Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 30th October 1957.

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Photo of Sir Alexander Spearman Sir Alexander Spearman , Scarborough and Whitby 12:00 am, 30th October 1957

It is a question of alternatives, of whether it is better to have a few temporary unemployed or to run a grave risk of mass unemployment for a long time.

I am convinced that the future of the country depends not on feather-bedding declining industries, but on encouraging and stimulating expanding industries. If we freeze the economy in an obsolete direction there is no end to the unemployment we shall have. With the knowledge which we have today, there is no longer any need to fear mass unemployment, except for one thing. Mass unemployment is no longer an avalanche. We know how to control it, but the one thing is our ability to get raw materials. If we cannot get raw materials, we will indeed have mass unemployment, and if we have inflation to a sufficient degree followed by a balance of payments crisis we shall not get the necessary raw materials. Undue fears of unemployment and excessive precautions against unemployment are just the one way in which we may get mass unemployment.

It was said yesterday that the Chancellor's announcement was war against the unions. That is as great a piece of rubbish as I have often heard. It is war against a disease which would be disastrous for the trade unions and the whole country. The Chancellor's policy as he announced it yesterday is to make an increase in profits harder to get, and that is a jolly good thing. This means that wage increases will be harder to get and will have to be striven for. It also means a stimulus to efficiency. Lazy and wasteful firms will suffer and the efficient and competent firms will find it easier to get labour and resources and the result should be increased production and lower prices.

Although there is no prospect of that in the near future, we will then be getting towards the next instalment when the Chancellor can safely reduce taxation. His object must be to create a situation where profits are hard to get, but very well worth while getting.

In conclusion, I want to pay tribute to the Chancellor. He has had the courage to act to stop a crisis without any fear of unpopularity. The result of that is that all over the country among all sorts of people there is today an upsurge of confidence, and if the Government stick to their present policies I believe that that confidence at home and abroad will grow and grow.