HC Deb 21 June 1951 vol 489 cc711-20
The Chancellor of the Exchequer (Mr. Gaitskell)

With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the investment programme.

In the Economic Survey, it was stated that the investment programme was being reviewed to take account of the impact of defence orders, and I should now like to inform the House of the outcome of this review. As I said in my Budget speech, the heavy new demands of the defence programme on the engineering industries must involve some check to civil investment at home. The total output of these industries is limited by shortages of steel and other materials, and we cannot afford a serious decline in exports of metal goods when the rapidly rising cost of imports presents a serious threat to the stability of our overseas balance of payments.

In consequence, there will in 1951 be no increase in the supplies of plant and machinery available for home industry, while in 1952 and 1953 there must be a substantial reduction, since more and more of the engineering industry will be producing armaments instead. Moreover, of the plant and machinery available for the home market, a much larger share must from now on go to firms engaged on defence production, so that even in 1951 there will be some fall in supplies for purely civil purposes.

In the case of the building and constructional engineering industries, output should continue to rise by about 5 per cent. a year. Provision will have to be made, however, out of this increased production for a substantial amount of defence work, and in the next two years some parts of the civil building programme are bound to be delayed in areas where important defence works have to be executed and where they will, if necessary, be given special priority.

In view of the greater uncertainty caused by the impact of defence production and material shortages, I do not propose to publish for 1951 or 1952 a detailed investment programme of the kind prepared in previous years with figures for individual industries. I can, however, give the broad outcome of the recent review of the programme and indicate in general terms the level of investment which we hope still to achieve.

Total fixed investment in 1951, including a substantial amount of defence investment, may amount to £2,230 million (in terms of the prices ruling at the end of 1950), compared with £2,162 million in 1950. This represents only a very small increase. It will be accompanied, as I have suggested earlier, by an actual decline in the amount of civil investment, which must be expected to fall still further in 1952 and 1953.

Within this total it is intended that investment in coal, electricity, gas, coke ovens, railways, roads and petroleum will be higher than in 1950—in the first two cases substantially higher. The programme of new industrial building for manufacturing industry, other than the industries to which I have already referred, will continue at about the same rate as in 1950, but a proportion of the work will be on projects directly or indirectly related to defence, and fewer licences will, therefore, be available for ordinary civil projects.

There will be some increase in investment in education in 1951 and 1952, though less than was planned a year ago. The housing programme will be maintained at 200,000 houses a year, but there may have to be some local interference with house building in the interests of defence work.

Investment in other fields will have to be severely restricted. The volume of Government building will be checked, and in 1952 will be below the 1950 level. Investment in the health services, on some local government services, and on university building will have to be less than it would otherwise have been, and in some cases will have to be brought down below the level achieved in 1950. It will be necessary also to reduce private building work for agricultural purposes.

The Government have also decided on two special measures. The building of all new offices will, for the time being, be prohibited, except where work has begun or already been authorised or in other very special circumstances, or in the case of offices which are an integral part of industrial establishments. Secondly, it is proposed to ban all building projects for entertainment purposes costing more than £5,000. Projects costing less will be licensed only if there are especially strong reasons for permitting this work to be done.

These particular restrictions, and the general reduction in the level of civil investment, will unfortunately have to continue for some time. Architects, engineers and other professional and technical staff are urgently required now to deal with the large and sudden increase in the planning of defence works. The Government hope that all employers who possibly can will release staff—especially those engaged on long-term civil projects —for this much more urgent defence work.

We have also considered carefully whether in the new circumstances further progress can be made with the reconstruction of blitzed towns and cities. It is clear that during the next two years it will not be possible to do much. We propose, however, to make a special survey of the position area by area, and to decide in each case, in the light of the supply of labour and materials, what might be spared for this purpose. Work already authorised will be completed and new work will be approved as and when this can be done without holding up more urgent and important projects such as defence and housing. The ban on new office building will not therefore apply to blitzed areas.

Mr. Lyttelton

I think that a statement of this kind, which covers in very general terms a great many aspects of the industrial life of the country, must really await further consideration. I think we ought to be careful not to accept it until we have had a further opportunity of studying it, but there are one or two questions which occur to me.

The first is this. When the Chancellor said that in the next two years some part of the civil building programme is bound to be delayed, does that mean that the Government's programme of 200,000 houses will not be reached? [HON. MEMBERS: "No."] May I ask the right hon. Gentleman what the words mean if they do not mean that? It seems a genteel manner of saying there will be fewer houses built.

Secondly, I wish to ask the right hon. Gentleman whether what he said about not publishing a detailed investment programme means that the Government have at long last abandoned the idea that the investment programme can be planned in detail. If that is so, I shall welcome it. There are a number of other questions which still remain to be asked, but the statement is in such general terms that I think there must be some delay before making detailed criticisms.

Mr. Gaitskell

With regard to the housing programme, there is no change: it remains at 200,000. We have said on a number of occasions that if in a particular locality there is a great scarcity of labour for urgent defence production, it may have to be taken from housing and, put on defence.

Mr. Aneurin Bevan

Is not this just the sort of statement which ought not to be made after Questions? It is a statement relating to a running programme. There cannot be said to be any special urgency about it, and, at the same time, it is so full of most important details that I should have thought it was a matter which ought to have been made the subject of a White Paper setting out the whole thing in very much more detail so that we might examine what its repercussions are likely to be on the economic life of the country.

Before the White Paper is produced— which I hope it will be—will my right hon. Friend indicate where the cutting back will take place in civil consumption, what industries will be particularly affected, and what part of the country will be affected, because those of us representing development areas are particularly apprehensive about it. May I therefore ask the Government, through the Chancellor of the Exchequer, whether they will consider a more detailed White Paper and provide an opportunity for an early debate?

Mr. Clement Davies

I agree with what has been put to the Government by the right hon. Member for Ebbw Vale (Mr. Bevan). This is a very general statement, and, of course, it holds out a very grim and austere prospect for the next two and a half years, especially in the development areas. I would ask, therefore, that any White Paper should not only contain details of the programme, but also that the Government should try to put before us the effect of the decision as they see it upon production in the various branches throughout the country.

Mr. Gaitskell

I think that when my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) and the right hon. and learned Member for Montgomery (Mr. C. Davies) have studied this statement they will see that I have given a fairly clear picture of the general effect of these cuts in the investment programme. I made it plain—and here I am replying to my right hon. Friend's question—that we do not consider that this year there would be any value in giving the detailed figures that have been given in the past for individual industries, for the simple reason that there is a great deal of uncertainty, as there is bound to be, in present circumstances in view of the material position and in view of the impact of the defence programme. But I must, of course, also point out that if we want to carry out the defence programme as swiftly and as smoothly as possible, some other things have got to give way.

Mr. Lyttelton

Is not the right hon. Gentleman aware that we must regard these overcoat statements with some apprehension, because, unless there is an opportunity of debating them, we become by inference committed to some things about which we might wish to make further comment? I think there is a great deal in the suggestion that a White Paper or some other document should be published so that the House may have an opportunity of debating it.

Mr. Gaitskell

The question of a debate is not one for me, and I was not suggesting that it should not be debated. I have already indicated to the House why I do not think that this year a detailed White Paper of the kind included in the Economic Survey in previous years would be of much value.

Mr. Bevan

May I ask my right hon. Friend for an answer to my question whether there is to be a White Paper?

Mr. Gaitskell

I think I made it perfectly plain that there would be no particular value in a detailed White Paper of the kind suggested.

Mr. Bevan

May I ask the Government to consider this matter further, because as it is left now it is highly unsatisfactory? If we cannot have a debate on the White Paper, will the Government consider having a debate on the statement which has been made?

Mr. Gaitskell

That is not a matter for me. I suggest that my right hon. Friend should first read the statement, which, I agree, contains a good deal of comment, before he comes to a conclusion in his own mind about the need for a White Paper.

Mr. Nally

On a point of order. In my limited experience of the House, it has always been understood that a statement of any kind, whether it be made from the Government Front Bench or anywhere else, is adjusted, so to speak, to the fact that in the nature of things it has to be a précis. I would ask you, Mr. Speaker, whether or not we are now to assume that a vital statement of Government policy affecting many constituencies in the country can be made in the House without any document accompanying it, and whether it is in accordance with the custom of the House that we should be told, in reply to our questions about such a statement, to read it? I wish to ask whether, in point of fact, what has happened today has not been a gross abuse of the normal practice of the House over many years regarding statements of major Government policy.

Mr. Speaker

There is no point of order there. It has always been the custom for Ministers to make statements. They are entirely responsible for what is in them; I am not.

Mr. Edelman

Contrary to what was said by the right hon. Member for Alder-shot (Mr. Lyttelton), does not my right hon. Friend's statement involve a nationwide and detailed system of control, licensing and allocation, particularly for the engineering industry, and will he announce what course he intends to take in that respect, because otherwise the statement on the investment programme will seem to many like putting the cart before the horse?

Mr. Gaitskell

Of course, a great deal of the control through which the investment programme is carried out is through building licensing, but we shall also use material controls, so far as they are appropriate, to ensure that it is carried out.

Mr. Churchill

Is it not rather abrupt to turn down all idea of a White Paper, even supposing it could not have the full precision of previous years—if, indeed, that quality has resided in the documents then published? Could it not be issued under the necessary reserves? Could not we have the most detailed and careful statement that the right hon. Gentleman can prepare under the reserves, even if some of the details are necessarily I omitted? Surely we ought to have some thing more than just these three pages of typescript read out to us before very large: changes affecting the social life of the: whole people are, as it were, tacitly assented to by the House? May I ask the Chancellor of the Exchequer whether he will not reconsider this matter and give' us the best White Paper he can, and then we can consider in what form the matter should be debated or carried further.

Mr. Gaitskell

Of course, we considered very carefully whether, in the circumstances, a White Paper would be appropriate, and I have already endeavoured to explain to the House why, in our view, on this occasion it would not have had any particular value and, indeed, would not have contained much, if anything, more than I have already read out to the House. I should like to ask the right hon. Gentleman whether he would study the statement I have made, because I feel that when he has done that he will appreciate that there is a good deal more in it, perhaps, than appears from a first hearing.

As to the question of a debate, that is not a question for me; it is an entirely different matter and, as far as I know, there is no particular convention which rules out a debate on a statement any more than on a White Paper, if it is the desire of the House generally to have one.

Mr. Michael Foot

With reference to the last two sentences of the Chancellor's statement—on blitzed cities—can he say what will be the nature of this review which is to take place on the question of blitzed cities? How long is that review to take, and what effect will it have upon applications for licences which have been put forward by the blitzed cities? Is not this a further indication of the difficulties which arise from a general statement being made without defining the principles which are to be applied to the blitzed cities in dealing with the whole of their applications?

Mr. Gaitskell

If I may say so to my hon. Friend, it is probably an instance of the difficulty which arises from trying to discuss the statement before it has been read. I made it plain that work already authorised in the case of the blitzed cities would, of course, be completed and new work approved as and when the labour and materials are available. The surveys to which I referred will be carried out as quickly as possible, and in the light of the pressure of housing and defence work upon the available supplies, we shall be able to see how much can be spared for the work of reconstruction, the building of shops and offices, and so on.

Mr. David Eccles

Apart from the question of the blitzed cities, it appears that the programme announced by the Chancellor calls for more steel than was used in the investment programme last year. Is the right hon. Gentleman satisfied, therefore, that there will be enough steel for the programme alone, without any further work on the blitzed cities; and if there is not enough steel, will he indicate to the House which categories in the programme are of low priority and will be cut into first?

Mr. Gaitskell

That is a very much wider question, but it indicates the difficulty we have this year of giving the degree of precision that we should like to give to the individual investment programmes. Uncertainty about the precise output of steel is one of the difficulties I had in mind, but I would not say that one should conclude from this statement that the total demand for steel implied in it is greater than will be available.

Mr. Driberg

In attempting to carry out such a programme in an orderly way, will my right hon. Friend bear in mind the particular importance both of reinstituting controls over the allocation of steel and of reviving something in the nature of the Ministry of Works' mobile labour force, in order to prevent unfairness to local authorities and their housing programmes on account of the defence works of which he has spoken?

Mr. Gaitskell

The allocation of steel is very much under consideration by the Government and I hope that a statement will be made on the subject next week. On the mobile building labour force, perhaps my hon. Friend will address a question on that subject to my right hon. Friend the Minister of Works.

Sir Herbert Williams

On a point of order. As this is neither Question Time nor a debate, would I be in order in moving the Adjournment of the House in order that we may have a debate?

Mr. Speaker

I am afraid nobody can move the Adjournment of the House except the Government. That is the rule.

Major Tufton Beamish

Is the Chancellor of the Exchequer aware that even if a White Paper would be unlikely to contain much more detail than was contained in his statement, the next issue of c "Tribune" certainly will.

Miss Jennie Lee

Will the Chancellor of the Exchequer please try a little harder to meet the real fear in many of our minds that by trying to do too much too soon he will not get as good a defence programme as otherwise he would; and will he also keep in mind that if he wants the best results he needs the cooperation of men and women as well as machines—men and women who really understand what he is trying to do and what he has got to do?

Mr. Gaitskell

I think both precepts put forward by my hon. Friend are admirable, and I will do my best to observe them.

Several Hon. Members rose

Mr. Speaker

We are to have a day to debate this, so I think we must get on with the business.