Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 14 November 1963.

Alert me about debates like this

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent South 12:00, 14 November 1963

Today we listened to the Secretary of State making a reasoned case in support of a new policy which, provided that it is carried out, means a complete reversal of Government policy of the past 12 years. Providing that they really mean business, then, to a very great extent, they will meet with a certain amount of support in the country But my doubts lie in the fact that they have undermined the confidence of the country in their intentions, as my hon. Friend the Member for Grimsby (Mr. Crosland) indicated.

The Secretary of State for Industry, Trade and Regional Development said that the Government were to embark on a policy of the modernisation of Britain, which included British industry. He said that this was to be based on increased mechanisation and computer management, leading to a process of automation.

If this is to be consistent and in harmony with mid-twentieth century scientific ideas, the machinery of local and national government must be capable of translating those ideas into reality. Unfortunately, we have already lost 12 years.

He went on to make what I thought was a change from the years of retreat from planning. Those of us who had become downhearted and discouraged by the retreat from planning—and this applies not only to one political party—and who had spent the best part of our lives in large-scale industry of the kind to which the right hon. Gentleman paid tribute and who have always known that Britain could hold its own in the modern world only by this kind of policy, have long argued that our people needed to be far better educated and the machinery of government modernised.

He went on to say that there would be work on an increased scale towards mechanisation and an expansion of trade and that it was about time that there was if we were to maintain our standard of living. I, for one, hope to live to see the day when it will be greatly increased and not only maintained. To bring that about we have to have a larger share of world trade. It is in our heavy industries, which are responsible for manufacturing the products which find markets abroad, that the credit lies for maintaining the strength of this country.

He rightly paid tribute to the breaking of all records by the motor car industry. I welcomed his observations, but I wondered whether we were not putting too many of our eggs in one basket. Ought we not to be planning for even higher figures? He—I ought not to say "he"; I believe in maintaining standards in the House of Commons, for we profit greatly by doing so; I ought to say, "The right hon. Gentleman"—the right hon. Gentleman said that he intended to apply this policy in his new position. He reminded me of my close association with giants like Sir Stafford Cripps and Sir Kingsley Wood and of how they worked almost night and day and undermined their health. Any Minister in a modern Government who is doing his job properly must have regard to his health. I intend to say something later about this subject, because I have seen too many from both sides of the House and in the Civil Service paying dearly for working too hard.

The right hon. Gentleman spoke of the need for continuity of growth. I wondered whether that included continuity of employment, for I speak for the workers. I was delighted when my hon. Friend the Member for Grimsby said that the Newsom Report should be implemented before anything else. My own daughter is among those teachers teaching classes of 40 or 50. The result is that the teachers are overworking and cannot do justice to their pupils. If one child gets measles or influenza, they all do. Conditions of that kind are almost indescribable.

I welcome the new outlook towards education and it will have my wholehearted support—and I include the prodigious increase in expenditure. I hope that all the universities, especially the professors, will remember the sources of all the wealth and will remember where their incomes come from and the importance of the exports upon which we all depend.

This week, the House of Commons has made a great contribution towards the restoration of realistic politics in this country. We were drifting towards the personification of politics and I dreaded that. I had seen it develop in other countries and it is only a matter of degree. The main issues of life are sidetracked, as are the fundamental differences which should be reflected in the two political parties. The Smart Alecs of the Press, aided by similar types in "Panorama" and "Gallery", were encouraging the trend of this attitude. I am pleased that the House has reversed that trend and that now, as the result of the selection of the Prime Minister and the capacity and experience of my right hon. Friend, the trend has been completely changed in the elected House of Commons. Perhaps I regard this more seriously than most hon. Members because in Stoke-on-Trent 32 years ago it fell to my lot to deliver a mighty blow against the growth of Fascism in this country and to keep out of the House a man leading that growth, a man who had had all of life's benefits.l Last night, as I was lying in bed thinking of what to say today, I recalled a friend of mine who was one of the most respected of hon. Members, Mr. Tom Johnston. He wrote a book, Our Noble Families. This morning I went to the Library, but I was courteously told that there was no copy there, nor anywhere else in London. I went to my Scottish friends and I was supplied with a copy of The Scottish Miner. On page 2 of that book there are extracts from Tom Johnston's book and from the speeches of the Prime Minister. In this, the last Session of this Parliament, I welcome speeches by the Prime Minister and by my right hon. Friend the Leader of the Opposition. The Prime Minister issued a challenge to this side, and we should accept that challenge without any equivocation. We should welcome it, for reasons that I shall indicate later. I was pleased with the observation made by my right hon. Friend the Leader of the Opposition in reply to that challenge. He said, "We will play the ball and not the man." That has cleared the air and cleared the road, and we now know where we stand. We have two men—the Prime Minister and the Leader of the Opposition—representing parties which are fundamentally opposed. At last, after a great deal of vacillation in this House, the issues have become clear without there having been an introduction of personalities. We know where we stand and we can proceed to examine the various policies, and the issues with which we are faced.

In my view, based on experience, we need a new look both at Government machinery and at our economic situation. One of the Amendments on the Order Paper to my mind represents a constructive road forward. It reads: But humbly regret that the Gracious Speech contains no proposals for a comprehensive economic policy that would enable our manufacturing industry to increase the volume of output, reduce the prices of exports, reduce the costs of raw materials and overhead charges, and obtain a greater percentage of world trade; and that no proposals are made regarding the urgent need for a Ministry of Production and Economic Planning. In my view, that is the constructive road forward which we urgently require if this country is to hold its own in the world.

I very much regret that although the Labour Government had a good record in 1945 and 1946 it made two or three mistakes. I found, when I was involved in accepting responsibility for construction, that if one made a mistake it was better to admit it as soon as possible and then make amends. In my view, one of the mistakes that we made was to terminate the functioning of the British Commercial Trading Corporation, which had done such a good job in the world, and the other was to terminate the functioning of the Ministry of Production and to merge it with the Board of Trade. Our economic situation is such that to burden the Board of Trade with all the responsibilities outlined by the President this afternoon is in my view a fundamental mistake. Two Ministries are required.

I do not join with some Members who have suggested that we should have a number of new Ministries, but on this issue we urgently require a Ministry of Production and Economic Planning, in addition to the Board of Trade. We have arrived at a situation in which powerful and well organised private interests are exerting more pressure and exercising more control than in any other industrial country, and we shall find it increasingly difficult to hold our own in the world if this policy is not completely reversed.

A number of Government Departments have issued excellent publications—some weekly, some monthly and some quarterly. I have before me some excellent publications of the Central Office of Information, dealing with the growth of investment, the need for action with growth, and trade expansion. The Board of Trade has produced some of the finest statistical information in the world. We have the Statistical Digest and the Board of Trade Report, and the Journal is improving each month. We also have a number of publications from the Economic Division of the Treasury, including the confidential quarterly bulletin on the economic situation. There are also private publications published by the banks and a number of large industrial establishments. All these provide an excellent background for setting forth the kind of information which is required by a Ministry of Production and Economic Planning of the type that I am advocating.

I welcome the announcement that our exports have been rising, but in my view they have not risen nearly enough, considering our increasing responsibilities. I have before me an excellent report published by Barclays Bank, dealing with the situation in Japan, and pointing out that Japan has made great headway because it has applied, in a greater degree, the kind of policy that I am advocating.

Since the Government, at the most, have only 10 months to carry on, it is permissible to envisage a situation in which there will be a Labour Government. When we become the Government I hope that we shall show that we mean business and that we are determined to translate into concrete realities the theoretical ideas which we ventilate in the House, thus making a great contribution towards solving the economic difficulties which Britain faces.

It was in 1944 that the Trades Union Congress first advocated a policy of 400 planning, with the setting up of a National Economic Ministry and the adoption of a policy of planning—the merging of the Ministry of Production with a Ministry of that kind and also the organising of an investment board. In my innocence I thought that we meant what we said. I had a number of documents in drawers, which I brought out time after time in order to put forward constructive policies. I worked night and day to translate into legislative proposals what we had said for years and years on these matters. Little did I realise that a man who is now in another place was, according to the Financial Times, taking steps to see that the ideas that we were putting forward were not translated into reality. I hope that this time we shall be on our guard against that kind of thing.

I take second place to no one in my regard and respect for our civil servants. Those with whom I was associated would have worked night and day to assist me, and I would not be a party to uttering a word of criticism against them. But never let it be forgotten that five Permanent Secretaries used to meet at lunch every Friday—and some of us know what went on at those lunches, with the collaboration of the person who is now in another place.

I hope that when we become the Government all our young men who are given office will learn the lessons of the past and will be on their guard, and will remember that although we all respect the conscientiousness of civil servants there are always certain types who are not prepared to sink their individualities and ideas for the welfare of the country and in support of the elected Government.

I wish to refer to one or two matters which have appeared in the Press and which have given me some concern. According to today's Guardian, some discussion is to take place, first of all behind the scenes and then between representatives of the Government and Mr. George Ball, the American Under-Secretary of State, who is now touring Europe, on some economic problems. According to the report, the West Germans exported to the Soviet bloc last year goods worth 717 million dollars while Britain's exports to that bloc totalled 310 million dollars. It appears that the West Germans exported to the Soviet Union alone nearly 210 million dollars' worth of goods while Britain's exports were valued at only 117 million dollars. The Guardian also contains a leading article in which some excellent observations are made about these exports. It says that if a Labour Government were to come into power in Britain they would probably want to do more to stimulate East-West trade than is at present being done. The leading articles states: Some countries, notably, France, Italy, and Japan, are showing more initiative than we are …". I have with me the report of some British manufacturers who recently toured the Soviet Union and other Eastern bloc countries. They advocate a great increase in the amount of trade being done between Britain and the Soviet bloc. They point to the trading potential that exists.

In addition to the Confederation of Shipbuilding and Engineering Unions, the union which I represent is extremely disturbed about the number of ships that are being ordered from abroad. I wish to make it clear that we do not take a narrow view towards this. We are prepared to make all the necessary allowances, but, despite this, something must be wrong when, for instance, the British Petroleum Company—in which, I understand, the Government hold a big percentage of shares—has ordered ships to be bought abroad. Is this so and, if it is, may we have an explanation?

In an effort to ascertain the facts we have asked for a searching inquiry to be held so that, when armed with the facts, we in the unions may help to share the responsibility for preventing orders from going abroad. We are prepared to consider constructive proposals to avoid our losing orders, but we want the facts so that we may act with a full understanding of what is happening.

Mr. Cyril Thompson, chairman of a large shipbuilding organisation on the North-East Coast, is reported to have said recently at the launching of a ship: … serious competition is now being faced from Japan … It is a country with a much lower standard of living, and, consequently, lower production costs, not only for the ship itself, but also for the steel and machinery and, in fact, nearly everything that goes into it. Obviously we have no intention or desire to try to meet this competition by lowering our standard of living. Equally obviously, this competition must be met even if it means some form of protection. The trade unions are willing to accept their share of the responsibility for dealing with this sort of competition so long as the facts warrant action being taken. It is mainly because of this that we are asking for a searching inquiry to be held.

In this connection, several questions need answering. Is it true, for instance, that present steel prices represent a fair cost to British shipbuilders? Is it a fact that British steel sheet can be bought cheaper on the Continent of Europe than in this country? Are Continental ships' plates quoted at prices well below those prevailing here? Is the price of the equipment needed for our ships fair? Why are we not exporting more steel and, consequently, lowering our prices? Why do we not have a greater share of the world's exports of steel? I ask these questions on behalf of my constituents. I am optimistic about the future, so long as we can approach the second half of the twentieth century and the problems that face us in the spirit that cur forefathers faced their problems; with knowledge of the need to modernise our industry, the machinery of government, and to make all these improvements consistent with the modernisation that takes place.