Public Investment

Part of the debate – in the House of Commons at 12:00 am on 9th November 1960.

Alert me about debates like this

Photo of Mr Norman Pentland Mr Norman Pentland , Chester-le-Street 12:00 am, 9th November 1960

I hope that the hon. Member for Weston-super-Mare (Mr. Webster) will forgive me if I do not follow him in the wider aspects of the remarks which he has just addressed to the House. I wish to draw attention to some simple facts of the economic position, regarding how our people view the position today and, particularly, in relation to the Chancellor's speech this afternoon, not so much because of what the right hon. Gentleman said but because of what he left out and left to the imagination of hon. Members on both sides of the House.

I think it true to say that whenever the economic situation is debated in this Chamber we invariably find among speeches made by hon. Members opposite and also in the daily Press an emphasis laid upon the fact that the greatest dangers to our economy can come from the demand of trade unions for increased wages for their members. Also drawn to our attention are the harmful effects to our economic situation created by irresponsible action, or supposedly irresponsible action, taken by certain workers to industry today.

I think it is true to say that most of us deplore unofficial strikes. I have worked long enough in industry to know that the workers of the country do not strike unless they have a very real grievance. They do not lightly strike. I for one refute the popular assumption that unofficial strikes are, in the main, caused by irresponsible shop stewards and trade union leaders who are supposed to be out of touch with their membership. I refute that assumption at once. Indeed, I have far more faith in the integrity and the intelligence of the British workman to believe that the simple fact is that far too many workers in industry today are not having it so good and because far too many peaple are seeing that the position remains that way.

As far as I can see, the present Government are doing nothing at all to bring about a solution of this situation. Indeed, they are doing quite the reverse. I believe that one of the most pointed charges that could be made against the Government, and which could have been made and indeed was made about Tory Governments in the past, is over their economic policy since 1951. I know that this has been said on many occasions, but that is no reason why I should not say it again today. They have deliberately encouraged a free-for-all. That is the whole of their philosophy and that is the line which they have been taking all along.

I understood from last Sunday's Press that this week the Chancellor of the Exchequer was to make a big appeal for a go-slow in wage demands. We have heard that today. He will have to do a lot better than that, and there will have to be a drastic change in the way the Government are conducting our economic affairs before the trade union movement will even consider such an appeal. Do the Government think that they can encourage a free-for-all in profits and dividends and, at the same time, not have a free for all in wages? If they continue as they are doing to impose restraint unfairly upon the workers, the inevitable result will be that they will provoke wage claims and push them to the point when strike action occurs.

It is quite true—this has been levelled at us time and time again from the benches opposite—that the workers of the country accepted a measure of wage restraint during the period of the Labour Government. But the situation at that time for industrial workers was entirely different from the situation which exists now under this Government. The trade unions then had evidence satisfying them that, when they worked together with the Labour Government, they could be quite happy to think that the Labour Government, when economic difficulties were encountered, would work out and apply a plan which made equal demands and offered equal opportunities to all sections of the community. This is not the situation today, and in the difference lies one of the real causes of unrest in industry.

Every worker is now fully aware that the rise in profits and dividends has jumped again this year and is steeper now than ever before, and he knows that dividends are outpacing wages and salaries faster than at any time since the end of the last war. In fact, dividends are now rising more than four times faster than wage earnings in industry. Is it any wonder that there is unrest among the workers? We have had a credit squeeze. We have had a 6 per cent. Bank Rate. At one time it was 7 per cent. The previous Chancellor appealed for a lowering of prices or for stability in prices. The Prime Minister has appealed for more exports in order to avoid an autumn financial crisis. We have had all that, but those appeals have not been accepted at all by the people to whom they were directed, and profits and dividends move merrily on their way.

This extraordinary shift in our national wealth for the benefit of shareholders and profits and away from wages and salaries has been gathering force for nearly three years. I shall not weary the House by going into all the figures; they are readily accessible and the matter can be easily proved. As I have said, dividends are now rising over four times as fast as wage earnings. Does anyone really seriously believe that the workers are not fully aware of these facts? In my opinion, they are at the root of the unrest in industry. I assure the House that every industrial worker, through his trade union and the knowledge which is passed on to him, is fully aware of them.

The Chancellor of the Exchequer spoke about the rise in dividends and said that one was entitled to expect them to increase having regard to their level in the pre-war period. The Daily Express in its leading article of 24th March this year had something to say about this. Bad news from the wages front."— said the Daily Express—I am quoting certain passages from it— Bad news for those who have the healthy development of British industry at heart. Wage increases are lagging behind the rise in company dividends. Wages have gone up 42 per cent. since 1952. In the same time dividends have increased 78 per cent. This comparison is discouraging. And it is not a good answer to say"— this is the answer to the Chancellor of the Exchequer from the Daily Expressthat from 1938 to 1952 wages increased at five times the pace of dividends. So they should have done, for in 1938 Britain was still suffering from a dreadful depression. Wage rates were only catching up. The principle should be clear and imperative. Dividends and wages should march together. There should never be a situation in which dividends move ahead of wages. Both should share alike in the benefits of a prosperous national economy. That is not the Daily Worker, the Daily Herald or any Left wing paper speaking. It was said in the leading article of the Daily Express of 24th March, and I think it very well sums up the situation in industry today. Apparently, the Government do not take that view. They have made their appeals, but they know as well as we do that those appeals have met a very bleak response from the people at whom they were directed.

My hon. Friend the Member for Gloucester (Mr. Diamond), who is unable to be here today, made a very pointed reference to this matter in the Budget debate on 5th April last. Referring to what the Chancellor had failed to mention in his Budget speech, he said: It is my job to encourage him to put a little more accent, as it were, where encouragement is needed, and I invite the right hon. Gentleman in his important capacity to say to the nation, 'Thank you, workers, for having contributed to the stability of prices over the past year ', and to all his friends who are responsible as directors for dividend policy 'I regret that you, directors, have not come up to the standard of the workers in their sense of patriotism'."—[OFFICIAL REPORT, 5th April, 1960; Vol. 621, c. 247.] Those were very wise words from my hon. Friend. They apply to the present situation. Of course, his invitation was not taken by the previous Chancellor of the Exchequer.

We have a free for all more intense than ever, and we may as well face the fact that profiteers and Stock Exchange manipulators are getting away with murder at the present time. Everyone in the House realises that perfectly well. I sincerely believe that the trade union movement—we should remember this when we speak about the responsibilities of the trade union movement in Britain—has been very meek and mild in pressing the claims of its members throughout the whole of 1960.

Some people may claim, as the Chancellor has claimed today, that because the rise in living costs has been halted—we all know that this is due to lower world prices—the trade unions are not justified in submitting further claims now. My reply to that is that high living costs are not the only justification for increased wages and salaries. Rising dividends are another. The sooner the Government recognise that and do something about it, the better for everyone in the country, as I am sure everyone concerned about the present economic situation will agree.

I turn now to the lack of provision for the relief of local unemployment. We have always recognised that the changing pattern of industry is, in turn, changing the face of Britain. There is a striking example of that in the cotton and coalmining industries. My hon. Friend the Member for Bedwellty (Mr. Finch) has just spoken about the coal industry. I want to refer to it myself, but for another reason—I know more about coal than I know about cotton.

I know also that the situation in mining areas has been described many times before, but whenever we have the opportunity, it is our duty to hammer home to the Government the facts of life as they are taking place in the mining areas of Durham, Scotland and South Wales.

The coal industry is an extractive industry. It is inevitable that the reserves of coal in certain older coalfields will peter out and become exhausted. We now know well in advance almost the exact time at which pits have to close. When pits in Durham, Scotland and South Wales close down, as many will within the next ten years, the situation will become desperate. Almost all the population—the young and middle-aged—now have to rely almost entirely for their livelihood upon the working of a colliery.

If these communities are not to become derelict areas, the Government must provide work when pits close. That is our claim. I do not say that another industry could be started in every mining village. That is unnecessary in modern times. There are better roads. If there are not better roads, there should be. They could be built up. In most mining areas of Durham there are better travel facilities for getting people to and from work. The Government must provide a positive plan to meet the situation and save these areas.

It would be a tragedy if the nation lost the capital assets in the mining areas, which collectively must run into millions of pounds in housing and social services alone. They must not be lost. We say that there should be a plan which would use our industrial potential in such a way that we would be able to use the social resources in housing, and so forth, and take work to the people, thereby preventing thousands of them moving to other areas in search of jobs.

My hon. Friend the Member for Bedwellty mentioned the alarming manpower problem already existing in the coalmining industry. It will continue in the future. One of the main reasons why young men are leaving the coal-mining industry is that they can find no security in it.

Earlier this year I asked the Minister of Defence how many young men between the ages of 18 and 25 whose previous occupation had been in the coalmining industry had joined Her Majesty's Forces from 1957 to the latest available date in 1960. The figures published in the OFFICIAL REPORT showed that in that period, which I think was up to February of this year, almost 10,000 young men between those ages had left the coalmining industry for the Forces alone. Thousands of pounds had been spent on training those young men so that they could become efficient miners in the future. They have left the industry because of the paucity of the Government's present policy. We shall have more to say about that when a debate on the coalmining industry takes place in the future.

I have said repeatedly in the House that the Local Employment Act has only scratched at the surface of the problems in Durham. Our problems are now more serious than ever, and become alarming if one is concerned about the future, as I am today.

The present position is serious, but it will become more serous in ten or twenty years time if a positive plan is not forthcoming for Durham. Earlier this year—the position is not much better today—there were 24,500 unemployed in the geographical county. There were 2,500 unfilled vacancies. Therefore, there were nearly ten persons unemployed for each vacancy notified to the labour exchanges. This compares with a ratio of well under two to one for the country as a whole. Perhaps more significantly, there were sixteen men unemployed for each adult male vacancy, compared with a national ratio of only three to one. It will therefore be recognised that even the present situation in Durham is gloomy.

Looking to the future, as we are entitled to do, it seems that there will be a very real crisis ahead. The memories of people living in Durham are not by any means short. They have very long memories. Worse still, the young people in Durham are becoming very frustrated and embittered about their prospects, so much so that they are leaving the county. Numerous school leavers still cannot find a job. It is no wonder that thousands of people migrate from Durham every year, and the same applies to Scotland and South Wales.

The present situation demands that the Government take urgent, vigorous and co-ordinated action. When direction of industry is mentioned, the invariable reply is that that would mean direction of labour. Direction of labour is already taking place in Durham, Scotland and South Wales, as we all know. Because of the economic situation in those areas thousands of people are being forced to leave. The prospects of finding a job in those areas are hopeless.

I have repeatedly asked for industries to be sent to Durham which could work in harmony and co-operate with the basic industries there, preferably coal. I make a suggestion to the Government now which they will probably not accept. One of the solutions to this problem is that they should assist nationalised industries to build subsidiary companies. There is no reason why they should not. Nationalised industries spend millions of pounds on materials and equipment. Why should not subsidiary firms be built by nationalised industries, assisted by the Government, in development areas or where the Local Employment Act is expected to operate?

Durham needs more light industry, but, more than anything else, it needs heavy industries to meet the demands which will be made upon it in the future. I therefore hope that the Government will give serious consideration to the position of the people of Dunham, Scotland and South Wales. I hope that they will take urgent action to relieve the fears and anxieties which our people have about the future.