Orders of the Day — Budget Proposals and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 17th April 1958.

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Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East 12:00 am, 17th April 1958

The hon. Member for Newton (Mr. Lee), in a characteristically pleasant speech, has carried out the duty which, presumably, his colleagues laid upon him to rebut a charge which has never been thrown at him by any responsible Tory—the charge that the Socialists desire to foment strikes. This has, of course, saved him and I am sure he is grateful for it—from having to explain exactly what the Socialists would do if they set about expanding production and if they were no longer to treat sterling, as we understand is their point of view, as the sacred charge both to our own inhabitants and to our creditors and to the trading world that we as Tories believe it to be.

The hon. Member seems to think that it does not matter at all what job a man does; he is still entitled to the same ever-growing wages, whether he works in a modernising, expanding industry or in an industry threatened—through no fault of the men, I fully agree—with obsolescence. By that argument we should still be paying handsome wages to coach drivers and wheelwrights making wooden wheels. I will deal with various parts of this aspect of his speech later in my remarks, but I should like to congratulate him on at least being able to claim credit, justifiably, for seeing in the Budget something which he himself has urged. I remember that in the debate on unemployment he urged that the Government should take some action about those areas where unemployment was above the national average. He was gracious enough in his speech to acknowledge the Chancellor's prompt action and the Government's plea to the House to pass quickly into legislation a law to make this intervention in areas of higher than average unemployment as quickly as possible.

I do not want to appear in the least smug about the trading arrangements of the free world. We have much room for improvement in our own arrangements, but let us not forget that in the last 20 or 30 years great improvements have been made in our knowledge of economics. Thirty years ago very few hon. Members on either side of the House realised that to combat an internal slump one had to go in for large deficit finance. The Socialist Government at that time were nonplussed. We all remember that the Minister for Employment did not reduce unemployment, although we all know that he tried hard to do so. We have learned more and, if one admits at once that we have more to learn, surely we can take hope from the past.

I speak as a passionate expansionist—no more of an expansionist than most of my hon. Friends, but perhaps a little more enthusiastic about it. It is my comfort to feel that there is one person even more expansionist in the long-term in the Tory Party, and that is my right hon. Friend the Prime Minister, whose views are shared by all of his colleagues in the Government. This is a party dedicated to expansion. I do not deny that right hon. and hon. Members opposite share the same view. All sensible people in this country must share this view, and it becomes sheer politics to accuse anyone in the House of wishing deliberately to be restrictionist. Only the most romantic mediaevalist thinks that happiness necessarily consorts with poverty. It is equal folly to suggest that happiness necessarily consorts with wealth. Nevertheless, everybody has the right to that chance to work to make his own sort of happiness or unhappiness.

We are a highly industrialised international trading concern on a virtuous spiral which forces us to become ever more and more productive and efficient if we are to survive, and it is nonsense to accuse anyone on this side of the Committee of doing anything to limit the long-term expansion. Peace itself and the tranquillity of the under-developed parts of the world depend upon the fraternal help which can come from countries like ours. I would pay my tribute to my right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) for putting to this country, against massive unpopularity, the theme that all parts of the Committee should applaud, the theme of fraternal co-operation for more benefits for all from the Free Trade Area in Europe. I only hope that the Paymaster-General can succeed in his negotiations in that great endeavour.

I have, as some may know, a particular interest in the social services, and I have recently been trying to carry out some inquiries by my own research into what the social services will cost us in twenty-five years. It is a very enlightening inquiry. We are an ageing population with an ever lower fertility and also a lower mortality, and we are going to have an ageing population to support We have very properly higher standards and provisions for health and education. Unless we have an expanding economy the burden of the cost of the social services in twenty-five years will be utterly intolerable. My comfort is in knowing that there is no greater expansionist in this Committee than the Prime Minister.

I welcome the Budget, though each one of us doubtless would like to see some things which are not in it; but the debate has not been about the Budget but about whether expansion should come before a stable £ or a stable £ before expansion. Hon. Gentlemen opposite talk about stagnation, but they seem to forget that we are stagnant, if that is the word, at the highest gross national product this country has ever known. We could all regret, it is easy enough to regret, that we did not level it at that plateau at a time when world trade was booming, but that was not the problem the Chancellor faced when drawing up his Budget.

Expansionists take grave risks with the reserves, and they all pray in aid an American loan or they all talk of calling international conferences, but they would not be in time to save the reserves if there were any increase in production without any protection for the reserves. The hon. Member for Newton confuses production with productivity. He thought higher productivity would ruin sterling. That is not so. It will save sterling. What the Government are frightened of is a higher production of everything haphazardly without any question of productivity or costs, which would jeopardise sterling, and we have to remember that we are looking after not only our trade but international and Commonwealth trade as well.

However, I think the Socialists have the right to ask, what will permit us to expand? We have lower import prices, wages are coming on to a plateau, perhaps. When shall we be permitted to expand? It is a very legitimate question. I ask it myself. I feel that the time for expansion will come when wages are stable; not static, but when they can be seen to be rising only in proportion with productivity in the industries in which are employed the individuals having the increases.

I, for one, stand, as I am sure every Tory in this Committee stands, for higher wages. Quite apart from moral or humane considerations, it is only a sensible business view, for unless there are high wages there is no consumption at a high level. However, for the Socialists to pretend that higher production must mean lower prices is to forget the experience of the Last few years. The fact is that the Socialists have to explain to themselves that there is in this world high unemployment, as in Italy, and rising prices, and that there can also be high unemployment and rising production and productivity, as in this country in the 'thirties. The fact is there is need for a little more humility on both sides of the Committee.

The Chancellor has to predict and equate a year hence, with utter accuracy, supply and demand in the international theatre with characters political, economic and psychological intruding from every part of the world. He may make no mistake of even 1 per cent., because if he miscalculates by 1 per cent. in one way there may be inflation, or by 1 per cent. the other way there may be massive unemployment. When we remember that the gross national product runs at £650 per second day and night, it seems to me to be a formidable task.

I should like to agree that too often stress is put upon wages. The fact is that management has the leverage in any industrial country, and I wish there were a bit more exhortation to management to absorb wage increases, though exhortation, as we know, is not the answer. Tories must depend, it seems to me, on competition. It is the only thing that forces management to watch costs, and if we are to have competition, we must always have demand a fraction below supply. It is easy enough to say that, but it is a very different thing to achieve it, but that it seems to me is the legitimate job and task we can ask of the Chancellor; for the key to expansion, it seems to me, is confidence, and businessmen and public enterprises will have confidence, even if demand is dammed up by some sort of artificial restriction like hire-purchase control. What makes for healthy expansion is confidence and a stable currency.

I do not believe that the Socialists have begun to have the answer. We have heard the hon. Member for the Park Division of Sheffield (Mr. Mulley) talking about planning, and we all remember the right hon. Member for Easington (Mr. Shinwell) too late confessing that the Socialists did not think enough before introducing their nationalisation Measures. Are they now sure that they have thought enough about planning? We give them credit for eschewing any planning of labour, but do they think they can succeed just by the planning of imports? They blame the Americans bitterly for the restrictionism of tariffs and quotas.

I declare an interest here. I am a builder. Do they think that the control of building is the answer? It is only a fraction of building which they regard as frivolous, and that will not solve the national problem. I do not believe that they have begun to have the answer. Their doctrinaire phrases are nothing but cant, and I hope to heaven that they are not deceiving themselves, as well as trying to deceive the rest of us.

I should not like to blame the trade unions. I think they are desperately keen on productivity because they see that their future interests lie there, but I wish they would pay more attention to an imaginative redeployment of redundant labour so that those men could take up jobs in the expanding industries. That is where the trade unions can help their own members and the country, and management should encourage them. If only there were more contracts like those of the boot and shoe operatives requiring work study and methods study, the country would be better off.

As Tories, we want more competition, more production and, to be quite brutal, more bankruptcies. We want more production at a high level of efficiency and not just more production at any cost. I stress that it is not only the private employer who has a duty to use the modern managerial methods of methods study, work study and cost analysis, incentive schemes and so on.

The Government are the largest employers of us all, but there are differences between one Department and another. Some Departments are using these techniques to the full, and I particularly commend the Services for their imaginative use of methods study. There are Government Departments which have not yet used to the full these methods. I only wish that when I asked my right hon. Friend the Minister of Health how many methods study experts he had in his Health Service of 400,000 he had answered with a figure larger than the derisory one of nine. The Government should give an example to private enterprise which is itself patchy in this respect, some brilliant and some laggard in the proper and full use of skilled and unskilled labour.

I have tried to cover far too much in far too short a time. That is the privilege of a back bencher. I hope that I have at least treated seriously the theme which many of us feel basic to the debate, that the Socialists are kidding themselves and the country if they think that this simple eight-letter word "planning" contains a single answer to the problem to which we all want a solution—expansion combined with a stable £.

The Government are, by temperament and by conviction, expansionist. That is the only solution that any sensible person can wish for, and although I am a passionate expansionist I rely on them to go ahead just as soon as our reserves and the stability of our currency permit.

I wish that I had more time to deal with the detailed suggestion made by the hon. Member for Newton in connection with arbitration. These are very delicate matters and he was very properly cautious in handling them in view of the national situation today.