Economic Affairs

Part of the debate – in the House of Commons at 12:00 am on 12 February 1957.

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Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire 12:00, 12 February 1957

I am much obliged to the hon. Gentleman for saying what we on this side of the House have often said in the past about India and Burma and the freedom of those countries. What I meant to say—and I ant sorry if I did not make myself clear—was that the economic influence of this country has declined so substantially that the old British imperial and economic power is now dead. Right hon. Gentlemen opposite have presided over its decline. We are now at the end of an epoch which, as I said, means that things are never going to be quite the same again.

In effect, we are seeing the death of the ruling class as it used to be. We are seeing almost the last Etonian administration that we are likely to see in this country unless it is an Etonian administration of descendants of the hard-faced men, as the hon. and gallant Member for Arundel and Shoreham (Captain Kerby) described them. I am not, like Malcolm Muggeridge, going to say that it perished on the beach at Golden Eye. It died because of death duties introduced by William Harcourt and an incredible series of political ineptitudes culminating in the Suez situation.

The second thing that has happened is that not only has the old ruling class died but the old working class is dissolved. People no longer regard themselves as members of the working class as they used to do. They are losing their veneration for what is virtually the moth-eaten squirearchy and are feeling a much greater sense of power. They expect a much greater return for their endeavours.

I believe that when historians come to look back, these changes will be evaluated as of equal importance as the ending of the feudal system and with effects no less far-reaching and profound. We have to realise that much of the apparent frustration and lethargy which appear to afflict our society at the moment arise from the fact that we are at the end of one epoch and have not yet started on the next, and that the people who are in the old society feel that they are in a rut. That is why they are seeking to emigrate. I think that the desire to emigrate and the restlessness that exists is a hopeful and helpful sign, because it shows that people are not going to be satisfied with the old rut. As I see it, there is hope in these stirrings.

The real question at the moment, in view of these profound social and political changes which are going on, is to what kind of society are we going to change in twenty or thirty years' time. Are we going to be another political and social democracy like Sweden? Are we to go snoring our way to Sweden with Heals furniture and Medici prints for the whole British nation? Or, alternatively, are we to cherish, like the Prime Minister, some illusions of mothball grandeur and to turn the nation into a taxidermist's shop window. Or is there some other function which we can fulfil in the economic society of the world? Can we make any other contribution?

These are the questions which, I think, make it essential for us to look far beyond the right hon. Gentleman's remarks this afternoon. It is essential for us to have people who can look over the top of our present difficulties. Our charge against this Administration is that it is still in the rut, is still thinking of the old epoch and cannot see beyond it.

I do not say that it is necessary for us to emigrate to get out of that rut. If I were in the Chancellor's shoes I would borrow an idea from Canada without emigrating to do so. Very recently there was an account in the Financial Times of the preliminary report of a body called the Gordon Royal Commission. That Commission was set up to look at the Canadian economy and to see where it is likely to be in twenty years' time and to report back to the Canadian Government. The Gordon Royal Commission has produced its first Report, which shows how it thinks things may be going.

We want something like that Commission in this country, because so many of our leaders are so busy going from one appointment to another that none of them seems to have time to think, and it is essential that someone should do some long-term thinking. The kind of questions that we should address to such a Royal Commission would be, first of all, what is likely to be the shape of our economy in the future and to what extent can we mould it. It may be that we cannot mould it very much, that events have gone too far or that it may be very difficult to do so. If that is the case, then let us look ahead and try to see how things are likely to be, so that we can make the best of them. I think that is a defeatist philosophy. If we can mould the future, how far can we mould it and what are likely to be the ways in which it can be done?

There are three facets to any society and to any Governmental approach. The first is the defence problem; the second is the political shape of the society, and the third is the economic shape of the society. If we save on defence we can expand somewhere else, but we have to look at the juxtaposition of all these three aspects of society to see where we are likely to go in the next twenty or thirty years. In particular, we need to assess the proportions of our people that we want to see engaged in defence, in industry, in education, in technology, in research and in the various aspects of Government.

The second question that we should address to any Royal Commission that might be set up is what external and political economic developments are likely to take place, the sort of thing about which the hon. Member for Louth spoke. What is going to be the possible economic and political development in Africa or Asia? What is likely to happen in Europe as well, and what is going to be our relationship to these areas and how are they going to effect us?

The third question is what technological advances are likely to take place—and not only the likely but the possible? And how these are going to affect our economy.

The fourth question we have to address our minds to is how we are going to get the new capital that is absolutely essential to us in order to finance these technological advances of the future.

There are only three sources of new capital. One is personal saving, the second is industrial saving, and the third is public saving. We have all to adopt a new attitude towards capital. Capital is a necessity, not a term of abuse. Capitalism, of course, is another thing, but we have all got to have capital. Personal savings, obviously, have their limitation. especially owing to the limited room for manœuvre available with our fiscal position as it is now. Industrial savings involve larger undistributed profits, and the Government must address their mind to seeing how these industrial savings are used to the best advantage in the national interest.

The third source is public savings. There was a very interesting article by Professor Arthur Lewis in the September issue of Socialist Commentary called "Public Saving versus Private Saving." I commend that article to the Economic Secretary in his future researches tonight, because it gives some idea of the possible use of public resources to expand the vital private industrial production and also to finance the nationalised industries' production as well.

These are the sort of things to which we must address our minds, but, ultimately, there is only one way in which we can increase our capital and that is by saying that in the short run we may have to do without so that in the long run we shall be better off. We must have the courage to say this constantly. There can be no argument about it. It is a question of priorities. As my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) once said, the religion of Socialism is expressed in the language of priorities. That also has to be the religion of the Government Front Benches of the future, otherwise this country will find many of its resources frittered away yet further.

The final thing to which this Government must address themselves—I say this Government because, in my view, the transitory time is limited and room for manœuvre is very limited—is whether our existing institutions—financial institutions, governmental institutions, Civil Service institutions—are adequate for the degree of transitory change now taking place. These are the sort of problems which my right hon. Friend meant when he was talking about the need for new policies for the future. We have heard from the Economic Secretary some good jokes and some little information, but little else. What we require from the Minister of Labour and National Service, when he speaks at the end of the debate, is a sense of purpose and direction. We want to know where the Government are going.

I do not believe that the difficulties are so insurmountable and society in such a rut that we cannot get out of it. But I say to right hon. Gentlemen opposite—this is a feeling which goes far beyond party politics—that there is no evidence in the country that they have any clear idea of how we are to get out of this situation and what people have to do. People want to know what they have to do so that they may give of their best. I heartily endorse what my right hon. Friend had to say.