§ 3.36 p.m.
§ Mr. Frederick Willey (Sunderland, North)
I intend to raise the question of the failure of the Government to arrest the rise in the cost of living, or to afford any protection for the housewife, or, indeed, to ensure her the benefits of the fall in the cost of imports which this country has enjoyed over the past three years. In particular, I intend to indict the Government on their disastrous food policy.
I have, therefore, every sympathy with the right hon. Gentleman, the two-headed Minister, "Mr. Facing Both Ways," who is now both Minister of Food and Minister of Agriculture and Fisheries. I have every sympathy with him because when he was Minister of Pensions he had the respect of the whole House, and he deserved a better fate than that which the Prime Minister has now bestowed upon him. I suppose we can regard him as a genial liquidator in bankruptcy, the administrator of a policy already in ruins, although with this difference, that the act of bankruptcy usually brings an abrupt end to losses, whereas the right hon. Gentleman is accountable not only for past losses but for present losses on an aggravating scale.
I understand that the Parliamentary Secretary to the Ministry of Food is not to intervene in the debate today. [HON MEMBERS: "Why?"] I accept his silence as a mark of repentance, though I for one shall miss the entertainment and distraction of his vigorous but often frivolous irrelevancies. While I regret the absence of the Parliamentary Secretary, I think it is right and proper that for once we should have a spokesman from the Treasury, because the real responsibility for what has happened lies upon the shoulders of the Chancellor of the Exchequer.
2080 Food policy affects agriculture, so whichever way he looks the right hon. Gentleman can find no consolation. I shall mention only three factors affecting agriculture. In the first place, here is a quotation from the Command Paper entitled "Annual Review and Determination of Guarantees, 1955," commonly called the Annual Review:Following the return to free market conditions there has been a fall in tillage area—469,000 acres in the United Kingdom in the last year,As hon. Gentlemen opposite know, in "the unfilled acres of the homeland lies a great reserve of production." They know that because that is what they said in "Britain Strong and Free." I can hardly welcome the action of the Government in putting 500,000 acres into reserve at this time. I would rather that those acres were contributing to the economy of this country.
Secondly, I quote the Minister himself:…. we may have more grass than we have animals to eat it."—[OFFICIAL REPORT, 11th March, 1955; Vol. 538, c. 852.]or, to quote the Parliamentary Secretary to the Ministry of Agriculture and Fisheries:Last year…the livestock population of grass-eating animals was nothing like enough to eat the extra grass."—[OFFICIAL REPORT, 11th March, 1955; Vol. 538, c. 905.]As the Minister himself has said, all this is very sad. It is the shadow of the prewar pattern of British agriculture when we had idle fields and no animals to eat the wasting grass. It is very sad indeed.
In the third place, we have the utter fail failure of the Government, hag-ridden by their belief in free markets, to provide any system of orderly marketing for agricultural produce. Together, these factors explain why anxiety has replaced confidence in the farming industry. Together, they provide a very different picture of British agriculture from that which the industry has enjoyed in the past decade.
To turn to food policy more directly rather than deal with its consequences on British agriculture, the charges I make against the Government are these. They have acted in flagrant and cynical disregard of their election pledges. They have pursued a traditional Tory practice of deliberately following a high-price policy when foodstuffs have still been relatively scarce. The Government, afraid 2081 of a frontal attack on the Welfare State, have undermined it in subtle and devious ways by trying to abolish the food subsidies and pursuing a high-cost policy. The Government have acted with such incompetence and, indeed, crass stupidity that they have saddled the taxpayer with enormous losses.
As to my first charge, it is unnecessary now to recite the specific pledges made by the Tory Party during the last election, but I am prepared to make the ears of the noble Lord turn red by reminding the House that Lord Woolton said on the wireless during that election campaign:There is a story that the Tories would cut food subsidies. That is not true.It was so untrue that not only did they slash the food subsidies, but they set out to eliminate them altogether. They have not quite succeeded. They have abolished all food subsidies, except those on milk, bread and welfare foods, but even these did not escape attention and attack.
Milk is 1½d. a pint dearer than it was when the Labour Government were in office and bread is 3d. a large loaf dearer. There is, of course, the case of eggs. Before the Minister had stopped boasting that he had destroyed the subsidy on eggs he found that it was bigger than when he began. Eggs today are running at from 3d. to 4½d., corresponding to 2d. to 4d. at this time in 1951. Last December they were costing from 6½d. to 7d. each, whereas under the Labour Government they were never more than 5d., and that despite the fact that today we have a subsidy on eggs which is larger than was the subsidy under the Labour Government.
§ Mr. Harmar Nicholls (Peterborough)rose—
§ Mr. Willey
I can understand that this is embarrassing to the hon. Gentleman, but he will probably have his opportunity to speak.
If we wish to see the effects of the Government's policy, we have to look at the retail prices of essential foodstuffs. When the Government took office, the maximum price for 3 lb. of flour was 1s. 1¾d. It is now 1s. 8d. I am taking all my figures from the "Grocer," the official journal of the trade. When Labour was in office, sugar was 6d. lb. and now it is 8d. I do not want to advertise, but cubes are 9½d. a lb. When the present 2082 Government took office cooking fats were Is. 4d. a lb. and now they are 2s. 2d.
Lard was Is. 4d. a lb. at the time of the Labour Government and now, again, the maximum price is 2s. 2d. Margarine, under the Labour Government, was Is. 2d. a lb. The top price today is 2s. 2d., and the average price is 2s. I can say that the average price is 2s., because a grocer in my constituency has had his supplies withheld because he was selling at 1s. 11d. a lb.
§ Squadron Leader A. E. Cooper (Ilford, South) rose—
§ Mr. Willey
If we compare like with like, we see that bacon back rashers under the Labour Government sold at a maximum price of 3s. a lb. and they are now running at 3s. l0d. a lb. Gammon was 3s. a lb. and is now 4s. 4d. Cheese was Is. 2d. a lb. and the price range now is from 2s. to 3s. 6d. a lb. [An Hon. Member: "It could not be got before."] Butter was 2s. 6d. a lb. and the price at London stores today is from 4s. Id. to 4s. 6d. a lb.
§ Mr. Willey
I am giving figures from the "Grocer."
The price in the country ranges from 3s. 8d. to 4s. 2d. a lb., and we can say that the average is 4s. a lb. The average price of tea under the Labour Government was 3s. 8d. Today, the price range is from 6s. 4d. to lis. 10d. a lb.
§ Mr. Nicholls rose—
§ Mr. Willey
The corresponding average price is 8s. a lb. If the hon. Member for Peterborough (Mr. H. Nicholls) has any dispute, he can conduct it with the "Grocer."
The price of meat before decontrol was 4d. a lb. more than when we had a Labour Government. According to the "Meat Trades Journal" this week, the price of home-killed beef has gone up by 9d. since decontrol and home-killed Iamb by 10d. Therefore, the price of home-killed meat is 1s. 1d. to 1s. 2d. more than it was under the Labour Government. The Home Secretary used to talk about the sausage. Now, pork sausages cost from 4d. to 10d. more per lb., and beef sausages 5½d. a lb. more.
§ Mr. Willey
All these price increasesand the consequential price increases that have followed from them are the result of the Government's flagrant breach of faith. Not only the housewife but the baker the butcher and the grocer should blame the Government for the fact that she has to pay 4s. in the £more than she had to pay under the Labour Government.
§ Mr. Nicholls rose—
§ Mr. Willey
I can quite understand the hon. Member's embarrassment. That is why I made it quite clear that this was the non-controversial part of my speech. I have confined myself deliberately to quotations from the "Grocer" and the "Meat Trades Journal."
It is not an unfair charge to say that we have had an absolute abrogation of responsibility by the Government in their refusal to exercise any control whatsoever to mitigate increases in prices. It is true that in the last few months the terms of trade have moved against us. Indeed, that has brought down the heavy hand of a doctrinaire Tory Chancellor to increase the Bank Rate to a point higher than that at which it has been for twenty years. But that has not affected these retail prices.
The free market has affected these prices, because the present increases in imported food prices are entirely due to tea, coffee, cocoa and meat. The Parliamentary Secretary to the Ministry of Food has spoken in the past about the Government getting out of the business, but they have done nothing since to mitigate the price increases. In any case, the plain fact is that whereas, under the Labour Government, import prices rose over three times as much as the increase in the retail prices, since October, 1951, import prices have fallen by 16 per cent. whereas retail prices have increased by 10 per cent. and retail food prices by more than 20 per cent. It is obvious that these prices are due to the deliberate fiscal policy of the present Government. If we turn to world prices and compare the prices ruling today with those in October, 1951, we find that all the world food prices are down.
2084 They are down for wheat, sugar, lard, butter, oils, fat—all except meat, and, as far as meat is concerned, the Ministry has been making a profit on imported meat.
Now I want to deal with two defences which the Government plead by way of excuse. First, they say, with a goodly smack of Victorian Pecksniffian charity, "We admit taking this money away from the housewife, but we have given it to the deserving poor." As the then Minister of Food said at the end of the first year's operations, on the wireless in his political broadcast, the Government "took away £210 million with one hand but returned more with the other—not to everybody, but to the people who needed it most."
I am bound by the rules of order, Mr. Speaker, but I must be allowed to say that the Minister's script writer was misinformed. The position in 1952–53, if we disregard entirely the increased petrol duty and postal charges, which together amounted to £76 million, was that the food subsidies were slashed not by £210 million but by £162 million. I am more modest than the right hon. Gentleman.
While the food subsidies were slashed by £162 million, all the increased social benefits to the war pensioners, National Assistance, family allowances, National Insurance, old-age pensions and the rest, in all amounted at most to £50 million.
§ Mr. Willey
For a full financial year, 1952–53. I will deal with the point made by the hon. Gentleman now. I will deal with 1953–54. In that year, the food subsidies were slashed by £160 million, and, according to the figure of the Chancellor of the Exchequer himself, the social benefits were increased by £24 million. So there is not much in that excuse.
The second excuse given by the Government is that if we have a high-cost domestic market and a free market we will attract to this country additional food supplies; free enterprise will—to use the hallowed words of "Britain Strong and Free"—"comb the world for greater supplies. "I regret very much that the business men have not got on very well with their combing. [HON MEMBERS: "Eggs."] I will deal with eggs in a moment.
2085 In 1954–55, according to the Board of Trade Journal, the volume of food imports will probably be less than the year before. It will certainly be less in regard to the essential foodstuffs I have been discussing. There will be more tea, yes, but I will say more about tea presently. There is no more butter, though I concede that we have imported just as much butter as we did in the previous year, but we have imported 15 per cent. less wheat, and what are we doing now? We have heavy current imports of wheat at a much higher price than that at which it was available last year. That is how big business helps this country in its economic difficulties.
We have imported appreciably less sugar—£25½ million worth less than in 1953. We have imported much less cheese—14,000 tons fewer than we did in the previous year. Hon. Gentlemen have mentioned eggs. We have imported over 10 per cent. fewer eggs than we did in 1953, 10 per cent. less bacon and appreciably less meat.
§ Mr. Willey
We have imported 40,000 tons less beef and 24,000 less mutton. [An HON. MEMBER: "So what?"] I am dealing with the point that if we have a high-cost domestic market it attracts the food. That has not happened. If we take the corresponding periods after decontrol and compare them with the periods under control, 12 months earlier, we find that even in the case of butter, imports have fallen since we have had a free market. There is this remarkable fact, that only in the case of oils and fats, which are stillsubject to Government procurement, have we imported more food than we did before the Ministry went out of the food business. So both defences fail.
The simple fact is that this Government have followed a traditional Tory policy, a dear food policy, which has not attracted more food to this country. Within that dear food policy there are wide differentials between foods of different quality, so that the poorer housewife finds not only that she has to pay more for her food but has to pay more for food of inferior quality. And all this 2086 has been a glorious picnic for the middle man. Unfortunately for the Government, through their unparalleled incompetence all this has brought no relief to the taxpayer.
I will now deal with the commercial losses of the Ministry of Food and I invite the interruption of the hon. Gentleman.
§ Mr. Nicholls
Would the hon. Gentleman deal with the position of the consumer? He has compared prices today with those when the previous Government were in power. Is it not a fact that when the previous Government had control, rations were restricted to a very low level, whereas for the last two and a half years every commodity mentioned by the hon. Gentleman has been consumed to a much greater degree?
§ Mr. Willey
I advise the hon. Gentleman to carry out a little research. Consumption levels for the past two years have been well below those under the Labour Government and this year—this is just like the Government on the production figures—the figures have been rather better but, if the imports have fallen, it is a bad lookout for the present calendar year.
I can understand the reluctance of the hon. Gentleman that I should so deal with the matter, but I want to deal now with the commercial losses of the Ministry. As they have been dealt with in previous debates, I hope I need not recount these in detail. At the time of the broadcast of the Minister of Food, to which I have referred, the Government claimed that they had reduced the food subsidies to a rate of £250 million a year. Shortly afterwards, in his Budget speech, the Chancellor of the Exchequer said that provision for food subsidies in the year 1953–1954 was £220 million or, if we make allowance for removing the subsidy from sugar, £210 million. He did not say at what rate the subsidy would be at the end of the year, but I think a fair estimate is that he expected it to be running at about £100 million.
The remarkable fact is that although we had price increases in flour, milk, sugar, margarine, cooking fats, cheese—and butter went up by 8d.—bringing a saving to the Exchequer of £160 million; although there was a fall in the price of food imports put by the Leader of the 2087 House at 5 per cent.—I can quite understand why he is not with us this afternoon—nevertheless, owing to the mammoth miscalculations and incompetence of the Ministry, its trading losses were not £100 million, were not £220 million, but were £334 million.
This year, although, again, we have had a succession of retail price increases, putting up the food index by eight points, and a further point in January, although we have had decontrol and elimination of all the food subsidies except milk, bread and the welfare foods, the Minister, at the time his Supplementary Estimate was debated, last month, said that the trading loss of the Ministry—we no longer call these subsidies—would be £326 million, in spite of a saving on his original Estimate of £22½ million on milk, bread and the welfare foods. Therefore, we have the position that the essential remaining subsidies have been whittled down and, at the same time, the commercial losses of the Ministry of Food have increased month to month.
I say "month to month" because these figures were given before the great meat muddle. The Minister at that time was expecting to make a profit on imported meat. Does he expect to make a profit on imported meat now? If the Government are long enough in office the burden upon the taxpayers will be greater than when they came to power, although nearly all the subsidies have been abolished. We thus have the net result that the housewives have to pay substantial increases in retail prices and the burden on the taxpayers is about as big as when the Government began their term of office.
I am sure the House will agree that the matter should receive a little detailed investigation. I will start with a very modest figure. The Report of the Comptroller and Auditor General, which has just been published, shows that in 1953–54, among other losses, the Ministry incurred a loss of £20,876,010. This had nothing whatsoever to do with subsidies. It was the old story of buying on a rising market and selling on a falling market. I do not know which colloquialism you prefer, Mr. Speaker, but it was either money down the drain or money up the spout.
I asked the Minister of Food a Question about this loss, and I got a very 2088 remarkable reply from the Parliamentary Secretary, who told me that the loss "represented about 8 per cent. of the cost of trading stocks held at that date." I wanted to know what percentage it represented on the stock realised, which was obviously far larger than 8 per cent. However, here we have the position that at the time when everyone else in the food business is making handsome profits, the Ministry is making a loss of 8 per cent. It is a remarkable achievement.
This year, the position is equally fantastic. As the Parliamentary Secretary likes to say, the Ministry is getting out of the business, realising stocks and paying the receipts to the Exchequer. When the year began, the Minister of Food, in the Estimates, said that he would pay over to the Exchequer £110 million. However, the Exchequer is not to get that at all. When we got the supplementary Estimates we found that not £110 million, but only £70 million would be paid into the Exchequer. Again, I asked the right hon. Gentleman to tell me the reason why, and I got this laconic reply from the Parliamentary Secretary:Because of lower realisation prices and reductions in quantities sold."—[OFFICIAL REPORT. 28th February. 1955; Vol. 315, col. 220.]
§ Mr. J. B. Godber (Grantham)
I am trying with great care to follow the hon. Gentleman's argument. Is he really arguing now against the whole principle of bulk purchase? If so, how does he fit that into his new plan for marketing commissions?
§ Mr. Willey
I will explain quite briefly. I am sorry that the hon. Member has not followed me so far. I am saying that we have high retail prices, but that, notwithstanding those high and increasing retail prices, whereas every one else in the food business has been making an enormous profit, the Ministry of Food has managed to make an enormous loss. I ask the Minister to state how much of the £40 million has gone down the drain. How much has to be written off as a commercial loss?
When we use the phrase "realisation of stocks," it really covers a grotesque position. Does the right hon. Gentleman dare to deny that butter and cheese are going bad in store. What about the 100,000 tons of sugar stored in the barges at Rotterdam and other Continental 2089 ports? There is bacon stored in the cold stores of Denmark, such a large amount that the Minister was too embarrassed to give me a figure. Today, meat is stored afloat. Two questions that I should like to put to the right hon. Gentleman are, "How much food is today stored abroad?" and, "What is the cost in foreign currency?"
Perhaps I ought to ask the right hon. Gentleman a third question. Has he received any representations from the bargees? Surely at this time of the year they want to be going up the Rhine. They may welcome being pensioned by Her Majesty's Government, but I should have thought that by this time they would have liked to use their barges for their proper purpose.
Now let us deal with the individual commodities which I have been discussing, and first butter and cheese. The taxpayers this year will foot the bill for Ministry losses to the tune of £5,300,000. That is £5 million more than the Minister estimated at the beginning of the year. How has that happened? Last year the price of cheese was increased by 2d. per lb. to eliminate the subsidy. As I have said, it is selling today at 2s. to 3s. 6d. per lb. compared with Is. 2d. per lb. under the Labour Government. Butter is selling at an average price of 4s. per lb. compared with 2s. 6d. per lb. under the Labour Government. Last year we had a price increase of 8d. per lb. followed by a further 4d. on decontrol, and yet at the end of the year the Minister comes to the House and says, "On butter and cheese I have made losses; the taxpayers have lost £5,300,000."
The same is true of oils and fats. The Minister began this year by saying that he would make a modest profit of £500,000 on oils and fats. What has happened? Instead of there being a windfall of £500,000 to the Exchequer, the taxpayers have now to fork out £5,800,000. The Minister was a mere £6½ million out in his calculations. Again, how has this come about? Last year we had a further 2d. per lb. increase in the retail price to eliminate the subsidy. Margarine, instead of being 1s. 2d. per lb. is now as much as 2s. 3d. per lb., and the average price is certainly 2s. per lb. Yet, again, at the end of the year the taxpayers are called upon to fork out 2090 £5,800,000 to cover the follies of the Ministry of Food. Exactly the same is true of sugar. The Minister began the year by saying that he would make a profit of £100,000 on sugar, but we now know that he is not going to make a profit. In fact, he will make a commercial loss of £3,200,000, again in spite of the retail price increases which were imposed to eliminate the subsidy. There is a rather curious fact in the case of sugar. While sugar has been sold at home at a higher price to the housewives, it has, at the same time, been sold abroad by the Minister at a lower price than last year to foreign consumers. We have only to glance at the Trade and Navigation Returns to see that. I want the Minister to tell me how much the taxpayers are now contributing to the relief of foreign consumers.
I asked the Minister a question on that some time ago. Again, I got a quaint reply from the Parliamentary Secretary. He did not deny this—he could not deny it—but he said "it would be difficult precisely to estimate the proportion of losses due to foreign sales." Let him have a try, because this is rather important. I have harried the Government occasionally about East-West trade. We have been selling sugar to Russia. Are we now subsidising the Russian consumers? That is certainly much further than I would go in pressing the claims for East-West trade. Is it now the Government's principle that they have no hesitation and no reluctance about subsidising foreign consumers while they refuse to subsidise British housewives?
Now let us turn to tea. The then Minister of Food, in his broadcast speech, referred to tea, and he chose to accept tea as the test case. He said "in the case of tea competition did what price controls used to do, only much better." That was at the time when he used to brag about the prospects of falling tea prices. However, he had the good sense to scuttle to the Home Office. Tea today, instead of being at an average of 3s. 8d. per lb. as it was under the Labour Government, is selling, even if we make allowances for the decreases over the past few weeks, at an average price of not less than 8s. per lb.
This is not due, as the Parliamentary Secretary occasionally tried to persuade us, to increased wages. I have gone into 2091 this and it is very difficult to establish any increase due to wages because they fell in 1952 and have done very little more than rectify themselves. Certainly, no more than a penny of the increased price of tea can be attributed to wages.
It is not due to supply and demand, because the Tea Trade Committee says that tea supplies are surplus to demand. The Committee says that there is a "very small surplus production" of tea in the world. Of course, it has something to do with bumper profits. As the "Economist" said, "some companies will hardly know what to do with the money." I agree with the Economic Secretary to the Treasury that those are mainly tea producing companies. It has a good deal to do with the exploitation of the market and that is why I complain of the complete abnegation of responsibility by the Government.
§ Mr. Cyril Osborne (Louth)
Since the hon. Member says that it is exploitation of the market which is responsible for the high price of tea, will he explain why it is that the Co-operative Wholesale Society, which owns 14,000 acres of tea gardens in Ceylon and produces 12 million lb. of tea a year and which purchases 75 million lb. a year in the open market, still sells tea at as high a price as do the private shops?
§ Mr. Willey
That is an irrelevant interruption. It is irrelevant because the Co-operative Society admits to having been making very handsome profits out of tea. The difference between that and private enterprise is that with the Cooperative Society the profits go back to the consumer. So much for the commodity which the Minister of Food chose to regard as a test case of his policy.
I want now to accept the challenge of an hon. Member who interrupted earlier and referred to eggs. "You cannot pour public money into a commodity over which there is no public control." Those are not my words, they are the words of the present Secretary of State for Home Affairs in his political broadcast, to which I have referred. How right he was. In 1952–53, the subsidy on eggs was £21 million. The Minister of Food then abolished the subsidy and he and his jovial Parliamentary Secretary stumped the country saying how they had saved the taxpayer money.
2092 In 1953–54, the year in which the subsidy was abolished, the loss was not £21 million, but £23 million and this year it is not £23 million, it is £29 million. When we had a debate on food at about this time last year the then Minister of Food attributed that remarkable result to the "exceptionally mild winter." Will the right hon. Gentleman now attribute this result to the exceptionally cold winter?
A year ago I complained of the muddle and chaos and exorbitant profits which were being made out of eggs by middlemen. How right I was. All the strictures I then made have been confirmed by the Comptroller and Auditor General. I doubt whether there has ever been such a critical report as his. As he points out, in March, 1953, the Government announced an interim scheme and declared that they were anxious to introduce permanent arrangements as soon as possible. That was two years ago and, presumably, they are still equally anxious. The Ministry told the Comptroller and Auditor General that the subsidy scheme was introduced as the only safeguard the Ministry had against "temporary setbacks in the market." Do we now have a subsidy of £29 million to provide for temporary setbacks in the market? The scheme is still the same. I am much obliged to the right hon. Gentleman who was kind enough to write to me about this, but he will agree that the scheme is still a temporary scheme to deal with setbacks on the market and it now involves a loss to the taxpayer of £29 million.
As the Comptroller and Auditor General said in his Report no provision was made for particulars of the prices actually charged by the packers. The Report refers to the inadequacy of the information provided, the arbitrary estimates of expenses, the fact that no provisions for costing were made. It is rather interesting to note that the Ministry told the Comptroller and Auditor General of its efforts to stem the decline of shell egg prices. That was just at the time when the Minister of Food and the Parliamentary Secretary were claiming credit for the low prices of eggs.
We learn the further interesting fact that of the £23 million less than £15 million went as a direct subsidy to home-produced eggs. What happened to the 2093 other £8 million? It did not go to the producer. We know that £4 million was written off as a commercial loss on the realisation of stocks by the Ministry. Once again, I say that the Government's administration of the egg subsidy is a public scandal. I invite them once again to accept my challenge to allow this to be the subject of inquiry and examination.
Let us turn to cereals. Last year, I complained of the mammoth miscalculation of the Ministry. On this occasion I will be more modest. I will quote the "Observer," which said:The free market has, in fact, revealed the astonishing situation that the milling industry, the main customer for English wheat, has no use for more than three-fifths of the crop and is not prepared to pay much more than two-thirds of the price guaranteed by the Government.That is certainly an astonishing situation. The Ministry of Food has been compelled to buy grain at a considerable loss. Indeed, it has been selling some of this grain abroad at a further loss, apparently again following its policy of subsidising the foreign consumer.
Farmers have been selling their grain to the Ministry to take advantage of the guaranteed price and have been buying grain more cheaply on the free market. In fact, they have been buying imported grain. One of the present difficulties of the Chancellor of the Exchequer is the heavy expenditure which there has been on imported grain which might have been avoided.
According to the right hon. Gentleman, farmers have been receiving an average of £10 10s. from the taxpayer for every ton of wheat they have sold. That is to say, they have sold it on the free market at £19 5s. a ton and have received £10 10s. from the taxpayer. As the "Observer" comments, this is not likely to endear them to the taxpayer. The world price of wheat and grain fell last year and at home millers have been buying grain at £20 per ton, £10 below the guaranteed price. Yet the taxpayer has still had to find £77½ million and bread has not been a farthing cheaper. It is a masterly understatement to describe that situation as astonishing.
Now for bacon and meat. We are concerned only with home-killed bacon and meat, because the Ministry makes a profit of 2¼d. on every pound of imported 2094 bacon that the housewife buys. Last year, the Ministry made a profit of £7½ million on imported meat. Where has that profit gone? Presumably it has gone to the trade. It has not affected prices. When bacon retail prices have been increased to absorb the whole of the subsidy and when retail prices for meat have been increased by much more than was necessary to absorb the whole of the subsidy, why should it happen that the subsidy on meat and bacon last year was £57 million but the subsidy on fatstock this year is £82 million?
I have asked the Minister this question before. His reply has been that it was partly due to increased supplies. With all respect, that is irrelevant. It does not matter what the supplies are, if they are selling at prices higher than is necessary to absorb the whole of the subsidy. The Minister says that another reason is that the Ministry of Food is making lower profits on imported meat and bacon. That is true, but, again, I ask: where has the £10 million that the Ministry was making as a profit on meat and bacon—setting it against the subsidies—gone? Obviously, it has gone to the trade. Even if we allow for this, the fact remains that the taxpayer, in spite of the increase in retail prices, is paying £15 million more than in the previous year.
Of course, this has something to do with the great pig muddle. In the autumn pigs were dumped on the market at giveaway prices, but, unfortunately, the pork was not given away in the shops. At times the taxpayer was paying nearly half the price which the farmer was obtaining for his pigs. We have the fantastic subsidy this year of £60 million on pigs alone, at a time when the Ministry is making £6½ million profit on imported bacon.
Talking of meat, we have the present muddle about imported meat. Today, far from combing the world for greater supplies, the Ministry of Food is sending officials to New Zealand to slow down and stop meat coming here, and the Minister is giving the novel advice to the butchers that they should charge more for home-killed meat, that they should sell it at even higher prices and should not be content with the present small margin of profit on it.
2095 Over the next two months two things are likely to happen. The retail price of home-killed meat will go up still further and the Minister, instead of making a profit, will make substantial losses in disposing of imported meat. All this is, of course, certainly true to form.
I have dealt with only one aspect of the Government's disregard of the cost of living problems of the housewife. The fact is that the food policy of the Government is in ruins; that their deception has been exposed. A blind doctrinaire inability to understand the implications of the guarantees to the British farmer has replaced confidence by disillusion. The Government's inept handling of decontrol has contributed to and aggravated the difficulties of the Chancellor of the Exchequer.
In place of wage and price stability which we ought to have had, we have a spiral of price and wage increases which is prejudicing us on world markets. We have had a mammoth incompetence which, certainly as far as I am concerned, is without parallel. At home, instead of equality, we have had an increasing emphasis on inequality. Profits and dividends have outpaced wages, and the food business has become a profiteer's paradise. The Parliamentary Secretary is silent and thoroughly ashamed. I give this advice to the Minister. I advise him to get out and to save his reputation while he yet has time.
§ 4.24 p.m.
§ The Minister of Food (Mr. Heathcoat Amory)
I am astonished at the suicidal tendencies of the Opposition as exemplified in their selection of this subject for debate today, seeing that it was a sphere of activity in which they had such a melancholy record when they were in office.
We have had a torrent of exuberant rhetoric from the hon. Member for Sunderland, North (Mr. Willey). It was a vast expenditure of ammunition, but not many rounds fell within the target area. It appeared to me that most of his missiles were very definitely not of the guided variety. He reminded me of a herald in one of Stephen Leacock's books, who was said to have jumped on his horse and galloped off madly in all directions. We are left completely wondering what 2096 Opposition policy is on this matter. I fancy that they are uncertain and confused—For if the trumpet give an uncertain sound, who shall prepare himself to the battle?The hon. Gentleman's object seemed to be to show that the cost of living had gone up. That is agreed; there is no doubt about that at all. It has gone up, but it has gone up far less than it went up in the years when hon. Gentlemen opposite were in office. It has gone up, but that is one side of the picture.
What about the other side of the picture? I refer to the nation's income. The fact is that the standard of living has improved. It is higher today than it has ever been before. The nation is better off today, and the nation knows it. Let us cast our minds back to the autumn of 1951, when Her Majesty's present Government came into office.
What did we find? We found the cost of living rising faster than at any other time since the end of the war. We found a first-class financial crisis in which this country was overspending itself on its overseas account at a rate higher than £2 million a day. We found, six years after the end of the war, that we had the full paraphernalia of controls, regulations and rationing.
What a position for a new Government to start in. It was certainly not the position which we should have chosen to start in. It reminds me of the Irishman who was asked the way to Roscommon. He replied, "If it was to Roscommon I would be going, it would not be from here that I would be starting." What did we do? At first, we had to take emergency action to restrict imports but then, as our policies began to take effect, the improvement in the national well-being was unchallengeable.
Have we achieved all we set out to do? Of course we have not. When one is facing a tough situation it is right to set one's sights high, but I have never been able to understand why it should be regarded as humiliating for a politician to admit that he has not entirely achieved his objective. That is not my experience of life. One never does entirely achieve one's objective, but in this instance the improvement in the condition of the nation has been so manifest and clear that there is every reason why we should feel proud of the progress we have made in 2097 three years towards achieving our objective.
I wish to refer now to some of the comments of the hon. Member for Sunderland, North, and I will refer to one or two others later. I want to point out to him, because he implied the reverse, that import prices for foodstuffs in the last three years have gone up and not down, though the general price of imports has gone down. The hon. Gentleman referred to agriculture and today I will not follow him there except to remind the House that last year was an absolute record for the years since the war not only for gross but for net output in the agricultural industry.
The hon. Gentleman referred to Ministry of Food trading losses. I remind him that the figure of £330 million he mentioned includes all subsidies, including the welfare subsidies and those for agriculture.
§ Mr. Willey
The right hon. Gentleman has referred to imported food prices. Will he specify those which have fallen? I have the figures before me.
The imported food index gives the figures. On looking at that and taking all foodstuffs over the past three years, the right hon. Gentleman will see that it has gone up a bit—not much, but a few per cent.
The hon. Gentleman mentioned sugar. He said sugar has been sold at an average price higher than the world price. The answer, of course, is the Commonwealth Sugar Agreement, with which he is familiar and which has the support of all parties in this House. To reply to what the hon. Gentleman said about eggs, I would remind him that home production of eggs has improved and increased in a very satisfactory way. The hon. Gentleman appeared to regret that, and I would ask him whether, in fact, it is something which he welcomes, or whether it is something which he regrets.
I have admitted that there has been a further increase in the cost of living during the past three years, measured by the most reliable indicator that we have, the Interim Index of Retail Prices. Having said that, I must ask the House to consider two very important changes: first, that the rate at which the cost of living has risen during the past three years has, under this Government, been 2098 only a little more than half the rate at which it increased under the previous Government.
§ Mrs. Jean Mann (Coatbridge and Airdrie)
Surely, the right hon. Gentleman will admit the authority of the cost-of-living index figures in the Ministry of Labour Gazette? The figures are 100 in 1947; 125 in 1951; and 147 today.
If the hon. Lady will allow me to continue, I have a few more figures to quote in support of what I said.
During the administration of the present Government, the cost-of-living figures have risen only slightly more than half as fast as they did under the last Government. That applies to food prices as well as to prices generally. Secondly, since this Government have been in office, wages have more than kept pace with the increase in the cost of living. This is shown by the movement of the index of weekly wage rates.
Let us look at these figures more closely. I hope that the House will forgive me for inflicting upon them quite a few statistics during the next few minutes.
§ Mr. M. Turner-Samuels (Gloucester)
Would the Minister first say something about the Tory election promise to reduce the cost of living?
The hon. and learned Gentleman must allow me to make my own speech, and I have a great deal to say.
In the years during which the previous Government were in office, the cost-of-living figures rose by 40 per cent.—this is over the whole period—and food prices by nearly 60 per cent. Over the 3½ years during which the present Government have been in office, the cost of living has risen by 13 per cent., and during the last 2½ years it has risen by only 6 per cent.
Surely that is a very striking contrast.
Over the last three years of the Labour Administration the food index went up by just a little more than 12 per cent. each year; whereas, during the three years of the present Government, it has gone up 2099 by just over 6 per cent. a year. Let us see what has happened to wages during that time.
Let us see what has happened to wages. Between 1949 and 1951, prices rose, on average, according to the retail price index, slightly over 6 per cent. every year. During these years wages rose, on average, by 5½ per cent. [HON MEMBERS: "Earnings."] Not entirely. Between 1952 and 1954, the average increase in prices was a little over 3 per cent. a year, but the index of wage increases rose, on the average, by 5 per cent. a year. This index takes no account of overtime working earnings, and so the true position is even more favourable.
As I have mentioned wage earnings, perhaps I might now deal with a fallacy sometimes expressed by hon. Members opposite, which takes the form of argument that, because food prices have risen by a certain percentage, wages ought to increase by the same percentage to put matters right. I would remind the House that food is only one of the things on which wages are spent, and, for the nation as a whole, food accounts for about 30 per cent. of the total private expenditure.
In the Interim Index of Retail Prices, food is expressed as 40 per cent., and therefore, if there is an increase of, say, 9 per cent. in food prices, other things being equal, it would require an increase of only 3 per cent. or 4 per cent. in wages to put that matter right. The conclusion which must be drawn—and it is impossible to draw any other conclusion from these figures—is that, whereas under the previous regime there was a deterioration in the standard of living, over the last three years of the administration of the present Government there has been a rise in the standard of living
§ Mr. Dodds
Is the right hon. Gentleman aware that the Economic Secretary to the Treasury indicated on 24th November that the world price index, which stood in 1949 at 87, was 100 in 1950 and 133 in 1951? In 1952 it had gone down to 129, and in September, 1954, it was down to 113. Does not that knock into a cocked hat his argument about the cost of living?
I do not think that it does at all. The House may have the opportunity of hearing the Economic Secretary himself later. I would remind the hon. Gentleman of one rather obvious thing, that prices in this country do not depend only on import prices. Secondly, as I have said, the import prices for food have not gone down, but in the last three years have gone up slightly.
I wish now to turn from prices and wages to food, looking at it from the angle of the quantity of food consumed. What is a bout the level of food consumption? During the past year or two we have been eating more of most foodstuffs. Measured in terms of calories—although personally I do not care to do that, because it never gives me much of a kick—the consumption per head today is at the rate of 3,120 calories per day. That is the highest figure ever recorded in this country. The comparable figure for 1951 was 3,020, and for 1938 it was 3,000.
In fact, there has been a striking improvement in the diet of the nation. It is more palatable and more nutritious. We are eating better, and, what is important also, we are getting more of our calories from meat and less from bread and other starchy foods—a sure sign of a rising standard of living. In 1954, we ate 50 per cent. more meat, 30 per cent. more bacon, 15 per cent. more sugar, and we drank 20 per cent. more tea than in 1951.
I ought, perhaps, to say a word more about tea because that is a subject on which hon. Gentlemen opposite are apt to go more than usually astray. During 1954, we not only drank substantially more tea than in 1951, but we drank more than during the war. The figures in lbs. per head per year are, pre-war—this is an average of five years—9.3 lb.; 1951, 8.1 lb., and 1954, 9.8 lb.
I mention those figures because I believe it is rather significant that even in 2101 cases where certain foodstuffs have increased quite sharply in price—tea and home-killed meat, for example—consumption has not, as might have been expected, diminished, but has actually increased. That is evidence of the improvement in the standard of living which simply cannot be controverted. It reflects a country which is enjoying great prosperity. Indeed, it is quite odd now to think back to those days, only four years ago, when the ration for carcase meat was 8d. a week, and when, even at that figure, it was sometimes not considered to be very good value.
The hon. Gentleman spoke a good deal about the increases in prices of certain kinds of food. The satisfaction which I am sure he feels with us at the lower prices for other imported foods which are available today was not quite so exuberantly expressed by him. I would remind him and the House that the prices of cheese, bacon and eggs are lower today than when they were controlled. So, too, are some brands of butter, margarine and fats. [HON MEMBERS: "No."] Yes, I said "some brands," and I can substantiate that.
§ Mr. William Hamilton (Fife, West)
Is the right hon. Gentleman prepared to be more specific and to name the brands of butter which are cheaper now than when they were controlled?
No, but what I can say is that I have a great deal of evidence of the price at which these commodities are being offered.
§ Mr. Willey
I made it quite clear that the figures I used were taken from the "Grocer," the official journal of the trade. Is the right hon. Gentleman claiming to know more about trade prices than the trade itself? These figures are published for the benefit of grocers so that they may know what prices are being charged.
The hon. Gentleman has quoted some figures, and when he did so I noted that he was apt always to give the maximum price.
§ Mr. Willey
On a point of order. Surely, Mr. Deputy-Speaker, I must have some protection from the Chair. What I said must be in the recollection of the House. When I referred to maximum prices, I did so expressly, and when I 2102 gave a range of prices I took the minimum given in the "Grocer," and the maximum price.
Mr. Deputy-Speaker (Sir Charles Mac Andrew)
The hon. Gentleman knows prefectly well that that is not a point of order.
§ Mr. Hamilton
Will not the right hon. Gentleman name the brands, because my wife would like to know?
At the present time it is possible to buy certain brands of butter, margarine and fats at prices—
I think that we might have a little more peace. I am surprised at the behaviour of certain hon. Members.
In using the word "brands," I may have been wrong. Perhaps I should have said certain grades, which may or may not have a name. To mention one, New Zealand butter is obtainable today at 3s. 6d. a lb., whereas the controlled price was, I think, 3s. 8d. a lb.
To mention some other cases, the prices of tea and coffee have fallen from their peak, and there are now indications of reductions in the prices of imported meat. Good-quality frozen meat is now being sold by my Department at 20 per cent. below controlled prices. These are substantial reductions, and when one adds to all this the unquestionable improvement in quality and variety, what reasonable person can deny the trend of improvement? I confidently claim that, all in all, the picture of our food situation today portrays a nation well supplied with food of higher quality and greater variety than ever before, and at prices that bear comparison with those of any other country in the world.
I know that some people get very tired of indices and statistics, but if we look for confirmation of this improvement in other directions we shall have no difficulty in finding them. I will mention one or two examples. The first is sweets and ice cream. I examined the figures showing the expenditure on sweets and ice 2103 cream for 1951 and 1954. In 1951, the nation spent £204 million on those commodities. In 1954, it spent £297 million, £49 million more than it spent on milk, and £130 million more than it spent on bread.
The figures of sweets consumption by weight are interesting. They are seven oz. per head per week before the war, 5.7 oz. in 1952, 8.1oz. in 1953 and 8.5 oz. in 1954. I am not saying whether that is a desirable or an undesirable development, but I do say that those are not the kind of foods that would be bought in those quantities by a nation which is finding it difficult to pay for its basic foods.
§ Mr. David Jones (The Hartlepools)
Could the right hon. Gentleman tell us at the same time how much the population increased between 1938 and 1954?
That is relevant to the total sum of £297 million which I mentioned, but there I was only comparing three years. I should not think that between 1951 and 1954 the population had increased sufficiently to alter the validity of those figures. The other figures were per head.
Another example—and this is not a foodstuff—television sets. In 1951, there were 1.2 million sets; in 1954, 4.2 million sets, and the numbers are still growing. This is a new aspect—
§ Mr. Arthur Lewis (West Ham, North)
Why does not the Minister give the figures for cars and champagne, because they have all gone up as well?
Television sets are a new aspect of modern life. They are gradually becoming a standard in every home, and one day I suppose, they may even get into the retail prices index. Who knows, one may even get into my home one day.
One more example—savings—and this I consider very important, because savings are an important indicator of national prosperity. The following were the levels of personal savings. In 1951, £237 million; in 1952, £697 million; in 1953, £875 million, and in 1954, £1,017 million. If we turn from those savings to small savings, what do we find? In the last full year for which the Labour Government were responsible, the net 2104 receipts from small savings sank to the lamentably low level of £4.6 million. In the current year the comparable figure is £131 million. I cannot think of a better reflection of national prosperity and well-being than that.
It is absolutely clear, from the figures which I have given, that the nation is better off today. Even so, it might be the case that certain sections of the nation, such as old-age pensioners, are severely hit. I have here the latest information made available by the National Food Survey. As hon. Members know, that Survey was begun during the war, and is based upon sampling techniques. It measures the food consumed in the homes of various sections of the community, and I think that it provides the best and most impartial information available of the foods actually consumed by old-age pensioner households, and, of their nutritive value.
We all know that old-age pensioners do not have an easy time, but the evidence is that in 1954 they ate 15 per cent. more cheese; 50 per cent. more eggs; 20 per cent. more meat and bacon, and 60 per cent. more sugar, and drank 25 per cent. more tea, than they did in 1951.
We have corroborative evidence from the scale of the requirements of the British Medical Association with regard to the diets of old-age pensioners. The British Medical Association figures record the present diets of old-age pensioners as being adequate both in respect of energy value and all the important nutrients. From the beginning of next month—and this is something about which we can all rejoice—there is to be a further increase of over 20 per cent. in the amount of the retirement pension.
On every possible occasion hon. Members opposite recommend to me one remedy for the troubles which they allege exist—the imposition of price controls. I should like to examine that suggestion for a moment, because it sounds a simple and attractive solution to the problem. Unfortunately, hon. Members opposite very seldom give any details as to how the scheme would work in existing circumstances. First, the controlled price must presumably be less than the market price; otherwise the whole exercise would be a rather pointless one. That being so, in the absence of anything else price control must discourage traders and producers, and, as a result, there must be a 2105 smaller volume of supplies coming along. As far as that is true, the cure would aggravate the disease.
It follows that in order to be effective price control must be accompanied by consumer subsidies to make up the differences between the artificially-low controlled prices and the market prices. That is the first complication, which is not always mentioned by hon. Members opposite. But that is not the end of the matter by any means. Even with subsidies, it is only in exceptional circumstances—bread and milk are two cases—that one can have effective price control without rationing or supply allocation of some kind or another.
The reason for this is clear from the experience of the Ministry of Food in the recent past. At the controlled price demand almost inevitably exceeds supply, and without some form of consumer rationing or allocation some other less direct forms of allocation have to be adopted. These usually start with queues, in which housewives wait patiently for their share of what is going, and develop into under-the-counter sales, black markets, and all those other devices with which we were so familiar during times of shortage.
The hon. Member for Sunderland, North, with his knowledge of these problems and his experiences at the Ministry of Food, knows that what I have just said is true—and the process does not stop at consumer rationing. If the system is to work at all there has to be erected, on top of that, a superstructure of allocation by quota to wholesalers and firsthand distributors.
The issue which divides us from hon. Members opposite is not the simple one of whether or not to reimpose control of prices, but a far more fundamental one. The question is whether consumers shall have the maximum amount of freedom to buy when, where and how they like, or should be told by some Government Department when, where and what they are to buy.
Today, consumers have freedom of choice. They can decide what quality of food they are going to buy, what price they are prepared to pay for it, and what retailer they are going to deal with. They are no longer expected to eat snoek or dried eggs or take whatever meat the first shop offers them. It is significant that the housewife, in exercising her freedom 2106 of choice, is now doing so in favour of high-quality foodstuffs. An example of this is meat, where the demand is strongest for the highest quality.
I referred to the markmanship of the hon. Member for Sunderland, North as being a little haphazard. He always seems to aim at where he thinks the Tory Government are, but he forgets that we keep moving. I was once teaching a young fellow to shoot, and when I asked him how accurate he was he said, "I shoot straight enough, but when I shoot the rabbit is no longer there." I am the rabbit today—I gladly accept that fact—and I claim that I am just in the right place. The hon. Member forgets the basic difference between us. He and his friends like a rigid, authoritarian system, where the consumer gets whatever the Government think is good for him. We like a flexible, dynamic system, where the consumer can choose how he will spend his money.
If, under the present level of prices, we are impoverishing the nation in the way that the hon. Gentleman tried to make out, how does he account for the fact that the whole community is eating more of most foodstuffs, including those the prices of which have risen substantially? The facts are against the hon. Gentleman and his friends today. The truth is that our present problems—and we have problems—are, in general, ones of relative plenty and not of shortage. If the country has to choose between one set of problems and the other I believe that it will choose the problems of relative plenty. The real test, as I see it, is whether people would be glad to go back to the situation which existed three or four years ago. I do not believe for one single moment that anyone would suggest that the nation would be glad to do that.
Measured by any material test, the nation is better off today than at any comparable period. As I have said before, the nation is aware of that fact. I know that that knowledge is disconcerting to the Opposition, but to us it is an encouragement. It shows that we have been moving in the right direction, and fortifies us in our resolve to continue steadily upon our course.
§ 5.0 p.m.
§ Mr. M. Turner-Samuels (Gloucester)
It was very proper that the Government should have put up a leading Minister of the Crown to deal with this very 2107 serious question of the rise in the cost of living. It is unfortunate that the presence and performance of the Minister have not made much difference, because I verily believe that no worse or weaker case could have been put forward even if the Parliamentary Secretary to the Ministry of Food had done it himself.
We have had a most pathetic example of what happens when a man comes to the Dispatch Box and has no case whatever, particularly when he realises that on this particular question the Government are "on the spot." There can be no doubt that the rise in the cost of living is one of the prime mischiefs of our times, and it is no use the Minister coming to the House and trying to delude people about the obvious, namely, that not only has the cost of living gone up, but it has gone up to the point of causing great hardship indeed throughout the whole country.
The Minister was so hard put to it to find some argument that he had to trot out what has now become an ancient and puerile argument, namely, that the cost of living has risen less under the Tories than it did under the Labour Government. The point to start from, to use the Minister's expression, is that the cost of living under the present Government has indeed gone up, and it has gone up in the context of their election pledge that they would bring it down. The party opposite, in their election manifesto in 1951, and over the wireless, made that solemn promise, and they made it with the motive of getting votes and misleading the electors.
Another thing to which the Minister referred to try to justify himself and the Government—really a most childish thing—was in connection with the amount of savings. He mentioned what he appeared to think was a fabulous sum, because it ran to about £100 million. Of course, anyone knows that very large profits have been made in the last year or two, and, therefore, it is not surprising, perhaps, that savings have gone up to this figure. Whether it is based on the savings of the working class or on the investments of more well-to-do people is quite immaterial. Put side by side with the huge figure represented by the cost of food, which runs into thousands of millions, 2108 it has really no relevance whatever. Therefore, that was a very poor effort indeed on the part of the Minister.
§ Mr. Turner-Samuels
That may very well be, but it does not alter the fact that people have to pay more for their food than they ought to pay, and that many people cannot purchase the food which they would like to purchase because of its very high price. About that there can be no doubt at all.
The next thing which the Minister did—and I think this was a cruel thing to do—was to try to lead the House to think that old-age pensioners were now having a picnic because of the present Government—[HON MEMBERS: "No."] Oh, yes, that suggestion was distinctly made. The Minister attempted to make the House accept the position that old-age pensioners were really getting adequate and plentiful food. I will not pursue that argument, but does anyone in his senses believe that old-age pensioners are, in fact, getting, or are able to get, the quantity, quality or the sort of food which they ought to have? That is a shameful illustration of how hard put to it the Minister was to produce any substantial argument.
§ Mr. John Peyton (Yeovil)
Before the hon. and learned Gentleman leaves that point, may I say that he does not seem to have the very widespread support of his colleagues on that side of the House. Perhaps he will make perfectly clear to the House whether he accepts the evidence and the value of the National Food Survey or not; or does he regard it as an entirely worthless document?
§ Mr. Turner-Samuels
That is an excellent diversion, but it is a very poor interruption. [HON MEMBERS: "Answer."] No, I have already answered it.
I now come to something which I consider to be much more material than the irrelevant interruption that has just been made. Let us look at the true picture, not the fanciful statistical picture that has been limned by the Minister. Does anyone deny that prices and the cost of living have been soaring week after week and month after month? It 2109 has now become an established phrase: the up and up and up of prices. At the same time we have been experiencing the down and down in the value of the £.
Does the Minister deny what the Chancellor of the Exchequer has recently had to admit—the weakness of sterling, and that the weakness of sterling reflects a serious deterioration in our present balance of payments? That deterioration had, in January, reached very worrying proportions and this is having a most serious adverse effect upon the cost of living. We have also now an adverse balance between exports and imports. Does the Minister deny that? In addition, we have to sustain a high Bank Rate—a higher Bank Rate than we have had, I think, for over twenty years. All this is causing an increase in the cost of living. Local rates are also increasing, and the burden on young people as a result of high prices and the rise in the cost of living is making it impossible for them to set up homes.
Yet in this context the President of the Board of Trade came to my constituency a week or so ago and laid down a truly remarkable thesis. He said that what we were suffering from is "the disease of prosperity." So apparently the difficulties which the country is experiencing through the high cost of living is to be attributed to what has become known as "the disease of prosperity." It makes one wonder whether the disease is of such a nature that the Government intend to seek a cure for it by going to the country to ask for a doctor's mandate on the homoeopathic principle of a "hair of the dog that bit you." That may be one of the underlying reasons why we are hearing so much just now about a General Election.
On this question of prosperity, the "Manchester Guardian" had something to say recently which is most relevant to the Minister's argument about the cost of living. The Government have been saying that prosperity consists in the fact that people are buying more, that there is plenty, and that they have more money with which to buy more. Of course, that is not true. It is easily said, but the facts more easily refute it.
The "Manchester Guardian" used one really significant and conclusive phrase, which was this: It said, bluntly:Tory prosperity is illusory.2110 The newspaper went on to indicate clearly that all the talk of Tory prosperity had proved to be an absolute sham. That has been further proved by the statements made by the Chancellor of the Exchequer a week or so ago, when he was forced to raise the Bank Rate and to bring back certain controls and restrictions to help save the situation from the very financial deterioration which the Government's policy has brought about.
Let us look statistically at the value of the £ and at the cost of living. Between January, 1952, and November, 1954, the cost of living rose by 4s. in the £. Those are official figures, and cannot be denied. The result is that a new escalator of prices is on its way. There is a further rising cost of living, and wages have therefore, had to be increased for millions of workers because of the rising cost of living. It is very difficult to understand why the Minister should try to delude himself that the cost of living has not gone up seriously, when, all over the country, millions of workers are having to have their wages raised very substantially, due to that serious increase in cost.
That process, however, will not cure the problem of the cost of living but will make it worse, because, as I say, we shall have a new escalator of prices and the cost of living will, in consequence, go up again. It is obvious that there cannot be increased wages without that being inevitably followed by increased prices. In the process our economy will be stretched to breaking point.
§ Mr. Douglas Glover (Ormskirk)
Is the hon. and learned Gentleman putting forward the proposition that every increase in wages is caused by an increase in the cost of living, and vice versa? Has he never heard of increased productivity? Is it not a great reflection upon the workers for him to say that increases in wages are based upon increased cost of living and not upon increased productivity?
§ Mr. Turner-Samuels
It is evident that hon. Gentlemen opposite cannot look these plain facts in the face. They are always producing an academic barrage or some sort of artificial thesis in order to hide the facts. What I was saying is irrefutable. It is that because of the high cost of living wages have had to be increased. [Laughter.] I will put it again. It is no laughing matter. Primarily, wages 2111 have had to be raised for millions of workers for no other reason than the burden of the cost of living, which the ordinary worker and his family could not sustain. No academic barrage from the Government benches can possibly hide that established fact.
What the Government and the Tory Party will do in this case will no doubt follow the line of what they have done before. Their method looks like bringing another 1931. We shall get a financial crisis and then wages will be pulled down at once and there will be a reduction in the standard of life. Then what will be said about plentiful food, about savings, and about the ability of people to pay for the cost of living? That will happen, because that is according to well-practised Tory pattern. The end-product of Tory policy is always that the standard of the mass of the people is brought down. It has happened before and, if the present Government get back into power, it will assuredly happen again.
Let us look at the Tory election manifesto of 1951. It said that "the greatest national misfortune was the ever-falling value of our money." What have the Government done about it? The true answer is that all they have done is to increase the misfortune. That is a very poor result, both of their promises at the General Election and of their performance as a Government since. The Minister tried to get away with statistics. When there is a complicated, difficult or bad case it is always a good idea to complicate it a bit more by statistics. Figures can be much like law. Montaigne once said:There is law sufficient everywhere to argue both pro and con.Anybody who wants to hide his case conveniently gets hold of some statistics—the more statistics the better—and buries the true facts under them.
The fact, however, is that basic food costs have gone up more than 40 per cent. since 1951. Anybody who examines the graph will see how the figures have soared. For a family of four, the increase over 1951 in basic prices of food in January, 1953, was 23 per cent. By January, 1954, the cost had gone up to 33 per cent. and by October, 1954, by 40 per cent. [An HON. MEMBER: "Where do those figures come from?"]
2112 They are from the research department of "Reynolds News"—[Interruption.]—and the official figures confirm them. That cannot possibly be denied. Those are official figures.
The comparison in the cost of bread, milk, eggs, potatoes and lard and other foods has already been given and I do not propose to repeat that. The lists for October, 1951, and October, 1954, show that the food which cost £1 11s. 10d. in 1951 cost £2 13s. 0½d. in 1954. Those are the facts. The Minister, of course, does not face it, but it is the difficulty which, at the present time, the country has to face.
§ Mr. James Harrison (Nottingham, East)
When my hon. and learned Friend quoted from "Reynolds News" some degree of derision was shown on the other side. Could be quite clearly state that what he deduced from that newspaper coincides almost identically with the official reports?
§ Mr. Turner-Samuels
I thought I had made that clear. Hon. Members opposite have jeered at the Reynolds' figures; they were the official figures.
§ Mr. H. Nicholls
The hon. and learned Gentleman is quoting figures and producing evidence which he has said cannot be questioned. Will he quote the official figures side by side with the Reynolds' figures, so that we may see how they compare?
§ Mr. Turner-Samuels
If the hon. Member wants a clerk I invite him to engage one, but if he cares to walk from the Chamber—and I am sure he will not be missed—and go to the Library he can himself there do the work which he asks me to do for him.
When the Foreign Secretary spoke some time ago, on, I think, the only occasion I have heard him do so, on domestic matters—[An HON. MEMBER: "A very good speech."]; I am not criticising the speech, but merely saying that I was rather surprised at the occasion—he then called the operations of the Government, from the time they had come into power, salvage operations. He wanted to give the impression that up to then there had been difficulties, and so on, and, accordingly, that they had been using their time for salvage operations, but that now everything was quite all right.
2113 One wonders how that is so, because the only effect of those operations that I can see—and I should like the Minister to refute this if he can—is that those most in need are having to pay higher prices for food, and the people who are worst housed at present are having to pay higher rents. Those seem to be the two net results of these remarkable salvage operations which, we are told, have been performed by the Government. The Government must find a much better case than that to justify the faults and deficiencies which have occurred since they came into office.
That the Government's deliberate policy is one of high prices and high rents is confirmed by their own acts. They deliberately removed the subsidies. When they did so they must have known what would happen. It is no use the Government now coming here in a white sheet to try to tell the House that they have improved the conditions of the people and eased the conditions of living when, in fact, their policy was deliberately aimed at bringing about the contrary effect. That is unquestionably why they got rid of the subsidies.
Hon. Members opposite will probably not like the following quotation relating to the question of the cost of living and higher rents. When I tell them its source it may occasion them surprise. However, I will read it first. This is what it says:From the middle-income men rises a cry of rage and woe. For rents bound up by several pounds a week. Up, up, up goes the cost of living. The Official Index leaps three points in a month and hits the highest level ever.That, Mr. Deputy-Speaker, comes from a recent issue of the "Sunday Express." Perhaps hon. Gentlemen opposite will now dissolve their look of solemnity and try to laugh again.
It cannot be denied that since the present Government took office our cost of living is, in the main—with one or two exceptions—the highest in Europe. Let me give another example of how prices rose: In 1945 to 1951, retail prices rose by 34 per cent.—these are official figures. In other words, they rose by one-third. On the other hand, import prices went up by 120 per cent. The Government can today say what they like about controls and rationing, but it was Labour's policy, and that alone, which kept prices down then.
Again, since 1951 import prices have fallen 16 per cent. but retail prices have 2114 risen 10 per cent. As has been mentioned already, food prices generally have risen 20 per cent., but that is not the whole of the story because basic food prices have risen by 40 per cent. This afternoon the Minister did something I had not expected of him. The Conservative Press has been in the habit of doing it for some time, but I really thought that the Minister would forbear from trying to blame the extra cost of food on the alleged fact that there is more food. Here, again, the official figures show beyond dispute that seven-eights of the expenditure on food is due to higher prices and only one-eighth to the fact that more food is being bought. Indeed, when a housewife buys a £'s worth of food, out of that £ she pays 4s. more in the total, and, of that, 3s. 6d. is represented by higher prices. Only 6d. can be attributed to the additional quantity of food.
Let us recollect what was the attitude of the Tories in 1950 and 1951 and see whether that same attitude persists today. Lord Woolton, who is Chancellor of the Duchy of Lancaster, a very prominent member of the Cabinet although he holds a sinecure, said at the General Election in 1951, and at the election before that, that the cost of living would be brought down if the Tories were returned to power. He made that specific pledge. He also said that there would be no withdrawal of the subsidies. Both those statements have been proved to be meaningless verbiage. The other day he even went as far as to give a cynical interpretation of what he had said. He said that his statement was not a promise nor a pledge, but a prophecy. Of course, everyone knows that it was no pious prophecy at all but a solemn promise, an election pledge, that subsidies would not be withdrawn.
What makes it worse is its motivation. The motivation of that statement was to delude the electors, to attract votes and to secure office. When the next General Election comes along—and, from what one hears, it will not be long now—the cost of living will become a major issue. It will, in fact, be a principal count in the indictment against the present Government. The Government, of course, hope foolishly that the electors will concern themselves with personalities. Let the Government make no mistake. The electors will not ask about personalities. They will want to know about the cost 2115 of living and the other matters on which the Government have defaulted.
This matter of personalities may be all right for street-corner gossip, but it will not be a major talking point at the General Election. Nor will the Government be able to use it as dope to obscure the real issues. The cost of living will be an issue, a very live and grievous issue for the Government, and it will put the Government where they justly deserve to be—out of office.
§ 5.34 p.m.
§ Mr. W. R. A. Hudson (Hull, North)
I am sure that the hon. and learned Member for Gloucester (Mr. Turner-Samuels) will forgive me if I do not follow him directly in his somewhat tenuous argument, although I will try in the course of my remarks to refer to some of his statements and arguments.
I want to begin by making a few observations upon the speech of the hon. Member for Sunderland, North (Mr. Willey), who opened the debate for the Opposition. I am sorry that he is not in his place. In fact, I am sorry to see the Opposition Front Bench almost completely denuded. I think that that is perhaps a reflection on their enthusiasm for the case which they have tried to put.
The hon. Member for Sunderland, North, by his rather exaggerated and forceful delivery, tried to make up to some extent for the weakness of his case, for he gave a most confused account of this situation. First, he challenged the Government with removing controls from foodstuffs relatively scarce, yet, almost in the same breath, he said that import prices have dropped. In fact, as my right hon. Friend stated there has been a slight increase in food import prices. But the hon. Gentleman cannot have it both ways. If foods are relatively scarce, surely there must follow an enormous increase in the price of imported foods. That is the logical outcome.
The hon. Gentleman also said that the quantities imported have been reduced. Yet it is a well-known fact that quantities consumed have been greatly increased. My right hon. Friend has already shown that to be so. Do hon. Members opposite complain of that? More home produce has been consumed by the people in this country.
§ Mr. Hudson
Surely that is something upon which we ought to congratulate ourselves, reflecting, as it does, the success of the policy which we have pursued.
I last intervened in a debate of this character when we debated the Gracious Speech in November, 1953. On that occasion I tried to relate the impact of the food situation upon the daily lives of the people.
§ Mr. Hudson
I think I succeeded and I intend to follow the same course today. I always feel that a debate of this kind, which centres around the cost-of-living index, is a little unrealistic. In saying that, I would at once add that I am not in any way criticising my right hon. Friend for having expounded the statistical position so clearly. I think the cost-of-living index is as good a yardstick as is possible. At all events, it is the same as was employed by the present Opposition, when they were in office. Therefore, I have no criticism on that score.
I think, however, that bare figures do not reveal the immense improvement in the standard of living, nor do they show how the quality and the variety of the national diet has improved. They do not take account of individual preferences or—another important factor—the impact of the different commodities and the different services required by different people. I shall return to that point in a moment.
In the cost-of-living index—and my right hon. Friend has stated the position with great clarity—it is true that since October, 1951, there has been a rise of 13 points, seven points up to June, 1952, and a further six points up to February, 1955. In the meantime, there have been only very minor fluctuations, and at the end of February there had been no increase whatever in the figure for some little time. The figure in January was 146, as it was in February. The important fact is that there had been no violent fluctuations throughout that period—merely a point up or a point down or a very minor fluctuation of that kind.
2117 We must admit, as we have always readily admitted, that certain increases in costs had to be made if we were to bring ourselves into line with realistic world conditions and if we were to restore our economy. Of course, that has been done. The whole of our experience up to October, 1951, revealed one most important fact—that controls and bulk buying arrangements together could in no way prevent an enormous rise in the cost of living and keep it within reasonable bounds.
What has been achieved under the relatively free conditions which have been re-established? First of all, supplies have been assured. We have been able to pay for them, but had we gone on as we were proceeding we should not have been able to do that. Secondly, I claim that prices have been kept within reasonable limits in relation to world prices. If anybody cares to challenge that, I have some interesting figures here which will prove it up to the hilt. I can show that, with very few exceptions, bread, sugar, butter, margarine, lard, cheese, bacon, beef, mutton, pork, tea, coffee and other items are lower in price in this country than in any country in Europe—with a very few exceptions in odd cases.
§ Mr. Hudson
I am not saying that it was not the picture up to 1951. What I am saying is that, despite Opposition criticism that freedom would bring our prices up to and in some cases higher than Continental prices—and that used to be the tenor of their arguments—that has not happened, and that with a very few exceptions prices in this country are lower than those on the Continent. Furthermore, we have increased wages and earnings and increased pensions and National Insurance benefits.
I referred earlier to the varying impact of individual preferences and I want to say something about that. It is nearly always forgotten that one of the greatest influences upon the cost of living is the price of fuel—coal, gas and electricity—from the nationalised industries. The greatest number of complaints which I have had from old-age pensioners at any 2118 time since I have been in the House have been not about food but about the price of coal, gas and electricity. Those are necessary items.
On the other hand, the cost-of-living index is, fortunately, influenced favourably by reduced clothing costs and reduced prices for household goods. Those are competitive industries, and the contrast I am trying todraw is this: whereas we have had enormous increases in costs in the nationalised industries, in some of the free and competitive industries and trades prices have been coming down.
§ Mr. J. Harrison rose—
§ Mr. Hudson
I cannot give way at the moment.
Not only does that condition apply to the nationalised industries when compared with industries producing household goods, for example, but I contend that freedom and competitive conditions also have a beneficial effect in the case of food. I am now prepared to give way to the hon. Member.
§ Mr. Harrison
I appreciate the hon. Gentleman's courtesy. I was thinking wicked things about him, but now I must change my mind.
The hon. Gentleman spoke about the nationalised industries and compared the rise in the price of their commodities with the fall in the price of clothing and other articles. Bearing in mind that the prices of clothing and other textiles had reached an unprecedented height in 1951, will he compare the prices of the nationalised industries' commodities or services with general prices and tell us the result? Will he not admit that the prices of the commodities provided by the nationalised industries have risen less, generally, than other prices?
§ Mr. Hudson
I am quite willing to examine the situation in the light of the hon. Member's remarks, but he did not contradict my statement that, whereas prices in the nationalised industries have risen, in some of the competitive trades they have fallen substantially.
It is generally admitted that some prices have risen since 1951, which was inevitable for the reasons which I have given, but it is too often forgotten that many important foods are lower in price today than they were in 1951. I have taken some pains in this matter, because I have 2119 an interest in it and am concerned with the distribution of food. In November, 1954, I checked on the prices of a large number of foods and I have here a list of 30 foods—all of them important—25 of which are lower in price than they were in 1951 and five of which have dropped considerably in price since 1953.
I could readily quote the details if hon. Members wished. These foods include dried fruits, tinned milk, canned meat, canned tomatoes, bacon, canned fruits, English canned fruits and a whole list of such foods as peas and beans. Those are all in regular demand for packed lunches, or by wives who pack their husbands' dinners or do home baking, and I suggest that all those reductions have combined to reduce the cost both of home baking and of packed lunches, which is a very important item in industrial areas. I have had another look at the prices of many of these foods within the past seven days and I find that there are among them a number of items which have still further dropped in price.
In obtaining these figures I have not been content to take a price here and there, but have collected them from the most reliable sources. Prices were supplied to me by one of the retail distributors on a national scale, which means that the prices were applicable throughout the country. Secondly, I obtained information from a group of multiple stores supplying the London area and, finally, I took examples of prices in the North-East, some of which were provided by my own company, but which can all be verified. I have them here.
§ Mr. Lewis
If we are asked to accept what the hon. Gentleman says, that things such as peas and beans have fallen in price, how does he account for the fact that the February edition of the Monthly Digest of Statistics showed that the price of all the types of food mentioned had risen by nearly 20 per cent. and that not one item of food included under the heading, "Miscellaneous, manufactured foods, vegetables and fruit," had fallen in price during the whole period from January, 1952? He will see that these figures were issued officially by his own Government.
§ Mr. Hudson
I do not intend to attempt to substantiate anything in that official document. It must be true. But 2120 if the hon. Member will come with me, I know that these prices are available and I shall be glad to show him where the goods are obtainable. I am quite sure that he is interested in food.
The hon. Member for Sunderland, North quoted prices taken from trade papers and, in particular, from the "Grocer." I should not dream of denying that the prices which he quoted prevail in certain cases. Those are average prices which the trade Press must secure, but I am speaking from facts which prevail in the shops and which can be verified by anyone in this House.
There have been criticisms of the price of meat. It is perfectly true that the best quality and the best cuts of English meat have gone up in price, but it seems rather a lopsided point of view to criticise that, for what does it mean? It means that wages and earnings are up, that people are anxious to have the best and are prepared to pay for it. That is a matter for congratulation, not a matter for commiseration. The money is available.
In passing, I would say that it is not the purchases of the wealthy shopper which affect the price structure, but the purchases of the average wage earner that influences these prices. Excellent imported meat is available and is neglected. It would not be if there were not money in people's pockets to buy the better meat and we can congratulate ourselves on our policy of producing more excellent English beef. I hope that we shall always go on doing so.
The argument about the burden of the cost of living is wearing a little thin. I think the shrewd housewife knows it. Anyone who reviews the facts objectively must be driven to the only honest conclusion, that the burden of the argument of hon. Members opposite is really quite fallacious. The Minister has quoted figures of savings. We know that there are record sales of household amenities, of television sets and all those kinds of thing, which, in themselves, are highly desirable. From what we know of that and of the real facts of the situation I believe that the Government have done a splendid job in holding the cost of living where it is. I believe that our policy has been highly successful. The people are only too glad to be able to buy good food in great variety wherever and whenever they want.
§ 5.53 p.m.
§ Mr. George Darling (Sheffield, Hillsborough)
I agree with the hon. Member for Hull, North (Mr. W. R. A. Hudson) when he suggests that we should use the Interim Index of Retail Prices—to give it its correct title—with a great deal of caution. For the rest, what the hon. Member has said is that prices fluctuate—with which we all agree—that some prices have gone up more than others and that some prices now and again come down. That is the beginning and the end of the story.
We are all well aware that that sort of thing happens. But what we are concerned about in this debate is the continuing general rise of prices, wherever it may have started, the rise in costs of production because of the claim for higher wages—which always follows increases in prices—and the inflationary situation which this country has to face. It is easy to talk about savings going up in certain years and not quite so much in other years, but those savings will not be much use unless we get some stability into the value of our money. That means getting stability in prices.
I should like to say a few words about the figures and a few things about the general problem of high prices in this country and to see what we can do about it. First, I mention a point that occurred in the speech of the Minister. I nearly rose to a point of order when the right hon. Gentleman was quoting the Food Survey figures, which is frequently done in the House. In this case, the right hon. Gentleman was mentioning the Survey in relation to old-age pensioners. I could not know whether he was quoting the correct figures—I am sure he was, because he would not mislead the House—but these documents are never published until it is too late for them to have any effect on current debates. If documents of this kind are used in this way they should be laid on the Table. I did not want to rise to a point of order and bring you into the debate, Mr. Deputy-Speaker, but I hope that that matter can be gone into and that we shall not be put into this situation again.
Because of the time available I want to make my speech a little shorter than I had intended. I will begin by saying a word about the Interim Index of Retail Prices. It is a useful index, as I think 2122 we all agree, for measuring general trends of price movements, but I do not think it ought to be used in the way it has been used in this debate by the right hon. Gentleman and will be used, I am sure, by other hon. Members, as a measuring rod to make comparisons with changes in incomes.
When the new cost-of-living index was being prepared in 1937–38, I wrote an article in a paper on which I was then working criticising the way in which the 30,000 households were being selected and the manner in which the index was to be built up. The arguments I used then have, I think, been proved correct, although the index has come into operation much later than anyone then anticipated. It has produced an average working-class household which is completely fantastic. Hon. Members will know what I am referring to—the 1¼ children and the composition of the household which bears no relation at all to a typical working-class family to which the cost-of-living index should apply.
I think, also, that the present weighting of food in the index is quite wrong. If it is true that, apart from fuel and light, the greatest increases come in the food section, the index is certainly not giving a true indication of changes in the cost of living. From inquiries I have been able to make, I think that the food index is very much under-weighted. It should be nearer 60 per cent. in the lower income groups than the 40 per cent. which goes into the index.
Before going on to the next point, I wish to say a word about "Co-op" tea, a matter which was raised by the hon. Member for Louth (Mr. Osborne). I am sorry that the hon. Member's figures were not quite correct. Less than 10 per cent. of the tea sold by the Joint Co-operative Wholesale Society comes from its own estates in India and Ceylon and it has no estates outside India and Ceylon. It is probably true that from those estates the financial position of the society has been made better this year compared with the year before. The society was faced with the problem of where to pass on that very small increase in prosperity.
As the Financial Secretary to the Treasury has said, the big increase in profits has been among the big producing companies and not the dealers and packers. The small part of the "Co-op" 2123 trade which comes from its own estates has not been sufficient to make any substantial difference to the price of tea as a whole. The society was faced with the problem of making a very minute reduction in price or passing on the benefit—as there are no individual shareholders—to the customers, and that is what they decided to do. I know that the hon. Member for Louth is interested in this trade and although I will not give any further trade information away in public I can tell him that the retail margin on "Co-op" tea would surprise him. In that way it is going back to the Cooperative societies' members.
§ Mr. Osborne
The figures I gave the House were given me in good faith by people who are supposed to understand the trade. I wonder which of the figures I quoted were, as the hon. Gentleman says, wrong. Can he give me the right figures, because I would not want to mislead the House?
§ Mr. Darling
If I recollect aright, the hon. Gentleman said that the "Co-op" were taking about 20 per cent. of their tea from their own estates. Actually, it is about 8 per cent. at the moment. It fluctuates from time to time, of course, according to the total at the time in the market, but it is seldom above 10 per cent.
§ Mr. H. Nicholls
The hon. Gentleman is confirming that the producers are the ones who are making the extra profits, not the distributors and retailers. In view of that—and it is a fact—would he admit that it is very unfair of his hon. Friends to say, as they are always saying, that it is the middlemen, meaning the distributors and retailers, who are responsible for the increased price of tea?
§ Mr. Darling
I think I had better couple two words together—dealers and packers. The dealers and packers, the people who do that double job, have certainly not been making great extra profits. Whether the middlemen, the dealers who go into the overseas markets and do not do packing and distributing themselves, have been making these profits, I do not know, but I do know that the packers have not. It is the producers who have been making these profits.
I come to the general question of rising prices. Quite clearly, there is no one solu- 2124 tion to the problem. We talk about increased subsidies and other remedies, but there is no easy solution. I do not want to abuse my fortune in being called to take part in the debate by taking up too much time, so I shall not, as I should have liked to had I more time, give a complete list of the things that I think could be done to bring prices down. I shall content myself with mentioning one or two.
First, there is the question of price maintenance. The Minister of Food twitted us for saying that we believed in price control. He said he was against price control. He said that price control would not operate properly under private enterprise. Believe me, there is far more price control under private enterprise than any official price control we are trying to suggest. The control of prices for what we think, rightly or wrongly, is the purpose of maintaining profits ought to be inquired into, vigorously.
We are told, when we raise this matter with the President of the Board of Trade, that we have to wait for the report of the Monopolies and Restrictive Practices Commission acting on a reference made to it under Section 15 of the Monopolies and Restrictive Practices (Inquiry and Control) Act. However, the Monopolies Commission is not concerned with the question of prices. It is concerned merely with the administration of price fixing, of collective boycotts, and the rest of it. There ought to be an investigation into the costs of manufacturing, distributing and retailing those things that comprise the chief items which enter the cost of living. There ought, in particular, to be an investigation into the costs of production and distribution where competitive conditions quite clearly do not apply. Some of the facts such an investigation would reveal would, I am sure, be rather surprising.
The inquiries that have been made into pharmaceutical products have shown how branded goods sold under the Proprietary Articles Trade Association arrangements are sold at prices very much higher than the prices of such commodities bought by the customers on prescriptions, instead of in a bottle with a branded name on it. I am sure that if the prices and costs of the main commodities in the main lines of trade with which we are concerned today were investigated we should be able to 2125 make an attack upon one sector of this problem, the high prices that are the results of these trade arrangements.
I come to the food question. We have heard much statistical argument about whether the prices of imported meat has gone up so much, whether the price of home-killed meat has gone up so much, and so on, but the point is that the price of home-killed meat is too high for the customer who buys it in a retail shop. Whether the farmer is getting a proper price for his cattle, sheep and pigs is something I am not prepared to argue about. He is probably getting a fair price, but the difference between the price he is receiving and the price people have to pay in a retail shop for killed and processed meat is too great to be left without any further examination.
I should say that, generally speaking, the prices of meat in the shops are too high because, first, our slaughtering charges are too high. They are too high because of the inefficiency of the slaughtering arrangements in this country. For one thing, we have not got factory abattoirs to deal with the meat, and we waste the by-products the proceeds of the sale of which should go into the incomes of the people who do the slaughtering and processing of the meat. If they received that extra income prices would come down.
Secondly, we have not got adequate cold stores for the home-killed cattle. I do not know how long this state of affairs will continue. The question of factory abattoirs and of cold stores was first raised as a political issue by the appointment of a Government committee to go into the matter in 1930, yet we are still pressing for efficient organisation of the meat trade in this country. The proper organisation of the meat trade would certainly bring down the price of meat to the consumer. Why do we not deal with it? What are we waiting for?
§ Mr. Godber
The hon. Gentleman suggests that one solution is the setting up of cold stores for home-killed meat. How would he deal with the fresh home-killed meat, which is a valuable product selling at a high price, for if that meat is put in cold stores it will not be worth anything like so much? Who is to stand that loss?
§ Mr. Darling
What the hon. Gentleman seems to forget—and I am surprised 2126 that he does—is that we do not kill home-produced cattle all the year round. I should even out the meat supplies. I admit that there is some loss of value of the meat if it goes into cold store, but we could keep the autumn-killed meat in cold store instead of selling it all at once. At the moment, all the meat from slaughtering in this country is mixed up, and the cattle rearing trade is mixed up. There is usually a spate of killing in the autumn, and there is the problem of storage to deal with. I am convinced that we can raise far more cattle if we offer the farmers guaranteed markets and guaranteed prices plus a properly organised system of factory abattoirs to deal with the cattle, sheep and pigs they produce, and bring down the prices of meat.
The same sort of complaint can be made about dairy produce. It is fantastic that in this great milk producing country—for it is—we have nothing like the co-operative creameries and dairies and processing plants for dealing with milk products that there are in Denmark, Holland and Sweden. There is no reason why we do not have them, except the lack of enterprise. The country's milk trade could be far better off and could provide us with more milk and milk products and at cheaper prices. We are paying high prices for inefficiency.
I come to the matter of fruit and vegetables. All our fruit and vegetable markets are utterly old-fashioned, out of date, costly and inefficient. The taking of produce to Covent Garden and such markets means that the consumer has to pay far too high prices when the stuff reaches the retailers' shops. Go into any provincial fruit and vegetable market, and there will be about a hundred dealers there, whereas possibly less than a score of specialist commission agents could handle the whole of the produce at the market at very little cost compared with the enormous cost which arises between the farmer or the importer and the retailer under the existing system. Why do we not do anything about these markets? Transport costs are enormous, and the consumer has to pay for them all the time. In attacking high costs, as I say, there is no one simple solution. We have to deal with many things at once, including little things. Consider weights and 2127 measures. The greengrocer, the retailer, quite properly, is compelled by law to give exact weight to the customer, but nobody is compelled to give the retailer exact weight. I would say that no consignment, whether it be a box of apples or of pears or other hard fruit or of vegetables, goes into the retail shop at the exact weight. As for the dirt in a bag of potatoes, that is something that ought to be inquired into, to see whether we cannot put a stop to the bagging of so much dirt. A grocer who lives near me showed me and weighed 17 lb. of dirt in 1 cwt. bag of potatoes. He has to pass the cost of that on to the consumer.
§ Squadron Leader Cooper
That is nothing compared with the rubbish which appears in nationalised coal these days.
§ Miss Margaret Herbison (Lancashire, North)
The hon. and gallant Gentleman should dig some. I should like to see him go down a mine.
§ Mr. Darling
I agree. I have a garden and I grow my potatoes. The hon. and gallant Gentleman should dig some coal.
§ Mr. Victor Collins (Shoreditch and Finsbury)
I would remind my hon. Friend that the retailer is not permitted to pass on the cost of the dirt to the consumer. He has to stand the cost himself, because he has to work under a controlled price.
§ Mr. Darling
I agree. What I meant was that in his general trade the greengrocer will not suffer this loss, because on commodities in respect of which he can make the consumer pay he passes on the loss.
§ Mr. Nicholls
This is a very fair point, but is not this again one of the reasons for the difference between the producer's cost which the hon. Member mentioned and the retail price? Ought not these facts to be advertised as much as other things?
§ Mr. Darling
I do not know where that gets us, but these matters should be inquired into and action should be taken. In the case of most of the food and manufactured goods trades the consumer is paying dearly for inefficiency, old-fashioned, obsolete methods, price rings, indefensible retail price maintenance 2128 arrangements, and managerial inefficiency, and the housewife often pays too highly for shoddy goods and misleading advertising. We have taken some action to deal with these matters. We have had the Merchandise Marks Act, the Food and Drugs Act, the Monopolies and Restrictive Practices (Inquiry and Control) Act, and so on, but however good each of these may be in itself it is insufficient, as at present administered, to deal with the exploitation of the consumer and with prices which are far too high.
In any case, there is no drive behind these things. These Measures are scattered about in Government Departments where they are not the prime responsibility of the Ministers concerned. In the Board of Trade, the Minister is at present far more concerned about G.A.T.T. than he is about dealing with weights and measures or a problem which the Monopolies Commission may be considering. If the Government go on burying consumer protection services in Ministries where the Ministers are not primarily concerned with them, there will be no full-scale attack on the cost of living problem. The Government are now proposing to place the Ministry of Food completely in the hands of the Minister of Agriculture. That is a misalliance if ever there was one, because the Minister's primary job is to look after the farmers and it should be somebody else's job to fight him on behalf of the consumers.
There is only one way to make full use of the Measures which already exist for looking after the interests of the consumer. It is to bring those Measures into one Department where there will be a Minister to look after these things and to have no other interest in Governmental administration. If the job is done in that way, and it is placed in the hands of a Minister who has this primary responsibility, it will be found that existing legislation is sufficient. Some improvements and modifications are needed here and there, but the more we go into this matter the more we shall find that there is less need for new legislation. It is our present legislation that is not being used properly. That is the cause of the trouble in so many of the spheres with which we are dealing.
The Co-operative Party, with which I am associated, has put forward, for these reasons, a proposal for a Ministry of 2129 Consumers' Welfare. We do not like the title, but we cannot think of a better to fit what would be the function of such a Ministry. We do not propose any new spate of legislation, because existing legislation brought together under one Minister and, vigorously applied, could deal with far more problems than I have attempted to deal with this evening.
We do not need an army of inspectors. There are plenty of inspectors under existing legislation to do all that would be required. We propose that these questions of high prices, exploitation of the consumer, price rings, price fixing, and all the rest should be tackled by a Minister who would be concerned only with that job. If the job is tackled properly and vigorously by such a Minister I am confident that a full-scale attack on the rising cost of living could bring the results which we all want.
§ 6.17 p.m.
§ Miss Edith Pitt (Birmingham, Edgbaston)
The hon. Member for Hillsborough (Mr. G. Darling) will, I am sure, appreciate that I do not want to follow him through the whole of the points which he made in his speech. I wish only to ask him now, as I did when he once addressed a meeting of a women's voluntary organisation on his ideas of a Ministry of Consumers' Welfare, to say whether he truly believes that if we had such a Ministry, and even if it took over part of the duties of other Ministries, we should not be building another empire and imposing an additional heavy financial burden upon the country.
The hon. Member's proposal is rather less than fair to the British housewife, in that it gives her little credit for the use of common sense in her purchasing and for her ability to learn to make the most of the new-found freedom of goods in the shops. It is from the point of view of the housewife that I should like to contribute to this debate.
No one denies that the cost of living is high, but so are earnings, and so is the standard of living. We on these benches are entitled to make a comparison of the position now and the position which we inherited in October, 1951, when hon. Members opposite found the job too much for them. During the whole of their six years of office the cost of living had been rising steadily. In the latter part 2130 of that period the rise was very largely accelerated.
§ Miss Pitt
Because no efforts were made by the Government to control it.
When the hon. Member for Sunderland, North (Mr. Willey) said today that the present Conservative Government had made no effort to mitigate rising prices, I wondered what he felt his own Government had tried to do during their period of office.
§ Mr. Lewis rose—
§ Miss Pitt
I have only just started my speech. I hope that the hon. Member will try to make his own speech in his own way and not by means of interjections.
There were no signs of any real attempt on the part of the Socialist Government to control those rapid and continuousrises. Here is the comparison. We now have abundance, especially of food. There is plenty to choose from, far more variety, and better quality, and more money in our pockets to pay for the goods. It is true that the cost of living has increased during the period of office of the Conservative Government but, as my right hon. Friend the Minister of Food has already pointed out, the increase in our three years five months of office has been only the same as that which occurred during the last 12 months of the Socialist Administration.
Furthermore, during our period of office there have been two reductions in Income Tax, and we have given or are in process of giving two rises in social benefits, which suffered tremendously from the rise in the cost of living under the Socialist Government. When the Socialist Government came into power the family allowance was 5s. [An HON. MEMBER: "They introduced it."] Oh, no, they did not. The "caretaker" Government introduced it. The family allowance was 5s. in 1945, and, when the Socialist Government went out of power in 1951, it was still 5s., although the purchasing power had declined considerably.
I will admit that social benefits were introduced by the Socialist Government, but when they were introduced the basic rate for a single person was 26s. When they went out of power it was still 26s., 2131 with the exception of a limited number of pensioners and yet there had been a constant rise in the cost of living.
§ Miss Pitt
I lived through the hungry thirties as the daughter of a Birmingham working man.
Furthermore, not only have there been two reductions in taxation under the Conservative Government, not only have there been improvements in social benefits, but for the first time wage increases are ahead of any increase in the price of commodities. That was not the case in the days of the Socialist Government.
I want to make a point which is too often misrepresented. The Conservatives never made easy promises. [An HON. MEMBER: "No rise in the cost of living."] I stood as a candidate in the 1951 Election, not a successful one, but I remember what I said. I remember also what was written in our policy manifesto, and these are the actual words—I quote from page 15 of "Britain Strong and Free":There is no single step that will of itself substantially reduce the cost of living … All these things will be achieved only by immense efforts and after some time … but they will enable us to control, and then as we are determined, to reduce the cost of living for all.
§ Miss Pitt
That was the policy which all of us who stood on Conservative platforms put forward in 1951. I think we have achieved much in what we have done to stabilise the cost of living and, at the same time, to improve the standard of living.
That is what really matters, the standard of living. I should like to remind hon. Members opposite that they made this point over and over again in the 1951Election; that the standard of living was more important than the cost of living. I remember it being made in Birmingham on platforms of the party 2132 opposite. Indeed, I do not need to remember it, because I have brought the evidence with me. The hon. Member for Aston (Mr. Wyatt), writing in a Birmingham newspaper shortly before polling day, said:And what is Birmingham thinking about the cost of living? Most housewives are grumbling about increased prices, but most of them are also saying 'But we have got the money to buy what we want.' That is the fact. Ordinary people in Birmingham are better off than they were before the war.If that was true then, how much more true now when everybody is much better off. Furthermore, the hon. Gentleman the Member for Stechford (Mr. Roy Jenkins) writing in another Birmingham newspaper, in referring to full employment under the Socialist Government, stated:As a result there was always a problem of rising prices, for it is an elementary economic fact that while, in a period of slump and heavy unemployment, it is easy to keep prices steady, or even bring them down, it is very much more difficult when demand is high and all resources are being used to the full.That is again an unanswerable argument, and one very much applicable to the position in which we find ourselves today.
In his Election address, the hon. Member for Stechford said:I ask you to remember that the STANDARD OF LIVING—much more important than the COST OF LIVING—has been higher under the Labour Government than ever before.I do not dissent from the use of the standard of living as a yardstick and as being much more important than the cost of living, but if it was true in 1951, and it suited Socialist Members of this House to write about it and to introduce it into their Election addresses, then it is obviously true now.
§ Miss Pitt
I am prepared to take that interruption in my stride. When I spoke in this House on pensions as long ago as July last year, I said that I had been challenged by Co-operative women in my own constituency on pensions and hardship. I asked them to give me names and cases. I have had none. I said that I had mentioned this in Kent and had asked for information. I have had none. The hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock) in- 2133 terrupted me, and said she would take me to her constituency and show me cases. I offered to go with her, and I have heard no more.
§ Mr. Speaker
Order. The hon. Lady is not entitled to speak if the hon. Lady who has the Floor is not prepared to give way.
§ Mr. Speaker
I know that is not the general principle of hon. Members of the other sex, but if the ladies have an arrangement of their own, perhaps they can apply any sanctions which go with it. Miss Pitt.
§ Miss Pitt
Mr. Speaker, I can think of certain circumstances when ladies should not give way but I am prepared to answer the hon. Lady. I assert that no one is going without food, even the pensioners, and that they can afford to buy enough to keep themselves comfortably, though they are not living in luxury. We should all like them to have more, and under the present Government they will have more.
§ Miss Pitt
The majority of people in this country are better off than before the war. That certainly applies to the weekly wage earners. They are spending more on food—on meat, bacon, sugar, eggs, and sweets—and they are spending slightly less on bread and potatoes. If the nation was hard up we should be spending more money on the cheap filling foods—bread and potatoes—but we are spending less on them. We are also spending more on tobacco, alcohol, pools, radio, television sets, washing machines, and other household goods—things that make life more comfortable for the family and easier for the housewife.
I had occasion to get out some figures a week or so ago, not in connection with this debate. Even I was surprised to find that whereas pre-war we spent 4 per cent. of our national income on tobacco, we now spend no less than 7½ per cent. of our national income on it. Does this suggest 2134 that we are hard up and cannot maintain a good standard of living?
We are also saving more. This point has been emphasised already and I only want to add my own evidence. Earlier this year, I, in common with everybody else who has helped with the National Savings Movement, received a letter from its Chairman, from which I quote:1954 has been a goodyear for us. Our savings figures are the best for eight years, and the number of Savings Groups and their members have also increased.These are the small savers, the ordinary people, the weekly wage earners as I prefer to describe them.
Furthermore, all hon. Members of this House must recently have had the first leaflet from the building societies. On reading it, I was interested to note they were able to say that shares and deposits showed a marked increase in 1952, 1953 and 1954. Again, their deposits are not infrequently made up of the regular, weekly contributions of small savers.
I do not have to rely on figures. I have quoted some, and many others have been given. I know that the ordinary working people are better off than they have ever been in their lives, because I belong to them, I was born among them, and I have lived among them all my life. In passing, I wish the hon. and learned Member for Gloucester (Mr. Turner-Samuels) was still here. I should like to give him a word of advice. I wish he had not used the expression "working class." We do not like it. We think that it is used in a derogatory sense. If I might give him a hint, if he exchanged that term for my own expression "weekly wage earners" he would be adequately describing the section of the community to which he wants to refer and would not be giving offence.
I know that the weekly wage earners are doing very well. When I go into their homes—they are the homes of my friends—I see television sets, new radios, new furniture, new carpets, vacuum cleaners, and even washing machines. The washing machine is the latest gadget in which they are interested.
§ Miss Pitt
I am very glad about it, but hon. Members opposite cannot say "Why not?" and then, in the same breath, say that the people have not got the money 2135 to provide these things. I notice that there are not so many refrigerators, although sales are going up, but husbands should beware, because I am certain that the refrigerator will be the next item on the list.
In Birmingham, on Friday night, I spoke to a workman whom I know well, a staunch Socialist who is never going to change. I said, "How are things going? How do you think we are managing under a Conservative Government? What do you think about the cost of living?" He answered, "Well, my wife is not the grumbling kind." I think he would not go so far as to admit that things were not so bad under a Tory Government. However, after a slight pause he added, rather quietly, "I have just bought a little car." I suggest that that is an indication of the high standard of living that we are enjoying.
I know there are some exceptions. The people who are most hard hit are those on fixed incomes. Also, not infrequently the comment is made to me that the black-coated workers, although they have made some progress, have not progressed to the extent that the weekly wage earners have done. I am not disputing that that is so, but I want hon. Members opposite to admit it.
What of the housewives? Two-thirds of the women of this country still describe themselves as "housewives," I notice from the last census. They are the most important members of the community. They have not yet got round to applying to themselves the American term "domestic economists," but that describes the job that they are trying to do.
What have the Government done for them? Clothing is cheaper, especially adult clothing. I hear complaints that children's clothing is dear. That is surprising, because children's clothing takes so much less cloth. The answer may be that the persistently high price of children's clothing is the result of labour charges. I suppose it is simple economics that one cannot have high wages without paying more for the articles. That is probably part of the explanation for the present price of children's clothing.
Household goods are cheaper, especially towels and sheets. Hon. Members
2136 opposite may say, as is often said, that these articles do not have to be bought every week. Nevertheless, I have referred to them because they are the household goods which one has most frequently to replace, and I am very glad that the largest fall has been in the price of towels and sheets.
There have recently been reductions in the price of margarine, and we now have good branded makes to choose from. The prices of cheese and butter have fallen in the last week or two, and the price of tea is now falling. Hon. Members discussed the price of butter earlier. I would remind hon. Members that butter is still very cheap in this country compared with many other countries. The average price is 3s. 8d. per lb. whatever may be said in the "Grocer."
I am prepared to take the hon. Member for Sunderland, North by the hand to Birmingham and there buy New Zealand butter with him at 3s. 6d. per lb. I am also told that British butter is available in the Harrow Road at 3s. 4d. per lb., and that is very much cheaper than butter in many other countries. Much more important, we now have choice of variety and quality.
I believe that the housewife has come into her own, and she thinks so too. She can feed her family better. I am quietly amused to hear these days the comment which I used to hear before the war, the rather proud boast of the housewife that she keeps a good table. She could not do that if the food were not available.
Many housewives have now discovered, some for the first time, the joy of being able to bake their own cakes. Again, I am a little amused when I hear my friends brag about the kind of cakes they have turned out or the new recipes which they have tried. How different that is from the days not so very long ago when they used to say to each other, "Oh, cannot we get away from food? I am sick of rationing and trying to manage." Now their pleasure lies in showing their ability in cooking.
Housewives make their own jam. I make jam. I made ours last year. Housewives now bottle their own fruit. Because the customers call the tune now, and because they now have the influence, housewives are doing something to bring down the price of certain foodstuffs, as 2137 they did with eggs and as they are doing with tea.
I should now like housewives to turn their attention to meat. What a commentary it is that the newspapers are reporting that there is too much meat these days. Housewives choose their shops, but they buy the expensive cuts. I believe that the selection of meat has tended to become a lost art to women or else that many of them have never known it, especially the younger ones.
I hear them say in the butchers' shops that they want a fillet or shoulder of lamb, but they do not know the cuts of beef. One rarely hears them ask for topside, silverside or bedpiece. They can now have the aitchbone; that is a joint which the butcher has only recently been able to cut. Housewives do not very often buy brisket, sweetribs, or breast or neck of lamb, the cheaper joints, cheaper not in quality but in cut, which make extremely good, nourishing meals if housewives are prepared to spend longer over the preparation of the vegetables and longer over the cooking.
I am not an expert cook. My father describes me as a good, plain cook. However, I do know the things my mother taught me, and I should like to see women getting fuller value out of their present opportunity to provide good meals at much less cost than some of them are doing at the moment. I am not for one moment suggesting that it is a job for the Government, which Heaven forbid. I do not think that "the gentleman in Whitehall" always knows best. I suggest that some of the women's voluntary organisations, particularly—
§ Miss Pitt
—the Women's Institute and the Townswomen's Guild, might add to their already full programmes for their members classes to help women understand the different cuts of meat and the variety of meals that can be prepared from them.
To conclude, there is one grumble which I frequently collect in every area of Birmingham, and I am surprised that it has not been mentioned by hon. Members opposite. The grumble is about the price and the quality of coal. I hope that hon. Members opposite will mention it, because it is a genuine grumble. It is 2138 still rationed, or allocated, and perhaps that makes a difference.
I should like to know—and I hope that when the hon. Lady for Coatbridge and Airdrie (Mrs. Mann) winds up she will tell the women of this country—what is the Opposition's remedy for the present high cost of food. What proposals do hon. Members opposite have? Is their answer to restore subsidies, as they say in "Challenge to Britain"? If so, how do they propose to raise the money? They have never explained that. Will it be by an increase of taxation, an increase of Income Tax—goodness knows, we are all hoping for a decrease of taxation—or will it be by an increase of indirect taxation on tobacco, alcohol and so on or Purchase Tax, or a combination of them all?
Are the Socialists proposing to take out of people's pockets the money which they now have, and spend it for them? Or are we to cut down the amount of food which we are now consuming and return to rationing? Are we to return to the rationed amounts which we found when we came to power in 1951—bacon 3 oz., cheese 1½ oz., butter 3 oz., Is. 7d. worth of meat, tea 2 oz. and sweets 6½ oz.?
§ Mr. Speaker
I heard the hon. Lady for Coatbridge and Airdrie (Mrs. Mann) use an expression which is not Parliamentary. She should withdraw it.
§ Mr. Speaker
I am not concerned with that. The hon. Lady herself will have the opportunity of replying, but she should not use the word "coward."
§ Mr. Speaker
I must ask the hon. Lady to withdraw the expression. If the hon. Lady is refusing to obey my direction, I can only take a certain course with her.
§ Miss Pitt
I accept the hon. Lady's apology.
I am well aware, as are hon. Members opposite, that the hon. Lady for Coatbridge and Airdrie is tonight winding up for her side. She will have every opportunity after I have finished, and that is why I particularly addressed this point to her so that she may be able to answer it.
If I may conclude—[HON MEMBERS: "You may."]—in November, 1953, when the right hon. Lady the Member for Fulham, West (Dr. Summerskill)—and I remember it very clearly, because it was in my early days as a Member and it struck me as so significant—was challenged from this side of the House as to what were her proposals for food and she was asked if she was proposing to reintroduce rationing if ever the Socialists were returned to office, she replied, "We shall adopt any methods that we think necessary. "I think that that is still significant. Does it mean that rationing would be reimposed? I should like to know, and so would the women of this country.
§ Mr. Ivor Owen Thomas (The Wrekin)
I thank the hon. Lady for giving way. Will she indicate what would have been the practical policy, other than rationing, which she and her colleagues would have pursued, in a condition of world shortages after a war which devastated the world, to ensure that everyone had a fair share of those things which were in short supply?
§ Miss Pitt
I quite agree that immediately the war ended, when there was a world shortage of food, any Government would have had no alternative but to continue rationing, not for six years, and not long after most other countries in Europe had given it up.
If hon. Members opposite intend to woo the electors with promises of a reduction in the cost of living, how can they do it, in these days of full employment and high wages, without some system of rationing and control? In that case, they are out of touch and they do not know what the ordinary housewife in Britain is thinking at this moment, nor do they know the expression which is most frequently on her lips. It is not a grumble about the cost of living. I will make them a present of the expression which I hear most frequently among 2140 housewives, and I ask them to bear it in mind when they go electioneering. What the housewives in Birminghamsay to me is, "It is lovely to have plenty to eat."
§ 6.46 p.m.
§ Mr. J. Grimond (Orkney and Shetland)
Of course this country is prosperous. I do not, however, find among the crofters of Shetland that there is the large-scale buying of washing machines and small motor cars which goes on in Birmingham. This country, speaking generally, is prosperous, and so it ought to be, and it will, I hope, continue to be. But it has to maintain its standard of living in a highly competitive world. I must confess that the hon. Member for Edgbaston (Miss Pitt) gave me the impression that there was no danger of inflation and no danger of running into trouble in foreign markets—trouble which would seriously affect all industrial workers. We have seen in Australia that these dangers are not so very far removed from the world horizon.
It may be said that the rise in the cost of living during the time of the present Government is not as big as it was in the time of the previous Government, but we all know the story of the camel and the final straw on its back. It is no consolation to the camel to tell it, "We put on only the last four or five straws." The trouble is that the beast was severely overloaded before the present Government came into office.
The Government know quite well that there is danger of inflation and that is why they lately put up the Bank Rate. It seems to me that the cause is reasonably well known. It is clear that there is too much purchasing power compared with the number of goods to be purchased at present prices. But the question which faces us is whether the suggested cures for inflation are not worse than the disease? A cure sometimes suggested from this side of the House by the Labour Party is the subsidising of certain commodities and thereby cutting down their prices.
§ Sir William Darling (Edinburgh, South)
The hon. Member spoke of cures being worse than the disease. Can he give an example of where that could be so?
§ Mr. Grimond
Yes. Having one's head cut off to stop a common cold. 2141 I suggest that to subsidise certain commodities one would almost certainly have to ration them, and unless one also reduced purchasing power one would find the prices of other commodities going up at the same time. The Government could further increase the Bank Rate and use other methods of restricting credit, and I am inclined to think that they may well have to do that. But there is no doubt that the reason why they do not do so is because of the deep-rooted fear in this country of unemployment.
I want to ask the House whether we are not a little too obsessed today with the conditions which obtained in the 1930s. Unemployment was then the great scourge of this country, and no one could exaggerate its evil effects in those days. In those days we werefaced with mass unemployment and a continuing lack of demand for many of the products of our great industries and with the apparently inevitable recurrence of trade slumps. It would be a very bold man who would say those circumstances will not recur. It is conceivable that they may do, but that is not the danger with which this country is faced at the moment.
Where there is unemployment—and there is high unemployment in part of my constituency—I do not think that the cure is a general increase in purchasing power. The fact is that unemployment, where it exists, is in pockets in the economy, and special remedies may have to be applied to cure it. We have learned a good deal about the distribution of industry, about bringing new light industries into different districts, and it is on those lines that we shall have to tackle the type of unemployment which we face today, rather than by attempting to deal with the position by continuous inflation.
I suggest that inflation is going on, and that it always hits the poorest people, the least well-organised. It hits the old-age pensioners, it destroys savings and the carefully laid plans of people who have made preparation for their old age. Above all, it continually puts in jeopardy our foreign trade. We are always living on this knife edge as to whether our reserves will go too low, whether there is to be a general flight from the £, or whether we are keeping in balance.
Our foreign balances today are considerably lower than they were in 1951. In these circumstances, I suggest to the 2142 Government that they should not be afraid to put some further squeeze on credit, to take a little more froth out of the Stock Exchange, for instance, and, if there is any sign of unemployment developing, to take special steps to meet it in the particular places where it may show.
If the Government are afraid of curtailing investment too far, they should make special arrangements for investment of a type that they want to encourage. I believe that the Government have been right to put up the Bank Rate. They should have done it earlier. It will be for the general good if the Government are not afraid to squeeze inflation out of the economy.
Another matter which one is forced to say something about is the question of wages. No one would deny a rise in wages to the workers in an industry which is doing well, which is becoming more efficient and increasing its output. Of course there have been considerable rises in profits, and I shall say something about that in a moment. Unfortunately, it is also true that a rise in wages increases demand for consumer goods. Naturally the wage earner wants to spend his additional income, and he spends it on the sort of goods which often the Government might like to go to the export market.
There has been a considerable increase in wage rates—in real wages and in money wages—compared with those of 1938. I think that the figure is 230 per cent., as against an increase in profits of 60 per cent. to 70 per cent. I wonder whetherthe Government should not grasp this prickly nettle of the method of negotiating over wages. I do not suggest that they should interfere directly. Of course the negotiation must be done with the trade unions, but I am not sure that the Government can ever stand completely aside—nor, in fact, have they been doing so.
An important book has been published by Miss Wootton, who is sympathetic to the Labour point of view, and who knows a very great deal about this subject. She has drawn attention to the very curious way in which wages are negotiated today. I do not agree with her conclusions, but she has drawn attention to a real problem.
2143 There have been big increases negotiated this year. I think that it will be agreed that they are bigger than could be justified by the rise in the cost of living. One might well argue how far wage rates should be tied to the cost of living at all. I suggest that they should be tied to productivity, and that mass negotiation for people called such terms as "engineers"—a term which I understand covers all sorts of jobs, trades and industries—is probably wrong.
It might be that we should break down wage negotiations, and that firms which are making big profits should pay a considerable increase, while firms which are not paying such big profits should not give big increases. Perhaps there should be some pressure put on labour either to leave that industry or that job by having a slightly lower increase, or no increase at all.
§ Mr. Grimond
So the hon. Member says, but will the present situation work?
Can we go on living under this continual danger of the economy toppling over under inflation? Are not these big increases in wage rates really a matter of first importance? It is difficult for a person like me, who admittedly is not a trade unionist but who has great admiration for trade unions, to discuss them, yet surely they must be discussed if we are to have a debate on the cost of living.
There have been these big increases in wages and surely they are an important factor which should be discussed. I suggest that if negotiations are broken down a little, if they take place between different firms and industries rather than through mass bodies such as the engineers, and if they are related to productivity, that might help us in dealing with this problem.
Another matter that I want to discuss is that of profits and private enterprise. I know that the amount of money injected into the economy through the rise in dividends is small. We know why that is—because so much of the extra is taken in taxation—and we know, too, that, as a profit or a dividend is not a prime cost, it does not enter into the cost of the article. Nevertheless, the importance of these relatively large increases in profits 2144 is not that they are pumping more money into the economy but that they show that firms have a certain margin—yet prices are not going down. It may be said that this is not a matter in which the Government can interfere, but I think that they could make their attitude known.
Their attitude ought to be that the private sector of the economy must really be competitive and enterprising. I suggest that it is riddled with restrictive practices and price maintenance, and that the attitude of most employers is "Do not let us bring down prices; let us do the thing up in a brighter packet or offer some small service with it; after all, our costs are bound to go up in a year or two and then we shall not have to put up prices again; let us keep them up; the public will pay; there is plenty of money about."
That is a fatal attitude, and if it continues the argument for nationalisation will eventually become irresistible. I agree that the Government cannot, for instance, in the case of restrictive practices and monopolies, prejudge the findings of the Monopolies Commission, but they could make it known that they are against monopolies, restrictive practices, and price maintenance, in the face of big profits and possibly some reduction in the price of raw materials.
I am not asking them to condemn any firm or any industry, but I think that there is a good deal in what was said by the hon. Member for Hillsborough (Mr. G. Darling). Industry must, wherever possible, reduce its prices and must accept competition. I do not know that I should go so far as to recommend a Ministry of Consumers' Welfare, or whatever the phrase is, but there is a good deal in what the hon. Gentleman said. There are plenty of laws, plenty of inspectors, and so on, but I have not noted that there is a coherent voice coming from the Government inevitably condemning monopoly and these attempts to keep up prices.
I agree with the hon. Member for Edgbaston that no doubt the housewives—the shoppers—must play their part too; but price maintenance and restrictive practices have gone a very long way, and it is asking a great deal of the ordinary buyer if one expects him to break up the absolute network of agreements which there are in industry tying people 2145 to sell at the same prices. One finds the same thing in almost any industry one cares to name. There are agreements throughout. I suggest that this is not healthy for the economy.
Another feature is that this country must maintain its investment. I do not believe that a high rate of consumption is necessarily antipathetic to a high rate of investment. America is a very good example of the opposite. What I suggest is that we shall not get savings and we shall not get investment unless people have real confidence that the Government are determined, not to maintain the value of the £ absolutely static, but to allow only a very limited amount of inflation.
All of us will suffer, and, in particular, the poorest people in the country—the pensioners and the people who benefit from our social services—will be deluded out of their rights unless the Government make it clear that they do not intend to keep on pumping indefinite amounts of purchasing power into the economy but that instead they intend to set their face against restrictive practices wherever they appear.
The Government should also make it clear that, in conjunction with industry and the trade unions, they will—I do not want a wages policy—clear their minds, if I may put it that way, and try to give some lead on the need to relate wages to productivity.
§ 7.0 p.m.
§ Mr. Cyril Osborne (Louth)
I entirely agree with a great deal of what has been said by the hon. Member for Orkney and Shetland (Mr. Grimond). Were we not discussing food, I should like to have followed up most of his points, including the point that inflation is the greatest danger facing us at present. I am not as certain as the hon. Member about how it is to be avoided.
I take it that this debate is the opening shot of the party opposite in the General Election campaign. To the hon. Member for Sunderland, North (Mr. Willey) I would say that I think he was unnecessarily spiteful, unnecessarily vicious and unnecessarily unbalanced. If his speech represents the opening shot of his party, it completely misfired. His hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels) likened the present situation to 1931, and accused Her Majesty's Government of trying to 2146 create a financial crisis similar to that of 1931. What I remember most vividly about the 1931 crisis—in which the right hon. Member for Llanelly (Mr. J. Griffiths) took part—was that three leaders were turned out, and there was bitterness and hatred, and the party opposite was rent in two, as it is being today.
§ Mr. James Griffiths (Llanelly)
I remember 1931 very well, but if the hon. Member is under the impression that I was in the House in 1931,I would correct him. I was not.
§ Mr. Osborne
I beg the right hon. Gentleman's pardon, but he does remember.
The only similarity between today and 1931 is that, unfortunately for the country, the party opposite was torn in twain in 1931. There was bitterness and hatred which has never been lived down, and since constitutional government requires that we should have a united and loyal Opposition, I hope that the same thing will not happen now.
§ Mr. Griffiths
The hon. Member is quite right. It will take a long time for the party on this side of the House to live down what happened in 1931—and after.
§ Mr. Osborne
I am glad that the right hon. Gentleman agrees that it was his party which went through that.
So far, every speech in this debate has been made from the consumer's point of view. If we are to talk about food and the cost of living, we mustlook at the problem not only from that point of view, but also from that of the producer. I represent a constituency which provides both fish from the sea and food from the land, and I wish to put a few points to hon. Members opposite from the producer's angle. If, as has been said on more than one occasion, the cost of living is to be one of the prime questions for discussion at the next General Election, I would ask the hon. Member for Sunderland, North and the right hon. Member for Llanelly—whose case is that the cost of living is too high—how much too high do they think the price of food is today, and by how much are they proposing to promise to bring it down? [Interruption.] The hon. Member for West Ham, North (Mr. Lewis) is a good advertisement for the Conservative Government in his present fat state—
§ Mr. Speaker
Order. I do not know what has gone wrong with this debate. Although it is not out of order, hon. Members should not make these personal remarks about each other. They should treat each other with courtesy.
§ Mr. Osborne
I beg to withdraw that remark, Mr. Speaker. I shall not sin again.
I wish to ask hon. Members opposite—and this is a question which will be asked of them at the General Election—by how much do they think that they can bring down the cost of food? How do they propose to bring down the cost of food? What action will they take to bring that about? I believe that the right hon. Member for Llanelly is coming to my constituency. If he does come to Louth I want him to answer those questions.
The cost of food might be reduced in three ways. First, it might be reduced by cutting the wages of the men who produce the food. Is the right hon. Gentleman—
§ Mr. J. Griffiths rose—
§ Mr. Osborne
Let me finish. Is the right hon. Gentleman coming to my constituency—if he is, I should like to be there to listen to him—to tell the agricultural workers that to get cheap food for the industrial workers who are getting higher wages than my constituents, he proposes a cut in agricultural wages? If that is his policy, I hope he will say so.
§ Mr. Osborne
I have not received a direct answer to my question.
The right hon. Gentleman might say that the price of food could be reduced because the farmers are getting too much out of it, and that, if they are returned to power, the policy of the Socialists would be to cut agricultural prices. Perhaps that is what he will say when he comes to Louth.
As the House knows, 60 per cent. of the food we consume is produced at 2148 home. How are we to reduce the price so that the consumer may obtain that food more cheaply?
§ Mr. Collins rose—
§ Mr. Osborne
No, I cannot give way now. May I just make my point and then I will give way, although it will be taking up time.
So far as I have been able to ascertain from the Ministry of Labour, these are some of the average weekly earnings in industry: coal miners, £12 17s. 2d.; motor car and cycle workers, £12 4s. 2d.; workers engaged in the printing and publishing of newspapers and periodicals, £11 16s.; agricultural workers, £7 2s. 10½d. This is the crux of the matter. My constituents say, "What right have men in the big industrial centres, who are enjoying these much higher wages, to demand that their food be cheaper, if it means that the men who produce the food have to work for less?" They contrast the position of the coal miner with their own.
During the ten years that I have been in this House, I have heard hon. Members opposite say on many occasions—and with a great deal of justification—that in the old days there was blood on the coal; that it was sold too cheaply—
§ Mr. Osborne
—andthe only way in which it was possible to pay a decent wage to the miner was to see that what he produced was sold at a better price. I entirely agree. But if that be true of coal and of the miner, it is equally true of the agricultural worker. Those who demand that we shall pay a high price for coal have no right to demand cheap food.
I want this question to be faced fairly and squarely, because if the issue of the cost of living is to be raised at the General Election, at least let us be honest with our people. Do not let us try to fool them.
§ Mr. Osborne
We have been told that during the next three or four months the price of coal is to go up again to meet increased wages. Today, there are no profits in the industry. There are no 2149 capitalists sucking the industry dry. All the money is going in wages and salaries. If hon. Gentlemen opposite are quite content that the country shall pay a higher price for coal so that the miner may get a better wage, surely it is reasonable that they should also say that the price of food should go up so that the agricultural worker can have a decent wage. Since his wage is little more than half that received by the miner, how can hon. Gentlemen opposite complain? What basis is there for their argument?
§ Mr. Griffiths
The hon. Gentleman seems to suggest all the time that we want a policy of low wages. From where does he get that idea?
§ Mr. Osborne
I will ask the right hon. Gentleman a question. Will he please tell the House how he proposes to get cheaper food from the 60 per cent. that is produced at home without either cutting the prices which the farmer receives for his products or the wages of the men who produce them?
§ Mr. Willey
I wonder whether the hon. Gentleman would answer this question, which is why, in "Britain Strong and Free," it was stated that there would be cheaper and better food?
§ Mr. Osborne
It so happens that I am making this speech, and I am asking the question.
To take it one stage further, it has been said more than once that it is the middleman's fault that food is so dear.
§ Mr. Speaker
Order. I suggest that we should proceed with fewer of these interventions. If I may say so to the hon. Gentleman who is addressing the House, if he persists in asking rhetorical questions it is difficult to prevent them from being answered. A straightforward statement by the hon. Member on the one hand, and a straightforward statement by another hon. Member in due course, on the other, would get us along more quickly.
§ Mr. Osborne
I will bear your advice in mind, Mr. Speaker.
2150 I should like to give the House some information on the middleman's position.
§ Mr. Osborne
It so happens that among various other activities, I am the chairman of a wholesale grocery company. What we handle is typical of the smaller-sized grocery concerns which distribute foodstuffs to the hundred-and-one small shops in the villages of the counties round about. Hon. Members may be interested to know what profits have been made by that company since 1946. I have all the balance sheets here, and I am prepared to show them to any hon. Member who wishes to see them.
Since 1946, this company—which, I think is typical of the smaller wholesale grocery companies—has turned over between £3½ million and £4 million of foodstuffs, and the gross profit made, that is, before allowing for wages, amounts to 8.06 per cent. After paying wages—and may I say that wages in that industry are miserably poor; they are among the worst in the country, owing to the fact that the margins are so narrow—the net profit over the nine years, before paying tax, was .68 per cent. That means that for nine years this company has bought 20s. worth of food and sold it for 20s. l½d. Its profit has been l½d. in the £. No hon. Member opposite could possibly say that that was profiteering.
§ Mr. Osborne
I have no inside information about the Co-operative societies. What I am trying to give the House is the actual position on the distributive side of the industry. From the figures I have given, hon. Members opposite will see that the high prices are certainly not caused by distributive costs.
My final point is that the other 40 per cent. of the food which we consume in this country comes from abroad. As the hon. Member for Sunderland, North said in his opening speech, the largest increases in price are in tea, cocoa, coffee and meat.
§ Mr. Osborne
The first three are produced by men who have a standard of life which is about one-tenth of what we enjoy in this country. I put it again to the right hon. Member for Llanelly, because I am going to touch his heart, does he and his party want poor workers in the Colonies to have their standard of life pushed down still further, and to work for starvation and slave wages so that he and his highly paid industrial workers can have their food at cheaper prices? If that is what he is after, he should say so.
I will give two more examples. The point has been made about the price of tea. The Indian tea picker receives an average wage of 2s. a day, plus food and shelter. The only way in which we can raise his standard of life is to pay more for what he produces, just as we do in the case of coal. Surely, no hon. Gentleman opposite would suggest that the Indian tea picker should work for less than 2s. a day so that the Socialists of this country may have their tea at a lower price.
Many Jamaicans are coming to this country because wages here are much higher than they can get at home in the sugar industry.
§ Mr. Griffiths
I entirely agree with that. Our relatively higher standard of life has been bought at the expense and poverty of peasantsall over the world, whether it be the picker of tea or any other worker producing primary products in the Colonies at low wages. But I would also point out that fabulous profits have been made out of these people in the Colonies for generations past. Is the hon. Gentleman going to say something about that as well?
§ Mr. Osborne
I agree that that is what has happened in the past, but we cannot deal with the present problem by digging up the past.
I was saying that Jamaicans are coming to this country today because the wages which they can earn here are four times greater than what they can earn at home. A sugar worker in Jamaica gets 10s. a day. I do not think that anyone in this country would say that because we want cheaper food, we should make them work for less than 10s. a day.
§ Mr. Osborne
The right hon. Gentleman says "Hear, hear." But if we do 2152 not do that, how can we have cheaper food?
§ Mr. I. O. Thomas
The hon. Gentleman has asked a question. He has asked how exploited native workers who produce these products at sweated wages are to get an improved standard of life while we, at the same time, have reasonably priced products. The answer to that question lies in another question, which the hon. Gentleman must try to answer for himself. It is, what happens in between the native producer and the people who buy the products in this country? Where is the rake-off going?
§ Mr. Osborne
The hon. Member opposite was kind enough to give way to me on one occasion, when I pointed out that the Co-operative societies had 14,000 acres of tea gardens from which they produced 12,000,000 lb. of tea a year. They also buy 75 million lb. of tea a year. But their prices were just as high as those of anyone else—and they are not paying the workers on their plantations any more than Messrs. Brooke Bonds or similar producers.
§ Mr. Osborne
If we want to give the depressed people of the world a better standard of life we must pay more for what they produce—
§ Mr. Osborne
—and if we do that we cannot have cheaper food. Because the whole world is becoming industrialised the position as between the producers of manufactured goods and the producers of foodstuffs will, in the near future, alter in favour of the latter, and it is inevitable—no matter what Government is in power or what they try to do—that food will cost us more. The right hon. Member for Llanelly knows in his heart that that is true.
§ Mr. Griffiths
I quite agree, but what did the hon. Member and his party say to the electorate in 1951?
§ Mr. Osborne
The only thing that matters to the right hon. Gentleman is what happened in the past. All that he has got in his mind is, "How are we to get votes? Can we get rid of Nye? If so, who shall we get in his place?" What concerns me is the economic welfare of the people. To tell our people that they can have cheaper food, knowing the facts that the right hon. Gentleman knows, is dishonest—and I am surprised at him and his party.
§ 7.27 p.m.
§ Mr. Arthur Lewis (West Ham, North)
If anyone had walked into this House when the hon. Member for Louth (Mr. Osborne) was speaking and asked him to cast his mind back to 1951, I wonder whether he could have remembered what happened during the last General Election. I agree entirely that the cost of living will be one of the major issues confronting the electorate whenever the next election comes. We are in some doubt about that at the moment, because the Prime Minister has not yet told us, but we all believe that it will be between now and next October.
As the question of the cost of living will be one of the most vital issues at the next election, it is right that we should examine it. We should also remember what was said about it at the last election. It was not hon. Members on this side of the House who, at that election, promised to bring down the cost of food; to reduce the price of commodities; to reduce the cost of living; to "mend that hole in your purse or pocket"; to make the £ worth something, and to do all the very things which the hon. Member for Louth now suggests that we shall promise to do at the next election. We never promised such things in 1951, and we shall not do so at the next election.
What we shall do is exactly what we did in 1951, namely, to explain to the electorate—as the hon. Member is now explaining, four years after the last election—that to a great extent the high cost of living is outside our control, because we have to import a large proportion not only of our food but of our basic raw materials, and are, therefore, dependent 2154 upon world prices, and are not in a position to control those prices. The Minister—and the Leader of the House on a previous occasion—tried to make out that when the Conservatives came to office they found the skeletons in the cupboard; found that the cost of living had gone up, and they did not know anything about it, but if that is true, why did they promise at the last election to put it all right? If they did not know the position, why did they promise to put it right? The fact is that they knew.
We know, and the hon. Member for Louth knows, that the reason the cost of living rose under the Labour Government, especially during the last 18 months of its term of office, was that world prices rose to astronomical heights mainly because, owing to the Korean war, there was so much stockpiling and building up of stocks of raw materials that commodities rose in price by 700 per cent., 800 per cent. and 900 per cent., and the cost of our imports rose by 120 per cent.
The astonishing thing is that, when the Labour Government were in power, by a system of controls and wise Government they were able to check the rise in the cost of living far more than any other country in Europe. Prices here rose far less rapidly than in any other European country. It is not for us but for the hon. Member for Louth to explain to his constituents just how far the Government have succeeded.
§ Mr. Osborne
I think that the hon. Member wishes to be fair and honest about the matter and does not want to misrepresent me. If he reads Hansard he will find that I have been saying the same thing for the ten years that I have been in the House.
§ Mr. Lewis
Then I bow to the hon. Member, and I shall correct myself and say that in their official manifesto "Britain Strong and Free" under the honourable signature of the Prime Minister, all the Tory Party—with the exception of the hon. Member for Louth—promised to bring down the cost of living; reduce the price of food, and make the £ worth something. How far have they succeeded? They made those promises and pledges well knowing, as the hon. Member has just revealed—he has let the cat out of the bag, as he often 2155 does—that these matters were outside the control of the Government.
The Government are responsible for internal causes and effects. The hon. Member for Louth will surely agree that it is not the wages of the workers in Ceylon that have pushed up rents; it has been entirely due to the action of the Government. It has not been through any external cause that big rebates have been allowed to Surtax payers, or that there have been rebates on Purchase Tax upon mink coats, refrigerators and washing machines. The hon. Member for Edgbaston (Miss Pitt) triedto suggest that all working-class housewives are now getting washing machines, refrigerators, vacuum cleaners and the rest. What a story! I certainly have seen no signs of them in the working-class homes in West Ham. It may be true of Birmingham.
§ Mr. Lewis
My hon. Friend the Member for Ladywood (Mr. Yates)—and, I think, in future the hon. Member for Aston (Mr. Wyatt)—will have to tell that to the hon. Member for Edgbaston.
The point we must be quite clear about here is the fact—and it is a fact—that, with world prices of raw materials falling, the Government have achieved the remarkable success of allowing the cost of living to reach the highest-ever figure. Over the last year the price of food alone has risen by 20 per cent. Hon. Members opposite say, "Well, wages have gone up by 4 per cent. and the cost of living has gone up by 4 per cent." The hon. Member for Edgbaston mentioned some of the items that have been reduced in price, such as towels and sheets. The hon. Member for Louth referred to my size. I make no apology for it; I like it—but even with my size I do not wear out sheets or towels every day of the week. My wife, therefore, does not haveto buy a pair of sheets every day of the week or every week of the year, but she does have to buy the eggs, bacon, butter and other day-to-day necessities of life.
The fact is that the old-age pensioners and those in the lower income groups cannot afford to buy these day-to-day commodities the prices of which have gone up 20 per cent. in the past year, as the official figures show. We are told that 2156 the old-age pensioners are to get an increase. They were promised an increase about six months ago and if they live long enough they may get it next month. I hope that they will be here to receive it, but many of them will not be. Even when they do get the increase, the overwhelming majority of them will have it reduced from their supplementary allowances, so that, in fact, they will get an increase of only 2s. 6d. That half-a-crown has already been lost in the increased cost of living which has taken place, particularly in the price of food, since the Government announced that the increase was to be given.
The Government have done nothing at all to control or reduce the cost of living, even when it has been within their power to do so. They have done the very reverse. By giving big hand-outs to the steel barons, the road hauliers and the brewers, and by giving big tax concessions to the well-to-do, they have been responsible for increasing the cost of living. When we on these benches get back into power we shall put right some of the retrogressive actions of this Government. We shall be in the happy position of finding that prices of imported raw materials and commodities, instead of increasing as they used to do, are dropping.
We are told by the Chancellor of the Exchequer that because world prices are moving against us, we may be in trouble. We are now, therefore, promised a further increase in the cost of living because world prices are against us. In addition, as a result of the increases in wages for railway men, miners, gas and electricity workers and engineers—and rightly so—there will inevitably be a further increase in the cost of living.
When the election comes along, we on these benches will not promise the electorate to bring down the cost of living. We never did so in the last election, and we shall not do it at the next. We shall tell the electorate that the cost of living will go up as a result of the policy of the present Government.
My last word is to tell the electorate not to be caught twice. The last election, in my opinion, was won mainly because many housewives mistakenly believed the false promises made by the Tories. I believe that the Tories will again make the same promises. They will say, "Return us so that we can continue the 2157 work which we have already started." I say to the women of this country, "Be prepared. Do not be caught twice. Let us get back to a really strong Socialist Government which can deal with the day-to-day cost of living on behalf of the whole of the people, and not on behalf of those few who represent the vested interests of this country."
The hon. Member for Louth laughs, but if he looks at the official figures he will find the facts. Those who were wealthy in October, 1951, are more wealthy today. The rich have become richer at the expense of the poor, who have become poorer.
§ Major W. J, Anstruther-Gray (Berwick and East Lothian)
The hon. Gentleman has said that wages have been rising. It is, therefore, untrue to suggest that the poor are becoming poorer.
§ Mr. Lewis
The hon. and gallant Gentleman is quite right. Wages have risen 4 per cent. officially, as the cost of living has gone up 4 per cent. also. But if the hon. and gallant Gentleman looks at the figures of dividends, profits and interest, he will find that they have risen twice as fast as wage rates.
There has been almost a 12 per cent. increase for the shareholders and the moneyed people. While it may be true that wages have kept pace with the cost of living, those who are in the happy position of owning stocks and shares, and who do not produce, have been obtaining, on official figures, almost three times as great an increase in their unearned incomes.
§ 7.35 p.m.
§ Mr. John Eden (Bournemouth, West)
The hon. Member for West Ham, North (Mr. Lewis) has made his usual colourful speech. He made certain references of a strictly party character, and I want to take up some of those remarks and follow him as best I can. In doing so, there are one or two points that I want to make myself.
The hon. Gentleman has talked about hand-outs to the brewers and the big businessmen, and has brought out the old cry about class distinction, capitalists, and the wicked Tories grinding down the poor. Hon. Members opposite seem to feel that that is a good heartrending cry for the next election, and when they have 2158 no constructive suggestions to make they fall back on that kind of sob stuff.
The hon. Member said that shares and dividends have increased. The other day there was published a Stock Exchange report which showed that the increase in dividends between 1950 and 1954 was something over £100 million. The amount paid out of that in tax was about half, and a certain amount of the remainder was reinvested. Wages, on the other hand, went up by nearly £400 million in a single year. The example which the hon. Gentleman gave of the recent wage increases—
§ Mr. Lewis rose—
§ Mr. Eden
If I have misquoted the hon. Gentleman I withdraw my misquotation, but I am not aware of having quoted him at all. I have referred to some of the things which he said, and I have pointed out that the interpretation that he has placed on the information which he has chosento give is wholly false and partisan. I am only trying to give a true picture of the situation. It is wrong that the hon. Gentleman should get away with those statements.
I am most concerned about the people who are hardest hit, such as those who live on small fixed incomes who have not benefited by the wage increases to which the hon. Gentleman alluded. They are not so lucky as the miners, the engineers, the dockers, and the railwaymen, who have benefited from wage increases. They have, in fact, suffered considerably. Their incomes fell a great deal when the £was devalued not so long ago. That is something which hon. Members opposite choose to forget, but it plays a great part in the cost of living today.
Those people have worked all their lives, have done their best to save a nest egg for their retirement, and have tried to invest it. They have been trying to deal with their own responsibilities themselves, and have endeavoured, as far as possible, to take the burden off the State 2159 and look after themselves. The wasteful money-spending policy of the Socialist Government has virtually ruined their little nest eggs.
I hope that hon. Members opposite will remember some of these people, who are among the hardest hit in the community, instead of thinking in terms of the powerful labour organisations to whose voices they listen so carefully. It is the powerful labour organisations which complain most about increases in the cost of living, and it is those organisations which demand most. By getting most they also contribute most to the increases in the cost of living.
A number of figures have been mentioned, but the hon. Member for Sunderland, North (Mr. Willey) did not mention the wage earners, the people who work in our industry, and the fact that their wages have been steadily going up and up, well above the rate of increase which has taken place in the cost of living; and that fact has very materially contributed to the increase in the cost of goods sold in this country.
§ Mr. Eden
We have heard a lot about dividend and wage restraint but Professor G. D. H. Cole, a Socialist economist, writing in "Money Trade and Investment," showed that dividend and wage restraint, such as had existed, broke down in 1950. Dividend restraint still exists in part, and many managements do their best to limit dividend increases, but what has never existed has been any form of wage restraint.
The trade unions have taken every possible advantage they could of exercising their bargaining powers to secure the maximum wage increases they could get for their men. They are in a very strong bargaining position because, as we certainly welcome, we have full employment in this country—the greatest degree of employment this country has ever known. There are more notified vacancies than spare men to fill them. That is something which hon. Members opposite seek to evade when they fight an election. I should like them to go to the country, when they get an opportunity, and say, "Our statement in 1951that the Tories would bring unemployment has proved to be untrue." 2160 For we now have such full employment that the trade unions are in a very strong bargaining position and there is no free movement of labour such as we should like. [HON MEMBERS: "Ah."] But the trade unions have made full use of their position, which is why most wage increases have taken place. Many companies have to resort to bribes nowadays, not only to keep their men at work but to encourage men to come in to work.
I will give some examples of the way in which organised labour is bribed to do a day's work. We have factory welfare schemes, special canteen prices, works pension schemes, recreation grounds, bonus payments, and overtime pay, held out as a great encouragement
§ Mr. Eden
These are facts, as hon. Members opposite know perfectly well. These measures are adopted not solely in order to show how generous management is but because management wants to keep the labour which it has, and to encourage the labour to do a day's work. These things materially increase the cost of living.
§ Mr. Eden
I hope that the trade unions, the men and women who work in industry, will demonstrate that they have a sense of responsibility, that they realise the heavy responsibility which they have in this country: that they can contribute far more than anyone else to reducing the cost of living by exercising a little wage restraint.
As a whole, they have admirable working conditions in this country. They have a short working week, full employment, and a rising standard of living, and they and their families are also bolstered up by the Welfare State. But what they choose to ignore, and what too many people choose to ignore in this country, is that those benefits entail certain obligations to the rest of the community. One of them, I maintain, is that, as far as possible, they should exercise restraint in their demands for the increasing of wages. I certainly hope that they will do so. Apparently they consider it as their birthright to get all these things, and they feel that all they need to do is a little work and then to ask for more.
2161 We have heard quite a lot about working longer hours in the week, but what is needed is working in those hours a good deal harder than people are working now. It is peculiar that one is not allowed to make any attacks on organised labour or trade unions, but the hon. Member for West Ham, North and his hon. Friends can freely attack management, the people who issue capital and those who run the risks of investing money in industry. They can attack such people as hard as they like and go scot-free, but if anyone answers them with an attack on organised labour he is accused of class warfare and class distinction.
Hon. Members opposite cannot have it both ways. It is as well that someone should speak about the men who are producing the goods of this country, who are vitally concerned with rises in the cost of living, and whose jobs are dependent on our ability to continue to hold the cost of living steady, as the Government have done. It is right that we should make some statement about the part which they play in the economy of this country.
Management, too, can play a very great part, particularly by taking the people in their employment into their confidence more. They do not tell them nearly enough about how the business is run, how the money is spent, and what are the dangers of competition. We have to remember the dangers of competition, because unless we can face this competition from Germany, Japan and the United States, this country will be hit very hard indeed, and the cost of living will be affected very seriously. This competition is not just a bogy which has come out of the blue; it is being seriously felt in this country. If anyone doubts it, let him ask the motor industry.
Unless we can get better labour relations, unless we can cut down restrictive practices, wherever they may be—as the hon. Member for Orkney and Shetland (Mr. Grimond) said—and unless we can speed up the delivery of our goods and make certain that we meet the demands of our customers by delivering the goods on time, we shall never meet successfully the challenge of overseas competition and maintain our position in world markets.
It is only by doing that that we can continue to maintain the present rise in the standard of living. We are spending more in this country, we are consuming 2162 more—as the Minister said; and he gave figures to support it—and we are getting more from the State in benefits. We have heard from my hon. Friend the Member for Edgbaston (Miss Pitt) about how family allowances have been increased and how pensions are about to be increased. All these things are taking place, and people still demand and expect more, still clamour for more, and still, at the same time, want to pay less and less for it and call for reduced taxation.
§ Mr. Eden
I know that hon. Members opposite think they can get away with it by introducing class warfare, but that will not help the country in the next few years. It is my generation and the next which will be concerned with meeting the increases in costs which will be made if the present trend towards higher wages and demanding more for fewer results should continue.
Apart from the trade unions, organised labour and management, the Government can also help to bring down the cost of living. The part they can play particularly is in their Departmental expenditure. I know that a great deal has already been done in that direction.
I am grateful that we have this Government, and not one elected on a programme as laid out in the Opposition's red paper, "Challenge to Britain." If a Government got into power on the mandate of the plans which the Opposition has put in "Challenge to Britain," with its beautiful, woolly-headed schemes, without any thought of where the money is to come from and who is to pay for them, without any confession at all as to how much they would cost, woe betide the people of this country, particularly the pensioners and wage earners. The cost of running the socialised machine for which they hope would cripple the country.
I believe that still further reductions can be made in Government expenditure. There is too vast an expenditure in the Departments. A colossal wastage is still going on.
§ Mr. Eden
I know of case after case where there are far too many spending their lives interfering with other people's lives. [Interruption.] Hon. Members 2163 opposite now seem slightly happier than they were when I began. I am glad to see that they are recovering their spirits. I hope they will also recognise that in making these remarks I have tried at least to be honest and have attacked the three principal causes which I consider are the main causes for the slight rise in the cost of living which has taken place under the present Government. Hon. Members opposite try to depend entirely on their rather nebulous and out-dated story of the wicked Tory boss. They had better forget about that pretty quickly because the electorate has long since got over its fear of the spectre which the Opposition tries to portray.
I should like to see more co-operation in industry because I think it would be a great help in bringing down the cost of our manufactured goods. [Interruption.] I am trying to cut my speech short.
§ Mr. Eden
—I advise hon. Members who represent powerful labour organisations to go back and preach to the men who support those organisations to demonstrate their sense of responsibility to this country by not forging ahead day after day with demands for increased wages. Let them show that they also consider not only what is going into their own pockets every day of the week but how the countryis placed. Let them show that they, too, consider the position of those on fixed incomes and the position of old-age pensioners. Let them contribute by doing an honest day's work for an honest day's wage, and help to produce the goods which the country needs to sell in overseas markets.
§ 7.54 p.m.
§ Miss Margaret Herbison (Lanarkshire, North)
Most of us on this side of the House, and perhaps some of his hon. Friends, felt that when the hon. Member for Bournemouth, West (Mr. J. Eden) spoke in a previous debate, on education, he had reached a very low depth. I do not think any of us has changed our 2164 mind after the speech we have heard him make today. What a farce it is for an hon. Member who has made such a speech to finish by saying that he wants better labour relations and greater cooperation in industry.
The hon. Member slighted every working man and woman in the country. He suggested that they have used the position of full employment to make demands which were not just demands. If one examines the whole history of the trade union movement from 1945 until the present day one can only come to the conclusion that our great trade unions have been led by the most responsible leadership.
I would say to the hon. Member that before he comes to this House he ought to make very careful inquiries to see that the points he intends to make are correct. He has indicted the workers but not said a word about the people who are jeopardising not just the present standard of the country, but the future security of employment for our people. As I hope to show later, if there are any dangers for the future prosperity of our people one cannot put them down to the working men of this country, but to the very class to whom the hon. Member was giving the greatest praise.
I have listened to almost the whole of this debate. I should like to congratulate my hon. Friend the Member for Sunderland, North (Mr. Willey). He made a most devastating indictment against the Government. The Minister skated over many of the points that had been made and to which we expected an answer. None of those who followed the Minister on his side of the House has found any answer at all to the specific points made by my hon. Friend. I hope that the Economic Secretary, who is to wind up the debate, will deal quite specifically with the points that have been made.
As for the Minister's speech and the speech of the hon. Lady the Member for Edgbaston (Miss Pitt), I have never known such complacency in this House. It would appear that everybody in the country is living a very full and happy life under this Government. The hon. Lady said people had told her that if she were to go to their constituencies she would see how old-age pensioners were living and she had replied that she had not been given the chance to go. I am 2165 sorry that the hon. Lady is not present, because I am certain that even in her constituency, in Birmingham—without going to any other constituency—she could find old people suffering miserably under this Government.
The Minister said that no politician should be ashamed of saying that he has not entirely attained his objectives. In the statement he made he was very biased indeed. We are not accusing the Government of not entirely attaining their objectives—we are accusing them of having made no attempt whatever to attain the objectives that they set out in the General Election in 1951. That is our criticism today, and I want to deal particularly with that. I would not accuse any politician who had really tried but, through forces outside his control, had failed. I do blame very much indeed the members of this Government who have not even aimed at attaining their objectives, but have ruthlessly and shamefully broken the promises they made to the British people in 1951.
The hon. Lady the Member for Edg-baston tried to show from the Tory pamphlet, "Britain Strong and Free," that the Tories had not made any specific pledges on this matter of the cost of living. I have a quotation from that document, through which they tried to tell the British people thatThe rising cost of living is the rising cost of Socialism.That was the story they were telling the country. They went on to say:The remedy is in your own hands. Turn out the Socialists and help the Conservatives to fight the rising cost of living.Was that not an attempt to tell the people of Britain, in 1951, that all they needed to do was to return a Tory Government to bring the cost of living down? They went on to say, in that very same document:A Government will be judged according to the effect of its programme upon rising costs and prices.I hope that they believe that today, because if they still believe that today they know that their fate is sealed at the next General Election.
We have been told today by various Members opposite, by the Minister and by the hon. Lady the Member for Edgbaston particularly, that we have been eating more. They have tried to tell us 2166 about the various things we have been eating more. I ask those hon. Members, particularly the Minister and the hon. Lady, whose speech was based on this assertion, who has been eating more? To us on this side it is of the greatest importance in examining this matter to find out whether all of our people have been eating more, or whether some of our people have been eating more and some of our people have been eating less.
Judging from my visits to the old people in my constituency, I am in no doubt at all that many of those old people who have no other income but their old-age pensions and supplementary pensions are eating less today than they ate when the Labour Party was the Government of this country. I talk not only of the old-age pensioners. I am thinking also of the children of the lowest paid wage earners.
The Tories are making a very different claim today from the claim they made in 1951. Their claim in 1951 was that they would bring down the cost of living. Their claim today, their claim in the television brains trust broadcast, their claim in all their propaganda, is not that they will bring down the cost of living but that at least it has not gone up so much under a Tory Government as it did under a Labour Government. They have moved a long way from their General Election promises of 1951. I think it is important that we should examine that claim.
This country, of all the countries in the world, is the most vulnerable to movements of prices in world markets. There is not another country that imports to such a large extent as ours. Because of that necessity to import we are very vulnerable indeed to fluctuations in world market prices. From 1945 to 1951 there was an increase in world market prices of almost all the raw materials we used and of about 50 per cent. of the food we ate of 120 per cent., yet during those years, under a Labour Government, the increase in the cost of living was 34 per cent. I say that that reflects great credit on the policies of the Labour Government.
What chances this Tory Government have had since they came to power to honour the specific pledges they made. Until a few weeks ago world prices were falling. There was a decrease of 16 per cent. in the prices of our imports. Every one of our housewives had a right to expect that when she went to the shops 2167 she would find a decrease in prices. No one on the Government side can gainsay that she has found the opposite. We are told today that there has been a 13 per cent. increase in the cost of living as a whole, and a 20 per cent. increase in the cost of food.
We are also told that wages have kept pace, under this Government, withthe increase in the cost of living. If one were to leave that statement thus one would be giving a completely wrong impression of what is happening to thousands of people. The old-age pensioners have had an increase in their pensions of only 4s. since the Government came to power, and that 4s. increase was for two people. The hon. Lady the Member for Edgbaston said they were to get an increase next month. That reminds me of a very old Scots saying:Leev auld horse and ye'll get corn.That decision was made so long ago many of the old people who were supposed to have benefited by it will not be living next month to benefit by it.
The old-age pensioners, the people with small fixed incomes, agricultural workers, many of the labouring classes—all those in the lowest income groups have to spend a bigger proportion of their incomes on food than do the rest of the people. So that it is quite wrong to say that wage increases for them have kept pace with the increase in the cost of living, and it is about these people we are very worried indeed today.
The hon. Lady the Member for Edgbaston talked about rebates. That is a story often told in Tory propaganda, but the people I am talking about, the people about whom we on this side are concerned, have not had any tax rebates: their incomes were so low that they were outside them. They have not benefited from that, but they have suffered because of the policy of the Government in taking away the food subsidies. I mentioned just now that two old-age pensioners had received an increase of 4s. in their basic pension since this Government came into power, but they have lost almost 6s. 8d. a week in food subsidies, so that they have suffered. And so have the children of the workers in the lowest wage groups.
From the hon. Lady the Member for Edgbaston and from the Minister we heard again today the story about the big increase there has been in the sale of 2168 television sets, and the hon. Lady talked about the great increase in the consumption of tobacco and drink, andof the money spent on the pools. I come from a home where my father neither smoked nor drank, and where, under previous Tory Governments, he and his family suffered very greatly indeed. Many of the people with whom we on this side are concerned are in that same category. If they did not spend a penny on cigarettes, if they did not spend a penny on drink, if they never put sixpence on the pools, but were as thrifty as my parents were, as things are today under this Government they would still suffer greatly because of the increase in the cost of living.
There is no doubt about it. We know from the Economic Bulletin of the Uinted Nations that there has been a larger increase in the cost of living in this country under a Tory Government than there has been in any other major country in Western Europe. The hon. and gallant Member for Ilford, South (Squadron Leader Cooper), in an interjection—it was a rather "Smart Alec" interjection—said he hoped that we on this side would notice the people who were complaining about the high price of coal and of the stones mixed up in it.
We have had that sort of interjection hurled at us often, and we have often been asked what we think about the high price of coal. It is important that we should deal with this, because the suggestion is quite clearly—it was made very clear by the hon. Member for Bournemouth, West—that our miners are not pulling their weight today.
I will give the figures. The output per man shift at the face in 1939 was three tons. The output in 1955, according to the latest figure, is 3.27 tons. In other words, there has been an increase under nationalisation of over ¼ ton. The overall output per man shift in 1939 was 1.14 tons and today it is 1.24 tons. It is important to remember these things. I come from a mining area and I am intensely interested in these matters.
Another point which should be noted is that the National Coal Board has been carrying national responsibility. If the pits had been under private enterprise today, pits which are making losses of up to 30s. a ton would have been closed. They are being kept open by the Coal 2169 Board because the nation so desperately needs coal. No one can tell me that that responsibility for the national well-being would have been borne by private coal owners.
According to the Economic Bulletin of the United Nations, the internal prices of coal are lower in the United Kingdom than in any other Western European country. One would never have thought from interjections made by hon. Members opposite today that that was the case. I interjected when the hon. and gallant Member for Ilford, South made a comment. I should like him to come to my village, where there is a higher incidence of pneumoconiosis than in the whole of Scotland. The hon. and gallant Member would also see a number of miners with broken backs, paralysed from the waist downwards, going about in wheeled chairs—and that is only one village. The Government realise—for they have not attempted to denationalise the coal mines—that if it were not for the miners there would not be full employment today. There would have been a much lower standard of living for many of our people if the coal industry had not been nationalised and the Coal Board had not taken the steps which it has taken in recent years.
Reference has also been made to security of employment and wages restraint. When we speak about hours and wages we should also consider the rise in profits and dividends. How can the Government ask for restraint on demands for wages when in almost every part of their policy they have made it possible for there to be no restraint on profits and dividends? All this is having an effect on everybody's cost of living in this country and if it goes on it will have a serious effect on future employment. I hope that the Minister will have an answer to many of the points which have been put from this side of the House in the course of the debate.
§ 8.15 p.m.
§ Mr. J. B. Godber (Grantham)
I am very glad to have the opportunity of following the hon. Lady the Member for Lanarkshire, North (Miss Herbison). She always speaks with great sincerity, and I always enjoy her speeches. When I was in my constituency last week I was surprised when I visited a hobbies exhibition to find exhibited there by the local camera 2170 club a photograph of the smiling face of the hon. Lady. The caption under the photograph was "The Canvasser." I was very happy to see her photograph exhibited in my constituency.
I am sure that, with her charm, she is always successful when she goes canvassing, but I do not think that her constituents, when they come to think about her arguments tonight, will consider that they really hold water. I do not want to follow too closely the points made by the hon. Lady, but she took up a point which was made earlier by her hon. Friend the Member for West Ham, North (Mr. Lewis), which must be refuted. She spoke of an increase in food prices of 20 per cent. in the last 12 months.
§ Mr. Godber
At any rate, that is what the hon. Member for West Ham, North said. I am sorry if I am misinterpreting what the hon. Lady said, and I am sorry that the hon. Member for West Ham, North is not here now. Actually, the Interim Index of Retail Prices has risen from 109.5 to 119.2, and that is certainly not a rise of anything like 20 per cent.
It is always possible to produce many different sets of figures in the course of a debate on the cost of living. We have certainly had plenty of them today and I do not want to enlarge further on them. It is always easy to choose a particular period to suit one's own point of view, and draw conclusions from it.
The only thing that is absolutely clear from the fact that this debate has taken place today is that the Opposition is paying a compliment to the Government in that it is saying that we on this side of the House should not have allowed a rise in the cost of living to take place, disregarding the fact that that rise has been only half of what it was when the Opposition was in office. In other words, the Opposition realises that we are much more efficient in that we have only allowed a rise of half of the rise which took place when hon. andright hon. Gentlemen opposite were in office. The Opposition thinks, therefore, that we should have been even more efficient and should not have allowed even that rise to take place. We take that as a sincere compliment.
§ Mr. Godber
I was referring to food prices, and world food prices have not been reduced. It is true that they dipped slightly in 1952 but they are now well above that figure.
§ Mr. Godber
No doubt my hon. Friend the Economic Secretary will deal with that point. Food prices are not lower. It is only commodity prices that are lower.
The House has heard from our side about abundant supplies and from the other side about how people cannot afford to take up those supplies. I should like to quote something extremely sensible which was said on 2nd November, 1950, in these words:Finally, I think there is another reason why nowadays people feel stringencies which they did not feel in earlier years. It is the simple fact… that there happens to be more to buy. When there was nothing much to buy in the shops people had plenty of money in their pockets, and the complaints, as we all remember very well, were about shortages. When more things that we all want to buy come on the market—well, my experience, at any rate, is that my wife presses me for more money to replace things—for instance, clothing, and sayswe ought to spend a little more money on clothes; and we find the temptation, of course, to spend more ourselves very much greater; and this creates a feeling—a very natural feeling—of stringency, that money is tighter and that somehow or other the cost of living is going up."—[OFFICIAL REPORT, 2nd November, 1950; Vol. 480, c. 345.]I forgot to say that those words were spoken by the right hon. Member for Leeds, South (Mr. Gaitskell). I thought that those words were very sensible. They explain a good deal of the attitude shown by hon. Members opposite today.
The position of the housewife has been commented upon already today, but it is worth enlarging upon because the housewives now are in a position to exert a powerful influence on prices in many ways, through the greater freedom which now exists. They are no longer chained to the ration books but are able to buy what they like where they like, and there is sufficient abundance and choice for them to leave aside a particular item, if they so wish, and by doing so force down the price of that commodity.
2172 That has already been shown recently in the case of tea. The fact that housewives were holding off buying helped to cause the welcome drop in the price of tea which has taken place in recent weeks. The same thing could happen in regard to fresh meat. The present price of home-killed best joints is high because meat costs a great deal to produce in this country at this time of year. There is, however, plenty of imported meat which can be bought at lower prices, and if every housewife bought one joint of imported meat in every two joints she purchased, it would immediately react on the price of home-killed meat. So the housewives have an ability now which they have not had for 14 years, and they should be encouraged to use it.
Now I turn to deal with one or two points made by the hon. Member for Sunderland, North (Mr. Willey). The hon. Lady for Lanarkshire, North said that he made a devastating indictment of Government policy. I thought his indictment was so devastating that it sunk the hon. Gentleman himself. In fact, I thought that he was completely submerged beneath the weight of his own statistics at the end of his speech. He produced such a wealth of them that they went out in all directions and ended nowhere, if I may say so without being too unkind to him.
§ Mr. Godber
Indeed it is, as I shall show.
The hon. Gentleman spoke about eggs. He seemed to be worried about the cost of imported eggs at one stage. If I understood his argument aright it was that we have been importing too many.
§ Mr. Willey
I apologise if I expressed myself badly. I called attention to the fact that the import of eggs had dropped 10 per cent.
§ Mr. Willey
May I explain, in order that the hon. Gentleman knows the case he has to meet, that I was dealing with one of the defences of the Government that if we have a high-cost domestic market, we attract foodstuffs to this country? I was saying that our experience over the past few years has shown that to be false.
§ Mr. Godber
Oh, no. The consumption of eggs is far higher now than it was then. The hon. Gentleman cannot get away with that. In 1951 it was a case of a black market in eggs. Today the housewife can buy what she wants. That argument is complete nonsense. If I cannot get any further with the hon. Gentleman on that point, shall I turn to what he said about consumer subsidies?
§ Mr. Willey
Before the hon. Gentleman leaves that point, may I apologise and say that I ought to have referred to 1950? [HON MEMBERS: "Ah."] Well, that was the year when there was an amplitude of eggs, whereas 1951was a bad egg year. Does he want to take that as a standard? Egg production is affected by the weather. In 1954 we had an exceptionally good egg year but consumption was still less than in 1950. I should like to know whether the argument of the hon. Gentleman is that we shall never have as many eggs as we had in 1950.
§ Mr. Godber
Certainly not. I am saying that we can get as many eggs as we like at this time, and I do not accept the figures of the hon. Gentleman. They take no account of the many eggs that now pass from the farmhouse to the consumer, of which there is no record.
§ Mr. Willey
Will the hon. Gentleman deal with the facts before us? If there was a black market of unrecorded eggs in 1950, the true figure for consumption was so much the higher.
§ Mr. Godber
The point that I am making is that there is now no need for a black market. There are plenty of eggs for sale today, as one sees on going along every road in the country, where there are placards "Eggs 4s. a dozen," or whatever the price may be. The fact is that any housewife knows that there are far greater supplies of eggs available today, and it is not a point to which the hon. Gentleman's argument can stand up.
He also spoke of consumer subsidies being whittled away, instancing bread and 2174 milk, and he mentioned a reduction of £17 million or £18 million. At the same time he said that home-grown wheat prices were low but that there was no reduction in the price of bread. He must know that much of that whittling away of which he was speaking was due to the fact that there was not the need for the same subsidy on bread because the price of flour was low. So his arguments were defeating one another. That is why I said they went in all directions.
§ Mr. Willey
If the hon. Gentleman will deal with the point I was dealing with then, may I explain that I was saying that the Trading Loss Account of the Ministry of Food was standing at £326 million and that the commercial losses were greater than are indicated by that figure alone, because the milk, bread and welfare subsidies had been reduced by £22½ million, compared with the original estimates.
§ Mr. Godber
Yes, but the hon. Gentleman used the words "whittling away." He tried to pretend that we were cutting the food subsidies, whereas the reason for the whittling away was the one I have given.
§ Mr. Willey rose—
§ Mr. Godber
I have been as fair as any hon. Member can reasonably be expected to be, and the facts are clear in this case. The arguments of the hon. Gentleman will not bear close investigation. I also want to take him up on another point.
I turn now to the effects of Socialist policy. We have heard a lot about the shortcomings of the present Government, but what about the policy of the Labour Party? As to its policy with regard to food, we got a little reference to it in "Challenge to Britain," but we have largely to develop our ideas about it from the policy statement on agricultural marketing which has recently been published. It is a most interesting document which I, for one, have studied most carefully.
I am interested to see that the Labour Party pins its faith largely, as regards both home produced food and imported food, on commodity commissions. The 2175 document talks of a cereals commission which will operate fixed guaranteed prices on a quality basis, and imports will be contracted for either directly by the Government or through the agency of the commission. That is bulk buying, of course. There is the same sort of thing in respect of livestock. Imports from exporting countries will be contracted for either directly or through the agency of a commission. The whole idea is bulk purchase by commodity commissions.
What I looked for most carefully in the document, but did not find, was a statement about just what the Labour Party was going to do about the control of imports. However, the hon. Member for Sunderland, North has been very forthcoming. He supplied some of the answer in his speech on Friday, 11th March, when we debated agriculture. He was talking about this document. He said:What about imports? We know that the real difficulty about the policy of guarantees is the isolation—and it is no good trying to avoid it—of home agricultural production from world markets. That is something against which we must safeguard our British agricultural industry in the most efficient and expeditious way possible. All that is required is that the livestock commission, as a non-profit-making body, should have the power at the point of control to determine the movement of imports. That, in short, is the proposal of the Labour Party about livestock marketing.—[OFFICIAL REPORT, 11th March, 1955; Vol. 317, c. 881–2.]If that means anything at all, it means control of imports. I imagine that what the hon. Gentleman means is that the Labour Party would control imports, and having read the policy statement, I presume it would do so in such a way as to maintain not too great a supply but almost a shortage in order to bring import prices up to the prices guaranteed to the home producer. In other words, if it means anything at all, it means artificially high prices to British housewives. It means bringing world prices up to home prices wherever they fall short, and, thus, British housewives will have to pay the full prices.
Under the present system whereby we make deficiency payments we are able to allow housewives a free run of commodities from all over the world at world prices. Under the system advocated by the Labour Party there will be restriction on imports and the housewives will have 2176 to pay through the nose as a result of the maintenance of an artificial price for the home farmer.
If that is the policy, I could understand it having some appeal to the agricultural community if they really thought it would be implemented. It is all very well to put that proposal forward on the one hand, but it is absolute hypocrisy to put forward on the other hand the suggestion that food prices should be lower and that the cost of living should not rise. The two things just do not go together.
I hope that whoever winds up the debate for the Opposition will show very clearly where the Labour Party stands on this issue. If not, it will be our duty to tell the constituencies throughout the country, and particularly the agricultural constituencies, just what the proposal means. I am certain that if it were implemented it would mean a substantial rise in the cost of living. It would be Government action deliberately to put up the price of food to the housewives. If that is the policy of the Labour Party, I hope that the Opposition will say so clearly when the next General Election comes. If it is not its policy, I hope that the Opposition will repudiate the document. Otherwise hon. Members opposite are misleading the agricultural community.
I wish, in passing, to refer to the speech of the hon. Member for Orkney and Shetland (Mr. Grimond), who brought into the debate a touch of realism which was most welcome, particularly as it came from the benches opposite. He showed what is really at stake, and that if we are to hold the rise in the cost of living we must secure greater productivity. Whether the productivity comes from farm or factory does not matter much. So long as it is commensurate with the rise in wages and profits we can carry on without any loss, and should be able to stabilise the cost of living.
It is when wages and profits rise at a higher rate than the increase in productivity that we get into trouble. I think that the hon. Member stressed the real point at which we should all aim if we have the benefit of the people of this country at heart. I hope that when my hon. Friend replies, he will touch upon that very important topic.
2177 I get a little tired of hon. and right hon. Gentlemen opposite talking about subsidies and controls as though they were something which they invented in some sort of magic way to solve these problems. They inherited them at the end of the war, and their only claim to any credit is that they inherited what were perfectly good arrangements for war-time and prostituted them by using them in conditions for which they were wholly unsuited.
I am glad that hon. Members on this side of the House have referred to the standard of living, which is the real basis. By whatever figure one judges it, the standard of living throughout the whole range of people of this country today, certainly not only the well-to-do, is better than it was in October, 1951. No amount of confusion which hon. Members opposite may seek to spread will stop the electors from realising that. That is the vital point to which we should hold, and we shall improve the standard more and more if we take the line that the hon. Member for Orkney and Shetland suggested, and step up productivity even more. There will then be no limit to what we can do for the people of this country.
§ 8.36 p.m.
§ Mr. William Hamilton (Fife, West)
If this debate has done nothing else, it will have been valuable if it makes it impossible for any political party in any future election to go to the electorate and make specific promises about reducing the cost of living. It would be dishonest for us to go to the country at the next General Election and promise that we will bring down the cost of living. Our main charge in this debate is that the Government got into power largely through making just that promise. They did not go to the country and say what they are now saying. They did not go to the country and say to the electorate, "If you return us the cost of living will rise, but not as fast as it did under the Labour Government."
The hon. Lady the Member for Edgbaston (Miss Pitt) stayed in the Chamber for about ten minutes after her speech and has not been seen since. She did not fully quote from the document, "Britain Strong and Free" on which the Conservative Party fought the election. I should like to complete the quotation. It read: 2178A Government will be judged according to the effect of its programme upon rising costs and prices.In other words, the Government invited the electorate to judge them on the cost-of-living issues. The document then went on to describe some of the measures that would be taken:The reduction of State trading will mean cheaper and better food….Have the Government reduced State trading? If so, has that meant cheaper and better food? It went on:All these things will be achieved only by immense efforts and after some time but, carried into effect together, they will enable us to control"—and this is the part the hon. Lady omitted—and then, as we are determined, to reduce the cost of living for all.That is the quotation from the manifesto on which the Government fought the last election.
The most honest speech that has been made from the Government benches was made by the hon. Member for Louth (Mr. Osborne). He put the question quite fairly. He said that if we wanted to reduce prices of food we had to say whether we meant to reduce wages for our own agricultural workers, or for the workers who are supplying the food which we bring in from overseas. Developing that theme is a more honest way of dealingwith the question which we are facing. I do not think that anybody in the House would be fully prepared to contend that that is the only way we can reduce the cost of food. Indeed, it is possible to reduce prices by increasing wages; but we must have someregard to the costs which we pay abroad.
The Economic Secretary will say, no doubt, that the prices we pay in world markets are not the sole cause of fluctuations in prices of food at home; but they are a very important consideration. My right hon. Friend the Member for East Stirlingshire (Mr. Woodburn) asked a Question on 8th February of this year. He asked for the import prices as a whole during the six years of the Labour Government and for similar figures for the period of the Conservative Government, and the Interim Index of Retail Prices for the same period. Figures given by the Treasury showed that between 1945 and 1951 under the Labour Government import prices as a whole went up 2179 by about 125 per cent. In the same period, retail prices went up by only 36 per cent. Between 1951 and 1954, under the Conservative Government, import prices came down by 14 per cent. but retail prices went up by 10 per cent. That is the picture as a whole.
Food prices are very much worse. They are up by20 per cent., quite clearly as a result of deliberate policy on the part of the Government and not in any way connected with the import prices that we are paying. Table 153 in the Monthly Digest of Statistics shows that between 1951 and January, 1955, the price of wheat was reduced by 19 per cent. In the same period there was a 44 per cent. reduction in the world price of sugar. While there was a 72 per cent. increase in the world price of tea, the retail price at home went up by about 120 per cent.
Table 151 in the MonthlyDigest of Statistics shows that the commodities which are basic foods, meat, bacon, ham and fish, have gone up by 25 per cent.; butter, margarine and cooking fats by 37 per cent.and tea, sugar, and so on, by 67 per cent.
The hon. Member for Grantham (Mr.Godber) referred to tea. During the whole six years of the Labour Government, tea increased in price by 8d. a lb. Under the Conservative Administration, in three years it has increased in price from 3s. 8d. to 8s. a lb. The Parliamentary Secretary to theMinistry of Health, in her broadcast in May, 1953, said after tea had been decontrolled:There's plenty for everyone and at reasonable prices.On 6th February of this year, at Eastbourne, she said:Britain's tea is still the cheapest in any country, except Australia.The hon. Lady was, of course, speaking from a brief which had been supplied to every hon. Member of this House by the tea trade. She continued:You can get 200 cups of tea out of 1lb. of tea.I should like to ask the Minister how much he pays for a cup of tea in a café or restaurant in Britain. Say it is 4d. Two hundred cups of tea at 4d. a cup means a total of £3 6s. 8d. The cafes and restaurants get £3 6s. 8d. for an 8s. lb. of tea. The hot water must be very 2180 expensive. That is the kind of thing the tea trade is trotting out, and the Parliamentary Secretary to the Ministry of Health faithfully repeats it, like the parrot which the Conservative Party is for the trade concerned.
The Housewives' League—Lord Kilmuir's darling—then came into the picture. Its solution to the tea problem was to stop drinking tea. The "Daily Express" and the Tory Press were full of stories on how to save on tea. Even special teapots were manufactured in order to save a spoonful of tea. I had visions of the old lady who appeared at a Labour Party Conference about two years ago and said, "We are getting very near to the days that I remember so well in the 'thirties, when you had to dry the leaves after each meal and use them again."
The "Daily Express" also said that the way to bring down the price of meat was to buy less meat. If we buy less tea and less meat, we shall reduce the cost of living. If we bought nothing of everything, and then died, the cost of living would be nil—that is the logical conclusion of that argument. Again, the Parliamentary Secretary to the Ministry of Health repeated what the tea trade said—and this relates to the same theme—that if the average consumer smoked eight cigarettes fewer each week, tea drinking would cost nothing at all. So we have to stop buying tea, stop eating meat and stop smoking, and then the cost of living will come down—and if we do not die at the end of it we shall be lucky.
Let us look at what has happened in other countries. In a competitive world we must consider what has been happening in other countries while these things have been happening in our own. I had occasion to peruse the United Nations Monthly Bulletin of Statistics for January, 1955. In that bulletin are listed 82 countries, of which 53 have had smaller food price increases since 1951 than has the United Kingdom, which is well into the second half of the table so far as food prices are concerned. Indeed, in 15 of those countries there were actually decreases in food prices during the period of present Government, including Canada, Cuba, Egypt, India, the Republic of Ireland, the United States, and Yugoslavia. All these countries enjoyed a decrease in food prices while 2181 we were having a 20 per cent. increase in this country.
Almost every European country has done much better than Britain in the matter of food prices in the last three years. According to the Bulletin, Belgium, Denmark, Finland, France, West Germany, Iceland, Ireland, Italy, Luxembourg, Holland, Portugal, Spain, Sweden, Switzerland and Yugoslavia all did better than we did. As I said earlier, there is, obviously, no easy solution to this problem. Certainly, there is no short-term solution to it. Were each party honest at the next General Election it would tell that to the people. It would say that the world does not owe us a duty to give us the cheap food that we have enjoyed for far too long. There has been "blood on the tea" as well as "blood on the coal" in the past, and it is the duty of nobody overseas to supply us with cheap foodstuffs.
I believe that we must do very much more than we have done hitherto in the matter of the production of food at home. The farmers were bolstered up and encouraged by the Labour Government more than by any other Government in our history. After three years of Tory Government, they reached the stage where, at the National Farmers' Union Conference, they were going to move a motion of no confidence in the Government, and they had to be bribed by the Annual Price Review into not doing so.
I believe that the time is over-ripe for a much more scientific and discriminatory use of the subsidies that are now being paid in such an undiscriminating way to our farming community. In a debate about 18 months ago, my hon. Friend the Member for Hamilton (Mr. T. Fraser) made the revealing statement that farmers in Scotland were receiving in subsidies the equivalent of their complete wages bill of £30 million a year.
If the public is paying the whole wages bill of the farmers in Scotland, then it is entitled to make absolutely certain that it is getting value for money. I am not at all sure that we are getting value for the public money which is being poured by way of subsidies into the farming community. I am not saying that all farmers are inefficient—of course, they are not; quite a number are efficient—but I am quite sure that inefficiency is being 2182 unnecessarily bolstered up by the indiscriminate use of subsidies.
§ Mr. Hamilton
I am stating what I believe to be true, and the only way in which we can establish whether or not I am telling the truth is by a much more scientific investigation of the subsidies than we have had hitherto.
So far as the distribution of food is concerned, my hon. Friend the Member for Hillsborough (Mr. G. Darling) made out a case for an inquiry into that side of the matter and, therefore, I need not say anything more about that. Looking at the international aspect, I think it would be wrong to assume that our standard of living should go up as of right if world production goes up. That need not necessarily be so. I think that if the world food production goes up the priority claim to any increase in the standard of living ought to be with the underfed millions in Asia, Africa, South America, and elsewhere.
However, that is no reason for our not making a special and increased effort to increase world food production, because, quite clearly, if we raise the standard of living of the peoples overseas, it automatically increases the markets for our own exports. That all ties up. If we are to increase our exports and are to sell them in the more numerous markets that we are hoping to create overseas, we in this country must do something to make our exports competitive.
The main argument put forward from the Government side today is, I think, the signpost to chaos, because they have been saying, "We admit that food prices have been going up, but wages have been going up just as much." What is the logical conclusion of that? Surely it is that export prices must continue to rise, as a consequence of which our ability to sell our goods abroad must be impaired. Indeed, the whole complaint of the Chancellor today is that our exports are not going up.
The Government have got themselves into the position of saying, "We are bleeding to death, but the blood transfusion service is wonderful." Our charge against the Government is that they made specious promises at the last General 2183 Election. They have been found out, and at the next election they will be condemned for them.
§ 8.55 p.m.
§ Squadron Leader A. E. Cooper (Ilford, South)
Part of the speech of the hon. Member for Fife, West (Mr. Hamilton) was essentially emotional, and was no doubt intended for constituency consumption, but part of it was a realistic attempt to face the facts of the situation.
I disagree with a number of the remarks made by my hon. Friend the Member for Bournemouth, West (Mr. J. Eden). It is within the experience and knowledge of all Members of the House that since the end of the war the T.U.C. has conducted itself in a highly responsible manner, and our industrial stability since that time is in no small measure due to the responsible attitude of its leaders. I do not think that we serve the interests of our country by trying to sow discord between different classes of the population, especially at a time when there is probably more unity in the country than there has been for many years.
Of course, we have our political battles upon the Floor of the House, and much that has been said today has been of a purely political character. For example, we have been privileged to listen to the dress rehearsal of the adoption speech of the hon. Member for West Ham, North (Mr. Lewis) for the forthcoming General Election. He knows perfectly well that he cannot expect any hon. Member to believe one word of what he has said, but it was good political, knock-about stuff.
At the end of the day, however, we have to face the realities of the situation. What are we to do about the cost of living and the standard of living? How are we to ensure that in future years we shall be able to maintain the high and rising standard of living which we now enjoy? On purely political grounds I did not think much of the speech of the hon. Member for Sunderland, North (Mr. Willey). It was a mischievous speech, and it contained a wealth of mis-statements which my right hon. Friend was able to destroy without too much difficulty.
We have to remember that the record of the Labour Government on the question of the cost of living is a very deplorable one. It is a very great privilege for 2184 me to find sitting upon the Opposition Front Bench the Leader of the Opposition and the right hon. Member for Llanelly (Mr. J. Griffiths), because it was the Leader of the Opposition who said, in Bristol, in 1952:We"—that is, the Socialists—kept the cost of living steady by food subsidies.Let us see what his right hon. Friend the Member for Llanelly was saying in 1946, when he was a Minister. When he introduced the National Insurance Bill he said that it was the intention of the Labour Governmentto hold the cost of living at about 31 per cent. over the September, 1939, level."—[OFFICIAL REPORT, 6th February, 1946; Vol. 418, c. 1742.]But, as the right hon. Gentleman well knows, by 1951, under the Labour Government, the cost of living had risen to nearly 70 per cent. above the 1939 level.
In the same speech, the right hon. Gentleman also assuredthe House that it was the intention of the Labour Government to take people off public assistance, but in the six years during which they were in office the number of people drawing National Assistance increased from 1 million to 2 million. When it comes to the question of fulfilling promises and pledges, therefore, it does not lie in the mouths of hon. Members opposite to complain.
I should like to go one stage further and quote from an article, which I have quoted once before in this House, by the hon. Member for Coventry, East (Mr. Crossman). He said on 7th November, 1954:While prices, profits and wages all soared under the Labour Government, the standard of living of our old people went down. They were cheated even of the modest slice of the national cake which they had been promisedIt was not a Tory who said that. That is the statement of a member of Her Majesty's Opposition.
In those six years the cost of living increased and the standard of living went down generally. That is evidenced by the fact that practically every year when the Labour Party controlled our affairs there was a decrease in the amount of small savings. But that trend has been reversed, and today there are published weekly details of increases in savings of 2185 the small investor in National Savings and in Post Office savings. Without going into all the statistics which have been quoted today, and which only serve to cloud the issue, the fact is that we are earning more, spending more, eating more, producing more and saving more All these facts are incontrovertible.
But, having said that, we come hard up against the questions which were put to the Government by the hon. Member for Orkney and Shetland (Mr. Grimond), who, if I may say so, I thought made the best speech in the debate today. Certainly it is the only speech in which has really been discussed the cost of living. The cost of living is not simply and solely concerned with food. It is concerned with every aspect of our lives.
I am very disappointed that the Opposition should have decided to provide, as their main speakers, to open and close this debate on their behalf, two hon. Members who are concerned purely with the food aspect of the situation. That is only one part of this great problem.
This question of taxation has to be tackled by the Government—not only this Government but any subsequent Government. We cannot, as a nation, continue to exist with any prospect of increasing our standard of living with the weight of taxation which is grinding everybody down at the present time. It is all very well for us on this side of the House to say that we have relieved millions of weekly wage earners of the liability to pay Income Tax, but these same people today have to pay 3s. 7d. for a packet of 20 cigarettes, a high price for their beer, and a considerable sum weekly in Purchase Tax. In addition, if they are fortunate enough to own a car, they have to contribute 2s. 6d. in tax for every gallon of petrol that they buy.
This is a situation which cannot be allowed to continue. In one way or another, taxation must be reduced. We are carrying, too, what we call in the business world an excessive overhead. We are today carrying in national and local government service more than a million employees, and that at a time when our labour force for productive purposes is inadequate.
I should like to ask my hon. Friend the Economic Secretary this question. If he were suddenly faced with a situation in 2186 which he did not have any of the existing methods of levying taxes, and yet had to find £4,500 million to finance the country, would he use the same methods of taxation as are employed today?
Looking back on the economic and financial life of the country, it seems to me that we work on something like these lines: we have a series of classifications—petrol duty, Income Tax, Purchase Tax and so on—and year by year the Chancellor of the Exchequer, whether he is a Conservative or a Labour Chancellor of the Exchequer, considers each tax and puts a little on here and takes a little off there. Over the years we have developed this almost Frankenstein system of taxation which is slowly stifling the initiative of the country. If we are to live in a highly competitive world we must, in the very near future, get down to reducing some of the overheads.
I have spoken on Purchase Tax in the House on many occasions, for I believe it to be a stupid and vicious tax. I do not accept the strictures levelled by the hon. Member for West Ham, North at the Government for their decision to reduce Purchase Tax on mink coats. A person earning his living in the fur industry, who has seen the possibility of continued employment being taken away because of the high rate of Purchase Tax, will look upon that concession as a decision which has kept him in employment. The concession has undoubtedly saved the fur industry in this country, and we are now back in a position which enables us once more to export.
When we consider that we can buy a car for £650, which is the price of the article, but then have to find another £350 for the Government, plus a high rate of petrol duty, plus a licence fee, we realise how stupid the situation is. This tax is a cost in industry which we must abolish. If it is necessary to provide the money, I should prefer to see a sales tax in some form substituted for Purchase Tax.
We must remember that it is not only the increased cost of food which has raised the cost of living. The increase in the cost of living in this country has found a great supporter in the costs of the nationalised industries—coal, gas, electricity, and transport. The cost of all those services has risen, and that makes a contribution to the increase in 2187 the cost of living. This year we must do something about the tax on petrol and fuel oil in an attempt to reduce these costs.
In certain ways we have the weapons in our own hands, if we use them properly, to make an onslaught on the cost of living. We have the weapons in our own hands, if we use them properly, to ensure not only that we maintain our standard of living in 1955, but that we create a sound, competitive position for our industries for the future.
§ 9.8 p.m.
§ Mrs. Jean Mann (Coatbridge and Airdrie)
I have been in the House throughout the debate, and since my hon. Friend the Member for Sunderland, North (Mr. Willey) sat down I have felt that I was living in cloud-cuckoo-land.
It appears from the speeches of hon. Members opposite that we have everything that is best in all possible worlds. The Minister told us about sweets and ice cream and television sets, and the hon. Lady the Member for Edgbaston (Miss Pitt) found it quite impossible to trace any person who was suffering in any way. I remember that the Minister's predecessor told us very complacently on the wireless one night about the large amount being spent on tobacco and alcohol and used it as a sign of the great prosperity of the country and a sign that no person was suffering. He had not the common sense to know that there are a great many people in Great Britain who do not smoke and never touch alcohol.
A great many of those people bitterly resented that the Minister should think there was a green light to go ahead with higher prices because of the increased consumption of alcohol and tobacco. The present Minister, in much the same way, cites the increased consumption of sweets and ice cream and the buying of television sets as a reason for increasing the price of all the basic commodities.
I have also been surprised at the getaway being prepared by hon. Members opposite. They have now completely forsworn their official document, issued by their own Minister, as a reliable authentic indicator of today's prices. What has gone wrong? Why do they not agree? Why do they not quote those figures? Every time I have quoted them 2188 at Question Time the Minister has repudiated them. The last time I asked about the price of three commodities he won the cheers of all around him by saying that those prices had not increased, that they had, indeed, decreased. Hon. Members opposite thought that was really a wonderful retort, but it was a wrong retort. If I had not rather a respect for the right hon. Gentleman I would say that it was a dishonest retort. He knows what I have been in touch with him about and the correspondence that has passed between us.
I was astonished at the prices he quoted. I wanted to know where he had got his figures. I knew he had not got them from the Ministry of Labour Gazette. It transpired that Tory Members have a new angle now. They discovered a shop selling margarine at 1s. 4d. per lb. Goodness knows where it is; I do not know. They have discovered other shops selling butter at 3s. 6d. per lb., although we all well know that the price is fluctuating between 3s. 8d. and 3s. 10d. per lb. Having made that particular discovery they have done something completely unwarranted along the lines of logic; they have argued from the particular to the general and despised their own Minister's figures.
The right hon. Gentleman said to me, "The facts you quote from the January issue of the Ministry of Labour Gazette refer to the average level of prices." Surely I am entitled to quote the average level of prices and surely the right hon. Gentleman is entitled to quote the average level of prices. Why, then, do we find that hon. Members opposite will not agree to the cost-of-living index figure quoted by the Minister of Labour? He is a very estimable gentleman, a gentleman whom we all respect. Surely there is not a split on the other side of the House. Are they not on speaking terms with the Minister of Labour? Why do they despise his figures? I think I know.
Here are the latest of them. We take the figure for 15th January, 1952, as 100–15th January, 1952, was after l0d. per lb. has been imposed on cheese and l0d. per lb. had been imposed on bacon. Compared with that figure of 100, the figure for butter, margarine and cooking fat is 137. The figure for tea and sugar is 167. Meat, bacon, ham, and fish—here we find the contradiction with the Minister's 2189 statement—are now at 125. Milk, cheese, and eggs, which he told us a few hours ago had come down below the controlled price, are now at 108. Vegetables and fruit are 110. Miscellaneous manufactured food is 106. I must include rents and rates. They are now 113.5.
I promised hon. Members opposite, particularly the hon. Lady the Member for Edgbaston, that I would deal with coal, with fuel and light. I was rather astonished that the hon. Lady should declare herself as being inside the Conservative Party and a member of the working class, but did not want to be known as a member of the working class. Iam very proud of being a member of the working class. My people were working-class people. It is a much greater effort to maintain a high character standard and a high human dignity when one has to put up with the deprivations and the situations in which many members of the working class find themselves. I would remind the hon. Lady that in that class was found the carpenter of Nazareth.
The hon. Lady asked me to consider fuel and light. They stand at 114.9. Fuel and light are supplied by nationalised industries. It is interesting to compare that figure of 114.9 in the nationalised industries with the figure of 137 for butter, margarine and cooking fat, with the figure of 167 for tea and sugar. What is more to the point, it must be remembered that if any commodity is in short supply, it is coal. If tea has gone up to 8s. a lb. because of the situation of supply and demand, can anyone suggest a figure for the rise in the price of a bag of coal, had coal mining not been nationalised?
I must emphasise this, that the Minister of Fuel and Power has been sadly lacking in his duty to prosecute where such action is necessary. All over the country there are complaints about coal. People meet me and say, "I have paid for Grade 1 coal, but I have got awful stuff in my cellar. I paid for Grade 1 coal and got three bags of Grade 5 and seven bags of Grade 1 on top." But there was no prosecution. The Minister is doing nothing whatever to inspect coal delivered to see that its quality corresponds with the great charge. There are many people paying for first grade coal today who are simply not getting even third grade. The 2190 Report of the National Coal Board shows that the available quantity of first-grade coal in the country amounts to only 1½ per cent. of the total supplies of coal. Yet everyone complains of having to pay for first-grade coal.
Again, it is said that the merchants will not take up the complaints. Why not? The Coal Board asks, in page 30 of its Report, for complaints. It urges coal merchants to report immediately when they receive a bad consignment. I had very bad coal delivered to my cellar. I suspected that it was Grade 5 and that I was being charged for Grade 3. My merchant gave the usual reply, "I have just got to take what I get." It is not true.
I asked him to let me take up his case, but he would not let me take it up with the Coal Board. Coal merchants do not want that. Housewives ought to have fair treatment from the Ministry of Fuel and Power. The Ministry should send out its enforcement officers to see that people receive the quality of coal for which they pay. I have spoken at some length on coal, because the subject is raised so often on the other side of the House.
Hon. Members opposite constantly speak of how the cost of living jumped under the Labour Government. It jumped from 1947 to 1951 by 25 points. We were told that that was due to Socialist muddling and to a stupid, bungling Government that did not know how to control prices. How would one describe a Government that, having said that, allowed prices to jump from 125 to 146 points? What kind of Government is that? What kind of people are they who went to the country and said, "We will mend the hole in your purse. We will bring down the cost of living"? What kind of Ministers are they who said, as one of them said over the wireless, "The rumour that we will take away food subsidies and abolish rent control is not true. There is not a word of truth in it. Do not let them pull the wool over your eyes"?
Did not hon. and right hon. Gentlemen opposite promise women voters that prices would come down? If they have not found it possible to reduce prices, why, after making such promises, did they increase them? Was it because world 2191 conditions were against them? On the contrary, every act which increased the cost of living was deliberately planned. [Interruption.] So it was not deliberately planned that the food subsidies should be reduced? Was that not deliberate planning? Was it not deliberate planning to take away controls and allow prices to shoot up to the roof?
It was not deliberate planning, apparently, to introduce the Act which increased rents by 13 per cent. It was not deliberate planning to increase the Bank Rate and to make the Public Works Loan Board charges higher for the local authorities and, in consequence, increase rents as well. Was none of that deliberate planning? Did it just happen? If so, could hon. and right hon. Gentlemen opposite tell us just how it happened if they did not plan it deliberately?
It might be said, of course, that when decontrol was permitted it was expected that prices would find their own level. Of course, they misled the boys up there in the Gallery—or the masters of the boys up there in the Gallery—who said, "Abolish controls. Make a bonfire of controls, and in the free competition that follows prices will find their own level." Where I live there are seven different grocers' shops with seven different names above them, and they are all one combine. There are eight different names above eight different bakeries and they are all one combine. [An Hon. Member: "The Co-op."] An hon. Gentleman opposite says, "The Co-op." The name above the shop where I make my purchases is the "St. George Co-operative Society" and they are honest; they put their name above the door. Moreover, I can become a shareholder, and so can any hon. Member, because there is no closed shop there. Hon. Members opposite know how to get in on the ground floor, but where the Co-operative societies are concerned, anybody can join on payment of 1s. 6d.
The policy of decontrol did not bring prices down, because we are running into the hands of monopoly and there cannot be competition where there is monopoly. I remember that when I was Chairman of the Glasgow Housing Committee, every tender we received for sanitary ware and for asbestos was about the same figure.
2192 I conceived the idea of breaking that ring and my committee agreed to order 5,000 baths at a time, 5,000 sink sets, 5,000 closet sets, delivery as and when required because we were going ahead with a very big housing programme. We found that even by that way it was impossible to break the ring. It is no use the Conservative Party, or the newspapers which protect it, pretending that there is competition in Great Britain today. It is slowly disappearing.
In June, 1952, just after there was decontrol of many things, I put this Question to the Parliamentary Secretary to the Ministry of Food:… how many food items … have gone up in price during the past six months; and by what amountThe reply was:In the six months to the middle of May, 27 items…. The increases on individual items range from 4 per cent. to 33 per cent."—[OFFICIAL REPORT, 11th June, 1952; Vol. 502, c. 207.]Even then the Government did not learn their lesson, because, when they decontrolled tea, the Minister of Food was asked what would be the effect on the price. Here is what he replied:The trade has undertaken that blends of sound quality tea will be on sale at 3s. 8d. a lb. in sufficient quantities to meet any foreseeable demand. This is the same as the present average price and only 4d. more than the present low priced tea. This means that although the subsidy is withdrawn the existing weekly ration of low priced tea will cost only ½d. more."—[OFFICIAL REPORT, 9th April. 1952; Vol. 498, c. 2738.]The Conservative Party now finds that its prognostications have gone wrong, that under decontrol there is no such thing as competition, and that prices are rising. What do Conservative hon. Members tell people? They tell them that they can get scrag end of mutton, that they can get the second quality, and that they ought to buy imported beef and imported mutton. What did hon. Gentlemen opposite say when the Labour Government were buying imported mutton? They called it "old ewe." Every day they attacked the Labour Government for providing housewives with imported mutton.
The Press tells us not to buy the choice cuts. I remember a noble Lady going to a Scottish constituency and telling the people how to make good soup from a cod's head. One old lady wanted to know who was getting away with the cod when 2193 others were making soup from its head. I should like to know who is getting away with the silverside and the other best cuts when we are cooking imported mutton.
It has been said that the Labour Party is the party of controls and that if it were returned to power it would impose controls. It is said that we are doctrinaire Socialists who levy control for control's sake. But the Labour Party took 90 items off the ration book, including biscuits, canned fruit, canned meat, canned beans, milk and dried fruit. The difference between the policy of hon. Gentlemen opposite and our policy is that when the Labour Government removed these things from the ration book they imposed a ceiling price which could not be exceeded.
I have here two cuttings from a newspaper, published on the eve of the West Derby by-election. One says:The green light goes up.Hoped-for fillip for markets"—No, I ought to read this one first:West Derby polling slows up share business.Voting day in West Derby was 'Mark Time Day' for buyers in the share markets. Many members were delayed by fog and this accentuated the general slowness of markets.It is evident that they were awaiting the by-election result. Here is the other quotation:Green light goes up.Hoped-for fillip for markets, and business generally, comes with the West Derby election result"—Hon. Members may laugh, but he laughs best who laughs last. I will finish the quotation:and fairly general marking-up of prices should follow.Let them laugh now. Let them take it to the doorsteps—and laugh. Let them show it to the housewives and tell them what will happen.
The Chancellor of the Exchequer told us that of the £600 million extra consumer expenditure—this will be the washing machines, the refrigerators, the alcohol, the tobacco, the ice-cream and sweets we were hearing about—£525 million represented increased prices. Only £75 million represented increased consumption. He said that on 16th March, 1954. [HON MEMBERS: "What about the time?"] My time has been encroached upon by hon. Members opposite—
§ Mrs. Mann
In the midst of the complacency, time and again I heard hon. Members opposite saying that wages hadkept pace with the cost of living. They are proud of that fact. Do they not know that if they let the cost of living go up, wages are bound to keep in step? At any rate, the wage demands will come. My iron and steel workers in Coatbridge are tied to the cost of living and their wages automatically increase as the cost of living increases. An increase in the cost of living is bound to bring wage demands from all the other workers, and we will have demands from all the others, be it transport workers, be it miners, be it anything else, and the vicious spiral will soar. Yet hon. Members opposite sit there and preen themselves about wages. They say that in this best of all possible worlds under Toryism we should let prices shoot up through the roof and let wages follow suit.
But what of our export trade? Do not hon. Members opposite know that housewives are not concerned only with the price of bread and butter of tea and sugar and meat? Housewives are concerned about the prosperity of their country. That is especially true of mothers who have to keep an eye on all aspects of the home. The housewife who is worthy of her salt has to keep an eye on her country's prosperity. To allow prices to go up as they are doing, without making any attempt at stability, is imperilling our export trade.
If there are people for whom we should be sorry, it is some of the old folk. I will not speak of old-age pensioners, because their case has been put again and again. I shall speak of some of the old folk represented by hon. Members opposite. They bought their houses thirty and forty years ago. They saved money then and they are now up against stern poverty. They vote for hon. Gentlemen and hon. Ladies opposite. They believe in them.
I have met these people. They are old dears who have told me that they have never voted anything but Tory. They were thrifty. They bought their houses. They put aside a sum of money in the bank—and the value of the £ has dropped. I know one old couple who, because they had to pay for a roof repair, 2195 went without new clothes which they needed during the winter. This is real, stark poverty, and there is no one, with the exception of the hon. Lady the Member for Tynemouth (Miss Ward), who has ever spoken from the party opposite on behalf of those in the fixed income group.
The poor old dears in the fixed income group are disappointed in the party opposite. They have told me that they blamed us. They put the party opposite back in power. They voted all their lives for it, and the party opposite has made matters worse. It has also made matters worse for our side, for our old-age pensioners. It is making it worse for the country, which is faced with the sternest opposition, and the best thing it can do for everybody is to get out as soon as possible.
§ 9.41 p.m.
§ The Economic Secretary to the Treasury (Mr. R. Maudling)
This is the first opportunity that I have had of replying to a speech by the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann). I listened with great interest to what she said, as we all know that this is a subject on which she speaks as a result of a great study Indeed, she speaks with great fervour, though I must confess that I cannot accept a great number of the arguments which she advanced. I will explain my reasons.
In particular, I was struck by her reference to recent by-elections. I should have thought that, whatever we may have heard today from her and her colleagues about the theory they hold that we won the last General Election by making specious promises, that view is not shared by the electors.
§ Mr. Maudling
The problem of the cost of living is obviously a serious one. It is one of the most serious of those which the House considers. I was very much impressed during the debate by the emphasis on the fact that the cost of living is only part of the problem of the 2196 standard of living. That was a point made by several of my hon. Friends, including the hon. Member for Edgbaston (Miss Pitt). It is true.
The reason we want to see prices coming down is that then we shall be able to buy more. I know that that sounds naive, but it is an important proposition. It means that what is fundamental to the problem of the cost of living is the problem of productivity, which was referred to by the hon. Member for Orkney and Shetland (Mr. Grimond) and my hon. Friend the Member for Grantham (Mr. Godber).
We cannot in this country consume more than we produce. All of us, I think, agree that if there is an increase in incomes not accompanied by an increase in output, obviously the mere effect of that is an increase in prices all round. But equally the converse is likely to be true, that, at a given level of production, we could only bring prices down by bringing incomes down—that is the fact of the matter—by more taxation or by reducing wages or by so restricting people, by controls and rationing, that they cannot spend.
Without more production we can get lower prices only by having lower incomes. It is possibly a simple argument but it is important and fundamental. Some of the approaches of hon. Members opposite indicate that they have not fully grasped the importance of that proposition.
On the question of the standard of living, I want to quote one or two figures about what has been happening in recent years. We have had many comparisons made during the debate, and I should like to make one or two of my own which seem to me to be most significant. Let us look at the experience in respect of real wages. Taking together the level of prices and the level of wages and fitting the two together, we get real wages—what people can, in fact, buy with the wages which they get.
Under this Government, since November, 1951, real wages have risen by 2½ per cent. Yet between June, 1947, and November, 1951, they fell by 2½ per cent. If we take earnings, between October, 1947, and October, 1951—it is a different period, but, as hon. Gentlemen will know, the statistics come at different 2197 times—the statistics rose by 2 per cent., and between October, 1951, and October, 1954, by 9 per cent.
That is a perfectly clear demonstration of the fact that the wage-earning people of the community as a whole earned more and had more to spend in real terms as a result of a Conservative Government policy than they had under the previous Administration. These are official figures which I amusing, and which have always been accepted on both sides of the House. I do not think that they can be seriously questioned. They may be inconvenient, but, nevertheless, they are accurate.
In addition to this increase in real wages, there have also been substantial reductions in taxation which were referred to by my hon. Friends. When reductions in Income Tax are mentioned, hon. Members opposite seem to suggest that only a small number of people pay Income Tax. In fact, over 16 million people pay Income Tax, and they and their dependants, taken together, probably make up the majority of the community. As Income Tax payers they have had a substantial reduction in taxation under this Government. There have also been reductions in Purchase Tax.
Let us consider the position of people receiving benefits from the State. During the period in which this Government have been in office, the index of retail prices shows that the cost of living has risen by 13 per cent. in 3¼ years—compared with 20 per cent. for a similar period under the previous Administration. During that same period, of all the social security payments which are in issue, the smallest increase is 25 per cent. and the largest, 60 per cent.
Against a rise of 13 per cent. in the cost of living, National Assistance is up by 25 per cent.; sickness and unemployment benefit by more than 50 per cent.; family allowances by 60 per cent.; 100 per cent. war disability benefit by 50 per cent.; widows' pensions by over 50 per cent. and retirement pensions by either 33 per cent., or more than 50 per cent. All these increases will have been effected by this Government when the new scales are in force.
So much for the extraordinary claim of the hon. Member for Sunderland, North (Mr. Willey), that we are undermining the Welfare State. If this great 2198 increase in the real value of social security payments in this country is undermining the Welfare State, language seems to me to have no meaning. Surely the fact is that all the evidence, examined objectively, shows that there has been a substantial improvement in the standard of living throughout the whole of the community in the course of the last three years.
Whether we look at the figures for wages or earnings; whether we look at the level of taxation; whether we look at the level of profits and savings—particularly small savings; the hon. Member for Coatbridge and Airdrie referred to "mending the hole in the pocket," but I should have thought the change in the level of small savings showed a pretty effective effort to mend the hole in the pocket—whether we take the figures given by my right hon. Friend, the new old-age pensions, or the amount which the community can afford to spend on less essential things; whether we look at the trading experience of the Co-operative and the multiple stores—the shops where the mass of the people go to spend their money—all the evidence is quite incontrovertible, that there has been a substantial increase in the standard of living of the people, as a whole, over the last three years.
§ Mr. Maudling
The object of Government policy clearly must be to achieve a high level of production and of employment with a stable value of the £ both internally and externally.
The question of the level of employment was referred to by my hon. Friend the Member for Edgbaston. It is important to remember, as the previous Government found, that the two objectives of maintaining full employment and production and a stable value for our currency are often conflicting. It was because they failed to realise that that we so often found ourselves faced with balance-of-payments crises.
The fact is that prices can be reduced by deflationary policies at the expense of employment. By reducing the amount of money people can spend it is possible to 2199 bring down prices, but at the same time employment is also reduced. Just before the General Election in 1951, when the textile recession was already beginning, Iremember the right hon. Member for Bishop Auckland (Mr. Dalton) telling people to reduce the price of goods by refusing to buy cotton textiles. His advice was only too well taken, not only in this country but abroad, and it had a considerable effect upon the level of employment.
§ Mr. Maudling
There is a conflict between maintaining a high level of demand in order to maintain full employment, on the one hand and, on the other hand, not allowing it to get out of hand so as to produce dangerous inflationary pressures.
It is sometimes argued—and in this respect the newspaper article of the hon. Member for Stechford (Mr. Roy Jenkins) has been referred to—that in order to maintain full employment and full output we must have a steady increase of what is sometimes referred to as controlled inflation, and rising prices year by year. The Government do not accept that for one moment. If we followed that course the effect upon savings and investment, and all that depend upon savings and investment, would surely be very serious.
§ Mr. Maudling
That is precisely what has not been going on, because savings have been showing a remarkable improvement under this Government.
The other very serious problem, which was referred by the hon. Member for Coatbridge and Airdrie, concerns people living upon small fixed incomes. They are people whom it is especially difficult for any Government to help.
§ Mr. Maudling
People who receive State benefits can have, and have had, their benefits increased, and people who pay taxes have had their taxation reduced, but many people neither receive financial benefit from the State nor pay 2200 a substantial amount in taxes to the State. In those circumstances it is very difficult to see what direct action the State can take to help them.
§ Mr. Maudling
I mention this matter particularly because I want to make it quite clear that the Government are conscious of the difficulty in which people at that level of income find themselves. The only effective way in which we can help them is by doing all we can to maintain the level of prices, and by not accepting the proposition that in order to have a healthy economy and a high level of employment we must always allow prices to go steadily upwards.
During the course of the debate many vigorous allegations have been made about the cost of living, some of which have been rather inaccurate. Many figures have been given about the prices of individual products, but with the exception of the hon. Member for Hillsborough (Mr. G. Darling), who made one or two interesting and practical proposals, I cannot remember any hon. Member opposite suggesting how this problem should be dealt with. The whole attitude of hon. Members opposite is utterly and completely negative.
The reason for this is twofold. First, as the hon. Member for Fife, West (Mr. Hamilton) implied, hon. Members opposite do not know what to do about it. Secondly, some of them suspect that the measures that they might adopt would not be at all popular. In a television broadcast a few days ago, the deputy Leader of the Opposition was questioned on the subject by a number of journalists, and he was singularly coy upon the subject both of controls and subsidies.
What is the policy of the party opposite upon the question of controls? Do they really believe that price controls will bring down the cost of living? If they believe that, they have learnt nothing from the experience of the last few years. Further, do not they realise that a return to controls and subsidies must mean a return to rationing? There is no possible escape from that proposition.
If we have a free market, the free market price fixes the level between supply and demand. The only purpose of price control is to bring the price down. If the 2201 price is brought down, then the demand goes up. But there must be additional supplies to meet that demand, or else we are back to goods under the counter, the black market, and queues. We have to go back to rationing. The only answer is largely increased imports, but how are we to pay for them with our adverse balance of payments? If we bring down prices below the free market level, we must create additional demand, and, if we cannot satisfy it, the result will inevitably be chaos.
Then there is the question of subsidies. If we are going to bring down prices by controls, we shall also have to restore subsidies, which means increased taxation. Incidentally, subsidies are another reason why a return to rationing under the Labour Party's policy will be inevitable. I know it is true that bread and milk are subsidised, but they are not rationed. They are things for which, to use the jargon, the demand is inelastic.
In other words, the people of this country have as much bread to eat as they want. Even if we reduced the price of bread drastically, we should not increase its consumption. But if we decreased the price of meat, we should increase its consumption. We should neither have the supply to meet that demand nor would any Exchequer be able to shoulder the unlimited liability that would arise as a result.
I think we should be quite clear that a policy of controls and subsidies, at which hon. Members opposite hint, but which they never openly adopt, inevitably means a return to consumer rationing. Hon. Members opposite should be honest about it. Apart from that, I find it difficult to see what other suggestions have been made from the benches opposite. The suggestion has been made once or twice about the need for more competition. I find that ironical coming from a party whose policy is to abolish competition. I should have thought that the whole question of monopolies and restrictive practices had been very thoroughly dealt with by my right hon. Friend the President of the Board of Trade in the debate last month, in which the Opposition showed more than its usual disarray.
Then there is the point about profits. The hon. Member for Orkney and Shetland referred to the level of profits and 2202 their effect on the level of prices. It is important that we should be clear on this matter. I quite agree that where profits are high, because there is no competition or because of restrictive practices, it is bad and often contributes to an increase in the cost of living because it creates inefficiency. But in an economy which is fully working at the high level of demand, output and employment, a high level of profits is a good and not a bad thing.
What happens to the profits of industry? It is quite fallacious to think that by drastically reducing the profit level of industry we can reduce the cost of living. We do nothing of the sort. What happens is that a very large part of these profits go to pay taxes, and if those taxes were not paid out of profits, they would have to come from the individual. The second purpose to which profits are devoted is the building up of the productive machine of the country. If we do not build up the productive machine, we cannot, in the long run, hope to get greater efficiency and lower prices.
The third purpose to which profits are devoted is to increase the savings accounts, by putting them into thebank or into gilt-edged securities. That helps to finance the whole capital programme of the country. When put to reserve, the profits of industry are a major factor in the savings of the country and are. in fact, disinflationary.
The only element in profits which can affect the cost of living is the amount distributed by way of dividends. I was interested in some figures quoted by Professor Cairncross. They showed that if we were to take all the money distributed as dividends, less tax, it would amount to less than 3 per cent. of the total amount of money available for spending by the people of this country.
In fact, in 1954, although we have been told by hon. Members opposite that wages and salaries are lagging behind profits, the latest figures which I have show that profits have risen at about the same rate as wages and salaries. The item in the national income figures for rent, dividends and interest shows a very much smaller percentage increase in 1954 than does the item for wages and salaries. In terms of volume, the amount of additional money going in rent, dividends and 2203 interest is £60 million and that for wages and salaries is £645 million.
As I have said, we have had from hon. Members opposite no suggestion of any value, apart from the suggestion of the hon. Member for Hillsborough, as to what we can do about the problem of the level of prices. What have been the main elements in the increase in prices which has taken place in the last three years? It is true that food, at 19 per cent., represents the largest increase, and that, of course, is clearly one reason why food has been concentrated upon by the Opposition, to the exclusion of other items.
The increase in the price of food arises from several reasons. One of the principal reasons is the reductions in the food subsidies in 1952, which were accompanied at the time, as we are never now reminded by the Opposition, by substantial increases in all the social services. The other influence on the level of food prices is the fact that since 1951the prices of imported foodstuffs have not gone down but have gone up. Hon. Members will find that in the Statistical Digest.
§ Mr. Willey
I should like the hon. Gentleman to deal with the specific commodities that I was discussing—not the general cost of food imports—and to give the comparable world prices. This Government are claiming the virtue of going on to the free market.
§ Mr. Maudling
It is really too naive of the hon. Gentleman to complain that I am dealing with the cost of food as a whole and to ask that I should pick out the items which suit him. The fact is that, taking import prices of food, beverages and tobacco together, they have gone up from an index figure of 115 in 1951 to 120 in 1954. As for comparison with other countries, I have been looking through some figures which show that foodstuffs in this country compared with practically every other country in Europe, are still substantially lower in price.
The other substantial increase in the cost of living arises on fuel, which has risen 15 per cent., and an increase of 13 per cent. in services, which largely refers to travel and transport. Those are the main increases. On the other hand, clothing has fallen in price, and prices of household durable goods and miscellaneous services have also fallen. The in- 2204 creases have been in food, transport and fuel and power, and the decreases have been over the whole range of manufactured goods produced by British industries, which I think is an interesting comparison.
Rents and rates have risen by 13 per cent. There are two reasons for this. One of the reasons for rising rates is the higher standard of local government services and higher emoluments paid in local government, to which I do not expect hon. Members opposite to object. Rents, of course, have risen, but what hon. Members opposite tend to forget is that against the increase in rents we must set off the increase in the cost of repairs.
§ Mr. Maudling
To the houses.
Those are the main elements in the cost of living which have risen in the last few years.
What are the main factors which affect these changes in either direction? First, there are import costs. Import prices certainly rose under the Labour Government and have fallen under the Conservative Government. No one has ever attempted to deny that, and that has been of considerable benefit. Obviously, we have gained from the improvement in the terms of trade. But import costs represent only about 20 per cent. of the total cost of all goods and services consumed in this country. As for food, upon which the Opposition have concentrated, prices have not fallen, but have risen against us.
What is significant is that experience has shown that increases in import costs are trebled or quadrupled by increases which take place simultaneously in home costs. A serious point for the economy of this country is that those import price increases are followed by big increases in home prices—in wages and transport costs, for example; but when import prices fall, home costs remain up, and therein lies the danger to our competitive position, to which the hon. Member for Orkney and Shetland referred.
Other items in the level of home costs are, of course, wage rates and the relation of wages to productivity. I agree with all hon. Members who have spoken of the importance of relating wage increases to increases in productivity, because, clearly, increases in wages or 2205 personal incomes which are not related to increases in productivity can only result in commensurate increases in price levels.
Next, there is the Government's financial policy. It is extraordinary how a cheap money policy, as pursued by the previous Administration, is in fact a very dear money policy to the consumer. Nothing can contribute more to inflation in this country than to allow the credit situation to get out of control and then to try to put it right by imposing an excessive level of taxation, which is what happened under the previous Administration. How do we intend to continue to tackle the problem of the cost of living? We intend to continue and to expand the policy designed to increase productive efficiency and to prevent inflation. That, and that alone, is the way in which we can deal with the problem of the cost of living. We intend to continue to free the economy. We have no intention of reimposing controls over consumers.
We are sometimes attacked by hon. Members opposite for allowing our traders to buy in any market in the world without discrimination—in the dollar markets if they like. Why do we do that? We give them that freedom in order to enable them to buy in the cheapest market. Do hon. Members opposite object to that? Do they want us to reimpose controls on our traders, and to force them to buy in the dearer non-dollar markets? Is that a way of bringing down the cost of living?
We intend to tackle the problem of monopoly in the way to which my right hon. Friend the President of the Board of Trade referred in the recent debate. Finally, we intend to continue our fiscal and monetary policy. It is difficult for me, at this stage of the year, to speak about our future taxation policy, and it is difficult at any time to speak about our future credit policy, but the House will be aware that it has been the Chancellor of the Exchequer's policy consistently to give all possible incentive to increased productive efficiency by reducing taxation and to expand by furthering demands for the products of industry—but not to expand so fast as to threaten once again a return of inflation.
There is this clear choice in the ways of tackling the problem, not of the cost 2206 of living alone but of the standard of living. There is our way—the way of giving freedom to industry, freedom of choice to the consumer, diversity and freedom to the housewife to buy what she wants in the shop; the way of reducing taxation, reducing controls, and maintaining the monetary policy. That is our way. The alternative is to go back to controls, to rationing and to higher taxation. That is the choice which will lie before the country when the next Election comes, and I have no doubt which it will choose.
§ Mr. Willey
In view of the last reference made by the hon. Gentleman, can he inform the House when the next General Election will be?
§ 10.10 p.m.
§ Mr. Norman Dodds (Dartford)
If a Sunday newspaper is to be believed, the Economic Secretary to the Treasury is the great hope for the future of the Conservative Party. If the speech he has just made is the best the Conservative Party has to offer the future is indeed bleak.
I could not help thinking that what the Economic Secretary said fitted in very well with the report last week of the meeting of the Coal Committee of the Economic Commission of Europe. There was a report before that committee alleging that the price of petrol and oil, which so much affects the cost of living, was too high. Statements were made attacking the oil racketeers. It was said in the "News Chronicle"—if the hon. Gentleman does not agree I know he will say so—that before the chairman of the Committee could reply, the British representative jumped up and was an excellent advocate defending the oil companies
§ Mr. Maudling
I have not seen the report to which the hon. Member refers, but I must say that it is completely inaccurate if his version is anything like true.
§ Mr. Dodds
I take it that tomorrow morning the "News Chronicle" will either apologise or say that was what happened at that committee.
Much of the speech of the Economic Secretary was devoted to twitting the Opposition for not telling the Government and the country how to reduce the cost of living. That has been the tenor of many of the speeches of hon. Members opposite. After being in power for nearly four years and having made 2207 promises which persuaded the people to put them in power, instead of saying, "We made a mistake" they have been charging the Opposition with a negative attitude.
I do not think the hon. Gentleman could deny that they made it clear in 1951that if elected they would be a Government of business men who would be able to deal with this question of the cost of living. In consequence, they got into power by what we all now know were false pretences. If not, I would have expected the hon. Gentleman or the Minister of Food to have admitted quite frankly that the Government had failed to do what they set out to do and to apologise to the electorate.
I have with me a report from the "Daily Telegraph" of 22nd January, 1954. It says:Major Lloyd-George, Minister of Food, declared that food prices would continue to drop. He said that taking the index of food prices since June last year food prices had dropped by three points and the drop is going to continue.I ask the hon. Gentleman, has the price of food dropped since January, 1954? He knows very well, and all hon. Members opposite know, that it has gone up. Is not this just one more miscalculation?
The best the hon. Gentleman seemed to offer the House and the country was that during the period of the Labour Government wages rose by only 2½ per cent. but from October, 1951, to 1954, they had gone up by 9 per cent. There, again, it seemed that the only thing the Conservative benches could offer is that wages have gone up very much more quickly than under a Labour Government.
The hon. and gallant Member for Ilford, South (Squadron Leader Cooper) paid great tribute to the wage restraint introduced by the T.U.C. I do not think it is a secret that for several years when the Labour Government were in power it was realised that raising wages was not the best way to deal with the economic problems we had to face. It has been pointed out by hon. Members on this side of the House that if that is the best which hon. Members opposite have to offer in this competitive age, which is growing more and more competitive, that sort of policy may react against workers and everyone else.
2208 It is fair to say that the policy of the Tory Government, commencing with the abolishing of many of the food subsidies, has resulted in a perpetual spiral of price increases, and that, in turn, has meant that the T.U.C. has not been able to restrain its members from demanding higher wages. The Economic Secretary was quite persuasive in his explanation about business profits and dividends, but it will require much more ingenuity than he showed to persuade the workers to exercise restraint in making their demands for higher wages when they see profits and dividends rising by many times the amount of their wage increases. I ask the hon. Gentleman seriously to note this. He must be more explicit when trying to persuade the workers that they must exercise restraint, since it seems that the Government are powerless to exercise restraint on those who get these dividends.
The hon. Gentleman the Member for Bournemouth, West (Mr, J. Eden) must have a hide of the thickness of that of a rhinoceros to come here today and attack, as he did, not only the T.U.C. but the workers generally. However, we must give him credit for this, that he was honest enough to say that one of the difficulties is that we have full employment.
§ Mr. Osborne
How does the hon. Member for West Ham, North (Mr. Lewis) know what big industrialists are saying privately?
§ Mr. Dodds
The hon. Member for Bournemouth, West has done a great disservice by his attack on the T.U.C, as, I am sure, many of his hon. Friends will agree, but what he has said here tonight is in keeping with what he has 2209 been saying in speeches in the country. I do not think hon. Members opposite would say that he is the only one of them who would welcome a little more control of workers through a little bit of unemployment. He said as much today in his speech. It is no use anyone denying that he did. The Economic Secretary could have said on behalf of the Government that the Government did not agree with the hon. Members, but he did not.
§ Mr. H. Nicholls
On a point of order. Did the hon. Member give notice to my hon. Friend the Member for Bournemouth, West (Mr. J. Eden) that he was going to make these charges against him? He ought to be given a chance to reply.
§ Mr. Dodds
I have sat through this debate, which has lasted nearly seven hours, and have heard several hon. Members refer to what other hon. Members have said, and I have heard them do so even in a manner not altogether complimentary, and without giving notice to the hon. Members concerned.
Both the Economic Secretary and the Minister of Food made great play with the fact that under the Labour Government prices rose very quickly indeed. The hon. Member for Hull, North (Mr. W. R. A. Hudson) said that prices had been reasonable in this country in contrast with world prices. As the Minister pointed out, not everything we use is imported.
I think the right hon. Gentleman will accept that much of what we use in food and particularly in raw materials comes from outside and, therefore, world prices must have a very big effect on our cost of living. In that connection, a Question was asked of the Chancellor on 24th November, 1954. He was asked to give from 1945 to 1954 the percentage trend of world prices affecting the United Kingdom. It was given as an index of average values taking the value in 1945 as 59 points. In 1949, world prices were 87. They jumped 13 points in 1950 to 100 and in 1951, the year of the Korean trouble, by 33 points to 133.
When the Conservatives came into office in 1952 they dropped four points 2210 and in 1953 they dropped 15 points to 114. The latest figure I have for September, 1954, is 113 points. Therefore, during the period since the Conservative Government took over, according to the figures given by the Chancellor, world prices in so far as they affect United Kingdom imports have dropped 21 points.
I submit, therefore, that whereas in many European countries the cost of living was going down, it has gone up steadily in this country and was higher in February than it had ever been before. The hon. Lady the Member for Edg-baston (Miss Pitt)—and I apologise that I have not seen her either—read out her election address. In that address, and this has been claimed by other hon. Members, it was stated that the Conservatives would be able to stabilise prices. The hon. Lady went on to say that they would be able in time to reduce the cost of living for the benefit of all. Therefore, anyone who studies the figures of the cost of living will do so with some alarm in view of those undertakings.
We find from Ministry of Labour figures that in January, 1953, the index stood at 138, or nine points higher than when the Conservatives came into office in October, 1951. In February, 1952, the figure was 140 points. It looked then as if, in accordance with the promises or the prophecies made, there was some semblance of controlling prices and of getting them stabilised and that the promised land of a reduced cost of living could be expected. That has not happened. In the next 11 months, from March, 1954 to February, 1955 the index went up by three times, that is, by six points as against the two points in 1953.
References have been made today to wage increases. I think that my hon. Friend the Member for West Ham, North (Mr. Lewis) said that the recent wage increases sooner or later—it may take some months—must further increase the cost of living. It seems from the picture we have that the housewife will not get the relief that the Government expect. I have in my hand a list of the approximate amounts that will result from recent wage awards: engineers, £70 million; railwaymen and bus men, £27 million; miners, £13 million: farm workers, £12 million; shipyard men, £6 million—totalling £128 million increase in wages in recent weeks.
2211 I submit that most of this has arisen because of the policy of the Government, who have never concerned themselves with the promise they gave to reduce the cost of living. This policy can only result in higher prices and, as was mentioned by my hon. Friend the Member for Lanarkshire, North (Miss Herbison), can only have an unfavourable effect on our exports which we hope to send abroad to compete with other countries which are getting into their stride.
I should like to say much more, but the time is getting on. Nevertheless, in recent weeks we have had debates into the early hours of the morning on Estimates for the Army, Navy and Air Force, and I make no apology for keeping the House a little later than usual on a matter which affects so many people.
I see that the hon. Gentleman the Member for Bournemouth, West has just come into the Chamber. Although I am on another subject, I will give way, since apparently he has had a report that I have not done him justice.
§ Mr. J. Eden
I am grateful to the hon. Gentleman for giving way and I am sorry that I had to leave for a short time. I am not clear about his reference to something I said because I did not hear it, but I can probably guess one or two things he might have said. If I am wrong, perhaps he will interrupt me. I would like to take this opportunity of saying—
§ Mr. Eden
There is one point I would like to clear up with the hon. Gentleman, Mr. Deputy-Speaker, with your permission. He may have made reference to the fact that I accused the trade unions of using their position to bargain. I want to give one example to substantiate my claim, namely, what the railway unions do in demanding a wage increase.
§ Mr. Dodds
I am sure I have not done the hon. Gentleman a disservice, and that he will be able to confirm this by reference to the Official Report. 2212 Before I reach my last point, I want to bring a little up-to-date evidence to this House which I would advise the Government Front Bench to take seriously. Last week, in the "Kentish Independent" a well-known, highly independent newspaper, there appeared this report:The Greenwich Liberal Association, in conjunction with organisations in other London constituencies, is taking part in a campaign aimed at halting the steep rise in the cost of living.I want to emphasise that these were Liberals—In the course of a canvas in the Charlton area, say members, they have found almost universal concern regarding increases in the prices of necessities, particularly food.Hon. and right hon. Members opposite would be well advised not to try to laugh off what the Opposition has been saying about the widespread concern in the country over the continued increase in the cost of living, especially in the cost of food, which is not in keeping with the undertakings given at the last General Election. I do not think there is any doubt that more will be heard of that in the coming months.
One hon. Member after another, including the Economic Secretary, has spoken of the higher standard of living under a Conservative Government. On 16th November, 1954, the hon. Member for Louth (Mr. Osborne), asked how much of the increase in the amount spent on food represented an increase in food and how much an increase in price. I very clearly remember his facial expression when he heard the reply.
The Chancellor of the Exchequer made it clear that between 1951 and 1953 the £600 million increase in the amount spent on food was made up by £525 million representing increased prices with only one-eighth, £75 million, representing an increase in the volume of food. It might be asked if that food went to everyone. It is true, of course, that a section of the population is living better today than it has ever done. It is obvious that somebody must be living better.
However, I should like to refer to old-age pensioners, who have been mentioned by few hon. Members in this debate.
§ Mr. Dodds
The hon. Lady said that the old-age pensioners were living better than ever before. The hon. Member for Bournemouth, West referred to fixed incomes. He must have the hide of a rhinoceros to say what he did when he represents what must be the laziest section of the community—Bournemouth. It would have been a much better balanced speech if the hon. Member had spared a minute to think of the poor old-age pensioners.
Let us deal with the promise in 1951. The Conservative Central Office issued a pamphlet in the form of a retirement pension order book. It has on the front an old lady and an old gentleman. Inside it says:This is not a real old-age pension book. But to every old-age pensioner it is a bitter reminder of the hard times they are having to endure. Rising prices and the high cost of living hit everyone, but it is the old-age pensioners who suffer worst of all.I ask hon. Members opposite to notice what follows. It says:Even the new rate of 30s. introduced this month for those who qualify, has been left behind by galloping prices.The Conservative Central Office said in October, 1951, that the pension of 30s. had already been left behind by rising prices. Yet the Government themselves have increased it by only 2s. 6d. since then in a period in which they claim prosperity has never been higher and in which they say the standard of living has never been better. If in October, 1951, the 30s. had already been left behind by rising prices and if, on the admission of the Economic Secretary food prices have gone up by 20 per cent. since then, then, as it is known that the poorest old-age pensioners spend a high percentage of their income on food, is not it obvious that they are getting the worst deal of all? The promise at the end was this:It is part of Conservative policy to see that help goes to those who need it—and that it goes in time. Those who need it most will get it first.If the 30s. had already been left behind in October, 1951, how can they claim that those who need it most will get it first? What we shall see—and it is becoming evident now that the books are being called in by the Ministry of Pensions and National Insurance to get the amounts 2214 altered—is one of the shabbiest tricks ever played by any Government.
I have been trying at Question Time on Mondays to get from the Minister of Pensions and National Insurance details of how many old-age pensioners will not get the 7s. 6d. or 11s. which they expect because they are already receiving above that figure from National Assistance. I submit that no old-age pensioner gets National Assistance unless he really needs it. There is a machinery to ensure that exhaustive inquiries are made. I propose to keep on asking until I get the exact figure but, from figures which I have got, I estimate that between 1,500,000 and 1,750,000 old-age pensioners, the poorest in the community, will not get 7s. 6d. or 11s. but only 2s. 6d. or 4s.
The hon. Lady the Member for Edgbaston seems to think that she knows more about the working classes than anybody else. I live in my constituency and I represent more people than anyone else except an hon. Member from Northern Ireland. I know something about old-age pensioners. Not only the pensioners themselves but their relatives will be disappointed.
I ask the Government to give a little more thought to the matter before the Budget. They should consider the position of these people, of whom there are at least 1,500,000, and also that of those on fixed incomes, many of whom are living in absolute poverty. We must do something for these people if we are to hold up our heads and to be able to say that all members of the community are sharing, fairly and squarely, in any cake that the country has. I should like to know whether there is to be any further statement to say that something will be done about these two bodies of people.
§ Mr. Dodds
Of course, the decision to give these increases was made five months ago, and the cost of living has increased since then, which worsens the situation for the old-age pensioners, whether they got this increase, or only the National 2215 Assistance Board increase of 2s. 6d. and 4s. I say that if this is allowed it is a national scandal.
§ 10.40 p.m.
§ Mr. H. Rhodes (Ashton-under-Lyne)
I do not wish to make a speech on this subject, but merely to ask the Economic Secretary for some advice.
I agree with his arguments about increased production and its relation to the cost of living. That has been preached for many years from both sides of the House. But what happens when one is confronted by an audience of Lancashire cotton workers? Do we still tell them how virtuous it is to increase production, when they cannot get enough orders to keep them going full-time?
I put that point to the Economic Secretary, because we shall have to have a few more precepts and ideas about this question. There are occasions when one cannot preach that doctrine to a particular section of the community, and I shall be sincerely pleased if the Economic Secretary will say something about that.
§ 10.42 p.m.
§ Mr. Victor Collins (Shoreditch and Finsbury)
I did not imagine that my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) would receive an answer to his question, because the most significant thing about the speech of the Economic Secretary, and, indeed, about the speech of the Minister, was that they completely failed to attempt to answer the devastating attack of my hon. Friend the Member for Sunderland, North (Mr. Willey). They dodged it completely. They ploughed resolutely and glumly on through prepared speeches.
The only concession to this debate which was made by the Economic Secretary was when he said, "Do not let us talk about prices, let us talk about real wages." Then the hon. Gentleman produced a mystical sum, and said that from 1951 until the present time real wages had gone up by 2½ per cent.—whatever that may mean—and for the four years back, from 1951 to 1947, they had gone back 2½ per cent. He said that was a tribute to the magnificence of Conservative rule.
He made no acknowledgment whatever of the £500 million a year bonus which has come to the Conservative Party and 2216 to the country as a whole from the improvement in the terms of trade. I believe that such statements are not merely nonsense, but that, in view of the vital importance of this discussion and the charges made by my hon. Friend, it is somewhat less than honest to fail to mention that.
Although I sympathise with the Minister in his determination not to attempt to answer the unanswerable, I am disappointed that he has fallen so far from his former high estate as a back bencher as to descend to using the kind of argument which he advanced in tryingto prove that the cost of living had risen less under a Conservative Administration, on the average, than under a Labour Administration. The right hon. Gentleman neglected altogether to point out that, whereas under Labour rule we had constant, and, at the end, very quick advances in world prices, the prices at home advanced less than in European countries. Under a Tory Administration the position is that, in the main, world prices have advanced in our favour, but prices at home have gone up more than in any other country.
The other thing which amazes me is the statement made by several right hon. and hon. Members opposite that the Conservative Party has given the housewife the benefit of the free play of markets. She is enjoying a greater selection and greater supplies, and, of course, the privilege of paying very much higher prices, while her husband, as a taxpayer, is paying £326 million in subsidies or in support prices, as they are termed.
The only plaintive remark that the Minister of Agriculture could make was that that was the total. I should think it was the total—£326 million—when the Conservative Party is supposed to have abolished subsidies. When the Labour Government were providing consumer subsidies of around £400 million, they were, in the main, being used in the direct reduction of prices to the consumer.
Now we have the higher prices as detailed by my hon. Friend the Member for Sunderland, North, and, in addition, this £326 million which we are paying for as taxpayers. It is heads the housewife loses, and tails her husband loses as well. We are paying both ways, and through the nose. There is no doubt that the indictment made this afternoon of broken pledges is well founded.
2217 It is no use the Economic Secretary saying that the electors do not know about them. Of course, they know, and equally, of course, right hon. Gentlemen opposite know all about them. They know that they made the promises deliberately and that, just as deliberately, they broke them. They knew when they removed the food subsidies that it meant increased food prices and increased wage demands. It is too petty for hon. Members opposite to complain about the increased price of coal, gas, and so on, when they deliberately engineered increases in food prices, with the inevitable wage increases which flowed from that.
Having sat for 7¼hours in a debate of this kind, one's interest in food becomes more keen, but one's interest in its price becomes less acute. However, I wish to say one word arising out of the statement made by the Economic Secretary that we on this side of the House had not made any concrete suggestions for improving the situation. I propose to make a modest suggestion which may mean a difference of a point or two in the cost-of-living index.
In particular, I want to refer to a remark made by the hon. Member for Louth (Mr. Osborne) when he asked, almost with tears in his voice, what he was going to say to the fishermen and the farm workers in his constituency about our methods for better wages. It was an amazing thing for an hon. Member opposite to ask that question, although, at the time, he would not let us answer it.
We know that the principal products of the hon. Gentleman's constituency are fish and market garden produce. One could not possibly select two more representative examples of free, untrammelled, glorious free enterprise than the horticultural industry and the fishing industry.
§ Mr. Collins
I am answering it now. As I say, one could not have two better examples than these two industries, and, therefore, the answer must come from the party opposite. The whole policy of the Government in respect of food has been to remove restrictions and controls, to do away with bulk buying, and to return to free enterprise so as to show us how Conservative freedom works.
I would point out to the Minister of Agriculture, too, that complete freedom 2218 has been given to British horticulture, and ask him how it is working. Those employed in the industry—and the Minister will be aware that I have some knowledge of the matter—are complaining bitterly, and their complaints have been translated in recent times into one-third less vegetable acreage. The wholesalers, the so-called middlemen—of whom there are far too many—say that they are doing far worse under the present system. The workers in the industry, like the porters at Covent Garden, who have been on strike for four weeks, must have some criticism, and of all the things complained about by the housewife, few bring more adverse comment than the cost of fruit and vegetables. On 8th March, the Minister of Agriculture issued a Press statement on fruit and vegetable crops and supplies in England and Wales.
§ Mr. Osborne
May I just explain to the hon. Gentleman that my constituency does not produce horticultural products? It produces sheep, barley, and potatoes.
§ Mr, Collins
All I can say to that is that when I visited the hon. Member's constituency quite substantial areas were devoted to market gardening; but perhaps under a Tory Government those people have had to go out of business.
But I was speaking about the Minister's Press statement, because in it he refers to the fact that winter cabbage, savoys, and the small stocks of brussels sprouts, will be finished this month, and that, owing to the long winter, with its very bad weather, there cannot be more supplies coming on until well into April. He adds that winter cauliflower supplies in March are not likely to exceed 2,000 tons, compared with the normal 15,000 to 20,000 tons, and that next month these supplies will not exceed 10,000 tons, compared with the normal 30,000 tons.
Here we have the normal conditions of supply and demand, and, when we have had a bad time in a long winter, we expect prices to be higher because commodities are fewer. It is one of the indictments that we make against this industry that, while a period of hard frost at the wrong time is bad, it is, in fact, less of a disaster than the generous bounty of nature whereby, when there is a good crop, it is not worth while sending it to market. 2219 The right hon. Gentleman will be aware that not long ago he increased tariffs. He had representations from the National Farmers' Union, who wanted tariffs even on vegetables which we did not import into this country, and he succumbed to the suggestion that these tariffs should be fixed; or perhaps, I should say, his predecessor did. But the tariffs were fixed. We on these benches suggested that these tariffs would constitute a fine on the housewife because, when prices here were low, the foreign exporter would not send his produce here, and, when prices were higher in this country because of a scarcity, there would be no need for these tariffs. That is the position with which we are confronted at the moment; and it will apply next month.
Is the Minister taking any steps to relieve this scarcity, by a temporary lowering of the tariffs, or is he prepared to let the matter go on without any sort of hindrance so that, of a certainty, next month will find us with fantastic prices—and some very high profits? Hon. Members on both sides of the House are asking him if he is aware of this and is merely going to make some lame comment. Unquestionably supplies are short; they must be at present, and that is not his fault. But the fault will rest with him unless he takes steps to relieve this scarcity.
I said when I began that it might not be considered very important, but if it means a couple of points increase in the cost-of-living index for a month or so—as it can mean—it can also mean a whole chain of reaction of wage demands for those who are dependent upon that index. Therefore, I ask the Economic Secretary to pay attention to this point and see if something can be done; and I hope that he will say that at least one contribution of some small importance and some value has come from this side of the House.
§ 10.55 p.m.
§ Mr. E. Fernyhough (Jarrow)
It is most unfortunate that, 10 years after the war, during which time the trade unions have been in the strongest bargaining position in their history, the hon. Member for Bournemouth, West (Mr. J. Eden) should have made the attack upon them that he did. No one can deny that if 2220 the trade unions had wanted to wield their power in a selfish manner there was no limit to the terms that they could have obtained because of the full employment which has existed since 1945.
If the coal miners decided to wield their industrial power today they would be in an impregnable position. Everybody knows what the consequences would be if they acted irresponsibly. Everybody knows that if they said, "We want certain concessions, and unless they are agreed to we shall strike," they would be in a very strong position, because a strike of the miners at this time would spell economic collapse for this country.
What applies to the miners applies to the steel workers, the engineers and, indeed, to the overwhelming majority of workers. The trade unions have acted with a patience, a responsibility and a judgment which ought to meet with universal acclaim, yet the hon. Member for Bournemouth, West, in defence of what he said, quoted the action of the railway-men last Christmas.
§ Mr. Fernyhough
If the hon. Member for Bournemouth, West thinks that the railwaymen, in making that modest demand and saying that they were prepared to strike, were acting irresponsibly, he knows nothing about the history of this country.
Our trade unions, unlike the employers, did not take advantage of their strength. In the inter-war years, when unemployment was the order of the day—when there were 2 million unemployed—there was scarcely an industrialist who did not take advantage of the labour market to get cheap labour in order to increase his profits and depress the standards of the workers.
§ Mr. Fernyhough
If the hon. Member for Louth (Mr. Osborne) thinks otherwise, it is obvious that he did not move in the circles in which I moved at that time.
§ Mr. Osborne
Surely the hon. Member knows that wages were negotiated between the responsible employers' federations and the trade unions. The bargains were made between the two great responsible bodies.
§ Mr. Fernyhough
Who locked the miners out in 1926, and caused industrial unrest in 1921 and throughout those inter-war years? It was the employers who were always demanding wage reductions, because they knew that they could sack workers and get men from the dole queues to replace them. There is no question that if the workers, having been in this strong bargaining position since 1945, had acted as the employers did when we had 2 million unemployed, this country would have been in a hopeless economic position.
It is perfectly true that there are some things beyond the control of the Government which tend to play a part in the cost of living; but from the time this Government came into office they have repeatedly made decisions which have led directly or indirectly to an increase in the cost of living. I do not think, for instance, that anyone doubts that the increase in the Bank Rate is bound to increase the cost of living. If local authorities have to pay more for loans that is passed on to the rates.
I remember that immediately after this Government came into office, the Minister of Supply informed the House that the Government had decided that the price of steel must be increased. At that time the Steel Board said that was not necessary and the Chairman resigned rather than agree. Subsequently, the balance sheet was published, and it was found that because of the unnecessary increase the Government had caused the Corporation to make a profit of £60 million in nine months.
If the Economic Secretary wanted to see our exports increase he should have objected to that. It was unnecessary, and made every ship built in our shipyards dearer. It made every lorry carrying goods dearer, every railway wagon dearer and every piece of machinery exported dearer. By forcing the price up the Government increased the cost of our exports, which consequently tended to increase the cost of living.
We are repeatedly told by hon. Members opposite that this is the best of all possible worlds. They tell us to look in the shops and see how crammed they are with food—plenty for everybody and 2222 plenty of everything. If one analyses a reply which the Chancellor gave to the hon. Member for Louth,one begins to appreciate just how much this so-called plenty means when it is spread over the country. The Chancellor said that increased prices represented £525 million of the £600 million by which consumers' expenditure on food had risen between 1951 and 1953. That meant that in 1953 the people of this country ate £75 million worth more food than in 1951. There are 50 million people in this country and it means that they ate 30 shillings worth of food more per year, in other words, sevenpennyworth more a week. All that this plenty and freedom amounted to was sevenpennyworth more food to the individual consumer. The difference between 1951 and 1953 or 1954 is not very great if it is represented by only sevenpennyworth of extra food.
Whilst it is true that some people are consuming more food, some are consuming considerably less. The Economic Secretary himself supplied the answer. He said that if the prices of meat and butter were reduced consumption would go up. This means that some people are not getting what they would like, because they cannot afford it. The hon. Gentleman does not believe in rationing by legislation, he believes in rationing by the purse. There is no question about it.
The hon. Gentleman asked how he could reduce the cost of living. I see that the Parliamentary Secretary to the Ministry of Food is present. I put a Question to him, but he would not answer it. I asked what profit we made on imported Danish butter and bacon. The hon. Gentleman was not willing to disclose it. If the Economic Secretary to the Treasury wants to reduce the cost of living, let die Ministry of Food enable the public to be supplied with Danish bacon and butter at the price which the Ministry pays for it.
Everybody knows that Danish bacon could then be sold at Is. per lb. less. Everybody knows, too, that there could be a considerable reduction in the price of Danish butter. Therefore, if the Government want an opportunity to contribute towards a reduction in the cost of living they should take steps to make it possible for people to have those commodities at the price which the Government pay for them.
2223 I can see the deputy Chief Whip looking very angry, and I promise that I will not delay the House unduly, but I want to say that none of us should pretend that it is an easy matter for any Government to reduce the cost of living while so much of our wealth is being devoted to defence purposes. I am not arguing the merits of the case for armaments now, but as long as we are having to pay hundreds of thousands of men for producing goods which nobody can consume, that obviously is bound to make an impact upon the cost of living.
While the Government have by no means taken all the steps open to them to keep the cost of living stabilised, while they must accept responsibility, because of the policy they have pursued, for the wage claims which the workers are now pressing, I would hope that the Government will struggle with might and main to reduce the extent of our defence programme and by that means make a more substantial reduction in the cost of living than they can achieve by any other means open to them.
§ 11.8 p.m.
§ Mt. Jack Jones (Rotherham)
I would not have ventured to intervene in the debate had I not been horrified to hear my hon. Friend the Member for Jarrow (Mr. Fernyhough) telling the House and the country that a young Tory Member had taken upon himself this evening to attack the trade union movement. I want to tell that young Member and his hon. and right hon. Friends, the Prime Minister in particular, and the Tory Party that they should be grateful that the trade union movement has acted in the way it has since the war.
I am not an expert on what goes on in some industries, but I can tell the House what goes on in the industry about which I claim to know a little—the steel industry, which I consider to be the finest in the country. If any Tory Member or Minister wants to tell me that the present Government or any other Government do not owe a great debt to the men in that industry I should like him to get up and say so.
If the steel workers were to insist on being paid in the way in which their original agreement provided for them to be paid they would be receiving about 2224 140 per cent.more on their base rates than they are today. We had a sliding scale agreement for very many years, and it provided that if steel went up 2s. 6d. a ton 1¼ per cent. was added to a man's wages. In the past few years there have been many 2s. 6d. increases. There has been a £10 increase in the price of most stable steel commodities. Those men have forgone all that money. They have instead a cost-of-living bonus which gives to all the workers, to the £30 a week man down to the £5 a week man, the same amount each per week.
The steelworkers have shown real restraint, because they are men who recognise the economic difficulties of the country. Those economic difficulties existed when this party was in power. They exist now, and they will exist after the next General Election, whichever party wins it. Those men have that sense of responsibility, and it ill becomes any Member of Parliament, particularly a Tory Member of Parliament, to attack people of that type. Members should go into steel works and down coal mines to learn something of the background of the steel and coal mining industries before claiming to know something about them.
§ Mr. Lewis
My hon. Friend, and my hon. Friend the Member for Jarrow (Mr. Fernyhough) quite rightly, have drawn attention to the appalling speech of the hon. Member for Bournemouth, West (Mr. J. Eden). Does my hon. Friend feel it is serious enough to warrant a reply from the Government, so that the Government can dissociate themselves from it?
§ Mr. Jones
May be they have not done so so far, but I am not one of those bigoted Socialists who think that there is no decency in a Tory Government. They have a sense of honour, and if they have a sense of honour they should, as I believe they can and will, dissociate themselves from any attack on the great trade union movement.
§ Mr. Jones
I was talking about the steel workers. Since the war started they have voluntarily worked a complete work-round system, 168 hours out of 168. They have no 40 or 44 hour week. Their works are not idle on Fridays, Saturdays and Mondays as are the spindles in the constituency ofthe hon. Member for Louth (Mr. Osborne). The furnaces are never still. Those steel men have made tremendous sacrifices. They work Saturday afternoons, Saturday nights, Sunday mornings, Sunday afternoons, Sunday nights. They have done so since the commencement of the war. They have made a tremendous contribution to the economic salvation of the country.
What have we seen on the part of the owners—the new owners—of the industry? I say seriously and sincerely that if the new powers that be were to show the same restraint in the payment of dividends and the making of profits as the men have shown in the matter of their wages I could see some sense in Tories starting attacks and charges against the trade unions, but as it is I advise the Tories and the Government to apply their minds not so much to what the workers are doing as to what those who employ the workers are doing, particularly in that industry.
The economic situation is far from being all we would like it to be. The Tory Government, and even a Socialist Government, will need all the help they can get from employers and employees alike before the country is out of its economic difficulties. There is something I ask them to remember. If the international situation is eased, as we hope it may be, and as it could be, and if we can bring sanity to the world, we shall probably see a big recession in our heavy industries, at least for a time. In view of that possibility, to provoke the trade unions is to go rather far.
I hope and trust that tonight or on some other occasion we shall get from the Minister of Labour, his Parliamentary Secretary or some other knowledgeable employer of labour—there are a few such employers on the other side of the House who have lived in industry long enough to know something about it—to say that the Government completely dissociate themselves from what has been said. 2226 Unfortunately, having been elsewhere on other business, I did not hear the speech of the hon. Member for Bournemouth, West, but I am always ready to reply to anybody who, in this period of history, attacks our great trade union movement. The trade unions are a model to the world, although they may not be perfect. Many things have happened in the history of the trade union movement that we would rather had not happened. Many memories are still fresh. I come from a constituency where the children and grandchildren of miners have been told the history of the mines as they have been brought up. I do not want to scratch old sores because all that does is to inflame them, but we have not forgotten that the Prime Minister was the person responsible for sending troops into my constituency. But I do not want to dwell on that; that is the sort of thing that can well be left in the limbo of the past.
Any Tory hon. Member who looks forward to the economic salvation of this country and wants prosperity in this country must be inclined in a more friendly fashion, both as an employer and as a Member of Parliament, towards the trade union movement than was apparent from the speech of the hon. Member for Bournemouth, West.
§ 11.17 p.m.
§ Mr. T. L. Iremonger (Ilford, North)
I do not propose to keep the House very long. If I really tried, I think I might confine my remarks to 55 minutes, and if I tried harder, I think I might even confine them to 55 seconds.
I am sorry that the hon. Member for Rotherham (Mr. Jack Jones) should have taken it upon himself to attack my hon. Friend the Member for Bournemouth, 2227 West (Mr. J. Eden) without having heard his speech. I did not hear it either, but I should like to tell the hon. Member—I am sure my hon. Friend would associate himself with what I am saying—that I, my hon. Friend and hon. Members on both sides of the House would feel very much happier about the economic condition of the country and about its economic future if we were confident that the leadership of the trade unions was in the hands of persons as sagacious, honourable and patriotic as the hon. Member for Rotherham. That was probably in my hon. Friend's mind, and it is certainly in mine.
I should also like to say a word to the hon. Member for Jarrow (Mr. Fernyhough), who is closely associated with another of our great national movements, the Co-operative movement. As we are debating the cost of living, perhaps it would not be out of place to say that the community as a whole has very much appreciated the initiative taken by the distributive trades in reducing the margin of profit of about 1s. put on 1 lb. of tea after it reaches the grocer's counter. Some of us may feel that the cut might have been made rather more quickly if a lead had been given by the Co-operative movement instead of it following the lead given by private trade.
I am not saying anything against the public spirit of the Co-operative movement, which makes a very valuable contribution to our national life, but I hope the hon. Gentleman will use his influence with the movement to ensure that it gives a lead at any time when it is necessary to bring down distributive costs.
§ Mr. Fernyhough rose—
§ Mr. Speaker
I believe that the hon. Member for Ilford, North (Mr. Iremonger) had finished his speech.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed.