion. How, in the nature of things, can a control expand anything? The whole point of a control is to restrict and to prevent, and it cannot do expanding. This progressive restoration of economic freedom and flexibility is an essential part of our philosophy, and it is succeeding, and I pray in aid some words from "U.S. News and World Report" of 16th July of this year: Something like a new economic era is beginning in Britain. The British, having finally shaken off wartime controls and turned away from Socialist adventures, appear to be in high gear.

Hon. Members:

High tea?

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

It seems to have affected some hon. Members more than it should. "High gear" has meant, in this connection, in the departure from controls, that words familiar three years ago have passed out of the daily vocabulary. "Austerity," "short supply," "registered customers," "cuts," "bottlenecks," "points," "utility," "black market," "under the counter" have all disappeared—[HON. MEMBERS: "Tea."]—and the things for which they stood have gone as well.

It is astonishing that hon. and right hon. Gentlemen want to get back to this rigid economy. As I have already pointed out, many of them went East this year. They have been behind the Iron Curtain and have seen the most rigid economy functioning. When they came back from what one might describe as the flight of the red herrings, they want to place upon us all these fetters of control. I just do not believe it. I think this Amendment is nonsense, from their point of view. They would not do the thing they allege they would do. That is shown by the fact that they do not answer any of my questions.

This Amendment is just an expression once again of the old doctrinaire views for the record and no more. The whole suggestion here is that we should reverse engines and go back to the old methods of 1945–51, methods which failed. During the Socialists' time of office, all their theories, planning and controls did not prevent the cost of living soaring 40 per cent.; and did not prevent it going up by 12 per cent. in the last year of office. They did not prevent recurring crises or chronic shortages which had to be dealt with by temporary expedients, as Sir Stafford Cripps used to say. They did not prevent the most fantastic increases in taxation, both direct and indirect. From what they protected the consumers I do not know except, possibly, happiness.

The saddest people in the world today are the Socialist intellectuals. When they came into office, according to their theories the country should have prospered as never before. In point of fact, it did have crises, it did have chronic shortages, and it did have no houses. The theorists failed and when we came in the Socialist intellectuals said, "Now that planning and controls are abandoned, there will be 1 million unemployed, prices will rocket"—

Hon. Members:

Tea.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

—"there will be mansions for the rich and no houses for the poor as well as cuts in the social services." Again, the theorists failed. The poor Socialist intellectuals. They are pundits in planning and potterers in practice. To reverse engines now is a very poor alternative. What we have been able to do in our time has been to avoid these crises every two years. We have paid our way in the world and we have got more stable prices.

Hon. Members:

Tea.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

In the last two years prices have only risen 4.3 per cent., whereas during the last year of the Socialist Government they rose by 12 per cent.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

No, I have not got the time to give way.

Hon. Members:

Tea.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

I was going to say a word about tea about which hon. Members are shouting. I thought I would be allowed to make my own speech. I was going to deal with tea when I was dealing with prices.

The right hon. Gentleman the Member for Lewisham, South quoted statements by my right hon. and gallant Friend the present Home Secretary as to the good prospects for tea in the foreseeable future. Those prospects have been falsified for a number of reasons. One has been the enormous increase in tea consumption throughout the world owing to the failure of the coffee crops. The second reason for the increase in price has been the imposition by Ceylon of an export duty of 1s. 6d. per lb. That, naturally, has had a very great effect.

We have seen more houses erected since we came to office. The right hon. Gentleman asked me about houses for Leeds, and I understand that no official figure has yet been settled. The right hon. Gentleman said, of all things, that we had been letting down the industry, letting it go to pieces with no social purpose behind that. More factory space has been arranged this year. The figures were given by my hon. Friend the Economic Secretary to the Treasury. Twice as many schools were built in the last three years as were built in the six years of the Labour Government's administration. We are embarking on a great programme of reorganisation.

I can sum up by saying that growing prosperity is writ large over the country as a whole. We see rising production, increasing exports, the £ pressing upon the upper limits of the exchange rates, improved sterling balances, a nearly stationary price level, a partial return to cheap money and a minimum of labour unrest … private savings for the purpose of investment have been steadily going up."—[OFFICIAL REPORT, House of Lords, 21st July, 1954; Vol. 188. c. 1256.] That is my summary of the situation, given by my voice, but the words are those of the second greatest financial ex-

pert of the party opposite—Lord Pethick-Lawrence in another place last July.

We now come to the Division, and in the Division we come to our conclusion on the Amendment. The Amendment rehearses the Socialist belief in planning, control, restriction. Our general line of policy is reaffirmed by the terms of the Gracious Speech. We shall be dealing with a number of important Bills during the Session but it is by our administration and our good housekeeping that we are being judged, and the Gracious Speech marks an advance along that road. We accept the challenge in this debate in the confidence that the House and the country are behind our policies, unshaken in the belief that it is the individual family and not Whitehall which is the hinge of national endeavour and national strength.

Question put, That those words be there added:—

The House divided: Ayes 269, Noes 298.

Division No. 3.]AYES[9.58 p.m.
Acland, Sir RichardDavies, Ernest (Enfield, E.)Hayman, F. H.
Adams, RichardDavies, Harold (Leek)Healey, Denis (Leeds, S. E.)
Albu, A. H.Davies, Stephen (Merthyr)Healy, Cahir (Fermanagh)
Allen, Arthur (Bosworth)Deer, G.Henderson, Rt. Hon. A. (Rowley Regis)
Allen, Scholefield (Crewe)Delargy, H. J.Herbison, Miss M.
Anderson, Frank (Whitehaven)Dodds, N. N.Hewitson, Capt. M.
Awbery, S. S.Donnelly, D. L.Hobson, C. R.
Bacon, Miss AliceDriberg, T. E. N.Holman, P.
Baird, J.Dugdale, Rt. Hon. John (W. Bromwich)Holmes, Horace
Balfour, A.Ede, Rt. Hon. J. C.Houghton, Douglas
Barnes, Rt. Hon. A. J.Edelman, M.Hey, J. H.
Bartley, P.Edwards, Rt. Hon. Ness (Caerphilly)Hubbard, T. F.
Ballenger, Rt. Hon. F. J.Edwards, W. J. (Stepney)Hudson, James (Ealing, N.)
Bence, C. R.Evans, Albert (Islington, S.W.)Hughes, Cledwyn (Anglesey)
Benn, Hon. WedgwoodEvans, Edward (Lowestoft)Hughes, Emrys (S. Ayrshire)
Benson, G.Evans, Stanley (Wednesbury)Hughes, Hector (Aberdeen, N.)
Beswick, F.Fernyhough, E.
Bevan, Rt. Hon. A. (Ebbw Vale)Hynd, H (Accrington)
Bing, G. H. C.Fienburgh, W.Hynd, J. B. (Attercliffe)
Blenkinsop, A.Finch, H. J.Irvine, A. J (Edge Hill)
Blyton, W. R.Fletcher, Eric (Islington, E.)Irving, W. J. (Wood Green)
Boardman, H.Follick, M.Isaacs, Rt. Hon. G. A.
Braddock, Mrs. ElizabethFoot, M. M.Janner, B.
Brockway, A. F.Forman, J. C.Jay, Rt. Hon. D. P. T.
Brook, Dryden (Halifax)Fraser, Thomas (Hamilton)Jeger, George (Goole)
Broughton, Dr. A. D. D.Freeman, John (Watford)Jeger, Mrs. Lena
Brown, Rt. Hon. George (Belper)Freeman, Peter (Newport)Jenkins, R. H. (Stechford)
Brown, Thomas (Ince)Gaitskell, Rt. Hon. H. T. N.Johnson, James (Rugby)
Burke, W. A.Gibson, C. W.Johnston, Douglas (Paisley)
Burton, Miss F. E.Glanville, JamesJones, Rt. Hon. A. Creech
Butler, Herbert (Hackney, S.)Gooch, E. G.Jones, David (Hartlepool)
Carmichael, J.Gordon Walker, Rt. Hon, P. C.Jones, Jack (Rotherham)
Castle, Mrs. B. A.Greenwood, AnthonyJones, T. W. (Merioneth)
Champion, A. J.Grenfell, Rt. Hon. D. R.Keenan, W.
Chapman, W. D.Grey, C. F.Kenyon, C.
Clunie, J.Griffiths, David (Rother Valley)Key, Rt Hon. C. W.
Coldrick, W.Griffiths, Rt. Hon. James (Llanelly)King, Dr H. M.
Collins, V. J.Griffiths, William (Exchange)Kinley, J.
Corbel, Mrs. FredaHale, LeslieLawson, G. M.
Cove, W. G.Hall, Rt. Hon. Glenvil (Colne Valley)Lee, Frederick (Newton)
Craddock, George (Bradford, S.)Hall, John T. (Gateshead, W.)Lee, Miss Jennie (Cannock)
Grossman, R. H. S.Hamilton, W. W.Lever, Harold (Cheetham)
Cullen, Mrs. A.Hannan, W.Lever, Leslie (Ardwick)
Danes, P.Hargreaves, A.Lewis, Arthur
Darling, George (Hillsborough)Harrison, J. (Nottingham, E.)Lindgren. G. S.
Lipton, Lt.-Col. M.Pargiter, G. A.Swingler, S. T.
Logan, D. G.Parker, J.Sylvester, G. O.
MacColl, J. E.Parkin, B. T.Taylor, Bernard (Mansfield)
McGhee, H. G.Paton, J.Taylor, John (West Lothian)
McGovern, J.Plummer, Sir LeslieThomas, George (Cardiff)
McInnes, J.Porter, G.Thomas, Iorwerth (Rhondda, W.)
McKay, John (Wallsend)Price, J. T. (Westhoughton)Thomas, Ivor Owen (Wrekin)
McLeavy, F.Price, Philips (Gloucestershire, W.)Thornton, E
MacMillan, M. K. (Western Isles)Probert, A. R.Timmons, J
McNeil, Rt. Hon. H.Proctor, W. T.Turner-Samuels, M.
MacPherson, Malcolm (Stirling)Pryde, D. J.Ungoed-Thomas, Sir Lynn
Mallalieu, E. L. (Brigg)Rankin, JohnUsborne, H. C.
Mallalieu, J. P. W. (Huddersfield, E.)Reeves, J.Viant, S. P.
Mann, Mrs. JeanReid, Thomas (Swindon)Wallace, H. W.
Manuel, A. C.Reid, William (Camlachie)Warbey, W. N.
Marquand, Rt, Hon. H. A.Rhodes, H.Watkins, T. E.
Mason, RoyRichards, R.Webb, Rt. Hon. M. (Bradford, C.)
Mayhew, C. P.Roberts, Albert (Normanton)Weitzmann, D.
Mellish, R. J.Roberts, Goronwy (Caernarvon)Wells, Percy (Faversham)
Messer, Sir F.Robinson, Kenneth (St. Pancras, N.)Wells, William (Walsall)
Mikardo, IanRogers, George (Kensington, N.)West, D. G.
Mitchison, G. R.Ross, WilliamWheeldon, W. E
Monslow, W.Royle, C.White, Mrs. Eirene (E. Flint)
Moody, A. S.Shackleton, E. A. A.White, Henry (Derbyshire, N.E.)
Morgan, Dr. H. B. W.Shinwell, Rt. Hon. E.
Morley, R.Whiteley, Rt. Hon. W
Morris, Percy (Swansea, W.)Short, E. W.Wigg, George
Morrison, Rt. Hon. H. (Lewisham, S.)Shurmer, P. L. E.Wilcock, Group Capt. C. A. B
Mort, D. L.Silverman, Julius (Erdington)Wilkins, W. A.
Moyle, A.Silverman, Sydney (Nelson)Willey, F. T.
Malley, F. W.Simmons, C. J. (Brierley Hill)Williams, David (Neath)
Murray, J. DSkeffington, A. M.Williams, Rev Llywelyn (Abertillery)
Nally, W.Slater, Mrs. H, (Stoke-on-Trent)Williams, Ronald (Wigan)
Neal, Harold (Bolsover)Slater, J. (Durham, Sedgefield)Williams, Rt. Hon. Thomas (Don V'll'y)
Noel-Baker, Rt. Hon. P. J.Smith, Ellis (Stoke, S.)Williams, W. R. (Droylsden)
O'Brien, T.Smith, Norman (Nottingham, S.)Willlams, W. T. (Hammersmith, S.)
Oldfield, W. H.Snow, J, W.Willis, E. G.
Oliver, G. H.Sorensen, R. W.Wilson, Rt. Hon. Harold (Huyton)
Orbach, M.Soskice, Rt. Hon. Sir FrankWinterbottom, Ian (Nottingham, C.)
Oswald, T.Sparks, J. A.Winterbottom, Richard (Brightside)
Owen, W. J.Steele, T.Woodburn, Rt. Hon. A.
Padley, W. E.Stewart, Michael (Fulham, E.)Wyatt, W. L.
Paget, R. T.Stakes, Rt. Hon. R. R.Yates, V. F.
Paling, Rt. Hon. W. (Dearne Valley)Strachey, Rt. Hon. JYounger, Rt. Hon. K.
Paling, Will T. (Dewsbury)Strauss, Rt. Hon. George (Vauxhall)
Palmer, A. M. F.Stross, Dr. BarnettTELLERS FOR THE AYES:
Pannell, CharlesSummerskill, Rt. Hon. E.Mr. Pearson and Mr. Popplewell.
NOES
Aitken, W. T.Bromley-Davenport, Lt.-Col. W. H.Drayson, G. B.
Allan, R. A. (Paddington, S.)Brooke, Henry (Hampstead)Dugdale, Rt. Hon. Sir T. (Richmond)
Alport, C. J. M.Browne, Jack (Govan)Duncan, Capt. J. A. L.
Amery, Julian (Preston, N.)Bullard, D. G.Duthie, W. S.
Amory, Rt. Hon. Heathcoat (Tiverton)Bullus, Wing Commander E. E.Eccles, Rt. Hon. Sir D. M.
Anstruther-Gray, Major W. J.Burden, F. F. A.Eden, Rt. His. Sir A. (Wrwk & Lmgtn)
Arbuthnot, JohnButcher, Sir HerbertEden, J. B. (Bournemouth, West)
Armstrong, C. W.Carr, RobertElliot, Rt. Hon. W. E.
Ashton, H. (Chelmsford)Cary, Sir RobertErrington, Sir Eric
Assheton, Rt. Hon. F. (Blackburn, W.)Channon, H.Erroll, F. J.
Astor, Hon. J. J.Clarke, Col. Ralph (East Grinstead)Fell, A.
Baldock, Lt.-Cmdr. J. M.Clarke, Brig. Terence (Portsmouth, W.)Finlay, Graeme
Baldwin, A. E.Clyde, Rt. Hon. J. L.Fisher, Nigel
Banks, Col. C.Cole, NormanFleetwood-Hesketh, R. F.
Barber, AnthonyColegate, W. A.
Barlow, Sir JohnConant, Maj. Sir RogerFletcher-Cooke, C.
Baxter, Sir BeverleyCooper, Sqn. Ldr. AlbertFord, Mrs. Patricia
Beach, Maj. HicksCooper-Key, E. M.Fort, R.
Beamish, Maj. TuftonCraddock, Beresford (Spelthorne)Foster, John
Bell, Philip (Bolton, E.)Crookshank, Capt. Rt. Hon. H. F. C.Fraser, Hon. Hugh (Stone)
Bennett, F. M. (Reading, N.)Crosthwaite-Eyre, Col. O. E.Fraser, Sir Ian (Morecambe & Lonsdale)
Bennett, Dr. Reginald (Gosport)Crouch, R. F.Galbraith, Rt. Hon. T. D. (Pollok)
Bennett, William (Woodside)Crowder, Sir John (Finchley)Galbraith, T. G. D. (Hillhead)
Bevies, J. R. (Toxteth)Crowder, Petre (Ruislip—Northwood)Gammans, L. D.
Birch, NigelDarling, Sir Willlam (Edinburgh S.)Garner-Evans, E. H.
Bishop, F. P.Davidson, ViscountessGlover, D.
Black, C. W.Davies, Rt. Hn. Clement (Montgomery)Godber, J. B.
Bossom, Sir A. C.De la Bere, Sir RupertGomme-Duncan, Col. A.
Bowen, E. R.Deedes, W. F.Gough, C. F. H.
Boyd-Carpenter, Rt. Hon. J. A.Digby, S. WingfieldGower, H. R.
Boyle, Sir EdwardDodds-Parker, A. D.Graham, Sir Fergus
Braine, B. R.Donaldson, Cmdr. C. E. McAGridley, Sir Arnold
Braithwaite, Sir Albert (Harrow, W.)Donner, Sir P. W.Grimond, J.
Braithwaite, Sir GurneyDoughty, C. J. A.Grimston, Hon. John (St. Albans)
Grimston, Sir Robert (Westbury)Mackeson, Brig. Sir HarryRussell, R. S.
Hall, John (Wycombe)McKibbin, A. J.Ryder, Capt. R. E. D.
Hare, Hon. J. H.Mackie, J. H. (Galloway)Sandys, Rt. Hon. D
Harris, Frederic (Croydon, N.)Maclean, FitzroySavory, Prof. Sir Douglas
Harris, Reader (Heston)Macleod, Rt. Hon. Iain (Enfield, W.)Schofield, Lt.-Col. W
Harrison, Col J. H. (Eye)MacLeod, John (Ross and Cromarty)Scott, R. Donald
Harvey, Air Cdre A. V. (Macclesfield)Macmillan, Rt. Hon. Harold (Bromley)Scott-Miller, Cmdr. R
Harvey, Ian (Harrow, E.)Macpherson, Niall (Dumfries)Sharples, Maj. R. C.
Harvie-Watt, Sir GeorgeMaitland, Cmdr. J. F. W. (Horncastle)Shepherd, William
Hay, JohnMaitland, Patrick (Lanark)Simon, J. E. S. (Middlesbrough, W.)
Head, Rt. Hon. A. HManningham-Buller, Rt. Hn. Sir ReginaldSmyth, Brig. J. G. (Norwood)
Heald, Rt. Hon. Sir LioneMarkham, Major Sir FrankSnadden, W. McN.
Heath, EdwardMarlowe, A. A. H.Soames, Capt. C.
Henderson, John (Cathcart)Marples, A. E.Spearman, A. C. M.
Higgs, J. M. C.Marshall, Douglas (Bodmin)Speir, R. M.
Hill, Dr. Charles (Luton)Maude, AngusSpence, H. R. (Aberdeenshire, W.)
Hill, Mrs. E. (Wythenshawe)Maudling, R.Spens, Rt. Hon. Sir P. (Kensington, S.)
Hinchingbrooke, ViscountMaydon, Lt.-Comdr. S. L. C.Stanley, Capt. Hon. Richard
Hirst, GeoffreyMedlicott, Brig. F.Stevens, Geoffrey
Holland-Martin, G. J.Mellor, Sir JohnSteward, W. A. (Woolwich, W.)
Hopkinson, Rt. Hon. HenryMolson, A. H. E.Stewart, Henderson (Fife, E.)
Hornsby-Smith, Miss M. P.Monckton, Rt. Hon. Sir WalterStoddart-Scott, Col. M.
Horsbrugh, Rt. Hon. FlorenceMoore, Sir ThomasStorey, S.
Howard, Gerald (Cambridgeshire)Morrison, John (Salisbury)Strauss, Henry (Norwich, S.)
Howard, Hon. Greville (St. Ives)Mott-Radclyffe, C. E.Stuart, Rt. Hon. James (Moray)
Hudson, Sir Austin (Lewisham, N.)Nabarro, G. D. N.Studholme, H. G.
Hudson, W. R. A. (Hull, N.)Neave, AireySummers, G. S.
Hughes Hallelt, Vice-Admiral J.Nicholls, HarmarSutcliffe, Sir Harold
Hulbert, Wing Cmdr. N. J.Nicolson, Nigel (Bournemouth, E.)Taylor, Sir Charles (Eastbourne)
Hurd, A. R.Nield, Basil (Chester)Taylor, William (Bradford, N.)
Hutchison, Sir Ian Clark (E'b'rgh, W.)Noble, Comdr. A. H. P.Teeling, W.
Hutchison, James (Scotstoun)Nugent, G. R. H.Thomas, Rt. Hon. J. P. L. (Hereford)
Hyde, Lt.-Col. H. M.Odey, G. W.Thomas, Leslie (Canterbury)
Hylton-Foster, Sir H. B. H.O'Neill, Hon. Phelim (Co. Antrim, N.)Thomas, P. J. M. (Conway)
Iremonger, T. L.Ormsby-Gore, Hon. W. D.Thompson, Kenneth (Walton)
Jennings, Sir RolandOrr, Capt. L. P. S.Thompson, Lt.-Cdr. R. (Croydon, W.)
Johnson, Eric (Blackley)Orr-Ewing, Charles Ian (Hendon, N.)Thorneycroft, Rt. Hn. Peter (Monmouth)
Johnson, Howard (Kemptown)Orr-Ewing, Sir Ian (Weston-super-Mare)Thornton-Kemsley, Col. C. N.
Jones, A. (Hall Green)Osborrie, C.Tilney, John
Joynson-Hicks, Han. L. W.Page, R. G.Touche, Sir Gordon
Kaberry, D.Partridge, E.Turner, H. F. L.
Kerby, Capt. H. B.Peake, Rt. Hon. O.Turton, R. H.
Kerr, H. W.Perkins, Sir RobertTweedsmuir, Lady
Lambert, Hon. G.Peto, Brig. C. H. M.Vane, W. M. F.
Lampton, ViscountPeyton, J. W. W.Vaughan-Morgan, J. K.
Lancaster, Col. C. G.Pickthorn, K. W. M.Vosper, D. F.
Langford-Holt, J. A.Pilkington, Capt. R. A.Wakefield, Edward (Derbyshire, W.)
Leather, E. H. C.Pitman, I. J.Wakefield, Sir Wavell (St. Marylebone)
Legge-Bourke, Maj. E. A. H.Pitt, Miss E. M.Walker-Smith, D. C.
Legh, Hon. Peter (Petersfield)Powell, J. EnochWall, Major Patrick
Lennox-Boyd, Rt. Hon. A. T.Price, Henry (Lewisham, W.)Ward, Miss I. (Tynemouth)
Lindsay, MartinPrior-Palmer, Brig. O. L.Waterhouse, Capt. Rt. Hon. C.
Linstead, Sir H. N.Profumo, J. D.Watkinson, H. A.
Llewellyn, D. T.Raikes, Sir VictorWebbe, Sir H. (London & Westminster)
Lloyd-George, Maj. Rt. Hon. G.Ramsdon, J. E.Wellwood, W.
Lloyd, Rt. Hon. G. (King's Norton)Rayner, Brig. R.Williams, Rt. Hon. Charles (Torquay)
Lloyd, Maj. Sir Guy (Renfrew, E.)Redmayne, M.Williams, Gerald (Tonbridge)
Lloyd, Rt. Hon. Selwyn (Wirral)Rees-Davies, W. R.Williams, Paul (Sunderland, S.)
Lockwood, Lt.-Col. J. C.Remnant, Hon. P.Williams, R. Dudley (Exeter)
Longden, GilbertRenton, D. L. M.Wills, G.
Low, Rt. Hon. A. R. W.Ridsdale, J. E.Wilson, Geoffrey (Trure)
Lucas, Sir Jocelyn (Portsmouth, S.)Roberts, Peter (Heeley)Wood, Hon. R.
Lucas, P. B. (Brentford)Robertson, Sir DavidWoollan, John Victor
Lucas-Tooth, Sir HughRobson-Brown, W.
McAdden, S. J.Rodgers, John (Sevenoaks)TELLERS FOR THE NOES:
McCallum, Major D.Roper, Sir HaroldMr. Buchan-Hepburn and
McCorquodale, Rt. Hon. M. S.Ropner, Col. Sir LeonardSir Cedric Drewe.

Question put and agreed to.

Resolved, That an humble Address be presented to Her Majesty, as followeth:

Most Gracious Sovereign,

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United King- dom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

To be presented by Privy Councillors or Members of Her Majesty's Household.