In our 1964 election manifesto, we analysed the 13 years of Tory rule. We set out a whole number of reasons how the economy got into the situation it did and how we saw fit to reverse the policies of the Tories and make certain that a Labour Government would not adopt their stop-go policy. In this year's manifesto, we said that, in our pursuit of solvency and the defence of the £, which were our overriding aims, the new Government were determined not to repeat Conservative stop-go. We went on to say that, whatever the pressures, they would not jettison the four central objectives of their policy. The third of those central objectives was:
To maintain full employment and a high level of investment in productive industry, while damping down the overheated economy.
Those were our election pledges; yet, in July, we introduced measures which led to the very reverse.
I will not deny that we had to take certain measures. It was obvious that some measures were necessary. There was a whole series of factors. I will not, as perhaps my right hon. and hon. Friends on the Front Bench do, overestimate the effects of the seamen's strike, but it was a factor. The Rhodesian crisis, which we are all determined to make certain ends in the way that we want with the six principles carried out, was another factor. We know that we had a further sterling crisis and that measures had to be taken. No one denies that the Government had to take certain measures. What we complain about is not that they took certain measures, but that they took the wrong ones, in our opinion. Our argument is that they adopted the wrong remedy.
The American journal Business Week had a report on the British economy only a week ago. In it, there is an interesting article dealing with a very important point I have raised the matter before, but I raise it again, because it fits in with certain comments which were made in the British Press at the time of the July crisis. It says:
Some big holders of sterling in the Middle East began to dump their pounds. Even some London bankers started selling sterling. In New York, climbing interest rates sucked capital away from London. Enter Johnson. Reverberations of Britain's growing plight reached the White House. As Britain's financial position worsened, President Johnson, according to insiders, pulled out what is referred to in the U.S. government as 'the list' —the things the British had committed themselves to do to restore health to their economy and their balance of payments…This midsummer, Johnson insisted that Britain take the actions it had promised if it wanted U.S. support.
That is a very important statement, and the same point was made in the Observer on 31st July:
It became clear yesterday that Mr. Wilson has made his wage freeze more comprehensive and introduced it more rapidly than originally intended, primarily to satisfy President Johnson.
So it is the American Government who are determining the policies of this country.
I remember a great debate in the House when a statement was made about the Executive Committee of the National Union of Seamen. We were told that they were not masters in their own house. Are we masters in our own house? Are we content to allow the policy of Britain as regards its economic future to be determined by the Government of the United States? If there are any hon. Members in the House who are prepared to accept that situation, I am not, and therefore it is obvious that we have to get down to alternative policies.
I shall not detain the House for much longer. It is a good thing that we are limiting our speeches by voluntary restraint, and far better than any decision taken in a Select Committee and adopted afterwards in the House.
The point was made by my hon. Friend the Member for Derbyshire, South-East (Mr. Park) that we had to have imme- diate and drastic cuts in our military expenditure. However, we have to face the fact that any cuts in military expenditure will take some time before they become operative. Our argument is that there are other immediate alternatives which the Government have chosen to ignore up till now.
I listened carefully when one of my hon. Friends was speaking about import controls no longer being possible if we wanted to get into the Common Market. I want to get into the Common Market. Hon. Members will have heard the speech which I made in the debate that we had on our entry into Europe. I do not believe that, at this stage of our negotiations, we have to say that the two contradict each other. In the interim, we can and must introduce selective import controls. I believe that they are absolutely vital. What is also vital is our overseas investment. That is not just the view of my hon. Friend the Member for Lewisham, West (Mr. Dickens), who is an expert on the subject.
If one reads Shonfield and many other economists, they all make the point that it is possible to take over control of our overseas investments and sell a percentage of them to overcome a balance of payments crisis. Indeed, we have done it before. I accept that it is only an interim measure, however. Productivity is the key, but we cannot get productivity, investment or growth when we have 500,000 unemployed and with that figure growing. That is why we say to the Government, before it is too late and before we enter into a long period of stagnation, that they must change their policy now and get back to the policies on which they were elected.