Clause 35. — (Amendment of National Loans Act, 1939.)

Part of Orders of the Day — FINANCE (No. 2) BILL – in the House of Commons at 12:00 am on 18th June 1956.

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Photo of Mr Harold Wilson Mr Harold Wilson , Huyton 12:00 am, 18th June 1956

If the hon. Member is interested in penny-farthings, he will remember that that was last year. We have had Tonbridge since then, and we shall be having Louth next. I think I should probably be out of order were I to respond further to the interesting observation the hon. Gentleman has made.

I was referring to the speeches of the Chancellor and the Prime Minister, which, in what I think were very carefully considered words, very seriously drew attention to the economzic dangers which the country faces. I have on more than one occasion drawn the attention of the Committee to the contrast between the moral appeal made by the late Sir Stafford Cripps at times of economic crisis and the somewhat cynical opportunism of the Chancellor's appeals. I was sorry to see that that argument did not commend itself to the Economic Secretary during the debate on the Budget. It seems that he thought it was all old stuff, and that only self-interest now, not the national interest or moral appeal, carried any weight with the people.

5.15 p.m.

Whatever one may think of that, there is one thing, as the Chancellor will agree, which needs to be emphasised and reemphasised—to his credit, the hon. Mem- ber for Louth (Mr. Osborne) has emphasised it for many years—that this national economic crisis which has been with us now for 11 years can be solved only by hard work, by restraint, by sacrifice, and, above all, by the sacrifice of self-interest to the national interest. The theme of all the Chancellor's speeches so far is, and must be, that there is no short cut to national economic solvency, except by the practice of those very serious virtues to which I have referred. Now, of course, the Chancellor has cut the ground from under his own feet by suggesting that, through this lottery, there is a quick, easy way, if not to great fortune, at any rate to useful windfalls.

Before I sit down, I should like to draw to the attention of the Committee an article in the May issue of the National Provincial Bank Review. This article contains a general review of the Budget and the economic situation by Mr. S. P. Chambers, a very high functionary of Imperial Chemical Industries and formerly a very high official of the Board of Inland Revenue, an extremely knowledgeable individual. After spending a long time dealing with the general economic position and the competitiveness of British industry, he comes to the question of Premium Bonds. He does not approach it from any moral or religious standpoint, but he looks at it from the economic point of view. He says: This question of the immediate appeal of the scheme is relatively unimportant. He has been dealing with the size of the prizes. What matters is the long-term effect upon the general attitude of people of all classes to the whole problem of saving and capital formation. It is a very difficult task to explain to people whose cars are receptive to propaganda of various kinds, how important it is that the country as a whole (which means the individuals who make up the country acting either separately or collectively) should save a substantial part of the national income and invest it in capital equipment so that our competitive power in overseas markets can be maintained, and the general standard of living can steadily rise over the years. He goes on—and I commend these words to the Chancellor: This task is made far more difficult if the whole subject of saving and investment is muddled up with schemes which amount to pure gambling. To mix up gambling which depends upon the toss of a coin, or the drawing of a slip of paper, with economic risk undertaken in the ordinary course of manufacture and commerce just adds to the confusion and misunderstanding. He has no moral or religious opposition to the scheme. He continues: It would have been far better if a straight State lottery had been introduced and the subject kept clear from the far more important issue of savings and capital investment. The revival of the habit of saving is of paramount importance to this country's future, and the Premium Bond scheme, though unimportant in itself, is likely to do damage to the cultivation of this old-fashioned, discredited, but absolutely essential virtue. It may be that the Chancellor feels that this little flutter of his, this little gamble, fits in with the new economics of the "Windfall State" in which we are living.

We are seeing now, especially over the last two years, a very big change in the financial and economic situation. There are signs of it in many directions. For example, the large cash prizes given on I.T.A. are unrelated in any way to the worth of services performed. We see the even larger gains in recent takeover bids on the Stock Exchange. The financial newspapers are full of them. One cannot read what is the position of British industry or commerce. What one has to find out is who is outbidding whom in a particular takeover bid.

We are seeing the City more and more putting a premium on capital gains and setting work and saving at a discount. That is why it is serious that the Chancellor should have allied himself with those who are putting a premium on windfall gains, however small they may be under the Clause, and setting the more important virtues of work and saving at a discount. That is why, in our view, the Clause represents not so much a personal as a national demoralisation, and my right hon. and hon. Friends intend to vote against it.