Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 20 April 1961.

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Photo of Mr Richard Marsh Mr Richard Marsh , Greenwich 12:00, 20 April 1961

I do not pay Surtax, but I should be perfectly willing to swop my non-Surtax income with the income of any hon. Member opposite who pays Surtax and be prepared to pay his Surtax. The majority of people who pay Surtax are among the section of the population which is at least far from being the worst treated section.

The hon. Member went on to suggest that there was a need to provide incentives to British businessmen to seek new markets overseas. That is very important, because one of the things which is wrong about the Budget is not just one aspect of it, but the whole attitude in the country which has become fat, lazy and complacent in spite of the difficulties of competition with which it is faced.

It is time that it was pointed out that there are large sections of British business and industry which could do much better than they are doing and which could make a much more positive effort to seek new markets overseas instead of sitting back waiting for trade and business to come to them like manna from heaven.

We always enjoy listening to the hon. Member for Louth (Mr. C. Osborne). Like my hon. Friend the Member for Blyth (Mr. Milne), I think that every young Socialist in the present generation has learned to value the speeches of the hon. Member for Louth and to write them down in notebook and quote them at meetings almost ad infinitum.

The hon. Gentleman mentioned what has been apparent to us—this lack of interest throughout the Budget debate. We have reached the position where, after eleven years of Tory Government, the country has sunk into a period of economic stagnation and everyone accepts that this once great industrial power—there is no need to refer to league tables—is today putting up probably the poorest performance in the world among the highly industrialised countries. What is so serious is not only that the situation exists, but that people have come to accept it and that nobody seems to care very much.

After eleven years of Conservative Government the only thing about which we can be proud is that industrially we are ahead of Belgium and Luxembourg. This is a matter which people of all political opinions should stop to consider and then ask where we are going. The serious aspect of the Budget is that it ignores our position and produces no alternatives and no remedies. For example, there is no alternative in the Budget to the problem of productive stagnation. We have a Budget which hands out a little bit which quietens the 1922 Committee, which quietens a few Government supporters, which ties up a few loose ends, but which is no nearer to meeting the problem this year than it was last year.

We are faced with ever-growing competition from the Soviet Union, from Western Germany, from Japan and from every industrialised country in the world, yet the Government sit there contemplating their political navels without any idea of where to look for a solution.

As one would expect with a Conservative free-enterprise Government, it is clear that they have no idea of economic priorities. We continue to jog along complaining bitterly about the lack of progress in the export field. It is rather like religion in the Christian Church. Just as the Archbishop of Canterbury takes a dim view of sin, Her Majesty's Government think that we ought to do something better in the export field, but nobody gets down to doing anything apart from odd speeches by the President of the Board of Trade. We worry about exports, yet we concentrate on consumer services. We worry about exports, yet our investment in the metal-producing and chemical industries, the fields in which we could find markets overseas, is far from satisfactory.

This is the real problem which always faces a Conservative Government. They cannot decide Whether to radically re-examine their approach to our economic affairs. Because of this threat of economic competition, which gets worse each year and from which we have been sheltered since the end of the war, it is no use fiddling about with Surtax and trying to kid people that the Surtax concessions are anything other than a way of paying off one's friends. It does not assist the country in the position in which it is placed.

The hon. Member for Wycombe said that the Surtax provisions were a matter of fiscal justice. Nobody would deny that the Surtax payer has a case. He has, but a lot of other people have a case. The aged have a case for increased pensions. The 10s. widows also have a case for more money. Persons paying Schedule A tax, especially those in small homes—because they are the only people who pay the tax these days—have a case for assistance.

What is wrong with the Surtax case is the type of person the Government have chosen as the first priority. Nobody denies that the Surtax payer can produce a case for increasing the level of Surtax, but no one can justify it at this time. This argument has been made many times. In a situation where, one month, a sum of £65 million is to be raised from the sick, it seems ludicrous to pay out £85 million the next month to people earning over £2,000 a year. If the Government have £85 million to spare, why should it be given to people who, with all their justifiable grievances, are certainly not suffering hardship, as the hon. Member for Wycombe rightly said.

We criticise the system of priorities, and we are told that Surtax levels were raised because it was necessary to the British economy that they should be raised. We are told that all these exporters have been on a kind of unofficial strike, refusing to export because the Surtax levels were too low, and that now that they have been raised the exporters will go galloping off exporting. What absolute bunk! Hon. Members opposite do not believe it—at least, very few of them do—and I am sure that very few of their supporters do. As my right hon. Friend the Member for Huyton (Mr. H. Wilson) pointed out, if we put forward the argument that exporters export more when they get more income the same can be said of importer, runners of striptease establishments, gamblers and everybody else.

The Surtax proposals are an inflationary move. The hon. Member for Louth, who uttered some very shrewd comments on the situation, paid great tribute to Sir Stafford Cripps and the policy of the wage freeze and the halt to inflation which he attempted to impose when he was in office, under very difficult circumstances. The hon. Member was asked whether this Government could rely on the sort of support that Sir Stafford Cripps had. Hon. Members know that no Conservative Government could implement a wage standstill at present. No Conservative Government could gain the trust of the majority of the working population at all levels in order to obtain a standstill in the economy to enable us to get our breath. Men earning £15, £16, £17 or even £20 a week, who are worried about mortgage repayments, and who have been told that they must pay more for their National Health prescriptions and higher National Insurance contributions cannot be persuaded to rely on a Government who, within a few weeks, give £83 million to people earning over £2,000 a year.

The Government do not have the confidence of most of our people, economically. They make the electioneering point that they did nicely in the county council elections, and also in the last General Election. We all know that. But one of the things that impress most people who go to the Iron Curtain countries—people like myself, who profoundly dislike their system—is the way in which even those people who disagree violently and completely with the régime feel that they have a stake in the progress of their country; that they are a part of it, and are involved in its advance. That is something which our people do not feel. There is stagnation in British industry because there is stagnation in the country as a whole. It has no sense of leadership, and no belief in where it is going or how it should get there.

It has become clear that this country cannot be run without central economic planning. Hon. Members opposite have woken up to the facts of life and have discovered that there must be Government intervention in aviation, cotton and almost every other form of our national life. The only difference between the two sides of the Committee is as to how much intervention there should be, and the method by which it should be achieved. I am convinced that until this country is prepared to plan its economy—to realise what resources it has and then what priorities it will allocate to those resources—year after year we shall have to face balance of payments crises and other crises of one sort or another.

Inevitably, by the law of averages, we shall find ourselves at some time in serious economic difficulties. We shall have a situation in which a Government who came to power because of their alleged support for a great industrial nation and its industrial know-how tipped this country down the drain, economically—not deliberately but because they were not prepared to take the measures which were so obviously essential.