Orders of the Day — Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 21st February 1956.

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Photo of Sir Eric Fletcher Sir Eric Fletcher , Islington East 12:00 am, 21st February 1956

The hon. Member for Lewisham, West (Mr. H. A. Price) has made a very unfortunate speech which was far below the very high level which the debate has followed in the last two days. In refutation of what the hon. Member has said it is sufficient to refer him to his much more experienced colleague, the hon. Member for Harrow, West (Sir A. Braithwaite) who, yesterday, paid this tribute to the British working man: We have the best body of working people in the world—and I have seen work people in almost every country, including the United States."—[OFFICIAL REPORT, 20th February, 1956; Vol. 549, c. 120.] That reflects the judgment of most experienced Members on both sides of the House about the quality of the British working man.

At this late hour I want to confine my remarks within a very narrow compass. I have listened to nearly all the speeches both today and yesterday and what has impressed me most is the general recognition shown by hon. Members on both sides of the House of the serious and critical nature of our present economic position. With one or two exceptions, hon. Members on both sides of the House have approached the problem conscious of its gravity.

I do not wish to be unduly controversial, but I think the country must recognise that this situation has been brought about by the lamentable failure of the present Government. We find ourselves in the most serious financial crisis we have experienced for many years, and it confronts our country alone. It is not paralleled abroad. No excuse can be found in world trade conditions. It is not caused by a slump in America, or because of the Korean War or because of the movement of trade is against us. It is due entirely to the failure of this Government to take adequate measures in time to protect our gold and dollar reserves.

The Government stand convicted either of complete miscalculation of the economic trends or, what is worse, of deliberate political dishonesty in not having taken the necessary measures a year ago. I believe it is now obvious that their inaction a year ago was due entirely to the desire to secure a victory at the General Election. We convict them also because, in our opinion, their present remedies are quite inadequate and unsuitable to correct the grave situation that has arisen. I agree with the comments of my right hon. and hon. Friends, and comments which have been made in a great many Tory and independent newspapers, that the most serious criticism of the Chancellor's proposals is that they will result in a serious cut in investment when more selective investment policy is required. The remedies announced will, in my view, do nothing to met the balance of payments deficit, but they will seriously cripple our ability to deal with the urgent economic situation which confronts us.

The Economic Secretary expressed the hope that we should have orderly expansion without inflation. We all want to avoid inflation and we all desire to see orderly expansion, but we want something more. I wish to ask the President of the Board of Trade a specific question. We understand that there will be some cuts in the education programme, a slowing down of this year's programme and the postponement of certain work until next year. Nothing has yet been said in this debate about the proposed advances in scientific and technical education and research. We are still awaiting the Government White Paper on the subject which was promised several weeks ago.

We were told that the Government were giving a great deal of thought to the necessity for immense development in technical and scientific education. In my opinion, that, in the long run, is essential to provide a solution of our economic difficulties. I hope that the President of the Board of Trade will tell us—for no Government spokesman has yet done so—whether, as a result of the Chancellor's measures, announced yesterday, there will be any change in that programme. So far, we have heard only one or two piecemeal announcements. We have heard that the size of the intake of the Imperial College of Science is to be doubled. We are told that the Lord President of the Council, the Minister of Education and the Treasury, in so far as it is responsible for the work of the University Grants Committee, are overhauling this whole subject. I hope that we shall have an assurance from the right hon. Gentleman that there will be no reduction in these measures to which hon. Members on this side attach great important and to which the right hon. Member for Woodford (Sir W. Churchill) has drawn attention.

I hope that the right hon. Gentleman will be able to go further and tell us that a full measure of expansion in this direction, as contemplated by the Government, will be carried out. One of the major criticisms of the measures announced by the Chancellor is that he is mortgaging the future of this country by immediate short-term remedies. The Economic Secretary said he believed that right economic decisions must be taken on short-term measures. It is not enough to take the right decisions on short-term measures. It is even more necessary to plan correctly the long-term measures. We have heard a great many statistics quoted by hon. Members and the Government have all the material to enable them to judge the trends of trade and take the corrective measures necessary regarding monetary control. But that in itself, even if the measures taken are right—and for reasons given by my right hon. and hon. Friends they do not appear to be right—will not result in our economic salvation. That will result only from taking the right decisions on long-term planning. We must plan ahead in the technical and scientific fields.

The Economic Secretary mentioned the tremendous development taking place in electronics. The whole nature and pattern of industry is changing. Tremendous advances are being planned and taking place not only in Soviet Russia and the United States but also in Western Germany, Japan and China—among all the industrial nations with which we are competing. We shall suffer not only in the immediate future but in the years to come unless we grapple with this problem now with a seriousness which, up to now, the Government have shown no sign of appreciating.

I hope that we shall receive an assurance that the Government will not be deterred by any obsession about the immediate short-term economic difficulties in which they find themselves because of their own ineptitude, but that they will look for long-term solutions of their economic problems. Having said that, and in view of the lateness of the hour, I shall jettison my other arguments and make this final comment. I hope we shall hear from the President of the Board of Trade that the Government are giving serious attention to the proposal made by my right hon. Friend the Member for Huyton (Mr. H. Wilson), who indicated, yesterday, what steps can be taken immediately, without any administrative or international risk to introduce physical controls.

It is my belief that the Government will realise before very long the inadequacy of the measures recently announced. They will find that they are driven to introduce physical controls, just as the United States of America do with great efficiency. We have heard no reasons why the Government prefer to adopt the doctrinaire attitude that they will not have physical controls. Before it is too late, before we drift further into an economic crisis, let the Government face the reality of the situation and take the powers and the measures that are immediately necessary for our economic salvation.