Budget Resolutions and Economic Situation

Part of Orders of the Day — Ways and Means – in the House of Commons at 12:00 am on 10th April 1962.

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Photo of Mr Joseph Slater Mr Joseph Slater , Sedgefield 12:00 am, 10th April 1962

I am always prepared to accept that from the hon. Member, but I should have thought that he would give support to Members representing North-East constituencies who have been agitating for the direction of industry to the North-East, in order to ease the unemployment there.

I was also interested in the speech of the President of the Board of Trade. In his opening remarks he drew attention to the Press publicity given to the Budget. He told us that the Press had referred to it, first, as a standstill Budget and, secondly, as a "lollipop" Budget. When the Labour Government were in office I well remember hon. Members opposite, who were then in Opposition, directing their attacks upon the Labour Chancellor of the Exchequer and referring to him as "Austerity" Cripps. The present Tory Chancellor will go down in history as the "Lollipop" Chancellor.

The President of the Board of Trade also said that hon. Members on this side of the Committee did not like the form of society in which hon. Members opposite believed. How true that is! The policy of the party opposite has always been, "For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath and given to him that hath." Hon. Members on this side of the Committee seek to raise the standards of the ordinary people and give them a greater opportunity for the development of their personalities and their qualifications within society.

We listened very patiently to the Chancellor's speech. I, together with many other hon. Members, hoped that he would put forward a set of proposals designed to assist this country to get out of its present serious position. If the Chancellor believes that by easing Purchase Tax on certain goods and placing a 15 per cent. tax on confectionery he will find favour with the country he is in for a shock. We have become accustomed to the Government's changing their mind and their tactics from one Budget to another, and from one year to the next, in relation to investment, credit, the Bank Rate, income and even taxation. In February last year there was an increase in contributions but in April concessions were announced for Surtax payers. Three months later, in July, we had a higher Bank Rate, with higher prices, a slow-down in our investments, and a clamp-down on wage increases.

I ask the Chancellor and the Government how we can expect industry to plan ahead with any assurance when the signs and forecasts put out by the Chancellor are no more reliable than those of his predecessor. The effect of the Government's policies on the workers is merely to cause a lot more irritation. They regard it as a positive punishment. Last year industry was asked to limit its dividends, and the workers were asked to do without wage increases. What justice was there in this? Dividends can be put into cold storage and paid out later, but wage increases which are denied are lost for ever; they are not merely deferred. If the Chancellor wants to convince the nation that we are in such a serious position that every effort must be directed towards attaining solvency he must abandon his scheme for giving free gifts to the Surtax payers.

As was pointed out by my hon. Friend the Member for Cardiff, South-East, those who earn about £20 a week have had transferred to their shoulders a much heavier burden than those who have higher incomes. It must be understood that the reason for so much criticism being directed against the Government on this occasion is their lack of consideration for the less fortunate sections of our society.

Another factor which has aroused criticism is the capital gains tax. When hon. Members visit their constituencies workers rightly ask how it comes about that overtime continues to be taxed while capital gains are not. Why cannot such gains be taxed over a long period? Why does the Chancellor not take his courage in both hands and do this? If the country is in such a bad state we cannot be allowed to run away from our responsibilities.

I have always held the view that if the necessity for taxation was properly presented to the people, and if each section was called upon to bear a proper share of responsibility, everybody would agree with the measures that were taken. I have always taken great pride in the attitude adopted by the Labour Government from 1945 to 1951. I was not in the House from 1945 to 1950, but I know that during that period it was because the Labour Government took the people into their confidence that they were able to get the increase in productivity for which they asked. Quite apart from all the assistance and the aid which was given us from various channels, if we had not had that increased productivity we might not have been able to carry on. I believe that if we do not take the people into our confidence regarding the position, and the reason why we find ourselves in such a position, we shall not get the support which we ought to have.

If we are to be realistic, in view of the great changes taking place in the world, the economy of the country must be planned and regulated; otherwise, in my opinion, it cannot work satisfactorily. We must realise that "John Citizen" is tired of hearing such slogans as "Double your standard of living in twenty-five years" or of being told that within a period of time workers will be receiving wages of up to £1,000 a year. We have listened to such platitudes for too long. They have become stale and today we require action. The burden on the workers has not been eased by the policies adopted during the last eleven years. If production is to increase and industry expand, the workers must be given an opportunity to counsel their own opinions to a greater extent than in the past. There are many able scientists and technologists in industry who could make a great contribution were they given the opportunity.

Let us not forget that too many men have been out of work for too long. In certain areas the figure of unemployment is high and it persists. People are never free from the fear of redundancy and of becoming unemployed. Many people in the North-East have this fear. Undoubtedly that state of affairs will continue for longer than we desire. Surely it is better social and economic sense to draft new industries to areas where jobs are scarce than to transfer them to areas which are congested and where homes are scarce and rents are high.

Today we require energy and imagination to be used in industry as much as at any time in history. If we are to boost our standard of living in a competitive world, we must also boost our exports. As an industrial nation we cannot live on the achievements of the past. We need new incentives and a more dynamic approach. The greatness of the past will not attract orders in the present, or bolster up our economy. Today an impressive transformation is taking place in the economic structure of Europe and we can play an important part in that without detriment to our wider obligations.

It is known that the Federation of British Industries was not happy about the export position. It was less happy about the business situation in the country than it was four months previous to its report being made. For the first time since October, 1958, more firms reported a fall in output rather than a rise, and more firms reported that they were working below full capacity.

What have the Government done about this? Surely they ought to know what is happening. They cannot shelve the responsibility. How can we achieve expansion in industry under such circumstances? Within the last eighteen months the Government have, as it were, torn up the agreements on service and wage rates without considering the result of such an action. Whatever may be said to the contrary, the action of the Government towards the machinery and procedure of negotiations built up over the last forty years has resulted in the whole set-up being shattered.

How often have we spoken about the rule of law. What sort of rule of law is it which justifies a Government, as the employer, suspending the operation of procedures to which by signature, honour and long practice they are bound? If ever Governments made blunders, the Tory Governments which have been elected since 1959 have done so. And what was it with which those Governments were attempting to deal? It was a recession, something which time and again we have been told did not exist. The facts reveal the sickness in our economy. During eleven years of Tory Government we have seen Chancellor after Chancellor confronted with a crisis. One Tory Chancellor resigned from office but drifted back again into the Government. Faced with a position of their own creation they told us that they had taken steps to stabilise the economy.

First there was the restraint on wages, coupled with the rejection of pay awards to which I have referred already. If the wheels of industry are to keep turning and men are to be retained in employment, there must be a proper balance in industry and this can be achieved only by planning. I know that the expression has not been favoured in the past especially by the supporters of a Tory Government. But now they are bending over backwards to establish a planned position. The operation of the steel industry has been reported to be down to 77 per cent. of capacity and the number of cars exported has fallen during the last few years. But we are told that there is no recession.

I ask any hon. Member to examine any of the durable trades and it will be found that redundancy is rampant and this is spreading to the consumer trades. I know that hon. Members opposite take pride in advocating Tory freedom and the way in which it is said to work. But never have we been faced with such a degree of complacency as has existed during the last eleven years and particularly since the last General Election.

Whenever we have reached a position where there were no longer too many men pursuing too few jobs we have been confronted with a foreign exchange crisis. The Chancellor ought to take note that this Budget will not result in the provision of more jobs on Tees-side or in Scotland or elsewhere in the North-East, because more men are being thrown out of work. More men have received their notices at Dorman Long in the Middlesbrough area. Unemployment is running at 6 per cent. in the Hartlepools up to Middlesbrough and down to Stockton, where there was a by-election last week. The electorate there gave their answer to the Tory Government. If this high rate of unemployment persists on Tees-side, I have great fear for our people there.

We have had an attitude displayed to us over the last two years by the present Tory Chancellor of no easement or advantages being meted out to the ordinary people of society. That has not been granted to them, but assistance and support can be directed and given in aid to those who are in a better position than the ordinary members of society. To them Tory Chancellors have directed aid. I sincerely hope that, irrespective of what might happen in the next Tory Chancellor's statement before the next General Election, the people will remember what the attitude of the Government has been for the last two or three years.