I may have misheard the Prime Minister, but I thought he said that we were a long way behind other countries in the amount that we were spending on research and development. If he said that, why should he belittle the country of which he is Prime Minister? Secondly, if he reads the O.E.C.D. Report, he will see that we are spending a bigger proportion of the national income on research and development than any other country except America, and we are spending only very little less than she is. The Prime Minister loves talking about modernisation, but I fancy that this is one of the subjects on which he finds words easier than deeds.
If we are to get modernisation, we have to do two things—make better use of labour, and get more investment. We cannot increase output unless we do those two things. In the 13 years of Tory rule output per man hour went up from under 2 per cent. to nearly 3 per cent. I think that that was because the proportion of the national income devoted to industrial investment doubled. In 1951 it was 6½ per cent., but by 1964 it had risen to 13 per cent. The National Plan does not indicate a progressive increase in investment on anything approaching that scale. If we spend a lot on consumption, clearly we cannot spend it on investment, and from the retail trade returns in The Times this morning it looks as though the Government's Measures are leading to a considerable increase in spending and a decrease in savings.
Modernisation means changes, and changes hurt. Perhaps I might give two examples. One is over-manning in many industries. This means redeployment, and redeployment means temporary unemployment. Secondly, if we went into the Common Market, and we had a market of 250 million people instead of 50 million, I have no doubt but that our manufacturers could reduce their costs. They could produce more at less cost. There would be a great increase in national prosperity, but it would hurt some people.
Lord Beeching said the other day, and these words are well worth listening to:
Britain's prosperity is slipping away because the nation had resisted change for the sake of present comfort…".
I do not know what happened in the past, but I believe that today there is more resistance to change on the Government benches than there is on these. There are, of course, many notable exceptions, and I hope that I shall not embarrass them if I name but two—the hon. Member for Pembroke (Mr. Donnelly), and the hon. Member for Birmingham, All Saints (Mr. Walden).
We have a choice between progress and a quiet life. There is something to be said for both. I am for progress, but there is something to be said for the other. To try to get both means getting neither. It means that we shall get the worst of both worlds.
I believe that if the Government relax their present inflationary measures, in the immediate future we shall have a grave balance of payments crisis. It will be no consolation to us on these benches that it will do infinite harm to the Government. If they do not relax their present measures, I think we shall find a slow rise in unemployment and a drop in earnings. The Prime Minister this afternoon consoled himself with the fact that these things had not happened, but I do not think anyone said they would. What we said was that if there were deflationary measures nearly a year would elapse before they would bite and unemployment would reach its peak. I have never thought that if the Government's measures were to bite there would be serious unemployment in the immediate future; but I think we are in for a period of partial industrial stagnation which will last longer than the short sharp recession which many of us advocated, and that is because the Government have not decisively faced the unpopular measures which they ought to have taken.
I believe it will soon become clear that the Government have fumbled in their economic policies. I believe that one reason for this is the clash between the Treasury and the Department of Economic Affairs, which was commented on in a leading article in The Times yesterday. I believe that the time has come for the Prime Minister to intervene between these two Departments. My right hon. Friend the Leader of the Opposition said that the Prime Minister was more concerned with appearances than with administration. Perhaps that is the explanation. What we need today is a Prime Minister who can act decisively.