Budget Proposals and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 11th April 1957.

Alert me about debates like this

Photo of Mr Douglas Houghton Mr Douglas Houghton , Sowerby 12:00 am, 11th April 1957

I am sure that the whole Committee will agree with a great deal of what the hon. Member for Bodmin (Mr. D. Marshall) has said. There is no doubt that our whole future depends on being able to increase our national wealth in order to maintain, and, still more, to increase the standard of life which a growing and more enlightened population now demands.

Our claims upon resources are great. Our outlook upon the amenities of life is broadening. We want more and more out of life. To achieve that we need more and more resources and material things, though for myself, and I am sure for many hon. Members of the Committee, I would say that the expanse of life and its enjoyment cannot be judged wholly by material resources. However, the general proposition is undeniable. We must increase our national wealth and also ensure equitable distribution of that increased wealth if we are to have social contentment and industrial peace.

There are several conditions for increasing national wealth. Some of them are economic, some financial, some rest upon international confidence as a trading nation, and some rest upon industrial efficiency and the enthusiasm of the general mass of the population for the social and economic purposes they desire.

We should look at the Budget in that context. I wonder whether the Chancellor of the Exchequer would have introduced this Budget on Tuesday of this week had the strikes gone on. As Budget day approached I said to many people, "I think that the Chancellor must he going through a most anxious and uncertain time". Budget making was perhaps more difficult in the few weeks before Budget day this year than on many previous occasions. How would things turn out? Was the nation to become locked in serious industrial strife, or would some means be found of overcoming what appeared to be very serious difficulties, with exceedingly gloomy portents? The whole Committee will agree that the contents of Budgets must have regard to the social and industrial climate as well as to pure theory on fiscal justice or even to important but broader aspects of economic policy.

Speaking for myself, I feel that this Budget may give wage and salary earners below the Surtax level a feeling that the higher-ups have been given a tax-free pay increase by the Chancellor and that those below the Surtax limit must still fight for their slice of the cake. I do not object to the reliefs which the Chancellor has given, on their merits, looked at in isolation as studies in fiscal equity or in the suitable incidence of taxation; but where Budgets can go wrong is in not keeping the balance at the right time, or in mistaken priorities. I think that there is a danger in this Budget from that point of view.

The workers are restless. There is no doubt about that. It is not easy to diagnose the real cause of the trouble. We may ask ourselves, why do workers getting£10,£12,£15 or even£20 a week feel so strongly about being denied a pay increase? No longer is the industrial battle for the basic requirements of life. Industrial disputes are no longer fought for the difference between poverty and bare subsistence. Trade unions have won great battles for the workers, and enormous concessions have been made by capitalism and by Governments over the years which have given them a much more favourable place in the community than they ever had before.

Yet, as the workers see it, there is something wrong with our industrial relations and with the social purpose of the Government. The crucial problem is how the workers under our present mixed economy, and even with nationalised industries, are to get their share of a rising national income without bickering, without disputes and without strikes. Does anyone know how they are to do it? They do not, and no one has yet told me how it is to be done.

This is becoming of greater and more urgent importance because of recent events. If strikes or the threat of strikes yield concessions which are refused in negotiation or arbitration, then strikes there will continue to be. No employer is likely to be better off at the end of a strike than he was before it. He will be in no better position to pay higher wages after a long period of a stoppage than he was before. Yet if employers continue to be more convinced by strikes than by arguments, what hope is there for peaceful industrial relations?

On the trade union side, it is essential to realise that, with the intricate pattern of industrial activity in the modern State, few strikes can avoid hurting many workers who are not directly involved in the dispute and may have nothing visible to gain from its result. I think that workers must face the fact that, under present conditions, a stoppage will speedily develop stresses and strains within the trade union movement itself, may endanger traditional trade union loyalties and create confusion and bitterness within the ranks of the workers themselves. There have been some signs of that recently and, had the strike continued, there would have been more.

That is something that the trade unions have to consider when using the strike weapon under present conditions. And that is not to mention the damage which may be done to the national economy—that is, to the interests of the workers as a whole—by a stoppage which may inflict serious if not irreparable harm upon the country's ability to pay its way and continue its pre-eminent position amongst the trading countries of the world. So I say that something different and something better has to be found if the trade unions and employers are to come to terms when dealing with pay and conditions.

I know the traditional objection of trade unions to anything in the nature of a wages policy, but none can say that collective bargaining is tremendously successful at present. Far too much is having to be referred to arbitration, or to special courts of inquiry or other special machinery set up to settle disagreements, and far too little is being settled amicably through the traditional machinery of collective bargaining.

Another thing is this. Negotiations now cover millions of workers at a time, and what may be given to one large section of workers may spread to millions more, From the evidence given to the court of inquiry on the engineering dispute, we have seen that there are already a considerable number of unions, representing large bodies of workers, who are knocking at the door, ready to receive whatever may be given to the engineering industry itself. I think that this means that, in many cases, what are called wage negotiations are really economic debates and economic transactions on a vast scale which may, indeed, affect the whole economy of the nation.

I believe that it was suggested in one newspaper that if there was a prospect of an industrial dispute over wages which, when settled, would spread increases throughout industry, it might be far better and save a lot of trouble merely for Her Majesty's Government to declare a 5 per cent. inflation. That is what it almost comes to, or may come to in certain conditions. Yet, Sir Gordon, everybody is supposed to keep out of the ring while negotiations are going on and disputes are mounting.

Even though disaster threatens, nobody must say a word that will hinder or upset anybody involved in the disputes. My right hon. Friend the Member for Ebbw Vale (Mr. Bevan), when he was assigned the responsibility on the Opposition benches for looking after Ministry of Labour matters, said that it was the easiest job on the Front Bench; because when industrial trouble was brewing one had not to say anything in case one made it worse, when industrial trouble was upon us one had not to say anything in case one exacerbated the feelings of one side or the other, and when the industrial dispute was over there was nothing to be said anyway. That, it seems to me, is how we are all behaving—