Her Majesty's Government (Opposition Motion)

Part of the debate – in the House of Commons at 12:00 am on 9th June 1976.

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Photo of Mr Hugh Fraser Mr Hugh Fraser , Stafford and Stone 12:00 am, 9th June 1976

After listening to what the Prime Minister said, I am convinced that my right hon. Friend the Leader of the Opposition was entirely justified in moving a motion of censure. I have never heard such an expression of vague sentiments of good intention, with which, alas, the floor of Hell is paved.

I want to speak on two main points—first, the economic manoeuvre which the Government succeeded in making on Monday and, secondly, the need for a new economic policy. I deal first with the economic manoeuvre of obtaining a standby credit of £5,000 million. The right hon. Member for Battersea, North (Mr. Jay) and others who follow economic matters will realise that one of the great changes with a floating rate is that the description of the pound as a national asset, which is what the Prime Minister once called it, is no longer true. The pound is merely a means of recording in the world the estimated value of a commodity. Therefore, the less we wrap ourselves or the Union Jack round the £ sterling, the more sensible we shall be tonight.

Unless the Government take much more severe action than they have taken hitherto, there is the greatest danger that the …5,000 million which has been borrowed will go down the drain in precisely the same way as the …3,000 million which had to be spent by the Bank of England in supporting the pound over the last few months. The House should address itself to that, rather than listening to the Prime Minister's vague aspirations. We are in a considerable crisis, and the needs of the situation demand that steps should be taken.

I do not know whether you have ever lost money in a casino, Mr. Deputy Speaker. It is extremely relevant to what is happening today. In my misspent youth, I lost money in casinos and in those circumstances one has two options —asking the casino for more money or asking one's bank manager for a loan.

The Government did not go to the International Monetary Fund. They went to the casino and asked for a standby credit. If one goes to the bank manager after losing money in a casino, one gets a very different reception from that which one receives from the casino proprietor who, after a good deal of argument, says "Please continue with the money I am giving you. The game must not cease. I do not want some of the rich clients to leave the building."

The Government should have gone to the IMF and said that they needed the money. They did not dare to do that because they knew that the IMF would impose conditions which the Government would find politically impossible to fulfil. The sooner this fact is made clear to the British people, the better.

This great boast of the Chancellor of the Exchequer is a sleight of commerial hand. It gives the Government only a few months before there is another serious and heavy attack on sterling. There will be such an attack because Government indebtedness is still rising and will continue to rise, whatever the Chancellor says, next year and the year after. If we add the interest on borrowings to the expenditure committed by the Government, the sums to be paid out will be larger next year than this year.

It is remarkable to note that in 1964 total Government expenditure was £8,000 million. Next year, the interest on the National Debt alone will be at least £7,000 million and, with the present rates of interest at which the Government are borrowing, it could be £8,000 million.

That is what is wrong with the present Administration. It is no good the Prime Minister talking about great aspirations. The Socialist coalition opposite has gambled on more nationalisation, a social wage which the Government cannot afford to pay, and a social contract which has failed.

I do not know whether the Prime Minister has read the suggestions of his son-in-law, Mr. Peter Jay—the son of the right hon. Member for Battersea, North —in The Times for saving about £3,000 million this year and next year. Perhaps the Prime Minister has not been in touch with his son-in-law. I am told that Mr. Jay is watching the Observer transatlantic yacht race. If he is all at sea, the Chancellor will have no difficulty in getting in touch with him.

Let the Government find out some of the problems assailing our currency and bring forward a proper programme of reform. It is not just a matter of holding out until 16th June when the trade unions go through the rigmarole of accepting a policy forced down their throats by a blustering Chancellor. It is not even a question of cutting Government expenditure. What is needed is even more serious than that.

We need a new approach to our whole economic situation. I have more sympathy with the left wing of the Labour Party than with the great mass of lumpen bourgeoisie in the centre. At least the left wing has a policy of some kind. It may be a policy which we would regard as misery, but that is better than the irreconcilable, invertebrate, adamantine drift we see from the Front Bench opposite. We must have changes. We cannot keep asking international bankers to lend us money and carry on as we did on Monday. The only reason we succeeded was that they did not want a collapse of the whole international organisation of exchanges.

We need a Government who will dare to tell the people the truth, as my right hon. Friend did today, but as this Government will not. We must have a Government who dare to make the necessary cuts in Government expenditure. We will do it, this Government will not. We must have a Government who will dare to restore differentials. Our skilled people and managers are the worst paid in Europe. We must have a Government who dare to realise that increased production is the only way out of our present problems.

Our gross domestic product is now at the same level as in 1973. What is the use of allowing the Government to spend more money when our GDP has not moved because there is no encouragement to invest or to work harder? We need a Government prepared to do the things which this Government are incapable of doing. That is why I back the motion and join my hon. Friends in demanding the earliest possible General Election.

It is no good the Liberals giving us a long discourse on a new form of incomes policy, controlled in some mysterious way by three just men outside. If the Liberals are against this motion, they are merely the running dogs of the broken Socialism we see before us.