Orders of the Day — Emergency Laws (Repeal) Bill

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

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Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North 12:00 am, 12th November 1958

The new Economic Secretary today made a maiden speech of almost maidenly innocence. He gave us a detailed and legalistic explanation of all the things that are in the Bill, but he gave no reason why the Government have put them there. All that has been left to the Solicitor-General.

I could not help thinking that the very fact that the Economic Secretary was so reluctant to tell us why we have the Bill in this form might imply that the reason for it was not such a reputable reason, After today's debate there is not much left of the claim that the Government have been inspired by pure-minded zeal for civil liberty in introducing the Bill, The present Government are perfectly willing to balance civil liberty against economic expediency when it suits their purpose.

What the Bill does, stripped of its legalities, is to weaken the power of future Governments, Tory or Labour, to prevent rises in the cost of living, to maintain full employment or industrial peace, to achieve expansion without inflation or to develop Commonwealth resources as quickly as we ought to develop them. The Economic Secretary protested great enthusiasm for what he called constitutional propriety in placing these emergency laws, as a matter of principle, on a respectable permanent basis.

We entirely agree that powers which are retained should be put upon a proper permanent legislative basis. But the Government have taken seven years to carry out these virtuous principles. They are making an honest woman of themselves after seven years' legal twilight, during which some of the children have grown to a quite advanced age. It was the Manchester Guardian, and not I, who described this as a deathbed repentance, whose real object was to spite the heir rather than to right a wrong. If this hasty deathbed conversion is all done out of a new-found conviction—as the hon. Member rather suggested—I do not see the purpose of the Lord Privy Seal's recent speech, when, in one of his characteristic bursts of candour, he talked about this as a flick of the switch. What did he really mean?

Moreover, contrary to the impression given by the Economic Secretary, and contrary even to what the hon. Member for Carlton (Mr. Pickthorn) seemed to think—although I hesitate to suggest that he is ever fallible or wrong about anything—the fact is that the Government are not putting the remaining emergency powers upon a permanent basis. The Bill, for the most part, is merely continuing certain Defence Regulations and other emergency powers, as temporary powers, until 1964, very much as the Supplies and Services (Transitional Powers) Act, 1945, continued them for five years, until 1950.

As for the constitutional propriety of the matter, the Bill is neither more nor less respectable than was the 1945 Act. Nor is it the slightest good for the Government to pretend that they object upon a ground of high principle to economic controls as wicked and tyrannical invasions of the liberty of the subject. That pretence has not survived this debate. The Government are themselves retaining, and in many cases operating, a whole battery of economic controls—and I think that they are doing so rightly in respect of foreign exchange, imports, hire purchase, and the price and distribution of certain welfare foods, and they are also retaining them for the supplies allegedly interrupted by overseas Governments.

It is not the principle of controls to which the Government object, or in respect of which the two sides of the House are divided today. What really divides us is our respective valuation of the aims which made it worth while to exercise these powers. The Government believe that the limitation of imports and the control of hire purchase, for instance, are worth the trouble of the restraint imposed upon individuals by those controls.

We attach equal importance to full employment, price stability, the strength of sterling, industrial peace, and Commonwealth development—none of which was mentioned by the Economic Secretary this afternoon. We value full employment, price stability, industrial peace and the rest so much more highly than the Government that we are willing to incur the trouble and sacrifice which they regard as necessary for other purposes, but not for this.

Leaving aside the legal framework, what substantial powers does the Bill propose to abandon? If I am right, price control over almost all kinds of goods is abandoned, as is control over the production and supply of a large range of goods. Compulsory arbitration, and many of the purchasing powers of the Ministry of Supply and the Board of Trade, and a few others, are also abandoned.

No impartial person who understands the Bill can deny that the sweeping away of all those powers must at least make far more difficult the practical job which every speaker in the economic debate a fortnight ago recognised to be the most crucial issue facing us in internal affairs— the job of achieving expansion without inflation.

If, for instance, we abandon these powers of price control altogether, even the power to use price control temporarily in certain circumstances, we have little power left to stop a rise in the cost of living; except by slowing down the economy and experiencing the sort of stagnation policy which we have had in these last three years. On the evidence of the last ten years or so, I do not believe that very many price controls should normally be necessary to keep living costs under control, provided that import prices are not rising.

That is why, incidentally, it is doctrinaire nonsense to say that price control need involve rationing, because, were price control applied at all, it clearly would be applied in those instances where rationing was not involved. But to throw away the power to use price control altogether in any circumstances is surely to force us into the dilemma of having either low prices or vast chronic unemployment.

Even during this past year we have had a 2-point rise in the cost of living, with our industry heavily under-employed and a 10 per cent. fall in import prices. That is not encouraging to the theory of hon. Gentlemen opposite. That is why I believe that this Bill in its present form will make stable prices and full employment more difficult to achieve. I agree with the hon. Member for Louth (Mr. Osborne) that no Government can guarantee full employment always in any circumstances with any certainty. But we say that they can do 'some things which makes it more likely and many things which makes it less likely.

The Government are also virtually abandoning all the general powers of control over industries and supplies contained in Defence Regulation 55. Certainly, those powers, so far as they are retained, ought to be enshrined in permanent legislation. Certainly, they ought to be very sparingly used and probably normally only in the case of essential goods where Parliament, by Statutory Instrument, specifically judges that to be necessary. But to sweep away virtually the whole lot is, in our view, going much too far and will again make any priorities, or planned use of resources in difficult times in the future, far harder to achieve.

In the past few years the present Government have, for instance, at times rationed both steel and oil. Under the provisions of the Bill we shall not be able to do either of those things even in a period of shortage. I agree that the Government have not been able entirely to blot out of their mind the memory of Suez. What happened then? It was not until 31st October. the clay after the Suez ultimatum, that the Government thought of laying an Order before the House to take emergency powers to safeguard our oil supplies. But they would not be able to do even that under the provisions of this Bill which says that such powers could be used only if the shortage of essential goods was caused by measures taken by the Government of any country outside the United Kingdom. The shortage of oil after Suez was not the result of measures taken by another Government. It was the result of measures taken by this Government.

I suppose that the learned Solicitor-General may tell us that the Government have at least learned that lesson and will never commit a folly like that again. But Lord Hailsham is still a member of the Government and he has one unique distinction in British politics. He was an enthusiastic defender of both Munich and Suez. That is a distinction which even the Lord Privy Seal would not claim to rival, because he was somewhat lukewarm about both.

The Bill also severely limits the power of the Ministry of Supply to produce civilian goods. In my view, that is another blow to employment in Scotland. Wales, Lancashire and other areas affected by unemployment. It virtually abolishes, apart from jute, where, again, the Government admit that there is nothing wrong with the principle, the power of the Ministry of Supply and of the Board of Trade to purchase the produce of Commonwealth countries, such as the West Indies, West Africa, Ceylon and India. That in itself is a blow to employment and the development of those countries. I do not think that we can do that sort of thing and then complain when Commonwealth citizens come here in thousands and expect employment in this country.

There can be no doubt that the Bill will make it more difficult to break out of this stagnation policy, which is at present costing the country about £2,000 million a year of income. What extraordinary folly and waste this stagnation policy of the Tory Government is, because while production here stands still, it is going ahead not merely in most of the countries of Western Europe, but in Russia and China and many other totalitarian countries as well.

Of course, the Economic Secretary tries to imply, although he had not quite the face to say it, that under the wise management of the present Chancellor we have virtually overcome all the temporary postwar economic difficulties and so can dispense with all these unusual powers.

The Chancellor himself, last week, boasted of his luck, and he gave me the impression that, in his view, it would be by faith rather than by works that he would guide the economy from now on, That did not inspire me with a great deal of confidence. All Chancellors of the Exchequer tend to suffer from a sort of delusion, not of grandeur but of virtue, that thanks to their own personal purity and sacrifice the country has at last overcome all its economic difficulties and can cast away all defence and restraints.

If the Chancellor is now fitting that halo on to his head, and that is his one 'reason for sweeping all these powers away, let me remind him and the Government of one or two facts before we pass from the Bill tonight. Consider, for instance, the last Chancellor of the Exchequer, the one that we do not mention, as my right hon. Friend called him. Incidentally, he seems to have become not merely unmentionable, but invisible this Session. It almost seems that the Patronage Secretary has hounded him out of the Chamber altogether. Wherever he is, the last Chancellor of the Exchequer, the right hon. Gentleman the Member for Monmouth (Mr. P. Thorneycroft), said in his Budget speech in April, 1957, that expansion must be our theme. He thought that most of our troubles were over. Yet, by September, 1957, we were in the worst exchange crisis since the war and the full employment policy was virtually abandoned by the Government.

Out of the last four autumns, we have had three severe exchange crises. We all rejoice at the inflow of gold into this country since 1957, but does the Government Front Bench recall, for instance, that gold flowed into this country every month from September, 1949, to June, 1951, that was not 14 months but 21 months, and the reserve in June, 1951, was very much higher than it is now?

That, I believe, is a warning against assuming that our difficulties can be too easily overcome. Again, if the Government still deceive themselves into thinking that these powers are no longer necessary because everything is running smoothly, let me remind them of this one fact. If import prices had moved between 1957 and September, 1958, as they moved between 1950 and 1951, we should now have not a balance of payments surplus of £400 million, but a deficit of about £1,000 million. I think that that, again, is a warning of the kind of thing that can happen. Therefore, I believe that we should show a little more humility, modesty, and caution in the face of economic fortune, and not throw away the steering wheel when we have barely climbed out of the ditch for the third time in four years.

I myself hope that it should not normally be necessary, in future, to use more than a few carefully selected controls, temporarily, at certain times, to achieve expansion and stability at the same time. Indeed, as is well known, the Labour Government got rid of a great number of controls in those six years. Nevertheless, to throw away altogether even the power to impose price control in certain cases, building control, and control over any other supplies generally is, in our view, imprudently flying in the face of recent experience.

The Government have now been giving an exhibition, for three years or more, of trying to drive the economy without a steering wheel. They have landed the country three times in the ditch in four years. Throughout 1958 we have been standing still for fear of moving too fast, and we fear that this Bill will make it even more likely that either stagnation will continue for a number of years further, or that we shall be in the ditch again before 1959 is over.