Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 12:00 am on 6th April 1976.

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Photo of Mr Roy Hughes Mr Roy Hughes , Newport (Monmouthshire/Gwent) 12:00 am, 6th April 1976

In his long speech the Chancellor of the Exchequer dealt with a multitude of issues and tried to provide at least some of the answers to the problems which affect the country. I found him difficult to follow when he was dealing with negotiations with the trade unions. Perhaps I am not alone in that.

I thought that his figures were a little hypothetical. In the early part of his speech my right hon. Friend mentioned the twin evils of inflation and unemployment, which he said were essentially international in character. I shall deal with what I consider to be a distinctly British problem.

It would be repetitive to say that our economy is in a powerless state. We are suffering from inflation, and about 1,250,000 people are unemployed. There are severe restrictions on collective bargaining. I agree that they have been imposed through the voluntary co-operation of the trade union movement, but I was taught that free collective bargaining is an essential part of a free society. I have no wish to rock the boat today, particularly as the new Prime Minister has just come into office. I wish him well in his formidable task. The Government are making strenuous efforts to solve our difficulties.

The situation would be even worse if the Conservative Party were in power. It would not easily get the co-operation of the trade union movement and it would base its policy on even higher unemployment.

When, 20 years ago, I was being taught the rudiments of economics I was told how Britain earned her living as a nation. I was told that we imported 50 per cent. of our food supplies, plus raw materials to service our manufacturing industry, and that we in turn exported manufactured goods. I was told that those earnings were supplemented by those from shipping and from financial facilities such as insurance. That theory is now old hat. Food and raw materials account for only about 50 per cent. of our total imports, and the British market is being flooded with all types of foreign imports such as cars, washing machines, steel, television tubes, textiles and so on. A large deputation of shop stewards from the large Hoover factory at Merthyr Tydfil recently pointed out to hon. Members that the Italians were dumping washing machines in this country.

The Government are proposing assistance to the paper and board industry so that it can re-equip. Representatives of a firm in my constituency have said that they are afraid that the recipients of this public money would buy new machinery from overseas. That would be ridiculous, because we can produce the equipment in this country. There are many more examples of home production, and I have firmly come to the conclusion that we now need severe import restrictions. I agree that there is a danger of retaliation, but many countries are already practising all manner of restrictions.

I shall be told that import controls have nothing to do with Socialism. However, they are necessary to put the British economy back on its feet. There is also the case that import controls would be detrimental to the developing countries, but we must face the fact that charity begins at home, and a strong Britain would be better able to help those developing countries. Dogma in this respect must be put on one side to get our people out of the dole queue.

I appreciate that the principal obstacle to the imposition of severe import controls is our international commitments, whether through the Common Market of GATT or to the International Monetary Fund, but what justification can there be for allowing Britain to be flooded with imported goods that we can easily produce? We seem to be the softest touch of all in international markets. Our manufacturing industry is being eroded, and the result is heavy unemployment. It is as if it is no longer nice to put the case for essential British interests. Yet we must have a firm policy of import restrictions so that we import only what we can pay for with our exports. The economy is suffering from a lack of effective demand. If it could go flat out without the fear of balance of payments crisis, then employment, investment and production would rapidly grow. Our industry would recover its competitive strength.

A start could, perhaps, be made in the car industry. Nothing could be more calculated to stimulate the British economy than a boom in that industry. I welcome the fact that Leyland is now able once again to export to the Arab countries. That is the sort of reciprocal trade that we require. We need their oil and they need our motor vehicles.

Whatever international organisations we may be linked with must be flexible enough for our country to take the necessary steps to gets its economy back on on its feet. The challenge is to the Western world as a whole. What good can an impoverished Britain be to any international organisation?

The Government must be warned that they will not indefinitely get away with unemployment at the present rate. I appreciate that the social security benefits are cushioning the blow, but as they run out the Government could run into trouble. If unemployment persists, the trade unions will be less willing to accept a voluntary incomes policy. The recent trouble at the SU carburettor plant was the writing on the wall. The Government should take heed of it.