As one who has listened to Nye Bevan, I know that one of the arguments for taking over the heights of the economy was that the Government could exercise greater control over the public sector than over the private. But I take the point. What will happen when the return on capital which the nationalised industries have to make is not met? They will have to borrow and borrow and borrow again.
I believe that there is a need for direct action on incomes and prices and that now is the time for the Government to follow up the T.U.C.'s initiative on the wages-inflation guarantee. Perhaps last week, last month or the month before was not the correct time, but now the Chancellor says that he believes that the C.B.I. prices policy has at least a chance of working. If he has confidence in this and in his own policies for growth and containing inflation, surely he should now go to the T.U.C., throw the challenge down and say, "We accept your offer. We are prepared to go along with a policy of splitting wage demands into their two component elements—first, real growth in national income and, second, the amount which is needed to guarantee your members against inflation." There could be a real chance of such a policy working ; at least it is worth trying.
But the fundamental point is that, for the Nth time, the Government have accepted that low demand is no solution to inflation or to problems of balance of payments or growth in the home economy. But have they accepted that low demand has been our major long-term problem? We have had squeezes and freezes which have structurally changed our economy and our industry and ruined our industrial and financial morale.
What will happen when, and it will happen inevitably, the boost now given to the economy brings an import boom which will eventually overtake exports and we have a balance of payments deficit? Perhaps this is not a convenient time to raise such a spectacle, when we have a secure balance of payments. But now is the time to consider what we will do when the balance of payments is no longer secure, and it will inevitably become insecure within a few years.
Devaluation is at any time a dirty word—in times of a good balance of payments because nobody thinks it is relevant and in times of bad because it is only too relevant and dangerous. But it is not now against the policy of the Common Market countries. They devalue freely. We should make our position clear at this stage and say that we will meet the next crisis, when it comes, as it will come, in our balance of payments with a variation—one or other of the many variations—of a floating exchange rate within limits.
In the long term, the Government must plan ahead, not only for the time when a balance of payments crisis comes, as it will, but for the time when the next labour shortage arises, as that will happen, too. This may seem an odd time to discuss this matter, but if the Chancellor's policy works there will be a labour shortage in due course, and I believe that it will happen within two or three years.
There may not be a countrywide labour shortage. We may still have a rather high level of unemployment overall, but there will certainly be a shortage of certain skills. What plans are the Government making to ensure that we will have sufficient people skilled to overcome the shortage when it arises? What training do they have in mind? What other measures have they thought out to cope with this problem? Unless these two things are dealt with now, we shall be back at square one within three or four years.
It is no good thinking that we can adjust the economy with the economist's finesse and so avoid these problems arising. It is nonsense to talk of the regulator in this sense. We are not that clever and we should not rely on it. We will not stop a balance of payments crisis arising or a shortage of labour. We must prepare now so that we are able to walk through those two crises by adopting measures other than those we have used in the past.