We are all well aware that the Prime Minister is given to this kind of political presentation, which does not necessarily have to accord with the facts. Often, when I read what he says, I am reminded of a remark once made to me by the late lamented Aneurin Bevan, in one of the rooms in this Palace, just after he and I had had a difference of opinion. I said, "You want to get hold of the facts". Mr. Bevan said, "One of the things you will learn is that a knowledge of the facts often impedes the best speeches". I am bound to say that one would have been impeded this afternoon.
Every hon. Member knows that, leaving aside whatever political advantage one tries to get out of it, there is a serious side, if I may choose uncontroversial words, to the economic situation of Britain at present and which faces us in the future. One thing that we have to do in such a situation is to put the facts before the people and give them the sort of lead which will inspire them to the action that ought to be taken. How can that be done if the Prime Minister, when he speaks in the country, uses the sort of words and evokes the sort of headlines which leave everyone thinking as the hon. Member for Torquay thought, namely, "As long as you do not listen too much to the silly Socialists everything in the garden will be delightful". This is exactly what is not true and exactly what the Prime Minister ought not to put before the country.
What is the basic problem which faces us? Let us try to see it as clearly as we can and as it has emerged from the debate. The first thing is that the industrial production of the country is not rising fast enough and, except for a short period, has not done so for quite a time. In so far as it is rising at all, it is doing so far more slowly than that of our competitors. Various right hon. and hon. Members opposite have pretended that it is wrong, or not very important, when my right hon. Friend the Member for Huyton (Mr. H. Wilson) and others produce what are called league tables.
Unless we listen to the note of warning that is surely being conveyed when every one of our competitors in the world is going ahead productively faster than we are, how will we wake up to what is happening? We produce these tables—T will not repeat them now—not merely because we want to show that other people are doing better than we are, but because in this table of productivity, and even of our exports, lies the clearest warning to us of where we shall finish if we do not pull our socks up and do something serious about it.
Our industrial production record is and has been very worrying over a period. We can start by considering whether the Budget is addressed to the real problem which faces the country and then we can see what we think ought to be done about it. The slow rise in production has been paralleled by a totally inadequate rise in exports. In the second and third quarters of 1960 exports declined while import rose at an alarming rate. There was a slight recovery in the last three months of 1960, but the value of exports in the final quarter, after seasonal adjustments, were 3 per cent. less than the value of exports in the first quarter of the year.
This is not a booming situation. It is a frightening situation, one which can land these islands, peculiarly dependent, as we are, on imports and, therefore, needing the means to pay for them, in very considerable trouble. The President of the Board of Trade was one of those yesterday who, on the question of the league tables and comparisons, seemed peculiarly to want to make light of it. I do not know whether that was his intention, but that was the impression which he gave me. He did not appear to regard it as a serious business. The Chancellor, however, made a quite different impression. He not only referred to the insecure foundations, but he warned us about the balance of payments and about how far we had to go in building up exports. He went on to say that the solution to the balance of payments problem was not to be found in checking the growth of the economy, as the Government have so far been doing, and so on.
If the Chancellor's own side of the Committee had been listening to all that analysis of his instead of waiting so expectantly simply for the reference to tax reductions that hon. Members opposite hoped would come later, some of the speeches that have been made today on the Government side would not have been made. All that the Chancellor said in the analysis was excellent, but when it came to what to do about it, it was a very different story.
There is one thing that I should like to get clear and I ask hon. Members opposite to think about it. It is repeatedly being said—it was said again just now—that part of the reason for our problems is that we have either too many strikes, higher wages, or higher taxation than our competitors, or higher costs of social services. A variety of things like this are said.
If one looks at the comparison between us and our European competitors in particular, that is simply not true. There was a time when we were ahead of them in wages and social services. Now, however, if we take the true labour cost, both what is paid in money and what the employers have to pay in other ways—and social benefits in the other countries are often carried by the employer—it will be found that far from being penalised, we are in many cases behind other countries. It cannot be said that it is this which is holding us back. Other countries are going ahead and carrying heavier burdens in this respect than we are.
There are two key factors with neither of which the Budget comes into contact. The first is the shortage of scientists and technologists in British industry. I will return to Surtax presently. Folk who think that scientists and technologists are in short supply in British industry because of a marginal difference in the amount of Surtax which they might have to pay when earning £10,000 a year are barking right up the wrong tree. The reason is quite different. It has something to do with industry's very late recognition of the part that this kind of person has to play. It has a great deal to do with the kind of salaries that are offered to these people, not only at the starting point, but for a very large part of the time while they are working.
The second key factor is the inadequate pace of expansion of the British economy and of innovations in it. I believe, quite contrary to what some people have said, that there is nothing in the Budget that will stimulate investment or get investment to the places where it is needed. This is as much a part of our problem as the overall problem of expansion. It is the business of planning a longish period ahead and being selective in what one wants to achieve. On the contrary, not only does the Budget not attach itself to this task, but over the past nine years the Government's policies have actually held back long-term investment and have discouraged investment in the areas in which we ought to have it.
The biggest single cause of the balance of payments crisis that the Chancellor spoke about seems to us to exist in the tremendous rise in imports in the last year or so. The Government's Economic Survey does not say this. It states that the expansion of the economy over the past two years has resulted in a substantial increase in imports. That is not true. With great respect to the President of the Board of Trade, that is not the real truth. If the right hon. Gentleman will not look more deeply than that into this, we are in a tragic way.
Of course, there has been some increase in raw materials. There has been an increase in the materials required for industry, but that is not where the big increase has gone. The big increase in the last year, for example, has been in the imports of manufactured and semi-manufactured goods, which have risen in a single year, I am informed, by over one-third and which have added to our import bill an extra £150 million and £247 million respectively. These two increases taken together, were responsible for more than enough to account for the whole of last year's enormous balance of payments deficit on current account.
This, in our view, is where the weight of it happened. This happened because of the right hon. Gentleman's own premature dismantling of import controls, which would have allowed him to keep the economy steering the right way. He, more than anyone else, is personally responsible and it is not due, as the Economic Survey puts it, to an expansion of the economy.