Dissolution of Parliament

Part of the debate – in the House of Commons at 12:00 am on 26th July 1962.

Alert me about debates like this

Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South 12:00 am, 26th July 1962

That was the fate of the right hon. and learned Gentleman when he took over the office of Chancellor of the Exchequer.

The right hon. and learned Gentleman then proceeded, when faced with a crisis, to carry out exactly the same policy as his predecessors—the outs in public expenditure; the credit squeeze; the rise in interest rates; the general deflation; higher taxation, and the rest of it. We had it all before and we have had it again. And ail of them agreed on this. There is only one difference between hon. Gentlemen opposite when it comes to the question how to handle an economic crisis and what kind of economic policy to pursue.

There are some who say—the right hon. Member for Flint, West (Mr. Birch) is the most notable exponent of this view—that these policies of deflation have never been carried far enough. In the old days the present Minister of Defence was a supporter and associate of the right hon. Gentleman. They say, "Go on toeing tough. Don't let up. Never mind about electoral prospects." But they are in a small minority. The others say, "Go on for the time being, but, far heaven's sake, stop in time so that we can get the votes." In fact, of course, neither of these policies solve, or could solve, our long-term problems. They need far more drastic changes than right hon. and hon. Members opposite are likely to contemplate.

This brings us to two vital questions. Was there a dispute about economic policy before the massacre of 20th July, and is there now to be a change? Was there a dispute? Until the former Chancellor's dismissal there certainly was no suggestion of this. All were united. The Government were quite monolithic on the subject. It is only since the dismissal of the Chancellor, not by public utterance but by whispers, by rumours, by leaks, that the story has got around that there were disagreements in the Cabinet, that the Chancellor wanted to stand firm for a tougher policy and the others said, "No it is time that we let up."

The letter written by the right hon. Member for Flint, West to some extent gives countenance to this theory. Hon. Members will remember it. He said: Sir,For the second time the Prime Minister has got rid of a Chancellor of the Exchequer who tried to get expenditure under control.Once is more than enough. That suggests that there was a disgreement. Is it so? If it had been so I wonder how we are to explain the attitude today of the present Minister of Defence and the present Minister of Health who, with the right hon. Member for Flint, West, resigned on the first occasion. I wonder how we are to explain the attitude of the two former Treasury Ministers, the Home Secretary and the new Minister of Education. All four of them have done very well out of the Government changes. Did they abandon their friends and their policy?

It may be so, but, if that had been the case, my view is that events would have taken rather a different course. There would have been discussions in the Cabinet. There would no doubt have been a special sub-Committee of the Cabinet set up to discuss the matter with the Chancellor of the Exchequer. I can imagine the Prime Minister saying, "I am not satisfied with the advice you get from the Treasury and the economists who advise them. Why don't we call in Sir Roy Harrod, an old friend of mine and an expansionist?" Then there would have been three possible outcomes. Either the former Chancellor would have won the argument and they would have agreed to stand firm; or he would have lost the argument but nevertheless accepted it and we would have had a change of policy; or he might have lost but resigned. But he did not resign, so I do not think that there was any dispute of this sort.

I think that the story is probably a different one. I do not believe that the former Chancellor expected his dismissal for one moment. I do not think that he even realised that the Prime Minister disagreed with him at all. On the other hand, the newspapers told us that the Prime Minister had been thinking about this for some time, but that he had kept his counsel and raised no objection. He even congratulated the farmer Chancellor at the Cabinet meeting on that fateful Thursday morning and on Thursday, at six o'clock in the evening, he curtly dismissed him.

That is, of course, one of the two possible explanations. We should all be interested to hear which is correct, but if the second one is correct it still leaves unexplained the reason for the right hon. and learned Gentleman's dismissal To that I shall come back in a moment, but before I do so there is a second vital question. Is there to be a change of policy? We know from the letter sent by the Prime Minister to the farmer Chancellor that that is not in his mind. He said: Your courageous policies at the Treasury have always commanded the support of your colleagues. You can rest assured that we intend to continue on the path that you have prepared. I am certain that this is the only way in which we can, in your own words, build growth upon a sound basis. However, we are rather accustomed to the Prime Minister saying one thing and doing another. So it probably means that there is to be a change of policy.

Perhaps we could have some answers to specific questions. First, on the pay pause and the incomes policy we hear rumours of some now board which is to be set up. It is difficult to comment until one hears further details. Is this to settle wages and salaries, is it to override decisions reached voluntarily in industry? What is the idea? What is the new piece of machinery which the Prime Minister has in mind? In introducing it, are the Government standing by the White Paper on Incomes Policy, surely one of the most absurd documents ever issued from the Treasury? Do they still believe in it?

Do they recognise that the time has come when, in view of the state of the economy, we must have some positive encouragement to expansion? Are they prepared now to say that they will not go on waiting indefinitely and hoping and relying entirely on increased exports to get that expansion? Does the new Chancellor contemplate, for instance, encouraging demand, which is now worrying industry a good deal, by reducing interest rates still further? Is he going to remove the surcharges in order to encourage consumer demand? Is he even contemplating a new Budget in the autumn? At least, it would be a change to have a Budget for expansion in the autumn instead of a budget for dealing with a crisis. Are we to have any attempt to deal with the long-term problems of the economy, which have been so shamefully neglected? What is to be done about research and the deplorably low level in the major part of British industry? What is to be done towards encouraging investment? It is still, in this country, far below most of our industrial competitors. What is to be done about apprenticeship and the need to increase the supply of skilled labour? Are the Government coming forward with changes in this field, or are they waiting for "Neddy"?

In the field of housing, do the Government intend to continue to defend the present rate of municipal building as the best of all possible rates, or are they going to say, "Yes, it is time that we had some more council houses": and if they say that, how will they encourage the local authorities to build more? Will they offer them specially low interest rates? Will they give them some help in tackling the problem of land prices, or do they stand on the previous policy that it must be a free market no matter how high prices go or how great are the fortunes made?

Are the Government prepared to do something about the supply of building labour? Are they prepared to contemplate the effective control of office building so that flats—places where people can live instead of in slums— will be built in priority to offices and shops? On education, are we to have a change on the university grants position or do they still stand where the Home Secretary stood the other day—that although the sixth forms will be overflowing, there must be a quarter, perhaps a half, of the boys and girls going into them in the next few years who will not be able to go to the universities though they are willing, anxious and able to go.

Then there is the famous cat in the bag, whose existence was disclosed by the Leader of the House. I have wondered, during the last few days, whether it was the tiger which was let loose on that famous Thursday, or is it a rather sleepy, gentle, harmless pussy cat, something for the consumers, the Molony Report? [An HON. MEMBER: "Baloney."] Someone said, "Baloney". That may be, after our experience with the Weights and Measures Bill. I expect that we shall be having a No. 3 Weights and Measures Bill before long. Are the Government doing something about redundancy? If they are, they might well support the Bill of my hon. Friend the Member for Gloucester (Mr. Diamond). It would be interesting to know whether Ministers are to be covered by redundancy payments, too. All these are useful things, but they will not solve the nation's problems.

We come to the other alternative—that it was not a question of policy but simply a need for new men which led to the changes. Was it the beauty treatment solution which the Prime Minister had in mind? According to this theory, it dawned upon the Prime Minister one day that his colleagues ware tired. That was no surprise to us. The Leader of the House was so enthusiastic about this that as Chairman of the Conservative Party he sent out a circular ramming the point home. In this circular he said of the Conservative organisations: Many, unfortunately, display all the signs of tiredness that are not surprising when we have been in office so long. He went on, rather blandly I thought: You may find that some people who were admirable leaders a few years ago have lost much of the zest that must be an essential part of our appeal. I'm sure, too, you will agree that it is only right that you should apply the same standard to yourself and to the other officers of your association. That is a very good recommendation which might be applied to the other members of the Government, too.

If this is the explanation, there is one question which follows: why did the Prime Minister stop at seven? What about the Leader of the House himself? He does not always strike us as being flowing over with buoyancy and ebullience. Or the new First Secretary of State? To tell the truth, I must say that the former Chancellor of the Exchequer looks far more ruddy and healthy and wide awake than any of these Ministers. But perhaps we have not finished. Perhaps before long some of the others will be told that they are tired. There is the Minister of Labour. I understand that he even thought of resigning, but was fairly easily persuaded not to.

There is the Minister of Power, who had a narrow escape. There is even the Minister of Agriculture; though a little more youthful-looking than some of the others, he certainly should not regard himself as quite safe. One of these days they may go down the trap, finished, out of sight for good, just like the other seven who have recently left us.

But we must take them as they are today, the new team, forward-looking, brilliant, modern and progressive. Very high up in the list is the new Lord Chancellor, to give him his title, Lord Dilhorne of Towcester, that radical reformer whose appointment was greeted with such acclamation by the Bar, whose sparkling performances from that Box we all recall and which no doubt will be received with even greater enthusiasm in another place.

There is the new Home Secretary, that enthusiastic reformer whose first performance at the Box heralded the new liberal era at the Home Office. At least, however, he was able to make it plain that he was not to blame for all these cases, but that it was his predecessor who had left him all these babies. Nevertheless, we have the splendid success of his negative policy on housing and his negative policy at the Treasury to assure us of the reforms which lie ahead for the Home Office.

There is the new Minister of Defence. He is not exactly a new face, but at least he has been out to grass for some time. He is familiar with the game of snakes and ladders. Perhaps he is even immunised by now from any dangers from the Prime Minister. But there is one question of policy in which we are all interested. In his resignation speech in 1958 he complained that it was no use trying to maintain at one and the same time the Welfare State and Britain as a nuclear Power. Which one of these will he now abandon?

There is the new Chancellor of the Exchequer, not exactly a new face, if I may say so to him, but able, intelligent and likeable, his talent at last uncovered after all these years. The only point is this: he will be remembered particularly, as President of the Board of Trade, for the great success with which he conducted the Free Trade Area negotiations. Now he will be able to lend a hand in Brussels—although I wonder whether the Lord Privy Seal will be greatly encouraged by this prospect I wonder whether the new Chancellor of the Exchequer will quite live up to the standard of enthusiasm for the Common Market recently laid down by the First Secretary.

And there is the First Secretary himself. One of his ambitions has been achieved. After being the assumed acting Prime Minister he is now officially Deputy Prime Minister—the best Deputy Prime Minister that we have. But new, fresh? Hardly. He and the Foreign Secretary are the only two relics of the Chamberlain Government.

There is one other, younger man, the Minister of Education, an endearing personality whose speeches we always enjoy. I cannot but help a certain regret at the loss of Sir David Eccles. He was not the most tactful of men at times, but he was not incompetent; nobody would say that he was. He must be reflecting a trifle bitterly on his famous remark, "Treat 'em mean, keep 'em keen". Perhaps he is wishing that he had been even more accurate—"First back 'em, then sack 'em".

So we come to the Prime Minister, the leader of the new team—and the leader of the old team as well; the old team which was so bad, so tired, so worn out, so ineffective, all chosen by him, whose policies have led us to this pass—all approved by him. For no Government has ever been so much presented as the creation of one man. Colman, Prentis and Varley saw to that, even though the hon. Member for Peterborough (Sir Harmar Nicholls) thinks that they oversold him a bit at the last General Election. I give the hon. Gentleman the prize for the understatement of the year.

July has left him still more on his own, no longer able to share the cartoons with the former Chancellor of the Exchequer, which he did for so long, first as Foreign Secretary and then as Chancellor of the Exchequer. Of course, all this has been a continuing process. It is said that the right hon. Gentleman became Prime Minister at the beginning of 1957 on the votes of his former colleagues in Lord Avon's Cabinet. How many of the old comrades who voted him into power now remain? Six out of nineteen. Not since Stalin liquidated the old Bolsheviks has there been such a successful process of elimination.

But if some of these old comrades from their places of exile—Lord Salisbury, Lord Avon, Viscount Head and the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd)—feel a little bitter and angry, and even a little lonely, they can reflect that the man who got rid of them all is now perilously alone, too, his friends gone and the Deputy Prime Minister, whom he elbowed out of the succession at the time of Suez, breathing down his neck.

Why is it that this Government is a Government of which nobody—not the House, nor the country, nor, I think, the Conservative Party—is particularly proud? It is not merely their dismal record of failure. It is not merely the pursuance of policies which are neither just nor wise. There is another reason. The great Governments of the past have often been composed of men of different views and outlook, but they have been bound together by some common purpose. Prime Ministers who have lived in history have set more store by their policy objectives than by the time they remained in office. This was true of Peel, of Gladstone, of Churchill, of Attlee. It was true of Lord Avon, however mistaken we may think the policy was.

It is not true of the right hon. Gentleman the Prime Minister. His Government will be remembered not for the leadership they gave the nation, but as a conspiracy to retain power. Men and measures have been equally sacrificed for this purpose. That is why we call it a Government of gimmicks, an Administration of ad-men. I believe that this is a very grave weakness today. No doubt when things are easy and no response is needed from the people they can get away with it. But today it is clear that we cannot solve our problems as a nation without a deeper sense of national purpose. Such a purpose is not created when evasion is regarded as a virtue and double talk is regarded as a duty.

If the Prime Minister had proclaimed a policy and chosen a team and stuck to them, we could have respected him, even though we profoundly disagreed. It is because he can do neither that he and those with him have lost the confidence of the nation. Let him do this last service to the people—give them the freedom to choose a new Government.