Debate on the Address

Part of Orders of the Day — Queen's Speech – in the House of Commons at 12:00 am on 10th November 1965.

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Photo of Mr David Ginsburg Mr David Ginsburg , Dewsbury 12:00 am, 10th November 1965

Apart from his comments towards the end of his speech, the hon. Member for Ilford, North (Mr. Iremonger) gave us a fluent but rather mischievous oration. I doubt whether my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) will fall for any of his embraces.

The hon. Member for Ilford, North in the more serious part of his speech, basically ignored the Government's policies and proposals and the immediate problems facing the country. In contradistinction to him, I welcome the Gracious Speech. My reasons for doing so are cogent ones. First, after 12 months in office the Government have a solid record of achievement behind them in circumstances that were far from easy. Second, the Gracious Speech sets out important proposals both with regard to the modernisation of our economy and the improvement and development of modern social services in this country. I have no doubt that my constituents have a greater sense of economic security now that the Labour Party is in office, and there is a far greater feeling of confidence and hope in the country as a whole than there has been for a long time.

However, let us not be complacent when we speak of the nation's welfare services. There is still a lot to be done. My right hon. Friend the Prime Minister and today my right hon. Friend the Chancellor of the Duchy of Lancaster spoke about the Government's priorities —yesterday in housing and today in social security. The steps outlined will make an enormous difference to the lives of our people.

But all this, as the Government must know, can be only a beginning. I want to draw the attention of Ministers to a very important article in the August issue of the National Institute's Economic Review entitled "Social security in Britain and certain other countries". I will read two extracts from its conclusion. It says: The British system of social security compares most favourably with other countries in the comprehensiveness of medical care provided under the National Health Service and of the minimum level of subsistence provided under a centralised National Assistance scheme. The social insurance benefits and family allowances are by contrast much less adequate. It goes on to say: The proportion of national resources devoted to social security is very much lower in this country than in any of the Common Market countries: taking cash benefits alone the ratio is not more than about half the level in Germany. Clearly, the introduction of wage-related sickness and unemployment benefits, as proposed in the Gracious Speech, and which we all welcome, is very important, but even more important is the comprehensive review of social security which the Government are undertaking, and especially the arrangements for paying retirement benefits. I hope that that issue is kept in the forefront of Ministers' minds.

I will contrast my warning words to my right hon. Friends with some comments about the speech of the right hon. Member for Leeds, North-East (Sir K. Joseph), in which he seemed to commit the Conservative Party to an extraordinary scheme of social security. It struck me as being half-baked. It would appear that the Conservative Party has jettisoned its wage-related pensions scheme, a wage-related scheme, albeit a limited one, which was introduced only seven years ago by a Conservative Administration. They now propose to jettison it.

The scheme which they suggest instead seems to me to fly in the face not only of academic experience in this country but the best practical experience in social security in Europe. For example, where in the scheme now proposed by the Conservative Party is the hedge against inflation? Incidentally, it is remarkable that at the moment when the Leader of the Opposition is committing the Conservative Party firmly to going into Europe—which must mean harmonising social security arrangements with Europe, for which there is a very powerful argument—the right hon. Member for Leeds, North-East, the spokesman of the Conservative Party on social security arrangements, takes the Conservative Party's social security philosophy right away from Europe into a scheme which I find it difficult to comprehend. The public will find it difficult to comprehend as well, because we have heard nothing this evening in the right hon. Member's statement about what will be the rights of existing contributors to the scheme which was passed by this Parliament six or seven years ago.

The House is agreed that the key to everything today is the economic situation and the Government's ability to handle it. There has unquestionably been a great improvement. The Prime Minister told us yesterday that we have halved the deficit both on the current and the capital accounts. The latter achievement, which has not been referred to so much, is particularly important, and even remarkable, when we bear in mind that some of the measures which the Chancellor of the Exchequer announced in April concerning the capital account have not yet begun to bite.

The Government can take pride or comfort from the statement in the Economist of this weekend. Although the Economist is not noted for its friendliness to the Labour Party, it said in its leader headed "First Term Report": By contrast, Labour's achievement in reducing the long-term capital deficit has been considerable, and it is doubtful if the Conservatives would have done half so well here; at any rate, Labour's measure to stop excessive long-term investment overseas had to be fought through against opposition from orthodox City opinion almost into Lord Cromer's last ditch. As we have heard, the Leader of the Opposition is still not willing to accept his party's responsibility for the balance of payments crisis of the autumn, 1964. He claims that he has done some research into the Prime Minister's speeches which suggests to him that the Prime Minister was aware of the way in which things were moving. He claims that the Labour Party exaggerated the economic crisis. I, too, have done some research—into the speeches of the Leader of the Opposition and the speech of the right hon. Member for Barnet (Mr. Maudling) at the time of the 1964 Conservative Budget. In my reading of HANSARD, I found evidence of appalling complacency. It is apparent, from a rereading of the right hon. Member for Barnet's Budget speech in 1964, for example, that he knew and stated clearly that we would be in certain difficulties over our overseas investment. But the right hon. Member for Barnet was not so rash in his statements as the Leader of the Opposition, who tried in his speech to spirit away the import gap— in this case, too, I have reread the right hon. Gentleman's speech—by arguing that imports were steady at the beginning of 1964 and that the trend for our exports was a rising one. The emerging facts did not justify the statistical exercise of the present Leader of the Opposition. Action was required to defend the balance of payments: it was not taken by the previous Government and this Government have taken it.

Nevertheless, we should not pretend that the problem we face today is out of the way. The gap must be closed and a surplus built up. Whereas I feel reasonably confident about the capital account —indeed, I think there should be a still further improvement—there are, as we must admit, serious problems over the current account. We cannot continue to rely on the surcharge as an indefinite wall of defence, especially if we mean to build bridges to Europe. Continuing action is necessary, both to stimulate exports and to assist import-saving industries.

This week The Times criticises the Government for what it terms their "interventionist philosophy ". Without intervention, this Government would very easily find themselves in the situation in which the previous Administration found themselves in 1964. The Chancellor of the Exchequer is under some pressure to let production rise, in case there is a risk of demand deficiency later this winter. Perhaps he should relax a little; but when the relaxation comes it must be coupled with measures and action to make industry more efficient.

Some steps are outlined in the Gracious Speech. I hope that the Opposition will not attack these measures as either doctrinal or interventionist. Indeed, many of the proposals were canvassed by the National Economic Development Council in its pamphlet "Conditions Favourable to Economic Growth", published in 1963; proposals dealing with an incomes policy, regional planning, and many other, subjects. However, it is interesting to note that it was left to a Labour Government seriously to implement the work which N.E.D.C. undertook under the previous Administration.

In the planning debate last week, my hon. Friend the Member for Birkenhead (Mr. Dell) spoke about the need for mergers and for larger units in the economy if British industry is to compete. I wish this evening to carry his views further as they relate to exports. Larger units are important, not only for efficient production, but—what is vital for the country at present—for marketing overseas. The small and medium-sized firms, of which there are many in my constituency, cannot involve themselves in the overheads of an international marketing operation.

I agree that many steps forward have been taken by the Government in recent months in stimulating and helping exports, and the results are showing in our better export performance. But to my mind the incentives given do not go far enough. The present chairman of Marks and Spencer, a man whose ability and success needs no advocacy from me, referred in a speech on planning which he made as long ago as 1933, over a generation ago, to the scope for industrywide export corporations, particularly for the purpose of exploiting new markets and for acting as a channel between overseas selling and production at home. I hope that the Government will look hard at proposals of this kind, because the logic in the argument which was used then is even more valid today.

I should like to end on perhaps a rather different note. Planning the economy needs the working out of a new relationship between Government and industry. This is coming about. There is bound to be intervention by the State, and we must not be ashamed to say so. Government inevitably extends its frontiers. That is why all the time we must seek to redress the balance on behalf of the individual citizen. Therein lies an important part of the job of the House and our job as hon. Members. I am therefore particularly glad that the Govern- ment have made proposals for a Parliamentary Commissioner for Administration. The ombudsman, as he is popularly called, can play a special part in preserving and enhancing the balance between liberty and planning.