The Economy

Part of the debate – in the House of Commons at 12:00 am on 25 July 1978.

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Photo of Mr Ian Mikardo Mr Ian Mikardo , Tower Hamlets Bethnal Green and Bow 12:00, 25 July 1978

The Government have put down a "catch-all" motion in order to attract support, or at least some evidence of support, for something that is not in the motion at all. That is what puts me in a quandary about the way in which I should vote tonight.

I wish to concentrate my remarks on a single sentence in the speech of the Leader of the Opposition. It was a sentence which she used several times. She said that the problems of this country were due to Socialism. She spoke twice of the past four years of Socialism. Even in her absence and by proxy I want to tell her something about Socialism. I believe that I have greater authority to speak on that subject than she has.

I have listened to the right hon. Lady saying this in every weekend speech that she has made recently. She has been followed sheepishly by many of her hon. Friends and the newspapers which support the Conservatives. They say that all our ills are due to the fact that this Government have turned Britain into a Socialist society. I have been all round Britain with a fine-toothed tooth-comb, a magnifying glass and a laser beam, and I have difficulty in perceiving any evidence of Socialism in our society that is discernible—even to the greatly reinforced naked eye.

We have no economic plan. Whoever heard of a Socialist society without an economic plan? Except for a few marginal things, we have a virtually unrestricted laissez-faire system. There may be justification for that in some people's eyes, but it is still not Socialism. We do not even have planning agreements with the major companies. That would be a tiny, tangential piece of planning, not even Socialist planning. The French go in for planning agreements in a big way and the French entrepreneurs are at least as individualistic as any in the world. Yet they take it as a matter of course that any big company shall enter into a planning agreement. We have only one—with Chrysler. Whatever that is, it is not Socialism.

We have no effective controls over import penetration. How do we run a planned Socialist economy without controls which enable us to decide which parts of the things we use we make ourselves and which parts we get from outside the country? As a result of having no import controls whatever, one British industry after another is going to the wall. That is not Socialism.

We have totally inadequate and ineffective controls over outward investment. Whoever conceived of Socialism without there being controls over money flowing out of the country? Everyone in the House must know what has been happening as a result of the inadequacy, incom- pleteness and ineffectiveness of our overseas investment control.

We live in a country which desperately needs more investment in British industry in order to raise the standards of technology and to provide jobs for British workers. Yet British business has multiplied its investment overseas fivefold in the past decade, at a time when British industry has been starved of investment.

It is sometimes said that we have inward investment as well as outward investment and, indeed, a great deal of this is very welcome. But this is a relatively poor country in investment terms. As the outward investment figure continues to be twice as great as the inward investment figure, all that we are doing with much of this investment is creating in other countries the jobs that we should be creating in the United Kingdom.

On the calculation of Government Departments themselves, 35 per cent. of all British overseas investment occurs at the expense of jobs in Britain. Forty-five per cent. of our investment in the other eight EEC countries is at the expense of British jobs. Some may try to justify that, but they cannot say, as the Leader of the Opposition says, that it is Socialism.

We have not had four years of Socialism, as the Leader of the Opposition rather foolishly suggests, but we have had a manifest waste of our economic resources by the failure to use even some of the most simple instruments of economic intervention. This is partly because we are locked into the European charter for big business and partly because Government economic thinking is dominated not by Socialists, but by pragmatists, monetarists, mercantilists and by the last remaining survivor of the Manchester free trade school of more than a century ago. I hope that no one will intervene to ask me the name of the last person on that list.

If I were a private entrepreneur, should say a prayer before I went to bed every night for the people who are running the economy of our country today because it is largely for the benefit of private entrepreneurs that it is being run.

Let us look elsewhere for evidence of the four years of Socialism that the Leader of the Opposition was babbling about. We see that major decisions affecting the lives of millions of people are made outside this elected Parliament by a self-perpetuating oligarchy of a few hundred directors of big companies. The manifesto on which my right hon. Friends and I were elected—perhaps the difference between us was that I meant it and they, apparently, did not—included as its central theme a significant and irreversible transfer of power and wealth to working people and their families". We have made no transfer at all. The same little oligarchies still determine the way this country is run.

There has been no extension of participation in decision-making and no transfer of power. The nationalised Bank of England takes its prime function to be not the guardian of the national interest but the protector and spokesman of private City interests. Whatever justification there may be for that, it is certainly not Socialism.

We see that earned incomes are held down while unearned incomes are virtually unrestricted. Whatever that is, it is not Socialism. We see that workers at all levels pay their full taxes, but we know that rich people and, as The Sunday Times told us, large companies avoid paying large parts of their tax. Whatever that is, it is not Socialism.

It is still true in this country that more than one-third of all personal disposable income is held by 1 per cent. of the people. I cannot equate that with Socialism either. We have luxury living side by side with millions on the poverty line. There has been no transfer of wealth to working people and their families. That is why we see highly expensive private hospitals proliferating while National Health Service hospitals are being shut down left, right and centre in working-class areas. Whatever that is, it is not Socialism.

I hope that I have said enough to stop the Leader of the Opposition from carrying on with the babbling brook of nonsense which she inflicted upon us earlier.

Except in a few small communities such as the kibbutzim in Israel, Socialism has not been instituted and does not exist anywhere in the world. That is why there is no factual basis for the Leader of the Opposition or anyone else saying that Socialism "has failed". There is no experience to go on, no experience on which she can base that claim. What someone once said of Christianity is equally true of Socialism: it has not been tried and found wanting; it has been found difficult and not tried.

I end on a personal note. When I joined the Labour Party nearly half a century ago, I did so in the belief that our party would be the instrument for transforming this country into the first genuinely Socialist society in the world. I was a young man then and I hoped to see the transformation come about in my lifetime. Having reached my three score and 10 years, I know that that hope will not be fulfilled, but I am convinced with every fibre of my being and from everything I have learned in that half century that this country and many others will turn to democratic Socialism—if not in the lifetime of my children, at the latest within the lifetime of my grandchildren.

The tide of history is sweeping hard that way and no Political Canute can turn it hack. Any politician who can project his thoughts beyond the next General Election but one can see it coming inexorably and inevitably. One does not need to go far to find the reason.

The young people of today, who are better educated and more mature, understanding and sophisticated than young people were when I was their age, can look around and see for themselves to what a pathetic mess the world has been brought by the competitive, capitalist system which dominates it. They can judge for themselves how capitalism has failed to improve and refine its mechanisms for distribution and exchange in order to keep pace with the great improvements in its mechanisms for production, with the result that the people of the world cannot consume all they produce.

These young people see millions of unemployed workers and millions of others who pine for the goods that those unemployed workers could make. They see millions of idle builders and millions more without a roof over their heads. They see millions of hungry people and millions of tillers of the soil with no soil to till. They see exuberant luxury and exuberant waste, side by side with abject poverty—casinos in the West End and people sleeping rough in the East End, mountains of unused milk powder in the northern hemisphere and starving babies in the southern.

These young people see that over the past decade the money spent in the world on the instruments of life has remained virtually static while the money spent on the instruments of death has doubled. They see science geared to making a nuclear weapon that is so clever that it can select its own target, and they see, at the same time, people dying for lack of a few kidney machines. As these young people look around our society, they can see that, to this day, a man is judged not by his worth, but by his birth and esteemed not for what he is, but for what he owns. That is why we shall have a move away from the system that has caused all these ills. Our young people see all that I have described, and in the long run they will not stand for it. They will reject the system that brought the world to this pass.

I hope that our young people will not be attracted by any totalitarianism that exacts too high a spiritual price for whatever material benefits it may confer. They will ruthlessly reject any political leader of any party, including my own, who is too myopic to see their vision. That is why the future lies with democratic Socialism.

If there is any hon. Member who thinks that what I have been saying is not directly relevant to the motion he is wrong. The fact is simple. After this motion is passed or defeated, when the General Election has come and gone, whenever that may be, all the problems we have been discussing today will still remain unresolved. They will continue to remain unresolved until we break away from the fetters of conventional thought that have shackled all our Governments, Conservative and Labour alike. Until then we shall go on having economic debates against the same sad and sombre background that afflicts us today.