Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 20th December 1956.

Alert me about debates like this

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North 12:00 am, 20th December 1956

The Minister of Labour and National Service, although he attempted to finish on a cheerful note, has celebrated his birthday with a rather gloomy and, in some ways, rather disturbing statement. He told us that there was danger of a serious break in employment in the motor industry and that we were likely to see an increase in unemployment over the coming months. I cannot feel that his statement as a whole did justice to the magnitude of the difficulties now facing the country, and still less do I feel that the practical measures which he has announced will be very much comfort to those now threatened with unemployment and short-time working.

The right hon. Gentleman has decided on some measure of relaxation of the hire-purchase restrictions, after prolonged pressure from this side of the House upon the Government to do something. So far as it goes, we welcome it. But I should like to ask the right hon. Gentleman and the President of the Board of Trade straight away why what is being done for the motor industry is not also being done in, for instance, the furniture industry as well, because the President of the Board of Trade knows that it has also suffered great difficulties in recent months. I am sure that hon. Friends of mine will have other questions of that kind to put.

It seems to me that the present economic crisis may be about the last chance for this country to recover as an economic great power. We shall do no great service to the country by glossing over the grimness either of the facts or the tasks which face us. On the whole, the Minister of Labour did not attempt to gloss it over, at any rate to any great extent. One of the reasons why the country is in its present plight is that, in the past five years, the public has been so often misled into thinking that there is some easy way out of our difficulties.

Before coming to the immediate chaos caused by the oil shortage, there are two even more lamentable facts which the Government have to face if we are to take the strenuous action necessary. First, the gold reserve is now pitifully low—lower in relation to the sterling area's needs than at any time since the war. Second, production in this country—total production—for almost the first time since 1945 has been stagnating all this year, and was already actually falling before the oil crisis occurred.

Briefly, since we have been deprived of some time, let us look at the gold reserve. It seems to me that the gold and dollar reserve is still the heart of the economic problem, because we are still, unhappily, heavily dependent on essential dollar imports. It is a pity that the present Chancellor never makes that sufficiently clear to the country. Indeed, the right hon. Gentleman today, like the Chancellor on 4th December, merely spoke about the balance of trade and the balance of payments of the United Kingdom. He would have given the impression to many people that the future of our gold and dollar reserve depends only on the activities of this country and not, as of course is the fact, on the sterling area as a whole. It is a pity to allow that misconception to prevail.