No one has suggested either in this country or in the United States that the improvement in the capital account should be made at the expense of aid—very far from it. The export of private capital is the crux of the matter, certainly not aid to the under-developed areas.
The second pre-condition if we want to get 4 per cent, growth is that we must have some increase in the amount which we invest in this country. The Chancellor, in his very complacent speech yesterday, pointed out that our ratio of investment to National Income had gone up since 1951 from 14½ per cent, to 18½per cent. I should hope so too! In 1951, we were spending 11 per cent, of the national income on defence—a fact consistently forgotten by this Government; we are now spending only 7 per cent. In other words, in this period of 12 years, we have saved on defence 4 per cent, of the national income, and it would have been a scandal if that had not gone into investment. So the fact that we have had some improvement is not surprising at all. It would have been incredible if we had not.
But most people, I think, on both sides of the House, still take the view that our investment as a proportion of the national income is too low. It is lower than it is in most other comparable countries. Private manufacturing investment, which the Chancellor did not mention yesterday, is almost certainly lower now that it was two years ago; he did not mention the fact that there had been a two-year period of almost total stagnation in private manufacturing investment. Most people would agree that although investment is no panacea there has to be some increase in the proportion which it bears to the national income as a whole.
Of course, we shall have an investment boom next spring—this is accepted by everybody—but it will be superimposed on an economy which is already running very flat out and the most likely result is that it will push us into a balance of payments crisis and the whole thing will be cut back again. The point that I want to make, and I fell very strongly about this, is that the Government have shown no signs whatsoever that they have a long-term policy, first, for keeping investment steady and secondly for raising it permanently as a proportion of income. So in my view, No. 2 pre-condition of 4 per cent, growth is not fulfilled under this Government, and there is no sign that it will be.
The No. 3 pre-condition, much referred to yesterday from the Government's Front Bench, is more spending on education. I agree profoundly with what the Secretary of State said this afternoon, that if one could relate rapid growth with any one single factor in different countries it would probably be education more than any other. I think his figures were highly suggestive that of the various reasons for the growth of production over a certain period in the United States, education was the most important single reason.
The Chancellor yesterday took great credit for telling us that the proportion of income which we are spending on education in this country had gone up from 3 per cent, to 4 per cent, and would go up to 5 per cent, before the end of this Parliament. I would hope so, too. There has been an enormous bulge in the birth rate in the years of which he was speaking, and therefore a huge increase in the child population, and if that proportion had not increased in the way that he described it, we would be giving less education to every child in the country than we were 12 years ago. The Chancellor always makes the wrong kind of speech. When he ought to make a serious speech he makes a knockabout speech. When at the Tory Party conference he ought to have made a real electioneering speech he confined himself to solemn platitudes.
Despite the higher proportion of educational spending, nobody in the country is satisfied with the educational position. I personally think that the Newsom Report is fundamentally more important than the Robbins Report. I think that the picture that emerges from the Newsom Report of slum schools in particular and the handicap suffered by those children in terms of reading ability at a given age, is appalling.
At any rate we have to increase the amount that we spend on education to a much higher level than it is now in this country. Of course, here we are faced with Government promises. The question is how far we believe these. E cannot believe it of this Government which 18 months ago cut the programme of the University Grants Committee to such an extent that for the next three years a smaller proportion of children of 17 who are willing and able to go to the universities will be able to do so than two years ago. It is a fantastic situation when we consider it. It comes out in the section in the Robbins Report on the bulge. This is one sentence which I should like to repeat, because it is such a damning condemnation of the Government, that a smaller proportion of people with the ability to get into the universities and who want to get in, will be able to do so in the immediate future than in the immediate past, as a consequence of the cuts made by the Government and defended by the Home Secretary in a disgraceful speech 18 months ago.
The last pre-condition—and I will be brief because there are other hon. Members who want to speak—is that the Government really should believe in planning and indulge in planning. Here I should like to pay very strong tribute to what N.E.D.C. has done in the first period of its life. I believe that it has forced the Government and also management and trade unions to face up to a lot of unpalatable facts, and I think that its whole psychological propaganda effect has been entirely to the good. It has even forced the Government, although not the Prime Minister, to face up to the question of a wealth tax. I should like to add one word to what my hon. Friend said about the wealth tax.
The facts are perfectly plain. The N.E.D.C. Report, which my hon. Friend quoted, considers a wealth tax on the Swedish model. My hon. Friend, I think rightly—and I have supported this for years—suggested that the Labour Party should also consider a wealth tax. roughly on the Swedish model. There is not the slightest doubt about what we have in mind. I refer hon. Members opposite not only to the speeches made by my hon. Friend but even to a book which I wrote and to an article in the Bankers Magazine about six months ago by Mr. Michael Stewart. These are the facts for everyone to see.
But despite the existence of N.E.D.C. and its excellent, although in the Prime Minister's case imperfect, attempts to educate the Government, the fact is that we still do not have anything like effective planning in this country. We have no little N.E.D.C.S able to play a highly constructive part in prodding individual industries in their efforts. And even big N.E.D.C. is so under-staffed that it is not capable of making the really detailed long-term projections which the French and Japanese planners have been making.
Until we get a much larger N.E.D.C. there will be no effective planning. I have serious doubts as to whether the Government take N.E.D.C. seriously. I am interested to know whether the Government consulted N.E.D.C. about the present plans for increased public expenditure. I find it impossible to believe that N.E.D.C. could conceivably approve of this bunching of new plans and promises just in the pre-election period.
I am, therefore, quite unconvinced that any of the essential pre-conditions of a 4 per cent, growth rate are currently being fulfilled by the Government or would be by a Tory Government which succeeded them.
It is said that somehow the Opposition are cynical and over-sceptical when we refuse to believe that the Tories can now galvanise the economy into quicker growth and when we refuse to believe that they will suddenly become enthusiasts for much more higher education, much more public housing and so on. Why is this regarded as so cynical and sceptical? I am not one of the most extreme partisan politicians on these benches, but I find it quite impossible to convince myself that the Government, which have had a 12-year period of exceptionally favourable world opportunities, will suddenly change their spots. I do not believe that they are all evil villains but I do not think that they will behave in a very different way in the next decade from how they have in the previous ten years.
This is not only my view. I think that the country will turn from the Government's promises and talk about modernisation, and will show its total disbelief by turning to new men pledged to new measures.