Please! We have either to earn more or spend less. In a Budget debate we cannot deal with the expenditure part of the problem, but we cannot get into balance until both sides are considered. On the budgetary side we are dealing with the problem of earning more, and there is nothing in the Budget which will help us to earn more. The other weakness of the Budget is that it assumes the success of the incomes and prices policy. Right from the beginning I have supported that policy. It is the only economic hope for the nation. But I cannot see how the Government can assume its success when the Minister of Technology, who is the head of the greatest trade union in the country, is himself really against it at heart, together with his union. The fallacy of the Government's reasoning lies in the person of the Minister of Technology. That is the great hurdle that the Cabinet must surmount.
I want to make three points about the. Budget which cause me to feel that it is a clever Budget, drawn up by someone who has no practical experience of life. Let us consider overseas investment, which the Chancellor mentioned and then passed on, and which, as far as I know, has not been mentioned today by any other speaker. The Chancellor said that he would allow investment overseas only if it repaid itself in two or three years' time. That is preposterous. Hon. Members opposite should not shake their heads. No investment could possibly earn 33⅓ per cent. as a minimum and 50 per cent. as a maximum to repay the capital in two or three years. That assumes that the investment starts to earn dividends from the very moment that the first sod is turned to build a factory. It is preposterous, and no one who has ever had anything to do with overseas development or business would dream of making that suggestion.
If such a thing were possible it would be profiteering of the most extravagant and ruthless kind. Does the right hon. Gentleman believe that foreign Governments will allow that? It is this stupid impossibility of a schoolboy concept—and I am trying to be fair to the Government—that vitiates these proposals. It is ridiculous, and I am surprised that such an intelligent man as the Chancellor should make a suggestion of that nature.
The Chancellor's main suggestion is a selective poll tax. I agree with the hon. Member for Sheffield, Brightside (Mr. Winterbottom) that generally the people in the distributive industries get more out of our economic system than those engaged in manufacturing industry. That imbalance has to be put right, but this selective poll tax leaves out the two greatest sinners who ought to be brought in — Government Departments and nationalised industries. They will escape, but they are clawing to themselves a greater share of manpower than anyone else. I ask the Chief Secretary to the Treasury to look at this.
On Tuesday next I am to speak to farmers and corn merchants in the Louth area. They will be furious about this poll tax. They are to be told to pay first and to recoup themselves through the February Price Review. They complain that already they do not get from the Review the expenses imposed upon them. To put this initial burden on them will make them livid. I ask the Government to thing about it again.
I speak also for small hotel and boarding house keepers who are having a very difficult time. There are many in Cleethorpes, where I have 23,000 constituents. This tax will put an unbearable burden on these people in a small way of business. It is bound to put up prices and drive people overseas for holidays instead of encouraging them to spend holidays on our own sea coasts. It will make our people spend more currency abroad.
Also in my constituency there is a big dairy company. I know from experience that it is having the utmost difficulty in getting men to work a seven-day week on milk distribution. This will be an intolerable burden on an industry such as that. It suggests that the Government think we ought to follow the French example over purchases of bread and milk and that one should buy a loaf, tuck it under one's arm and carry it home. Do the Government want a revolutionary change such as that, or are they interested in fundamentals?
I quote from a newsreel which the First Secretary to the Treasury will recognise. It was issued by the Labour Press and Publicity Department. That is a very good source from which to quote. The May Day message by the Prime Minister, issued last weekend, said this, and it is germane to the Budget:
we are still in grave danger of paying ourselves much more than we are truly earning, and unless we hold back in our demands, all our plans for improved industrial efficiency and higher living standards will be undermined.
This is what the Chancellor should have been saying and underlining. The Prime Minister went on to say:
it would be tragic if we created unemployment through an uncontrolled scramble for higher wages which priced our goods out of world markets.
I can hear the late Sir Stafford Cripps saying that 20-odd years ago. The Prime Minister also said:
Incomes must not rise more quickly than productivity.
This is our problem. The same department reported a speech by the Minister of Labour who came to the Bull's Head Hotel in Loughborough, two miles from where I live, to a May Day victory dinner. This is the sort of thing which should have been said in the Budget statement. The Minister of Labour said:
No Government can of itself increase by one penny the total resources available for improvement in standards of life.
The Chancellor did not say that.
The resources of this nation accrue from our productive effort and only as we are more
efficiently, and in greater quantity, produce the goods that we sell, can we find any answer to the continuing demands.
He finished with this stern warning which should have been given to this crowded House this afternoon:
The alternative to continuing our present selfish and slothful way, indeed our thriftless and dishonest way of living on foreign money"—
I hope hon. Members will note that; after 18 months they cannot blame the Tories for this—
is in the end to have deflation forced upon us … deflation that could mean unemployment
This is what is really at the basis of all our troubles—
our present selfish and slothful way, indeed our thriftless and dishonest way of living on foreign money",
as the Minister of Labour said in Loughborough on Saturday night. The Budget has done nothing at all to touch that problem.
Having listened to Budget speeches for 21 years, I want to hark back to the man whom I respected more than any other man in the Labour Party—Sir Stafford Cripps, for whom I had a deep regard, as I said in the House when he was Chancellor of the Exchequer. This is what he said in this House on 27th September, 1949, and he should have been here tonight saying it:
Any firm which could earn dollars and fails to do so, or any manufacturer or trader—whether he exports or not—who does not get his costs down to the lowest figure, is, in fact, helping to put up the cost of living for us all, and to put some of us on the dole. Any worker by hand or brain who goes slow, or is an absentee, or demands more money for no more output, is, in fact, doing his best to put up his own household bills and to put somebody—quite possibly himself—out of a job."—[OFFICIAL REPORT, 27th September, 1949; Vol. 468, c. 31 and 32.]
This is a stern warning which I was hoping the Chancellor would give to the nation today, but he failed.
Later, in this House on 26th October, 1949, Sir Stafford Cripps spoke again and I should like to quote from his speech. It could be said that these utterances of his are as applicable today as they were when I first came into this House. He said:
We can express our present situation, robbed of all its technical surroundings and explanations, in quite simple terms. Unless
we can all quickly produce more and get our costs down, we shall suffer a tragic fall in our standard of living accompanied by all the demoralising insecurity of widespread unemployment.
That was an honest and fearless man speaking, a man of character and integrity. Let me quote his concluding sentences. I can remember them now. I was immensely impressed by him, for one felt that he was speaking the truth from the bottom of his heart. He said:
These economies, like devaluation, are a prelude and no more to a new surge forward to conquer the hard currency markets without which our industries, our standards of living, indeed, our civilisation itself, must fade and wither away. Mr. Speaker, we dare not fail in our efforts."—[OFFICIAL REPORT, 26th October, 1949; Vol. 468, c. 1352-3.]
That is a challenge to this Government from the grave. I know that the right hon. Gentleman had a great regard for Stafford Cripps, as I did. But the problem still faces us in spite of those stern warnings.
At that time, the average industrial wage for male workers over 21 years of age was £7 6s. 6d. a week. The latest available figure shows that the corresponding industrial wage in October, 1965, was £20 3s. 3d. For the benefit of those who like stupidly to talk about thirteen wasted years, I remind the House that the corresponding figure in October, 1964, was £19 8s. 10d. Industrial workers have said to successive Governments of both parties, since these stern warnings, "If this is an industrial crisis, may it go on for ever". They have done fine out of it. They are not bothered. When the hon. Member for Huddersfield, West (Mr. Lomas) said earlier that we must make the nation face the facts, I interjected to ask, "How are you going to make them believe them?". It says in the Good Book,
… neither will they be persuaded, though one rose from the dead.
This is the core of our problem: how do we make people believe, until they are hungry?
Neither the country nor the House would believe Winston Churchill's warnings until Hitler stood at the very gates of our country, breathing down our necks and putting the fear of God into us, which made us work and made us fight. Can we have that same spirit from our people without the hardship that that was for us? How does the right hon. Gentleman think that he can make the industrial worker and the employer—for both are equally involved—believe him when they would not believe Cripps and Attlee? This is the problem. The rest of the Budget really does not matter.
We are importing more than we are exporting. We are told that there is a limit at the moment to what we can export. We are compelled, therefore, to look at the problem of imports. Instead of increasing taxation, as I thought he would, in order to mop up what Cripps used to call the extra spending power, will the Chancellor consider these two figures? In the so-called tragic year of 1964 when the Tory Party is supposed to have failed so miserably, the physical adverse balance of trade was about £375 million. The rest was finance, as the right hon. Gentleman knows. But in that year Canada exported to this country £458 million worth and we exported to Canada only £193 million. Thus, the Canadians had a favourable trade balance with us of £265 million. America exported to this country £650 million worth and took from us only £425 million. If the North American Continent had bought as much from us in that year as we bought from it, there would have been a trade balance in our favour.
It is true that in 1965 the position improved slightly. Canadian exports to this country were £458 million and her imports from this country were £208 million, leaving a balance of £250 million. The position vis-à-vis America has improved extremely well: imports to this country were £672 million, and our exports to America, with re-exports, were £514 million, giving a balance in favour of America of £158 million.
When I was in Vancouver and San Francisco talking to businessmen there last October, I constantly said to them, "If you do not buy our goods, how can we have the American and Canadian dollars to pay for your goods?" This imbalance with North America has lasted every year since the end of the war. It is time that we talked straight to both countries and said to them, "If you will not allow us to sell our goods in your market, we are sorry but we shall have to impose quotas." They would not like it, but they would have to lump it.
An example was brought to my notice only recently that plastics going into the American market from this country have to carry a tariff of 40 per cent. whereas American plastics coming into the United Kingdom carry a tariff of only 10 per cent. This is cockeyed and should be put right. No matter what they say about G.A.T.T., it is high time that we said to the North American Continent, "If you do not buy our goods, we cannot buy yours". We should have no balance-of-trade problems if we did that, and I ask the right hon. Gentleman please to look at that suggestion.
May I ask two other questions? Does the right hon. Gentleman and does the Chancellor accept high money rates as inevitable for ever? May I remind him that between 1932 and 1951 we had a 2 per cent Bank Rate? Now we are suffering the highest rate of interest for the longest period which this country has ever known. In the old days the Socialists used to talk about international financiers as blood-sucking, non-producers. It seems to me that the present Government are in the pockets of the international bankers. Can they not get out of those pockets? Is it not possible for the Treasury to control the volume of credit and to reduce its price? Does the right hon. Gentleman think that hot money does us any good? Could we not do without it? I remind him that these high rates of money have caused housing rents to go up, have made it more difficult for expanding industries to borrow money either on debentures or on the issue of equities and have put an extra burden upon us. Can nothing be done about it?
There is nothing in the Budget about these things, but these are the things which really matter. Do the Government accept inflation as inevitable? Have they no cure for it? Have they given up the fight? If so, what rate of inflation per annum do they regard as acceptable? It is unfair to all Government stockholders to say that inflation must go on for ever. If the Chancellor is ever to get people back into National Savings, then he need not give them a higher rate of interest; he should gear their capital to the cost of living. They would rather have a much lower rate of interest and be sure that the capital which they have saved is safe then they would have a bigger return at present.
I beg of him to say to his people in the trade union world and to our people on the employing side of industry that the way to real political ruin in the country, as history shows, is to ruin the currency. In classical days the Roman Emperors fell when their currency was debased. It was the debasement of the currency in Germany which caused the middle class in Germany to turn to Hitler. The greatest challenge which this Government have is to keep money fair and decent.
I ask the Chancellor to look at the questions which I have put. I feel that the Budget does not face up to the real problems with which we are confronted.