ECONOMIC AFFAIRS

HC Deb 04 November 1964 vol 701 cc214-347

3.25 p.m.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown)

It is clearly apparent to the House and all parts of the country that our first major task as a Government has been to take urgent action to deal with the serious deterioration in our trading position and to prepare long-term measures which will restore the health of the economy. We had in this respect to act quickly and decisively, the more so because action had already been delayed too long and firm decisions had been too often postponed by the outgoing Administration.

Conservative Ministers, aware of the damage that the admission of yet another crisis would have done to their electoral chances tried quite deliberately to mislead the electorate—[An HON. MEMBER: "Nonsense."]—in the course of which presenting bulletins on the health of the British economy which were full of half truths and sometimes even of untruths. The Leader of the Opposition began very early. In December, 1963, he was telling the Parliamentary Press Gallery: We are bound, therefore, to be able to hold our share of world trade, or even to increase it. It would have been surprising if we had done anything of that sort under a Conservative Government since our share of world trade fell in every single year that they were in office, and fell again in the first six months of this year.

On 25th February this year, speaking in Glasgow, the right hon. Gentleman said: On the evidence before us the economy of Britain is very strong indeed, and the tendency is towards expansion. On the evidence before us, which surely must be taken to be the Official Index of Industrial Production, January of this year was the month when output stopped expanding and it has been stagnant ever since; the right hon. Gentleman was speaking in February.

In April, the official figures for trade and industry were already giving cause for concern, but the Leader of the Opposition was positively enthusiastic about them. Speaking in Bolton, and quoted by the Bolton Evening News of 24th April, he said: We have broken more records on exports than ever before. I am not quite clear whether he realises that every time exports rise they must by definition break a record, but he did not mention the other side of the story, which was that in imports we were doing some outstanding record breaking. It was the failure to present that side of the story and the overstating of the side he chose to put which was giving the country such a misleading account of the health of its economy.

Yesterday, as reported in column 56 of the OFFICIAL REPORT, he got a little better. Yesterday, he did admit that there was an economic problem which has to be solved and an export problem which has to be faced. I say quite firmly that I believe the members of the Opposition knew all the time what the situation was. Indeed, by the summer of this year their own official Government journals were contradicting the statements they were making.

The right hon. Member for Barnet (Mr. Maudling) who, I understand, is to follow me in the debate, was reported in the Newark Advertiser of 3rd June as saying: I think that our economic prospects in the short-term are certainly good. But in the same month the Central Statistical Office, to which he must have had access, noted that the current account balance moved from a small surplus in the fourth Quarter of 1963 to a deficit of £62 million in the first quarter of 1964. The statement in Newark simply did not reflect what the Central Statistical Office must have been telling him.

In August the Board of Trade Journal gave this picture of our export performance: … exports of manufactures as a whole, which were increasing at a moderate pace until early this year, have since fallen back. … The level of imports has remained high. … The trade deficit remains substantial. That was published on 28th August, but on 21st August the same right hon. Gentleman, instead of warning the country what the situation was, simply repeated that The basic economy of the country … remains sound. The right hon. Gentleman was misleading, and he must have known it. Since he has gone out of office, he shows that there would have been no change, had the country happily not decided itself to make it, because when commenting on the measures which we have introduced, to which I shall refer in a few moments, in a long statement, which I will not wholly read, which is reported in The Guardian of 27th October, these words appear: Had he been faced with this situation he would probably have waited another month or two for further trade figures before taking action. It was this total incapacity on the part of the Conservative Government to take action that landed us in a situation in October far worse than we need have faced if it had been dealt with at any time after the first quarter of this year.

In contrast to this, we produced after our first 11 days a White Paper in which we set out frankly to the nation the situation as it was reported to us, without doctoring the figures or trying to hide them. We set out the emergency measures which we felt compelled to take to deal with the gigantic economic mess which had been left behind. [HoN. MEMBERS: "Oh."] Hon. Members opposite must make up their minds. Either the situation is serious or it is not. [Laughter.] In our view, it is, and the more right hon. and hon. Members opposite laugh at it the more the country will hold them to blame for it.

But, unlike the panic measures which they throughout their life took whenever they did anything at all, we have placed our emergency measures in the context of long-term measures for restoring health to the economy, and we set those out, also, in the White Paper. Further, unlike the panic measures of 1957 and 1961, our emergency measures do not depend for their effectiveness on hitting hard at social services, wages, salary earners and family budgets.

Let me proceed to set out the Government's general economic strategy. If I can establish this framework, then particular policies will fall into place. I want o go on later to deal particularly with the question of the imposition of import charges, with our policy for incomes and prices, and with our plans for regional development, plans which are related to and arise from those policies. The Statement on the Economic Situation which we issued on 26th October had two basic elements in it. There was the emergency action to check the loss of reserves, and there were long-term proposals for correcting the underlying economic weakness.

First, a word about the emergency action. Was it justified? The balance of payments deficit, as estimated to us, was betwen £700 and £800 million—I want to emphasise that this was the most cautious estimate presented to us—and there would be a further deficit next year which, while expected to be smaller, would be very substantial indeed on the basis of continuing policies. This by any standard is a deficit of gargantuan size. One year's deficit at the current rate is not far short of our total gold and dollar reserves. I think that everybody, except those who laughed just now, must agree that the deficit had to be checked, that it had to be checked drastically, and that it had to be checked at once. This the temporary charges on imports are intended to achieve and, we believe, will achieve.

Of course, these charges are in many ways regrettable, and I do not hide it. They offend against international agreements, but, oddly enough, other measures of direct restriction of imports, which would possibly be even more disruptive of international trade, are permitted by the international agreements in such a situation as we are facing now, while these offend. Direct quota restrictions are at least equally objectionable, I believe, as an interference with the free flow of trade and they had particular disadvantages which made them in our view unsuitable in this case.

For one thing, it would have taken a long time—some time, at any rate—to build up the import licensing machinery. Secondly, quota restrictions would necessarily have been more arbitrary in the way that they would act, because they would have set limits to the imports of different kinds of goods according to political and administrative decisions. Import charges, on the other hand, do not restrict freedom of consumer choice or freeze the existing pattern of trade. They are also less inflationary on balance than quota restrictions and the necessary accompanying measures would have had to be.

I myself do not believe that we should have escaped criticism from abroad if we had chosen quota restrictions instead of import charges. What is resented abroad, and what we greatly regret, is the need to impose a drastic check on our rate of importing, but, given our present level of export earnings, such a check to our imports was quite inescapable. It could have been done by indirect measures. If we had imposed a drastic deflation on the economy, our imports would have fallen, but our rate of importing would have been checked along with everything else. The effect on exporters in other countries would have been just the same, but the effect on our own economy would have been very much worse. Investment and enterprise would have been discouraged. The problems of the under-employed areas would have been made more acute and everybody would have felt and said, "Here we go again. Two or three more years of stagnation ahead".

We have turned our face on stop and go. We have had to find a solution for the balance of payments which did not involve a check to the steady growth of the economy. For this decision I frankly expect to have the support of British industry and, I would have hoped, of both sides of the House. We in the Government want private enterprise to flourish, and that is why we did not knock it over the head on this occasion with the usual deflationary package which right hon. and hon. Members have been used to before.

That is all I am going to say at this point on the emergency part of the measures. I asked my hon. Friend the Minister of State for Economic Affairs to go to Strasbourg to discuss this with our European friends and colleagues now meeting there. He is on his way back at the moment and will be in a position, if he catches your eye, Sir, to report fully on the European reaction and the situation later in this debate. I am convinced that the means we chose were the best means to hand of applying the necessary check to imports, and they will be removed as soon as the balance of payments can be put into a healthy state by other means.

This brings me to our longer term strategy, to the more constructive parts of the statement of 26th October. The second measure in paragraph 13 dealt with the tax relief which we propose to give to British exporters. This idea is not part of the emergency action. It, or something along these lines, is intended to be a permanent modification of our tax system. We believe it will provide a useful relief to those firms who are engaged in the most vital part of the national economy, the export effort. This effort must be enormously intensified and I am very glad that we were able to devise an immediate measure of concrete assistance within the framework of our international obligations.

The basic trouble with our economy is that our production is not attractive enough at present prices either to ourselves or to the world overseas. As the White Paper said: The plain fact is that British industry needs to become much more competitive and aggressive. How is this to be brought about? The most important elements in the answer are, to my mind, a plan for increasing our national productivity and a related plan for linking the growth of incomes of all kinds with an improved rate of increase of productivity.

I have a lot of other important matters to deal with, on which I think the House would want to hear from me, and I will, therefore, not go into detail on the programme of work which my Department and the Ministry of Technology are embarking on in an attempt to raise the efficiency of our industries by the application of the most modern methods of production and management. Opportunities to discuss those can be found later. In general terms, we need to create a competitive climate in which efficiency is rewarded and inefficiency penalised. There must be greater attention to design, quality and marketing. We must aim at a much more efficient use of our manpower and a continuous attack on rising costs. To do this we must create such general confidence in social and personal security through not only full employment but housing, severance payments and transfer grants so that people can and will change jobs with much greater readiness than they have been able to risk doing heretofore.

We must also get to the roots of cost inflation. In that connection, I shall come back later to the start that we have already made in the search for an agreed and effective incomes and prices policy.

There is also a very important job for the Government to do in reviewing the heat-up and, as I believe, election-orientated spending programmes which right hon. Gentlemen opposite left behind when they went out. We shall review these with two main purposes in mind: first, to make room for our own plans for increased expenditure in certain fields by cutting out what we believe to be low priority items; secondly, to try to reduce the demand of the public service on those parts of industry which need to make a bigger contribution to the ordinary economic life of the country, and particularly to the export effort.

We recognise that this involves unpopular as well as popular decisions. It will leave plenty of freedom for hon. Members opposite who want to write articles like that which appeared in one of the Sunday newspapers, concentrating merely on the fact that any of these decisions has unpopular consequences for somebody. We accept that, and both sides of the case will have to be stated and faced and the country's support invited on the ground that the balance of argument lies on one side rather than on the other.

I want to turn to a vital part of our longer term policy—prices and incomes. The Gracious Speech makes clear the importance which we attach to bringing the growth of incomes within a framework of a national plan for economic expansion. We are conscious that an incomes policy is not something which a Government can devise on its own, let alone impose on its own. It must be a joint effort in which the Government are supported by representatives of workers and employers alike. That is why I am glad to tell the House that my invitations to the bodies representative of the employers and to the Trades Union Congress to join with me in early meetings next week to begin discussions on this vital subject have in each case been accepted today, and those meetings will begin next week.

In these circumstances, I obviously cannot spell out today precisely what arrangements we have in mind, but there are some things that I can say. First, as to the spirit in which we approach the question. We are determined that our policy in this field shall be a fair one which does not just bite on the wage and salary earner but which applies, in fact as well as in theory, to all types of personal income—to profits, dividends, the lot.

Wage increases are inevitably, by their very nature, out in the open. They can be measured. They can be compared. It is our intention to use the price review body to which we have referred to put prices into the same position that wages are now inevitably in. This is not just a matter of justice, although, of course, it is that. It is as much as anything a matter of practical common sense. It is obvious that we will never get agreement to an incomes policy which covers only one part of the field.

But we are not concerned solely with improving real incomes, important as that is. Our aim is to devise a rounded policy which covers life in all its aspects. People at all levels want security as well as higher living standards. Workers must feel confident that there are other suitable jobs to go to if they fall out of work, that there are adequate severance and unemployment pay, suitable retraining schemes which are adequate both in quantity and in quality, that there are better placing and mobility arrangements to make work speedily available. Without these measures, workers will fear redundancy and will oppose change.

If these measures are taken, as the Gracious Speech indicates—and, as my right hon. Friend the Prime Minister said yesterday, we propose to take some of them very urgently indeed—we can reasonably hope that productivity will be stimulated and the planned growth of money incomes will be accompanied by a rising level of real incomes, and this will become a realistic objective. We must, however, face the fact that to secure stability or as near to absolute stability as we can get in the general level of prices becomes tremendously urgent. This means that as our national productivity increases with the introduction of the more modern methods and equipment, money incomes must be planned to rise at about the same rate. If we achieve that, then overall clearly we should, subject to the prices we pay for our imports, have a stable price level and a steady increase in real incomes.

When I speak of stability in the general level of prices I do not mean that every price for every type of good or service can be expected to remain steady. Some prices are bound to go up. But do not let us forget, as we often do, that there are other prices which can and should come down. Where productivity is increasing at a faster than average rate, it is not good enough for manufacturers just to claim that they have kept their prices steady. Unless there are very special circumstances, prices ought in those cases actually to fall.

Mr. Kenneth Lewis (Rutland and Stamford)

rose—

Mr. Brown

I think that the House will get more service from me if I am allowed to make a connected statement. There is plenty of time to follow up on what I am saying.

Otherwise, unless this happens, we cannot hope to prevent the general level of prices continuing to rise. I mention this because the price review body will have to be able to operate in this field, too.

That is our broad objective. The House will not expect me at this stage to say much about the procedures and the practical arrangements which we shall need, because this is precisely the sort of thing which I am about to discuss with industry, and on which we want to receive its views and ideas, and to discuss freely with it. We shall want to start, if we can, by reaching agreement on our common purpose. But a general declaration of agreement, necessary though it will be, will not by itself take us very far. We shall need to agree on procedures and on machinery for making the policy effective, and I trust that all those in industry understand the critical issue.

One such piece of machinery which we have already announced will be a body to review prices, and perhaps I may take this opportunity to remove one or two possible misunderstandings about our intentions here. There are, I suppose, tens if not hundreds of thousands of different prices throughout the country. We are not going to employ an army of officials to keep watch on each and every one of these, but there is a much smaller and identifiable number of prices which are of special importance, either because they affect the whole community, or a very large part of it, like food prices, or because they form an important element in the costs of other industries, or for some other reason.

We have in mind that if those who determine prices of that kind appear to be doing so in a way which does not sufficiently accord with the public interest, there is need for an independent body which can discover and examine the facts and report to the public on the matter. I do not pretend that an arrangement of this sort is without difficulties. There is nothing that is without difficulties, but it seems to us a more sensible way of dealing with prices than setting up some more elaborate system of price control. I hope that it will be seen in that way by those to whom these remarks are obviously addressed. A body of that sort can make a valuable contribution to a prices and incomes policy.

Turning from prices to wages and salaries, there are two main jobs to be done. First, we must agree on what can be regarded as a normal rate of increase consistent with the national plan for economic growth. Secondly, we must have arrangements for dealing with special cases of one kind or another. Even if all the parties concerned were angels, which right hon. Gentlemen opposite know is hardly the case, it would still not be realistic to suppose that every income will follow precisely the planned pattern of average rate of increase. Indeed, it would be bad for the economy if every income did. There always will be cases where special considerations justify special treatment.

We shall need, therefore, machinery which can identify such cases and deal with them in a manner which is acceptable not only to them but to the whole body politic. I hope that industry itself, employers and the trade unions, will play a part in any arrangements for this purpose which we may devise together. This is one of the things which we shall discuss with them. It will not be surprising, or out of keeping with our traditions in industrial relations, if we also find a need for advice from independent sources. If we regard these—prices and incomes—and another part which I am about to mention as all parts of one whole which has to be dealt with together we shall be less likely to run into the difficulties which the previous Government ran into with their rather ill-fated proposals.

The third side of this package is the profits side. Here, the arrangements are bound to be somewhat different. We have to recognise that profits differ in character from earned incomes, since they arise as a residual rather than a main element in costs and, therefore, are not the subject of negotiation. We should hope that in most cases where restraint in wages and salaries is resulting in an excessive growth of profits that this could be looked after by the price review body to which I have referred. As for the rest, it seems to us that fiscal weapons are the most suitable way of dealing with excessive growth in profits or dividends and we shall use them for that purpose.

I now turn to the shape of our plan for economic growth. To make the best use of our resources it is necessary to look ahead not just six months, or twelve months, but five years and more. The work of the National Economic Development Council was an important, if very belated step forward, but it suffered a major handicap. It was not adequately backed by the Government of the day. They did not co-operate fully in making the plan by disclosing their intentions. More important, when the plan was made they did not back it up with the policies and decisions it required.

Our intention in the Department of Economic Affairs is to take up the work already done by the N.E.D.C., expand and strengthen it and produce, in consultation with both sides of industry through the Council, a plan for the next five years to guide the development of the economy and all the economic activities of the Government. The N.E.D.C. plan has already revealed some actual and some prospective weaknesses, some of which are widespread across large sectors oil the economy.

It became clear that action was urgently required on a number of matters, including training, education, particularly for management, the improvement of labour mobility, not to mention prices, incomes and the balance of payments. A more detailed plan will define these deficiencies more precisely and, no doubt, will reveal additional ones. We shall see that all aspects of Government policy are geared towards the solution of these problems and the creation of favourable conditions for economic growth and the fulfilment of the plan.

In view of remarks made during the Election campaign and since, I should like to make it abundantly clear that although this plan will now be centred in Government, as we believe it must be, the planning process must be and still will be co-operative. Industry will be involved at all stages. Firms will be able to make their own plans on the basis of informed estimates of the plans and expectations of their customer and supplier industries, as well as with confidence in the Government's known policies.

The House will want to know what consideration we have given to the future role of the National Economic Development Council. Under the policy which we intend to pursue for more purposive economic planning, it is evident that the responsibility must lie with the Government themselves. Therefore, this work will be carried out in future in my Department, in close co-operation with the Treasury and other Government Departments concerned. Part of the staff of the N.E.D.C. office has already joined the Department of Economic Affairs for this purpose.

There is, nevertheless, a continuing need for an outside body on which representatives of industry and commerce can discuss the Government's economic plans at the various stages of their formulation, can contribute to their formulation and can discuss more generally policies directed to securing economic growth, particularly those dependent upon the understanding and co-operation of industry; and, finally, a body to provide a proper channel of communication with individual industries for the purpose of securing that the implications of the national plan are understood in each industry and that the circumstances of each industry are understood in the preparation of the plan.

It is for these purposes that we propose to reconstitute the National Economic Development Council on very much its former basis, with a membership of about 20 composed of Government, management and trade unions, with a small number of independent members. After I have been able to discuss the reconstitution of the Council with both sides of industry next week, I hope to proceed to reconstitute it and to preside over its first meeting later this month. The Council, as hitherto, will be served by its own staff in the N.E.D.C. office and I have invited Sir Robert Shone to continue in the office of Director-General.

I think that it will be clear from what I have said that the work of the Economic Development Committees, the "Little Neddies" as they are sometimes called, will continue to be of the greatest importance. I foresee their growing, in importance in their link with the central planning machinery. I am proposing, therefore, that they should work in close association with the Department of Economic Affairs and the other Departments concerned. So far, we have nine of these committees and I hope that others can be set up very soon.

Before I turn to an announcement which I want to make on regional planning, which I am sure will interest the House, I should like to say a few words about the proposals for iron and steel nationalisation.

Yesterday, the Leader of the Opposition used some very odd words. In defining the position which he was advising his right hon. and hon. Friends to take up, he said that they would prevent us from destroying the competitive power of one of the major industries of this country. I do not know how much attention the Leader of the Opposition has been able to give to the proceedings before the Restrictive Practices Court, or whether they have been brought to his notice. If he reads the evidence of Mr. Craig, the deputy chairman of Colvilles, or the evidence of Mr. Judge, the chairman of Dorman Long, and then reads the conclusions of the Restrictive Practices Court, he will find it very hard to take up a position in defence of the competitive power of the industry. He may still take up a position in defence of the iron and steel industry as it exists today, but he would be defending not its competitive power but its monopoly power, quite a different thing.

We have considered the contribution which the steel industry will have to make towards economic growth.

Sir Harmar Nicholls (Peterborough)

rose—

Mr. Brown

I wish to make a considered statement on this because it was asked for yesterday and I understand that the Opposition wish to have a debate on the subject a little later. We thought, therefore, that it would be not only courteous but useful to them if we made a considered statement about it now.

We have considered the contribution which the steel industry will have to make towards economic growth, and we are satisfied that this can best be achieved by re-establishing public ownership and control. The Gracious Speech announced that we would initiate early action to this end. Our intention is to take into public ownership the main part of the iron and steel industry.

Within the framework of this broad policy, we shall welcome constructive discussions with the representative organisations of the industry, with the trade unions, and with other interested organisations including those representative of consumers of steel, as well as with the Iron and Steel Board and the Iron and Steel Holding and Realisation Agency.

Legislation to give effect to our proposals will be presented to Parliament as soon as practicable and the details can then, of course, be debated. Meanwhile, there is one point which we made in our election campaign which I wish now, at this early stage, to reiterate. There are a few companies whose predominant interests are clearly in engineering and other activities, but which have substantial iron and steel interests also. The position of these companies is being considered, and we do not intend to use the nationalisation of the iron and steel industry to bring the main activities of these companies into public ownership.

It is clearly in the national interest and in the interest of steel managements, workers and consumers that, in the period until vesting day the day-to-day operations of the steel industry should continue smoothly and that programmes of capital expenditure should continue to be carried out in the normal way. I wish, therefore, to give an assurance that, under the nationalisation measure, when we present it, no person or company nationalised will be penalised or prejudiced as a result of reasonable action taken in the normal course of business and in good faith during the interim period. The Government will, with the Iron and Steel Board, keep the progress of the industry under review in the meantime, and they are ready at any time to discuss problems which may arise with the companies concerned or with the representative organisations of the industry.

Finally, a word to the men and women who work in the steel companies and in the central organisations of the industry. They can be assured that the nationalised steel industry will provide good and ever-increasing opportunities of employment for them.

I turn now to regional economic planning matters and a rather important announcement which I have to make arising from them. Our regional plans will take their place within a coherent national framework. We shall draw up regional plans together with the people of the regions themselves, after full consultation, and we shall be setting up effective machinery in the regions for this purpose. Our first major task, of course, must be to fashion the national framework into which all the detailed work going forward in the various regional studies can be fitted. This was one more reason why the Government embarked so urgently on the modernisation of the Whitehall machine. My own Department will be able within itself to draw together both regional and national economic planning so that each can be related to the other and contribute to the other. All this work we are pushing ahead as vigorously as we can.

Our second main intention is to ensure that regional plans reflect regional needs and regional views and experience. Many details of Government policy must, of course, be settled at the centre. While the nation's resources remain limited, choices between investment in one region or another or in one way or another must finally be made by the Government and answered for to Parliament. But we shall not plan solely from Whitehall. I intend, therefore, with my colleagues, to set up advisory regional councils, with membership drawn from both sides of industry, from the local authority world, from the universities, from commerce and from others who are concerned with strengthening and improving the fabric of life in each region. We shall be able to look to these councils for considered and informed advice on the regional problems which coherent planning and development needs to solve.

I do not see them as large bodies, and I am quite sure that they will be in no sense organs of the Government or intended to replace the elected local authorities in the regions. But we shall look to them to join in the concentrated hard work of study and analysis which must precede sensible planning decisions.

These regional councils will have to work with strengthened official machinery for co-ordinating the activities of Government Departments in the regions. This we propose to achieve by setting up regional planning boards consisting of the representatives of the main economic and social Departments which are concerned, but many of which until now have not been able properly to express their concern, with the essential planning decisions in their regions. The chairmen of these boards will be appointed by me, together with other staff from my Department, at each regional headquarters which we shall establish, so that all Departments are co-ordinated and are able then to work with the advisory bodies about which I have spoken.

The planning boards will need to collaborate with the local authorities upon which must rest so much of the responsibility for implementing the regional plans when that stage has been reached. The planning boards will look to the regional councils for advice.

These are our proposals for establishing regionally what does not at this moment exist and what has been so much at the bottom, not only of the neglect of some regions of the country and the over-straining of others, but of the production of a national order of priorities which was wholly competitive and to a large extent in excess of anything which we could do.

Our proposals in this context must, obviously, be different as regards Scotland, Wales and Northern Ireland. In Scotland, my right hon. Friend the Secretary of State will be responsible for the formulation and implementation of regional plans within the framework of our national economic policies and our plan for the country as a whole. He will set up a Scottish planning council with the same kind of functions and membership as those of the regional councils for England. The existing Scottish Development Group, strengthened as required, will be constituted as a Scottish planning board under a chairman appointed by him and will combine representatives of all the Departments concerned.

In Wales the Secretary of State will be making broadly similar arrangements.

I am happy to say that I have already had a preliminary talk with the Minister of Finance of Northern Ireland and that I shall be discussing further with the Northern Ireland Government the arrangements for that hitherto neglected region.

Arising out of all this, we have considered what should be done about the control of office building meanwhile. [Laughter.] I had a feeling, watching hon. Members opposite, that it would help if I tried to relieve the tension for them. Having done that, we have considered in this context what should be done about the control of office building, particularly in the South-East, and I want to make an announcement to the House on action that we have decided immediately to take.

The Government's first action in this field is designed to check the continued growth of offices in South-East England, especially in London, and thus to relieve congestion, and secure a better distribution of employment and a better use of resources. South-East England, with about one-third of Great Britain's population, has accounted for over half of the total increase in employees over the past decade. About three-quarters of South-East employment growth has occurred within the London Metropolitan Region. There is little prospect of housing adequately inside London more than the 8 million people who live there at present, yet employment in London has been increasing at a rate of over 40,000 a year. Office growth has been the main cause. This has, until recently, been largely concentrated in or adjoining Central London and has resulted in nearly 200,000 more office jobs there since 1951.

Outstanding planning permissions together with existing use rights under the Third Schedule to the Town and Country Planning Acts could result in over a quarter of a million further office jobs in London, half of them in Central London. The road and rail system into London is already severely congested, and we cannot afford the heavy capital investment and the new works which would be necessary to cope with the journey-to-work pressures resulting from all this additional office employment. So we have decided to call a halt to this rapid growth.

First, we must have a standstill on new offices in London. To this end, the Government will shortly be introducing a Bill under which, in stated areas, any new offices will require, in addition to the normal planning permission, an office development permit from the Board of Trade, both for new buildings and for change of use. The Bill will provide for areas to be designated as the need arises. The control will be applied with particular stringency in the Greater London Council area.

Sir Douglas Glover (Ormskirk)

Which office shall we go to for that?

Mr. Brown

In general, no permits—the House might like to hear this—will be granted in the Greater London Council area except in very special circumstances. Permits for new buildings will be required even if planning permission has been given, unless a contract to build has been entered into before 5th November, that is tomorrow. Permits will also be required in the case of change of use, unless planning permission has been given before 5th November. In the rest of the London Metropolitan Region, that is, the area roughly within 40 miles of Charing Cross, a permit will be required for new office building or change of use of existing buildings to offices in all cases where planning permission has not been given before 5th November.

The intention is, therefore, that the London Metropolitan Region shall be the first area to be designated, and that, for this region, the Bill shall have retrospective effect from midnight tonight. Where a permit is withheld, compensation will not be payable. Powers will be taken to exempt from the control offices of less than a certain size. Within the London Metropolitan Region it is intended that buildings of less than 2,500 sq. ft. shall initially be exempt.

Office development can make—I emphasise this—a valuable contribution to the economic strength and balance of employment in other regions than the South-East. We propose, therefore, to commission comprehensive studies designed to throw light on the scope for moving offices right outside the South-East, and on the considerations which should govern their location in other parts of the country. We intend to examine with the Greater London Council the whole employment situation in London in relation to housing, transport and other services in order to determine what level of office employment is acceptable in the long-term.

The new controls, while they will relieve pressure on certain congested areas, will not reduce the total demand on the construction industry. The Government's policy is to promote the rapid expansion of this key industry, so that the nation's essential social and economic needs can be met. A White Paper setting out these proposals will be on sale this afternoon in Government bookshops in London, tomorrow morning in the rest of the country, and copies will be available in the Vote Office this afternoon.

I realise that I have taken up a good deal of the House's time, but there seem to be a number of things on which one ought to report as clearly and as definitively as one can, right at the very beginning. The Queen's Speech has given our priorities for the first year. Our programme covers what we think are the most pressing needs in Britain today. That is why we have included provision for improved retirement pensions, moves against land profiteering, new measures on regional planning, and the replacement of private monopoly in steel, a basic and crucially important industry in any developed country. We shall show that in a difficult economic situation we can still expand our welfare services. We shall show that British industry need not lag behind in the development of new methods and the provision of good working conditions. These measures are at the very top of our list of priorities.

We have not, of course, included in the programme for this Session everything that we proposed in our manifesto. It would not have been a programme for five years if it could have been completed in a single year. But our manifesto will be honoured and the proposals in it will be covered in an orderly and rational way. Therefore, if anything is left out this year it is because other needs are held to be more pressing, and it has, therefore, had to be provided for in our second and subsequent years. No one can accuse me of not having made this very plain indeed during the campaign to everybody to whom I could speak. I said repeatedly that the one thing I hoped for more than anything else was to be a member of a Government which would try to raise the flag of unselfishness and explain why some people's needs ought to take priority over others, and explain it to the others; and this is what we are willing to do.

Equally, at no stage of the campaign did I do anything or say anything which would have led anybody to believe that the things we want to do could be done immediately and without effort and cost. On the contrary, on my tour of the country during the campaign I stressed again and again—I do so here—that times would not be easy because we were inheriting enormous problems. It does not mean a return to Crippsian austerity, because we are no longer in the condition of a siege economy. We are no longer living in a world in the first stages of recovery from the most expensive war in history. It is quite the contrary; we are living in a buoyant world.

But it means, as I said in all my election campaign speeches, that we have to be prepared to put national interest before selfish interest in the period ahead. It means that needs must attract benefits and that effort must earn rewards. People knew, I believe, what they were voting for. I believe they have shown that it is not enough or even necessary for a Government to appeal to self-interest. We appealed to people to join with us to build the economy up again. The job has begun.

4.22 p.m.

Mr. Reginald Maudling (Barnet)

The right hon. Member for Belper (Mr. G. Brown) has covered a great deal of ground and given us a good deal of information, not much of a very definite character, except the proposal on offices, which we shall, of course, examine. My first reaction is that it does not seem to be entirely in tune with the concept of modernisation.

At the beginning of his speech the right hon. Gentleman took up a theme which the Prime Minister developed yesterday and with which I want to deal first of all. One of the things that the Prime Minister said yesterday was that the Chancellor at the time—meaning myself—knew the facts of the economic situation and suppressed them. Secondly, he said that measures which should have been taken were held back for electoral considerations. I want to deal with both points.

I take first of all, because I regard it as very serious coming from the Prime Minister, the charge that I suppressed facts. I suppose that by that the right hon. Gentleman meant that I took deliberate action to see that the public did not receive information they would otherwise have got. This is totally untrue. There never has been a time when so much information about the economic situation has been made regularly and fully available to the public. Not one single statistic was held up, altered or cut down in any way whatever throughout the election campaign or before it. The production index, employment figures, indices of orders, trade figures, the first half of the year balance of payments figures—every single one of these figures was published without emendation or hesitation. When the right hon. Gentleman levels such a charge at me, I am entitled to ask him to specify what facts I suppressed.

The Prime Minister (Mr. Harold Wilson)

The balance of payments figures and the amount of borrowing that the right hon. Gentleman was doing overseas.

Mr. Maudling

The right hon. Gentleman knows that is wholly untrue. The balance of payments figures for the first half of the year were published in the middle of the election campaign, exactly on the day proposed. The trade figures month by month were published within hours of their being available to Ministers. It has never been the practice, as is known—and it is not the right hon. Gentleman's own practice—to publish details of central bank transactions. The right hon. Gentleman said during the election that it is right that that should be so. I have suppressed nothing, and I resent very much that wholly untrue charge. [HON. MEMBERS: "Withdraw."] The right hon. Gentleman is not of a withdrawing character.

The second point is about measures which should have been taken earlier. Let us look at the facts. First, I turn to the Government's own White Paper on the economic situation, which confirms three very interesting things. The first is that there is ample support for sterling in the facilities available—as we always said—which we arrange with the central banks and so forth. As I say—the Prime Minister is right this time—the White Paper confirms what we said on that.

The White Paper also says that, apart from special problems in individual areas and industries, there is no undue pressure on resources calling for action. Therefore, clearly the Government say that there was no case for any action of a restrictive character to be taken by the previous Government. I hope that is accepted. The Government cannot blame us for not doing what they say is not necessary.

The third point is that the Government say, as we said also, that in 1965, even without a change in policy, there will be a considerable improvement in the balance of payments situation. That is precisely what we said all the way through. Those three main facts are confirmed in the Government's White Paper. I always said—

The Secretary of State for Scotland (Mr. William Ross)

What about the borrowing?

Mr. Mandling

There is plenty of time. I said quite clearly in the Budget that 1964 would have a deficit on capital and current account and that I considered that it was right to deal with this by borrowing. There was no protest whatever from the Labour Party at the time. Indeed, I was constantly pressed by them to do more to expand international liquidity, to create more borrowing facilities. Is the idea that one should create borrowing facilities and then not use them? It seems to me that when the Labour Party is in opposition it is a matter of creating liquidity and that when it finds itself on the Government benches it is a matter of going "cap in hand". Does everyone who borrows go cap in hand? Did the Canadians come to us cap in hand? Or is it only for his own country that the right hon. Gentleman reserves this sneer?

I said that 1964 was a year in which we would cover our deficit by borrowing, and it was right to plan deliberately to do this, because the alternative was to take one of two courses, either to cut back on demand at home or to impose controls on international trade, and, obviously, both courses are to be avoided if it can possibly be done. The Government have already said that they themselves do not believe that there should be any restraint on home demand. Therefore, the only acceptable alternative in their view would have been to impose controls on international trade of the type that they are now proposing. We can see clearly that controls of this kind, be they surcharges or quotas, are to be avoided if possible. The Prime Minister said that it was with the utmost reluctance that he had introduced the measures. It is clear that we were right to plan as we said we would to cover our position this year, the most difficult year before the improvement in 1965, by international borrowing.

This year, 1964, was going to be a year of exceptional capital outflow. When the figures of £700 or £800 million are mentioned, let us not forget that between £300 and £400 million represents our investment overseas in creating new assets or in paying off debts like the North American debt, which has to be paid off year by year. We must not forget those things. Hon. Members opposite should not make the position look worse than it is.

Upon this necessarily high capital outflow, which I said in the Budget debate would take place this year, we had a deficit superimposed on visible trade. It is true that this is the hardest thing to predict. It is very difficult indeed to predict the future course of imports and exports and it was with that very much in mind that, in the summer, I gave instructions within the Treasury for all possible measures operating directly on the balance of payments to be reexamined in detail, whether means to cut down imports or to expand exports. I thought it right, in view of the uncertainty necessarily attending any forecasting of the visible trade position, to have these measures available if they should become necessary.

Turning to the trade balance this year, the situation must be analysed in two parts—imports and exports. Imports have been high, but that is not surprising. We must not forget that the average level of import prices rose by 5 per cent. between last year and this year, which made a very big addition to the bill. Secondly, there was a large element of stockbuilding at one stage—the figures published in the last day or two have confirmed this. Thirdly, and most important for the future of the trade balance, there is considerable evidence that there has been a large degree of forestalling in recent months. People, seeing the possibility of controls being imposed by one Government or another, have deliberately, and not surprisingly, imported more than they otherwise would have done in order to forestall such action. There are thus these three factors in the level of imports of an exceptional character—the higher price level, stockbuilding and forestalling.

But the figure in respect of exports is far the most disappointing. Exports this summer were disappointing. This was surprising to all concerned. There is a great deal of evidence, which we shall not ignore, that the position will change quite substantially for the better in the months ahead. There is the evidence of the orders of the engineering industry, of business itself and of the impartial Economic Commission for Europe. All this evidence shows that we are right in assuming—as, indeed, the Government accept—that 1965 will be a year of very considerable improvement in the current balance of trade.

The Prime Minister

What about the current trade gap?

Mr. Maudling

The figure of £700 million to £800 million has been quoted by the Government. This is substantially higher than any figure ever submitted to the previous Government. I should also make it clear that all the figures given to us, both for this year's deficit and for the much lower deficit expected next year, were within the means of financing available to us.

We should also remember that at the Commonwealth Finance Ministers' Conference at Kuala Lumpur in September, the assembled statisticians advised that the position of the sterling area as a whole during 1964–65 should show no deterioration. This is what underlies the position of sterling. So strong was the confidence in sterling during the summer months that it was not until the last days of August that it was necessary—apart from the $15 million "swap" transaction repaid in July—to make any drawings whatsoever on our borrowing facilities either with the United States or with the central banks of Western Europe.

In these circumstances, it seemed to me quite clear that it would be contrary to the interests of the economy, contrary to all informed advice and wholly unacceptable internationally to introduce, at that stage, the measures which the Government have now brought forward.

The Chancellor of the Exchequer (Mr. James Callaghan)

As the deficit—current and capital—for the first half-year was £340 million, what figure was the right hon. Gentleman working on for the deficit for the full year, since it is known that the first half of the year is always the more favourable?

Mr. Maudling

It is not necessarily done that way. Much depends on the movement of the balancing item at the time.

Mr. Callaghan

No.

Mr. Maudling

It is true. No figure larger than £600 million was ever given to the previous Government.

The Prime Minister

When did the previous Government publish that figure?

Mr. Maudling

The Prime Minister knows perfectly well that estimates of that kind are not published. The present Government are not publishing their estimate for next year. What we did do was to publish, all the time, the facts upon which the estimates were based. From that, the right hon. Gentleman cannot get away. He cannot climb out of that one.

Sir Harmar Nicholls

On a point of order, Mr. Deputy-Speaker. It is within the recollection of the House that, for a long time, we listened in silence to what was almost a statement by the First Secretary of State. Could not the same courtesy be accorded to my right hon. Friend the Member for Barnet (Mr. Maudling)?

Mr. Deputy-Speaker (Dr. Horace King)

I hope that right hon. Gentlemen on the Front Benches particularly, if they want to interrupt, will do so in the conventional way.

Mr. Maudling

As part of their short-term measures, the Government have decided, in the light of estimates in front of them, that the time has come to employ these measures to operate directly on the balance of payments. I entirely agree with them that if they feel now—and this was their judgment and responsibility, which we will not oppose in principle in any way at all—that action should be taken, then they are right to act directly on the balance of payments and not by "stop-go" or deflation.

We shall certainly wish to examine in detail the proposals they put forward and to see whether the surcharge in particular is in the form best suited to the interest of the economy—whether the level is too high and whether or not the coverage is too wide. This is a particularly important point because I know that many people in industry—chemicals is an outstanding example—are concerned about this. In chemicals, it seems that the imposition of the surcharge will have a retrograde effect on exporting ability. We shall wish to examine all these things very closely. I understand that an opportunity to do so will be given in the near future when we come to debate these measures.

It is true that the surcharge is contrary to international obligations, whereas quotas are not. But I must say that I have never really understood the point of the argument on that score. We all agree that it is most serious to break international obligations, but I cannot help feeling that, if the total amount of imports has to be cut back, there is something to be said for doing so by the most efficient method rather than by imposing quotas which may be extremely cumbersome to administer and more harmful to trade.

While we want to examine the level of the surcharge and its coverage very carefully, it is only right to state that, if this type of measure has to be introduced, one would not say from the start that a quota system is right and a surcharge is wrong.

Now I come to the longer-term measures set out in the Gracious Speech. I must say that a great deal of what the Government say we would agree with. They seem to echo not only our words but our actions. Indeed. I seemed to recollect a certain number of passages of my own about incomes policy in the First Secretary of State's speech today.

I am sure that, in matters of incomes policy, speeches from both sides of the House should follow much the same line because this follows the pattern that both parties have attempted to evolve. It is a most serious problem and, as the right hon. Gentleman said, it cannot be solved by the Government alone but by collaboration between Government, management and unions.

I want to speak about incomes policy because I have always regarded this as by far the most important economic problem we have. The whole basis of keeping up and improving exports is to keep costs competitive and the fundamental requirement for that is undoubtedly an incomes policy relating productivity to the rise in money income. I hope that the Government make progress in their discussions with both unions and management. It is in the interest of the whole nation that the problem should be tackled in a cooperative manner. Having had a little experience of it, I know, as the right hon. Gentleman knows, that the difficulties are very great and the task very complex. Possibly we have already made a good deal more progress than is sometimes recognised. It is my impression that overseas observers would share that point of view.

I should like to refer to what the right hon. Gentleman said about a price review body. This was an idea which was put forward in the Council of N.E.D.C. by the employers this year. It received a very dusty response from the trade unions and was subsequently repudiated by the employers, so I do not think that it starts with a very auspicious beginning. Nevertheless, I am sure that the principle is clear and that it is in prices rather than the total profit levels that one has to look for a satisfactory incomes policy, because, although wages and salaries tend to be uniform within an occupation, it is clearly of the utmost importance that profits should not be uniform and that the efficient firm should make as big a profit as possible and that the inefficient should be penalised. If we can get a stable level of prices as part of a general approach to an incomes policy, that is the way to encourage enterprise while maintaining restraint.

The right hon. Gentleman talked about N.E.D.C. I am glad that he is to continue it. However, he did not mention the National Incomes Commission. That was a pity, because, looking back on it, I am sure that it was a tragedy that the work of the National Incomes Commission was frustrated from the start by the deliberate attitude of the trade unions. I am sure that the right hon. Gentleman will find—he rather hinted at it today himself—that some body of this kind is necessary as part of the mechanics of making an incomes policy effective. There must be some impartial body which can say what is the proper interpretation of a particular case on general principles. There must be—I think that the right hon. Gentleman used the words himself this afternoon—some body which can identify the special case and see that it is treated as a special case. This is precisely what the National Incomes Commission was set up to do. It has clone its job extremely well aid 1 hope that the Government will be able to persuade the trade unions to adopt a new and more enlightened view towards this body in the general interests of the nation.

There are many other things on which we would agree with right hon. Gentlemen opposite—the importance of areas of under-employment, or the development districts. The contribution of the right hon. Gentleman by way of more organisation and more committees and more officials is not very large in comparison with the enormous progress made in the development districts in the last 18 months or two years—the measures in the 1963 Budget, free depreciation, standard grants, the enormous improvement in public investment for which my right hon. Friend was responsible, the £75 million shipbuilding scheme, surplus capacity aid—[Interruption.]—£75 million meant a lot of jobs. I hope that the party opposite does not disapprove of them.

Mr. John Rankin (Glasgow, Govan)

rose—

Mr. Maudling

The right hon. Member for Belper (Mr. G. Brown) did not give way and neither will I.

The fact is that we made a very large contribution to the situation in the North-East, Scotland and the development districts which is now bearing fruit and bearing fruit in a big way.

I come finally on this aspect of the debate to restrictive practices. I see that the Government intend to "call on" trade unions and employers' organisations to co-operate in eliminating restrictive practices. I hope that the new Minister of Technology has approved those words, by the way, because he very strongly disapproved of the word "require". Perhaps "call on" does not mean quite the same thing, but they seem to me to be similar phrases. As we all know, the national interest very much depends on the problem of restrictive practices being tackled and tackled quickly and with co-operation from both sides of industry so that the Government and both sides of industry can make progress together. The country would benefit and we would certainly support the Government in anything involved in that respect.

I turn finally to three aspects of the Gracious Speech which seem to call for criticism. First, there was nothing whatever on the subject of savings, and yet there is nothing more important for the economy of the country than to stimulate the level of savings. No greater progress in our economy has been made in the last 13 years than in savings, which have increased nearly 20-fold in the years of Conservative Government. I do not believe that that will happen again. I believe that the party opposite will find it very difficult to maintain any sort of record like that on savings. I am sorry that in the Gracious Speech I have seen nothing about savings. The right hon. Gentleman was saying the other day that savings were an alternative to taxation. I have seen something about taxation but not about savings. Has the right hon. Gentleman preferred taxation, which is the next thing to come up?

In the Gracious Speech we have large and vague projects of public expenditure. I am sure that we are to get the details in the near future. In their statement on the economy the Government said: The social programmes of the Government will be unfolded in the Gracious Speech. The country realises that these will have to be paid for, and the Government will state what is involved and how the cost will be met. Oh, what a change was there! How happy now they are to come forward with the details of the cost of their proposals which they very carefully cloaked from the electorate throughout the election campaign! How rapidly they leap forward to impose new taxation to pay for their social programme, after the then Leader of the Opposition assured us on television that no general increase in taxation was needed to pay for their programme! It is a remarkable thing.

This will be an interesting revelation to the country. How is it that they have now so rapidly produced the cost of their programme and tax proposals for meeting it while throughout the election they wanted a blank cheque for these things? They say with surprise in their White Paper that the previous Government's programmes would absorb the growth of revenue at present rates of taxation. We said that all along. The right hon. Gentleman the Chancellor of the Exchequer said that no responsible party could possibly go further than we intended, but his irresponsible hon. Friends have pushed him. Now this is coming home to roost and coming home to roost in a big way. This will be one of the questions which the party opposite will have to answer. How is it that the Government can load upon an economy, already by their own standards heavily loaded, a further large and extensive volume of expenditure? That they must explain and we shall be very interested to hear how they do it.

My one final criticism is of possibly the most serious of all their proposals. It is their wholly irrelevant proposal to nationalise the steel industry. I thought that this afternoon we might hear from the right hon. Gentleman some argument in favour of the nationalisation of the steel industry. Not a word. All we heard was that they had decided to do it. There can be no more irrelevant measure, no measure which has less relevance to the economy, no measure more dependent wholly on political prejudice than this foolish and damaging proposal to nationalise steel.

4.47 p.m.

Mrs. Renée Short (Wolverhampton, North-East)

May I thank you, Mr. Deputy-Speaker, for this opportunity to make my maiden speech?

Mr. Deputy-Speaker (Dr. Horace King)

Order. I would ask hon. Members who are leaving the Chamber to do so quietly, especially as I have called on an hon. Member to make a maiden speech.

Mrs. Short

I am proud to have been elected the Member of Parliament for Wolverhampton, North-East, a constituency which one might describe as the industrial heart of the West Midlands. I am particularly proud to be the Member for this constituency, because it is one which has sent a Labour Member to the House since 1945, and I am particularly happy to follow my predecessor who played a prominent and valued part in 1945 during the Labour Government when the National Health Service Act was introduced.

I come to the House with some years of experience in local government at two levels, as a member of a county council and as a member of a local housing authority. I am well aware of the prodigious task which faces our new Government, in building in particular, if we are to provide the houses, the schools and the hospitals which the nation needs.

Too many of our families are living in decaying slums; too many of our children are being educated in out-of-date Victorian buildings; too many of our doctors and nurses are struggling to carry out modern medical practice in out-dated, antiquated, 19th-century hospitals.

My constituency has more than its share of old decaying property. Too many of my constituents are living in overcrowded conditions in seedy buildings. I want to see the twilight areas of all our towns bulldozed and rebuilt. I passionately want to see every family in my constituency and every family in the country living in a good, well-designed, well-built home at a reasonable cost which it can afford. If we are to achieve this laudable ambition, which I am sure that hon. Members on both sides of the House will endorse, we need to build something like 8 million new houses in Britain.

It has been said that our lack of progress in building sufficient new housing for our people is due to a shortage of bricks. It is true that brick production in this country has been stagnant over the last ten years. Even in respect of Flettons, which are so important in the building industry, the average yearly increase in output has been only about 1 per cent. That does not even -begin to measure up to the 4 per cent. prescribed by N.E.D.C. Leaving aside the controversial question of political direction and the disastrous effect of stop-go-stop policies since 1952 on the building industry, and the building materials industry, we arc, as a nation, facing a very difficult building materials crisis. It is not only bricks we lack. At the present rate of expansion, in itself inadequate, we shall be short of cement, lightweight concrete blocks and even aggregates, although we are at present producing about 80 million cubic yards of aggregates per annum.

Consider the output of the precast concrete block-producing industry which is so vital to our building effort. On the assumption of an annual increase of only 4 per cent. per annum in output, and taking account of the fact that the lagging brick production will have to be made good with concrete, the production of high grade aggregates for concrete blocks will have to be increased every year by at least 500,000 cubic yards, according to estimates produced by the Department of Scientific and Industrial Research. Our present production of high grade artificial lightweight aggregates such as foamed slag, expanded clay and sintered fly-ash is only 1½ million cubic yards per annum.

The difficult situation in which we find ourselves has been precipitated in part by the sudden fall in the supplies of boiler house clinker from our modern electricity generating stations where ordinary coal-burning installations have been largely replaced by modern automatic systems using pulverised coal. We are today producing 7 million tons of fly-ash every year. This will increase to almost 20 million tons by the 1970s. I should like to see the Central Electricity Generating Board encouraged to make use of this waste material in the interests of the nation by producing building blocks, bricks and lightweight aggregates. I am open to correction, but I understand that at present it is prevented from doing so. But this nationalised industry could make a very valuable and urgently needed contribution to the building effort of the country in this way, and if legislation be needed I hope that it will be introduced and passed as soon as possible.

The Building Research Station of D.S.I.R. has for many years been helping the industry to develop methods of utilising waste materials such as fly-ash, china clay residues, waste slate and other materials. It has aided and encouraged the industry in the development of new methods or producing building blocks. In recent years, for example, at least nine factories have been set up for the production of aerated concrete blocks. This should have been done long ago. The scientific principle is quite well known thanks to the basic research of the Building Research Station. Yet no action was taken to develop the industrial "know-how" needed for mass production. Laboratory methods of producing new materials are one thing, but the major job is to develop industrial methods of production for industry.

It was left to the Swedes and the Russians to do this. Those countries are far ahead of us in industrialised building. I have had the opportunity to examine industrialised building methods in many parts of Europe. I have seen them in Scandinavia, in France, in East and West Germany, in Hungary and in the Soviet Union. Last year in Siberia I was able to see how their industrialised building development has progressed. They are able to build a single family house in three hours' erection time on the site. I saw eight-storey blocks of flats built in a matter of weeks. We are now importing and paying for Swedish production methods when we ought really to have been producing our own long ago. We cannot, of course, increase production overnight. Factories cannot be set up for the production of light-weight aggregates and new types of blocks and building units, as it were, in the first 100 days. It takes time.

There must be considerable capital investment. Men must be trained in any overall national plan for the expansion of industry, but we have to use our available materials to the best possible advantage. At this point I was proposing to urge on my right hon. Friend the need to restrict unnecessary prestige building and to control all inessential building. It is therefore with very great pleasure that I am the first speaker from these benches to congratulate my right hon. Friend on the proposals which he has made for the control of office building in London and the South-East. We have to use the materials at our disposal to the best advantage for the nation as a whole, and I am sure that people will welcome the proposals made by my right hon. Friend to cut down on unnecessary building until such time as we are within sight of achieving our desire to house our people adequately and to provide the schools and hospitals which the nation so urgently needs.

The most difficult and often the most heartrending part of my job as a member of a local authority housing committee was the allocation of the few housing units which came along from time to time between the hundreds of families on the housing list, all of which had equal and good claims. One needed, I think, to be a Solomon in order to do that job fairly. There are those who say that we should leave it to the blind forces of the market to solve the housing problem of the nation. I say that this attitude is nothing short of criminal, for human happiness and family life are largely dependent on the security of a good home. I hope that my right hon. Friend the Minister of Housing and Local Government will introduce measures to make sure that new methods of industrialised building are encouraged and that these are wisely and economically used in the interests of the nation I hope that the Government will see that there is no proliferation of irrelevant and profit-making concerns exploiting the serious shortage. Let us use the research establishments of the nation to select the most useful schemes. Let us concentrate on the most serviceable. Let us encourage local authorities to combine their housing activities, not only on the lines of the West Midland Consortium to which my constituency belongs, but also to integrate their housing lists and their housing administration as well.

As a member of a county planning authority, I have been horrified by the delays that occur in local government building schemes. I ask my right hon. Friend to reshape and reorganise the planning machinery of local authorities; to look at the outdated methods of agreeing and letting local government contracts and to deal ruthlessly with the frustrating delays that occur continuously within his own Department. Anything which the Minister can do to simplify the machinery and to cut out delay will be received with a sigh of thankfulness by every local authority and by the millions of families in Britain who look to them to provide decent housing at reasonable rents. What we have to do as the Government of this country is to cut out the red tape and to speed our housing programmes with all the energy and dedication required for a national emergency which, in my view, this is.

Finally, may I take this opportunity to thank the House for its patience and tolerance in helping me over this particularly terrifying ordeal of my maiden speech.

4.58 p.m.

Mr. J. Grimond (Orkney and Shetland)

I am in the happy position of being able to start my speech with two sets of congratulations. First, if you will allow it, Mr. Deputy-Speaker, I would like to express to you congratulations from the members of my party who sit on this bench. We have not had an opportunity to do this before. We wish you well and, like everyone else in the House, we can assure you that you have the fullest confidence of all Members.

Secondly, may I congratulate the hon. Lady for Wolverhampton, North-East (Mrs. Short) both on my own behalf and on behalf of the whole House. I am a feminist. I believe, in all seriousness, that we ought to have many more women Members in Parliament. I believe that when they have got here they should not be expected to confine their speeches to certain subjects which, for some reason, are supposed to be the only concern of women.

I genuinely welcome the fact, therefore, that she has had the courage to make her maiden speech both so early and upon an economics debate. Everybody in the House must have found it well informed; we were very sympathetic to the humanity she has displayed towards the difficulties of her constituents over housing—one of the most important problems in this country. I know that in future debates her deep knowledge of the building industry and all that goes with it and of local government will be greatly welcomed by the House. May I assure her, on behalf of the House, that when she addresses us again I have no doubt at all that she will be listened to with deep respect. I noticed a few overtones of controversy here and there, but this is desirable. Indeed, I suppose that on future occasions the colour which the hon. Lady wears may go an even deeper shade than it is now.

My party fought the General Election on certain principles and certain policies and we have no intention of departing from them. It has been suggested that some hon. Members are nervous about fighting another General Election. I cannot say I would welcome it, but I may point out that we have far more experience of fighting elections with no money than either the Tory or the Labour Parties.

I believe that the Government have the opportunity of carrying out many useful reforms. It struck me that in the speech we have listened to from the right hon. Member for Belper (Mr. Brown) he addressed his mind to many matters that certainly need attention There are, many points foreshadowed in the Gracious Speech which, I would have thought, could have commanded a great deal of agreement. We would welcome the proposals to improve the national social security schemes and increase the existing rates for National Assistance and associated benefits, always provided that the money can be found to pay for this. In this regard we hope that the position of public service pensioners will be kept in mind.

We welcome the proposals to modernise and develop the health and welfare services and to abolish the prescription charges, again, always subject to the overriding need to provide the wealth with which this can be done. We believe that the Government are right to draw attention in the Gracious Speech to the need to build up and strengthen the efficiency of the police. We see no reason why companies should not disclose their political contributions. So that there is no feeling of animosity about it, I take it this will be a general direction and that they would have to disclose all contributions, good, bad or indifferent.

I come to the proposals for regional development and for a national development plan. We have heard a great deal more about this this afternoon. First, I am convinced that the continual office building in London is a serious problem and I am, therefore, sympathetic to steps being taken to curb it. But sooner or later we have to attend to the basic reason why these offices are necessary and that is the over-centralisation of this country around London. Until we get rid of the basic reasons we are striking at the symptoms, although I do not dissent from that.

Do the Government intend to try to turn out any of the offices of the nationalised industries? I have often pointed out in the House that the Coal Board carries on its activities from London—the Labour party has frequently made the point—but there is very little coal under London. There are other bodies, such as the Forestry Commission, which are not making a great contribution to forestry in Hyde Park. There is something to be done in this direction.

On the regional structure, as I understand it. Scotland is to be treated as one unit, but the regions in Scotland are as distinct as the regions in England, and I would beg the Government to look at this again. Secondly, I understand that we are to have a comprehensive plan for the whole country and all the regions. From the Gracious Speech that is not quite clear. The speech puts emphasis on the under-employed regions, when the whole problem of the regional imbalance affects both the over-employed and the underemployed regions. I take it that we are to have plans for both a regional structure and for the whole country. Will the Government get rid of any of the existing organisations? They are adding a very considerable structure to the existing Government machinery.

In the northern area of Scotland there are a great many organisations, some of which are not very effective and I think that some of these could be thinned out. The hon. Gentleman on the Government Front Bench looks rather doubtful about this; I have the details if he wishes to see them. There are to be planning boards and advisory councils. Are the planning boards to be executive boards? What is exactly their relationship to the local authorities and to the central organisation of planning in the Government? I trust that we shall be able to have a very full debate on this subject, which is most important and very relevant to the economic state of the country.

The advisory councils, I understand, are not to be elected in any way. I do not complain about this as a start, but my party feel that there should be a democratic content in this regional development. Unless we provide that, we are not moving power away from the centre, I reiterate that I think this is a high priority. We proposed a Council for Wales which would eventually have had a democratic basis.

I will next deal with the specific proposals for specific areas. First, we welcome the appointment of a Secretary of State for Wales and I would like to congratulate the right hon. Member for Llanelly (Mr. J. Griffiths), who occupies that post. He is a most senior and respected Member of the House and we certainly wish him well. But what Departments are being put under him? I do not think that so far we have been told.

As for Scotland, we certainly welcome a Highland Development Board, which we have advocated for many years. I believe that this should be linked to a general programme of devolution, not only for Scotland but for Wales. Secondly, I would like to make certain that when the Government talk of a Highland Development Board they mean a board equipped with adequate executive powers and with access to adequate finance to do the very important job which is waiting in the Highlands. I trust that the members of this Board will be selected for their expert ability to do the job and for no other reason. We have suffered far too much from the appointment of retired people for whom someone is anxious to find a job. There has been too much of that in this country and I should like to see the Government make a clean break with that tradition. I think that the members of this board should be in the prime of life. This should be their whole-time job and we should not quibble over paying them a salary adequate to their responsibilities.

We would support measures for legal reform, though I have most sympathy with the sort of legal reform that ordinary people want and not merely the sort of legal reform which lawyers want. What ordinary people want is a greatly simplified legal system couched in language they can understand. We want to get rid of the absolutely horrifying restrictive practices in the legal profession. We might make a start by examining the Temple. I am a member myself, and I could give some useful advice. Certainly, laws need reform, but I believe that the system should be reformed from the point of view of the user and that in this country it should no longer be considered, as it is now, an unmitigated disaster to have to have anything at all to do with the law.

We need much more information about the Government's intentions over the Rent Act and the Lands Commission. We shall no doubt get it. I welcome the Prime Minister's statement yesterday that he did not simply intend to put the clock back to the position before the last Rent Act. We should certainly be glad to welcome leasehold enfranchisement.

May I come to the proposal for the nationalisation of steel. We were told today that it was to be "the main part" of the steel industry. In due course we shall know what that implies, but I take it that it means pretty full nationalisation. It is well known that the Liberal Party is opposed to that, and we shall oppose it whenever it appears. I will say only this about it now: I have never been a great upholder of the doctrine of the mandate, for I do not think that it has played any part in British constitutional history. But I understood that the Prime Minister yesterday claimed a mandate for the nationalisation of steel—and that, of course, is something which he cannot claim.

The reasons why we oppose the nationalisation of steel are not that we think that the steel industry is in a perfect condition. We are well aware of the strictures of the Restrictive Practices Court upon it. But, basically, we believe that what is needed is more competition in the industry, and we do not believe that nationalisation will bring about the most necessary reform of the industry to give that competition.

I come to three matters which, for various reasons, are not dealt with at any great length in the Gracious Speech, but which, I believe, will be three of the most important matters facing this Parliament.

Mr. Dan Jones (Burnley)

rose—

Mr. Grimond

I am willing to give way, as I always am, but I am making a fairly long speech and I do not want this interruption to be counted against me.

Mr. D. Jones

Is the hon. Member suggesting to the House that there is any competition now in the steel-making industry?

Mr. Grimond

I was not suggesting that there was enough competition, but we do not believe that the way to get more competition is to nationalise the industry.

Mr. D. Jones

There is no competition.

Mr. Grimond

I will accept that comment.

I want to come to an issue which I recognise is not far from today's business but which I believe is very relevant to a debate on the Queen's speech. It concerns the Government's attitude to the possibility of some form of international nuclear force. There is a passage in the Speech which reads: My Government will continue to play a lull part in the European organisations of which this country is a member and will seek to promote closer European co-operation. Does this foreshadow a change of heart? We should certainly welcome a more receptive attitude by the Government to the idea behind a multilateral force, although we recognise that the particular form of the current proposal may be open to criticism. But it seemed to me that during the Election the Labour Party rejected any idea of such a force. If the Labour Party made it clear that it would nationalise steel, it made it equally clear that it would have nothing to do with this force.

Now we read that perhaps the attitude is changing. If so, we welcome that, but we believe that the House should be informed of it as soon as possible, and I hope that there will be time, during the course of the debate upon the Gracious Speech, for the Government to tell us about their thinking on this subject, because the position in Europe is precarious. The information available to the British people on foreign affairs is now derisory. We have to read the foreign Press to find out what is going on. I therefore think that there is an obligation on the Government to keep the House informed of any changes in their thinking in this connection.

I turn to the structure of the Government. I do not blame the Prime Minister for not dealing with this matter fully yesterday, but it is not enough, although it is reassuring, to have it pointed out that the Wilsons do not want to replace the Cavendishes as the dominant political family in this country. Nor do I accept that the mere multiplication of Ministries necessarily means that problems which may have been neglected until now will, in fact, be dealt with better. The Government appear to have given rather more thought to balancing various attitudes in the Labour Party than to producing an efficient machine. It runs contrary to the Prime Minister's own expressed view that 23 is too many for the efficient despatch of Cabinet business.

I believe that some change in the handling of our affairs is necessary, and certainly this applies to the handling of our economic affairs. But the House is entitled to a fuller explanation of where power now lies. Is the Treasury to become merely a department of the Budget, as it might be called in the United States? At the moment there appear to be three, if not four, centres of economic power. They are all equipped with their own advisers, and some of the views of these advisers are unlikely to coincide.

Many of us have felt that one of the more serious difficulties of Her Majesty's Government has been that of getting decisions in any matters which overlap from one Ministry to another or in which we have to get agreement between the local authorities and the central government. The present tendency in government may make the difficulty of getting decisions worse and not better, and we are certainly entitled to clearer explanations of the relationship of the new Ministries to each other and to local authorities.

This is particularly so in the question of land use. Here we are concerned with the planning powers now held by local authorities. Is the new Ministry to deal with planning direct? Is it a matter for the Ministry of Housing and Local Government? What is the relation of the Ministry of Technology to the handling of academic sciences through the Ministry of Education? Why is the Ministry of Disarmament in the Foreign Office and not in the Ministry of defence? What is to be done to strengthen the Scottish Office. which badly needs strengthening by more economists and, I believe, by sociologists. I suggest that at some point the Government should take the opportunity to explain their thinking on the structure of government much more fully.

I come to the question of Parliament itself and the House of Commons. Yesterday's uproar should surprise no one. The basic purpose of the House of Commons has always been to thwart and criticise the Government. I believe that this is a somewhat out-of-date attitude, and I believe that many people in the country want to see the House of Commons play a much more constructive rôle. But we have simply not reformed our methods of doing business to allow ourselves to discharge this rôle.

May I take one other matter which arose yesterday—the matter of immigration? I deplore the incursion of immigration into politics, but it has to come; it is a matter which deeply concerns people all over the country and we, as representatives of the public, cannot ignore this. We cannot pretend that we must not discuss it. And yet I see very little hope that this House of Commons will be in a position to discuss immigration and the implications of immigration for housing and education, for instance, in a sensible calm, reasonably detached and full manner.

Let us take another matter of public concern. We are beginning to learn something of the methods by which vast sums of public money have been spent or pre-empted. For example, there is the Concord project. If we had had an expert committee of this House we could have been informed about this by people who continually kept a watch over what the Government were doing. Certainly, I for one am unaware of even the range of the Concord aircraft. The House has not been informed that major airlines, including Air France, had grave doubts about this aircraft. As to the estimates, all we can say is that up to now all estimates for this sort of project have been wildly exceeded, and, therefore, the House can put very little reliance upon the estimates put before it.

In passing, whenever I hear the word "prestige" my heart sinks. Most of the greatest human disasters have been carried out in the name of prestige. Prestige is something which used to be called "face"—and it was considered that a powerful nation need never worry about face. The Duke of Wellington was criticised for lowering his prestige by falling on his knees before a Spanish grandee, and he replied, "I wanted something from him, and down I flopped".

I do not believe that this is a question of helping science. There is no point is helping science unless it does something useful. If we feel that we are building an aircraft which is not useful, there is no point in doing it. We spend far too little time in subsidising the sort of science which affects the ordinary people. I personally prefer a slower and cheaper aircraft to get me to Orkney and Shetland at a reasonable cost and which could land at a reasonably-sized airfield. I do not suggest this is a prime consideration, but this is the kind of thing which I have in mind.

I believe that the case for specialist committees and for better services for back bench Members of Parliament is clearly made out and that we ought to have far more access to information.

There is inescapable injustice being done to the Liberal Party by the return of nine Members to represent 3 million voters. This, again, we cannot ignore to whichever party we belong, and I trust that consideration will be given to the whole question of our procedure and our methods and, indeed, to the rôle of the Civil Service and the training needed for it.

Lastly, I want to come to the economic measures. I was puzzled by certain passages in the speech of the right hon. Gentleman the former Chancellor of the Exchequer. I was not quite clear whether he thinks there is a crisis or not, but I assumed that he rather thinks that the situation is serious. I was astonished to hear him say that he had never been informed of the estimates made of the deficit. But these estimates must have existed in his time at the Treasury and it seems very odd that he was not informed of them.

Sir D. Glover

I do not think that the right hon. Gentleman wants to be unfair to my right hon. Friend. As a matter of fact, my right hon. Friend mentioned the figure of £600 million.

Mr. Grimond

The figure is said to be £800 million. Perhaps I am being unfair to the right hon. Gentleman and, if so. I withdraw.

Mr. John Hall (Wycombe)

What my right hon. Friend said was that at no time was the figure of £700 million or £800 million ever mentioned.

Mr. Grimond

That is the point. This is quite a big difference—£200 million.

I am not one who spends time looking up other people's speeches, but I seem to remember that during the election the last Chancellor talked a lot about expansion and said that one of the things we ought to do was cut tariffs. At the same time his own Department was preparing a 15 per cent. surcharge. What is the right hon. Gentleman's view? Is the situation serious or not? Could the surcharge be avoided?

I take the view that this is a situation which has to be dealt with. Therefore, I cannot blame the present Government for attempting to deal with it. But, equally, I view this surcharge with dismay. First of all, it is, of course, as, indeed, the Prime Minister himself admits, going in the wrong direction. At a time when we ought to be cutting tariffs and increasing competition we, who are already one of the most highly protected countries in the world, are increasing them. Secondly, it is a breach of E.F.T.A. Thirdly, it is by nature most unselective. The schedules upon which this sort of action are based appear to be wholly out of date.

Nowadays it is very difficult to define what is a basic material. Chemicals, for instance, depend upon materials which are imported which are not included in the first schedule to the Economic White Paper. It seems indefensible to put a 15 per cent. surcharge on ships already ordered abroad, and, of course, there are many components and, indeed, machine tools which are made more efficiently abroad and which, in turn, enable us to compete in highly competitive export markets.

I would like to have seen a much stronger incentive given to exporters, but I do not deny that the position is serious and that some steps had to be taken. This, again, would have been against the spirit if not the letter of various treaties. I know that the Government have reiterated that these steps are to be only temporary, but everyone must bring the utmost pressure to bear on the Government to see that the time limit will be carefully watched and that in due course the economic policy of the Government will be in the opposite direction.

There is a real and serious fear in the country, especially when we speculate on some of the advice that the Government must be getting, that, possibly against their better judgment, they will be bogged down in a series of expedients, reminiscent of Dr. Schacht. It is all very well to put charges on and to say that they will be taken off again as soon as possible, but we must see that they are not, like Purchase Tax, and before that Income Tax, built into the system.

The next point is that we are assured by the Government and, indeed, by the Opposition that there is no strain upon our resources. That appears in the White Paper and was reiterated this afternoon, but even if there is no strain now surely there is danger that there will be. The chemical industry and the steel industry are already working near capacity and we have very full employment. We are now to have a supplementary Budget. I should have thought that the only purpose of such a Budget would be deflationary. The 15 per cent. surcharge is in itself inflationary. That being so, I do not see how we can avoid another "stop" after a period of "go".

I do not blame the Government, who have only been in office a fortnight, for this. The fact is that once we are in this sort of crisis there is nothing else to do than to impose a stop. Unless we have deflation we may well be faced with devaluation. I think it only fair to warn people that, without attaching blame, we are up against a stop-go policy. Unless the Budget is merely to bring about a redistribution of wealth and, if so, there does not seem to be any reason for bringing it forward next week—it must be a check to expansion. The very fact of putting on extra taxes will be to depress activity and will have a deflationary effect on the economy. It may be that unless we have deflation to some extent we may be faced with devaluation. I think that the Government ought to "come clean" about this.

All this makes it more than ever necessary to get rid of all restrictive practices and monopolies with the least possible delay. These measures should be in the forefront of the Government's programme. It is a very large programme and one which few will believe the Government can get through in one Session. Ultimately, the Government will be judged by their priorities. It would be for the health of the country that it should be proved that an non-Conservative Government can establish priorities and can govern without incompetence or rancour. The country suffers from the belief that no Government except a Tory Government is capable of doing this. Therefore, it is very important that the economic situation should be effectively dealt with.

I trust that priorities will emerge, that measures to strengthen the economy will have priority and that the Government will not hesitate to take action in the interests of the general health of the economy.

5.27 p.m.

Mr. Ron Lewis (Carlisle)

Before I came to the House I was informed that many hon. Members on rising to address the House for the first time feel a strong sense of their inabilities as compared with what they feel when speaking outside the House. That I know at this very moment to be true. At the same time, I am not unmindful that the House can be very sympathetic towards hon. Members who are speaking for the first time. I trust that that will be the case now.

I have the honour of representing Carlisle, the last great city this side of the Border on the North-West, a city with a friendly people and, at the same time, a city with its problems and also its anxieties. During the past few years a number of small firms and businesses in my constituency have been merged or taken over, resulting in pockets of redundancy. I therefore welcome the statement in the Queen's Speech that action will be taken for the retaining of workers who lose their employment as a result of takeovers or who are changing their employment.

I hope that when the Government are giving consideration to the resiting of new industries Carlisle, and indeed Cumberland, will not be overlooked. The scars of the Beeching plan are now leaving their trail. My constituency, as most hon. Members will know, is an important railway centre and railwaymen of all grades are quite naturally asking questions concerning the future of the railway industry under the new Government. It is a pleasing fact that at long last a progressive transport policy will now be pursued. That in itself will, I hope, at least ease the minds of our transport workers, both road and rail.

The railways in particular can at least glean that at long last they will not be treated in isolation from other forms of transport. The statement presented to the House today will be welcomed by both management and men in the railway service and I particularly welcome the decision to keep the line open from my constituency of Carlisle down to Hellifield.

My constituency, like most others, has its human problems. Compared with past years our young people are somewhat better off, for which we must all be grateful. At the same time, our old folk have become poorer. The decision of Her Majesty's Government to act immediately to help the aged population is a humane step, a long-overdue one and one which will be of great assistance to the aged, many of whom are now in dire need. I only hope that even in this scientific and materialistic age we will give our old folk a greater degree of security than has been the case of late.

We have a proud record in the city I represent for the building of council houses. Carlisle is the proud possessor of about 10,000 such homes and I pay tribute to the city council for this achievement. Nevertheless, I regret to say that despite all the houses which have been built, we still have a very long waiting list. It is a pleasing feature to know that housing authorities are now to be encouraged to step up their housing programmes and this will be welcomed in all quarters.

I thank the House for its tolerance and kindness to me today and, while not wishing to be classed as a controversialist so soon in my Parliamentary life, I respectfully suggest that the new Government, of which I am glad to be a member, is enterprising, frank and courageous, like the man who … buckled right in with a trace of a grin on his face if he worried, he hid it. He started to sing, as he tackled the thing that couldn't be done, and he did it.

5.34 p.m.

Mr. Julian Ridsdale (Harwich)

I wish, first, to congratulate the hon. Member for Carlisle (Mr. R. Lewis) on his excellent speech. He verged on the controversial for a moment, but quickly got off it. I am sure that many of us look forward to hearing from him on many future occasions. I would also like to congratulate the hon. Lady the Member for Wolverhampton, North-East (Mrs. RenéShort) on her charming maiden speech, in which, in speaking about House building, she did not drop one single brick. I also wish to congratulate you, Mr. Deputy-Speaker, on your appointment as Chairman of Ways and Means and Deputy-Speaker. My only disappointment is that I will not be joining with you in putting my name in all-party Motions, as I have done in the past.

After two and a quarter years of imposed silence it is a great relief for me to be now making almost my own maiden speech again in debates; once again being able to take an interest in economic affairs, which, as Under-Secretary of State at the Air Ministry and at the Ministry of Defence was far outside my brief.

The last speech I made in a Finance Bill debate was in 1962, when I was accused by the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) of putting too liberal a cause. I stressed the need for competition and lower tariffs. I have not altered my views since then. In that year, I also stressed the need for careful control of Government expenditure. I must say some of us regard it as a bit rich, to say the least, that the Labour Government should now be complaining about the adverse balance of payments position since they did all they could to press the last Government to spend more—[HON. MEMBERS: "Oh."]—certainly not to spend less.

Indeed, their proposals in the last election were estimated at £1,000 million above the rate of spending of the last Administration. [Interruption.] Hon. Members opposite may deny this, but, like others, I am waiting anxiously to hear details giving more concise costs of their programme. Nevertheless, the figure I quoted is a conservative estimate which no one responsible has denied would be the cost.

No one has the right to crow about the present adverse balance of payments position unless they advised in the past on what would be the consequences of high rates of Government expenditure. If the criterion of judging our economic performance as a country is the balance of payments position, the only hon. Members who have the right to be listened to with respect and attention are my right hon. Friend the Member for Monmouth (Mr. Thorneycroft), my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) and my right hon. Friend the Member for Flint, West (Mr. Birch). Certainly no hon. Members of the present Socialist Administration, or at least those at present in the Cabinet, come into this category.

I must say that I regard the step to impose a 15 per cent. tariff as inept, and the way it was imposed as positively incompetent. Will it be temporary? Indeed, as the right hon. Member for Orkney and Shetland (Mr. Grimond) said, these things are rarely temporary. Income Tax was introduced as a temporary measure. I only hope that this new tax will be withdrawn on the first possible occasion.

I cannot understand why there was not prior consultation with our E.F.T.A. partners, who have supported us so well and loyally up to now, and particularly after the failure of the Common Market negotiations. Why was there this indecent haste? Surely it was a flagrant breach of a number of international agreements—of Article 19 of E.F.T.A., Article 2 of G.A.T.T., Article 3 of the European Coal and Steel Community, of the Irish Trade Treaty of 1938 and of Clause 1 of the Ottawa Agreement of 1931—a complete nap hand revoke of international treaties. What a record after an Administration of only a week or so—a period in which the cost of living has already been put up by nearly 1 point. I cannot say that the present Administration deserve a gold medal for this, just the wooden spoon.

The reason for the present adverse balance is quite simple. Our defence expenditure overseas, including the fighting in Aden, South-East Asia, Cyprus and New Guinea costs us something more than £500 million a year on foreign exchange account alone. There is the high rate of Government expenditure on roads, railways, schools and social services. We have had manufacturers stocking up ahead in fear of import controls and other similar methods which they rightly surmised a Labour Government would impose. There is the fact that a lot of our recent export orders have been for heavy machinery, and so have taken time to get into the statistical returns.

I am sure that our present trading partners recognise our obligations for defence expenditure overseas and the necessity for carrying the present rate of social service expenditure. Why, then, this need for panic and this hit in the face for our friends who, in the increasingly interdependent world in which we live, would be the first to help us correct our present and, as I believe, temporary embarrassment?

I hope that it is not so, but I cannot help feeling after the attack made and the words used by the Prime Minister in this House yesterday, that the right hon. Gentleman is playing party politics on this issue. Does it really help to create an easy home market? Already we have indications that supplies for export are being diverted to the protected home market. I have been told of machine tool capital investment cancellations that can only lead to a loss in vital productivity. Whether the other side admit it or not, the present effort is another version of "stop-go-stop", as the Leader of the Liberal Party has just said, but with very likely serious damage to our vital export markets, to say nothing of damage to our international honour.

World trade in the last few years has been expanding at the rate of at least 10 per cent. a year. That we have not been able to get our share is not the result of tariffs being used against us—though there is the long-term problem of the Common Market—but because our wages and incomes have been increasing ahead of productivity.

Do the new Government intend to tackle this vital problem of reforming the trade union structure? When I was in Japan last year, I was assured by many leading Japanese that the reason for their success was that their unions were organised on a plant and company basis, and not nationally. In fact, the only national union is being dissolved. I got the impression from the industries I visited that they were working together as a team, with none of the features there are in our own structure of so many different unions in one industry. That, I am sure, is the kind of structure that accounts for a great deal of our uncompetitiveness, especially in shipbuilding. Japanese direct shipyard employment is about 52,000 men, who annually produce 2¼ million gross tons. In Britain, about 36,000 men produce 1 million tons.

In Western Germany, Sweden, the United States and Australia, collective agreements are made enforceable at law. In all those countries there are labour courts with employer and trade union representation, and armed with considerable power to see that teeth are given to any labour policy in a time of full employment. I am sure that we want more decentralisation and negotiation on a plant and company basis in the smaller industries and, in the larger industries, more power to enforce collective agreements at law. Do the new Government mean to tackle the problem of modernising our trade union structure? Whatever we ourselves may feel about management and salesmanship, about restrictive practices and monopolies, that is the fundamental problem which any Government of either the Right or the Left must tackle, and tackle urgently, if our national affairs are to prosper.

Our aim is and must be to keep a balance between those who are being educated and trained, those who are producing the wealth of the country, and those who have retired. Over the last 12½ years, with the system of progressive capitalism we have been evolving, we have been able on the whole to be very successful in meeting this challenge. Production since last year is 5 per cent, higher than a year ago. The modernisation of British factories, farms, transport and social services is at record running levels. We have full employment. As a result of the Conservative Government's regional development programme, the position in the older industrial areas is showing substantial improvement. The purchasing power of earnings and pensions is higher than ever before, and the cost of living, has been steadier than in most European countries.

It is therefore no wonder that the country did not vote for Socialism in the General Election; indeed, the Socialist vote was 10,000 down on 1959. There is no doubt that we have been blasted into Socialism by Liberal intervention in many important marginal seats. It is not much use for the right hon. Member for Orkney and Shetland to say that Liberals will oppose nationalisation of steel in the House and that we want more competition, when, in the country, through their intervention in important marginal seats, the Liberals have made nationalisation possible.

The remedy is clear. If we want to see more progressive capitalism, and defeat Socialism and nationalisation, we have to recreate the alliance of those forces that helped to defeat them in the past. Time will, in the end, give us this, but the time for such people to join together is much shorter than many realise.

5.48 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

I feel exactly as did my hon. Friend the Member for Carlisle (Mr. R. Lewis); I now know what "butterflies in the tummy" really mean, although I have spoken on probably thousands of occasions in different circumstances.

I want to speak on aspects of the Queen's Speech which I consider to be of importance to the people of Merseyside, and particularly to those whom I represent. The Gracious Speech says: Our industries will be helped to gain the full benefits of advances in scientific research and applied technology. Central and regional plans to promote economic development, with special reference to the needs of the under-employed areas of the country, are being prepared. Merseyside has long been an underemployed area.

I do not want to be controversial, but the hon. Member for Harwich (Mr. Rids-dale) has said that we have full employment. At this very moment there are 24,000 people unemployed on Merseyside. In 1959, when the Conservative Government came in, we had 26,000 unemployed, so the numbers have been reduced by only 2,000 in five years. This despite the fact that industry was brought to Merseyside, or induced to go there—firms such as Fords and Vauxhalls—which gave a certain measure of marginal employment. Although industry has been brought to Merseyside the number of unemployed has remained approximately the same; there has been an almost static situation in the area. This is not good enough for the people of Merseyside.

The planning officer of Liverpool City Council, in an interesting and important survey of future employment needs of Merseyside, pointed out that we require approximately 10,000 new jobs per year in the area. Obviously we have to tackle the needs of areas such as this in a special way. We have special problems which have arisen because in the past there have not been facilities for the people to get necessary training in various skills. We have a dearth of unskilled and semiskilled labour on Merseyside. We require special measures so that they may have training necessary for the various industries there.

Not only are there 24,000 unemployed on Merseyside but the Merseyside and Lancashire Industrial Development Association Report says that since 1951 more than 42,000 have moved out of the North-West Region. This drift shows that the numbers of unemployed would have been even greater if they had not been forced to seek employment in other parts of the country. Two things are needed for Merseyside. We need a crash programme to make certain that those now unemployed shall be given an opportunity of immediate employment before we take long-term steps to ensure the planned development of industry in that area.

There is not only the need for economic planning but for physical planning. The two must be integrated. It is essential, to create full employment in the area, to ensure full economic development and that the physical planning and economic planning go hand in hand. If that is not done we shall not get a proper balance on Merseyside.

We need a number of important things. Much is heard about the Channel Tunnel. I can assure the House that people on Merseyside would be far happier if we heard more talk about a second crossing of the River Mersey. We could then leave the question of a Channel Tunnel as something to be considered in the future. We need an integrated transport system on Merseyside. I was delighted to hear the statement by the Minister of Transport this afternoon. I was pleased that he could now clearly indicate that, for example, the Southport—Liverpool railway line is likely to be saved, at least until we have some form of integrated transport system.

The Wigan line is an example of how one Department of the previous Government obviously did not know what another Department was doing. That line goes through Skelmersdale, which is a new town. We are hoping to get people to go from Merseyside to Skelmersdale, but there is only one railway line and the Beeching Plan proposed to close it. This is an example of complete chaos and lack of planning.

Modernisation of the building industry is very vital to the people of Merseyside. Two aspects of this question need to be brought out. We need to develop methods which will ensure continuous production in building, in the winter as well as in the summer. We have not yet got to grips with this problem. We also need to make greater use of industrial techniques. Modernisation of the building industry is not merely a question of the use of new industrial techniques and not merely one of new plant. Something else is required—the needs of the operatives have to be taken into consideration in any modernisation plans.

As a building operative I know that, despite the welfare code, there are still many firms which operate the same type of conditions as were written about in the book "The Ragged Trousered Philanthropists". It is high time that such things were completely eliminated from the industry.

We need to make certain when talking of modernisation that the question of decasualisation in the industry is considered. The unions have something to consider in that connection. It is quite wrong that operatives have no real measure of security for their future. It is also important that methods of training of apprentices should be changed. Unfortunately, there are still too many apprentices taken on because a father talks to the next-door neighbour over the garden wall and finds that his son could get a good job with the local plumber. Although youth employment officers are doing a good job, there is not a proper approach to apprenticeship in the industry. If we are really interested in modernisation we must realise that these matters are of vital importance and should be taken into consideration by the Government.

Returning to my original point about regional boards, I pose the question of whether Merseyside should be considered as a region or as part of the North-West. We are a regional centre and we have regional conditions. When considering regional boards we should look at the problem of Merseyside in a regional context. I ask the Government to look at that question when the new boards are developed.

5.59 p.m.

Lady Tweedsmuir (Aberdeen, South)

I am very glad indeed that it falls to me to be able to congratulate the hon. Member for Liverpool, Walton (Mr. Heffer) on his maiden speech. All hon. Members will agree that the hon. Gentleman was most impressive in the way in which he grew in assurance as his speech progressed, on only the second day on which this Parliament has sat. The hon. Gentleman spoke with great sincerity on behalf of his constituents. He spoke on a subject to which, oddly enough, I too should like to refer, namely, the various regional plans. I come from the north-east of Scotland, and in many ways our problems are similar. All hon. Members will look forward to hearing the hon. Gentleman's contributions, which we hope will be frequent. We look forward to having battles with him, which, alas, we cannot have at this time.

I want to speak entirely on the Gracious Speech and the action taken so far by the Government as it affects Scotland. The hon. Gentleman wanted to know very many more details about what he called the regional plan for his area. During the course of his speech he gave a great deal of support to the whole concept of planning. He must have been happy today as he listened to the First Secretary of State. The right hon. Gentleman had an absolute field day on planning. There seemed to be so many plans for all parts of the country that I wondered whether we would grind to a halt.

The First Secretary of State told us that we should have a Scottish Planning Council, which he did not define further. I had hoped that a Minister speaking today would give us further details of these plans for Scotland. The right hon. Gentleman went on to say that the Scottish Development Group was now to be called the "Scottish Planning Board". As far as I could make out—I took notes as the right hon. Gentleman spoke—it did not seem to have any different function from what the Development Group has at present.

I take this opportunity of commenting on the right hon. Gentleman's remarks about the control of office building. I would have hoped that the First Secretary of State would realise the concern and anxiety which exist throughout Scotland about whether the Labour Government will stick to the arrangement made by their predecessors that the Post Office will be moved to Glasgow. I therefore ask the Economic Secretary when he replies to make a definite announcement to the House that there will be no divergence from the decision already taken that the Post Office be moved to Glasgow.

The First Secretary of State said during the election campaign: We will plan every aspect of our national life. We in the House are entitled to have a little more detail about these plans. As I read the Gracious Speech, there are only two specific proposals concerning Scotland. One is not definitely related to an economic debate. Therefore, I shall deal with it only in passing and say that I welcome the suggestion that there is to be a Bill to establish what I presume will be a teaching council for Scotland as a whole. We shall examine the details of the Bill, because, presumably, the Secretary of State has satisfied himself about the transfer of power and responsibility for the entry of recruits into the teaching profession and for the supply of teachers in Scotland. This Measure, although we welcome it because it increases the status of the teaching profession in Scotland, will not of itself help to recruit the necessary teachers.

On the economic side, the only one other specific proposal concerning Scotland in the Gracious Speech is that for a Highland Development Board. Once again, we must await a Bill. This appears to be an administrative structure. We shall have to wait and see whether the board is to take over the functions of the existing various bodies concerned with the Highlands, whether it will be another board imposed upon them, or whether it will also be of an executive character and therefore empowered to distribute finance. If so, it will be interesting to see if these powers will conflict with those of the local authorities.

The regional plans, which we await expectantly, as does the hon. Member for Walton, are under study. Presumably they will be part of the studies already being undertaken in the Scottish Office by the Development Department and which are almost completed.

I turn to that part of the Gracious Speech which says: My Ministers will work for more stable prices … This is vital to Scotland in her endeavour to establish new industries and to expand existing industries. The very first action taken by the Government—as the First Secretary of State proudly said, within their first 11 days—was to rush into the imposition of a 15 per cent. levy on most imports, apparently without consultation with our allies and without awaiting either the November or the December trading returns. Does the First Secretary of State and the Government think that our industry as a whole will absorb all this 15 per cent. surcharge without rising prices? This measure must apply to the United Kingdom as a whole, but it will have a particular effect upon Scotland which is trying to attract new industry and to expand others, because, although raw materials for processing in industry are apparently exempt, there are many raw materials which are only semi-processed which apparently are not exempt and which are vital to our industry.

My right hon. Friend the Member for Barnet (Mr. Maudling), when Chancellor of the Exchequer, was at very great pains to have differential taxes and other inducements designed to be of particular benefit to areas such as the north-east of Scotland, from whence I come. Therefore, as the surcharge is a blanket surcharge on the whole United Kingdom, I must ask whether the First Secretary of State can give a far more definite assurance about what he means by "temporary". He said that it would remain in being until the balance of payments is in better balance. What does he mean by "better balance"? To what extent?

I want to show the kind of effect the surcharge will have. In the past we have had great trouble in trying to persuade American firms to come to Scotland and establish themselves there rather than on the Continent of Europe. To a very large extent, we have been successful. American firms now considering coming to Europe will well wonder whether they should come to a country in which they will have to pay a surcharge on their raw materials or whether they will establish themselves on the Continent and within the Common Market.

Further, I do not think that the scheme has been at all well worked out. Schedule I of the Statement on the Eco- nomic Situation says that the temporary charge will not be levied on Wood, not planed or further prepared. In other words, wood which is in any way partly processed will be subject to the surcharge. As everyone in the House knows, a vast quantity of timber in this state is imported into this country for the construction industry. One sees immediately the burden on prices and costs which this surcharge will have, and it will be shown throughout the construction industry of the United Kingdom. I have been told that it will probably mean an extra £30 a house.

Aberdeen is greatly concerned with the import of box boards. Coming from Aberdeen, I should like to inform those hon. Members who do not know it that the fishing industry is one of the major industries in the north-east of Scotland. Box boards are used to make fish boxes. They are used in the exporting of fish. This is an industry which the other part of the Government's measures is designed to help, and I welcome those measures as far as they go. But this 15 per cent. surcharge, if imposed on imports of box boards, will have a serious effect on the Aberdeen fishing industry. There is no alternative source of supply to what is really a raw material for the construction of boxes used for the export of fish. Therefore, I am driven to the conclusion that this levy is bound to add to the cost of exports as a whole. The White Paper also says: Relief of the charge will be given, as far as this is practicable, on imported goods subject to the charge and subsequently re-exported. There are no details of this scheme; it merely says: as far as this is practicable. Therefore, it is perfectly plain that this provision has not been properly thought out.

At this point may I say that I am glad to see the Minister of State, Scottish Office, in his place on the Front Bench. I feel that there are other matters which have not been thoroughly thought out, and this applies particularly to the structure of Scottish Government. That is why I am glad the hon. Gentleman is here. He will know that since the office of Minister of State was created in 1951 that office has always has been held by someone in another place, with no departmental duties. The idea was that the Minister of State should not only be free to be the deputy to the Secretary of State as the hon. Gentleman now is, and therefore able to be at St. Andrew's House in Edinburgh when other Ministers were working in the House of Commons, but free also to meet the local authorities, to travel all over the country and to meet delegations and representatives of every kind.

We now find the Minister of State in the House of Commons. If the hon. Gentleman is in the House of Commons where he has duties of his own, he must, whether he wishes it or not, neglect his duties in Scotland. If he is in Scotland he must be permanently paired—and who indeed is the person who will be prepared to be paired with him, to "go steady" with him? If he is in Scotland he will be neglecting his duties at Westminster. I noticed in the Scotsman a statement issued by the Secretary of State, whom I wish all success in his office because it will be for the benefit of all Scotland, to the effect that the Minister of State is not only the deputy to the Secretary of State but that he is to have a particular interest in Highland affairs. He is also to be responsible for public order including criminal justice, the police, probation, legal aid, liquor, belting, licensing, the fire service and civil defence. These were some of my responsibilities when I was an Under-Secretary. The Minister of State, who I understood was to be permanently in St. Andrew's House as the right hon. Gentleman's deputy, will have a very busy time running to and fro.

If, on the other hand, it is suggested that the Under-Secretary of State who sits in another place is to perform the duties of the Minister of State and is to be Minister of State in everything but name, I must ask, why not give him the position which apparently he will be expected to fill? I find that as an Under-Secretary in another place he has also been given departmental' responsibilities. He is responsible for agriculture, fisheries, food supplies, forestry, crofting and—a wonderful departmental expression" the formulation and progressing of plans for regional development ". I have not included general Highland matters such as shipping services because I find that he has an overlap with the Minister of State who also apparently has a particular interest in Highland affairs. Therefore, we have two Ministers running around the Highlands, if I may put it in that way; and who, I wonder, will be here in this House?

I think that what will happen is this. The Secretary of State presumably will answer Questions on all these matters for which his Under-Secretary who sits in another place is responsible. I presume that the Secretary of State will reply to all Adjournment debates. He will be kept up very late at night. I presume he will also be responsible for taking legislation through the House of Commons on these matters. Or perhaps there is no intention of having legislation on fishing which is of prime concern to my constituency, or agriculture, because these matters will be dealt with in another place.

All I can say is that if that is so, the Secretary of State will be very busy. Despite his undoubted ability to work very hard and very late, I do not believe he can give that clear, thoughtful and imaginative study to the whole picture of Scotland if he is going to take on all these duties as well.

Mr. Tam Dalyell (West Lothian)

Before the noble Lady sits down—

Lady Tweedsmuir

I have not yet sat down.

Mr. Dalyell

Before the noble Lady referred to the structure of Government, she made an incursion into the field of education. If she is going to make this sort of stricture on my right hon. Friend, will she explain why her party set up a committee on the question of the governance of the teaching profession in Scotland? She then made a snide remark about attracting teachers. Will she explain why she set up a committee and did not act according to the recommendations of that committee?

Lady Tweedsmuir

I always find the hon. Gentleman is several minutes behind in following an argument.

Mr. Dalyell

I was being polite.

Lady Tweedsmuir

I had already left that part of my speech and was talking about the structure of Government in Scotland. There will be plenty of opportunities to reply to my remarks.

Mr. Ross

If I may intervene, my hon. Friend the Member for West Lothian (Mr. Dalyell) may be several minutes behind in following the argument, but the Tory Party was 15 years behind in following the Report.

Lady Tweedsmuir

I do not find that a particularly enlivening or apposite interruption.

The Minister of State, Scottish Office (Mr. George Willis)

What about succession?

Lady Tweedsmuir

It was a Tory Government which took the Succession (Scotland) Act through Parliament, which is of great benefit to the women of Scotland.

So far as the structure of Government is concerned, we shall all watch developments with great interest. We shall help the progress of all useful Measures and we shall naturally examine them with the greatest care and in much detail. But as for Scotland at the moment, the Government have made a bad start, creating confusion, uncertainty and, I suspect, rising costs.

6.18 p.m.

Mr. Bert Hazell (Norfolk, North)

I am another new Member making his first speech in this House, and I crave the indulgence of hon. Members in any mistake that I might make.

I suppose that North Norfolk, which I represent, is one of the loveliest constituencies in the whole of East Anglia, with its long coastline from Wells-next-the-Sea down to what is known as Horsey Gap, including those delightful seaside resorts, Blakeney, Sheringham, Cromer and Bacton. In addition to that lovely coastline, which has problems of erosion with which I hope to deal at a later date, we also have in my constituency the Broadland area.

I think that almost every hon. Member in the House knows of that wonderful stretch of 200 miles of river and Broads that have such a fascination for so many tourists and holidaymakers. Indeed, my constituency, with its coastal belt and its Broadland area, is the mecca for tens of thousands of people from London and the industrial Midlands who spend their holidays within the area. North Norfolk welcomes this tourist trade and has set out to try to attract more of this trade because it is essential for the well-being of the area. This is a seasonal trade and, therefore, underlying the minds of my constituents, there is the desire for work all the year round rather than just during the hectic three months' period which constitutes the summer season.

The other big industry in my constituency is agriculture. This is an industry on which I have heard little comment during the debate on the Address. Agriculture, over the years, has played a tremendous part in helping to meet our balance of payments problem. It is an expanding industry. Year by year its output increases. It is an industry not backward-looking but forward-acting, with investment in capital for buildings and equipment. I suppose that today it is the most highly mechanised agriculture in the world. Certainly, in conjunction with its intensified mechanisation there has been an ever-increasing output of production.

I suppose one could say that if every industry in the country had increased its ratio of production on a par with that of British agriculture we probably would not be faced today with any of the adverse balance of payments, which is causing such considerable concern at this time. Agriculture still has a great future of intensified production and one is interested in every attempt made to improve the quality of cattle and the strains of the grain sown in our fields.

We therefore welcome that section of the Gracious Speech in which the Government indicate their desire to continue the system of guarantees under the existing Acts and to promote measures to secure better marketing arrangements for farm products. The fact that the Government have shown their complete confidence in maintaining the prosperous industry which I am proud to represent will give great satisfaction to everyone concerned with agriculture on both the employers and the employees? sides.

I come from a constituency which was represented in the House by a veteran trade union leader who was respected throughout the country and almost throughout the world, in the person of the late President of the National Union of Agricultural Workers, Mr. Edwin Gooch. His desire was always to further the cause of agriculture. In the debates on the Agriculture Act, 1947, which the then Minister of Agriculture piloted through the House, he played no small part in trying to convince the Government of the day of the need for such measures. The fact that the industry has continued to progress in the intervening years and that this Measure substantially remains the same today as when it was passed in 1947 proves its value conclusively.

The assurance from the present Government that they will maintain the prosperity of the industry, as set out in a paragraph of the Gracious Speech, will give tremendous confidence to everyone concerned. I was not surprised to see that paragraph in the Gracious Speech when I realised that the present Minister of Agriculture was a junior Minister under the Minister of Agriculture in the 1945–51 Government. I wish him well in his responsibility. I would only add, in connection with agriculture and the Gracious Speech, the fact that no reference is made to the workers within the industry. I assume that later, when detailed proposals for the future of the industry come under discussion, the workers will have some special mention, because their welfare was part of the Labour Party's programme during the recent campaign on the hustings.

Agriculture, expanding as it is from a production point of view, is a contracting industry in its usage of manpower. Year by year thousands of workers leave the industry. This continuation in the reduction of manpower is bound to go on, at any rate for a considerable time ahead. New developments in mechanisation and the application of science to the industry will lead inevitably to a continuing reduction in the number of those engaged in the industry. As my constituency is composed, on the one hand, of a coastal belt dealing with holiday traffic, which uses its labour for only a limited period of the year, and, on the other, an agricultural area where manpower is declining year by year, it represents problems which will have to be tackled. In this debate much has been said of underemployment in the North-West, in Scotland and in the North-East, but I assure the House that there is much under-employment in the purely rural areas. This is particularly true of a constituency like North Norfolk.

Over a number of years employment in the constituency was bolstered up by the continued use of airfields, ordnance factories and British Railways, but the number of airfields in my constituency have been reduced, the ordnance factories have disappeared, and the railways have virtually disappeared as well. Now there is only one railway line running through one part of the constituency. How long that would have remained in being if the previous Government remained in office I do not know.

The bulk of the railway system throughout North Norfolk has been closed down already. As a consequence, because little or no new industry has come into the area, our young people are moving out and going great distances to try and find employment. I know of some who are going even as far as Stowmarket and Ipswich, in Suffolk, because there is nothing for them nearer at hand in their own localities. The consequence of this migration of our young people will lead inevitably to the delightful area which I represent having within it a number of decaying and dying villages. I am sure that the whole House will agree that this is bad.

When the report on regional development in the South-East, "The South East Study", was published a few months ago a dividing line was drawn between King's Lynn, Norwich and Great Yarmouth. Apparently, under that plan, no development was to take place beyond that line leading towards the coast, but there is within the constituency an urgent need for new undertakings. I am not suggesting that the delightful coastline or the delightful inland area should see great new factories planted there. But I should like to see—I am sure that this is the wish of everyone in Norfolk—small and medium-sized firms coming into the area to provide employment alternative to casual seasonal work in the holiday trade and the declining manpower demands of agriculture. I am sure that the rural, urban and county authorities of Norfolk—I mention particularly the urban and rural areas of Fakenham, North Walsham and Cromer—would over-reach themselves to encourage new industries of small and medium scale to come in. This is a most important area which must not be overlooked when we are considering the underemployment problems of other parts of the country, and I hope that the Government, when going into the matter, will not draw arbitrary lines such as that drawn in the South-East Study, but will have regard to the whole of the areas under survey.

A word now about the new organisations which my right hon. Friend the First Secretary of State told us about today, the regional advisory councils to consist of representatives of local authorities, the universities, commerce and others. I draw attention to one type of organisation which has been in existence for a number of years and express the hope that it may be brought actively into the picture. I refer to the regional boards for industry. These were created by the late Sir Stafford Cripps when he was Chancellor of the Exchequer, and I was privileged to be a member of the East and West Ridings Regional Board for Industry when it was created. For the past 10 years, until my election to this House, I have been chairman of that particular board.

In case there are hon. Members not fully acquainted with the constitution of these boards, I remind the House that they represent not people who have retired but people actively engaged in industry on both sides, with six representatives of different employers' organisations, on the one hand, six principal full-time trade union officers representing different industries, on the other, together with the regional controllers of the Government Departments for the regions concerned. In my experience, these boards have performed an extremely useful function. They work very well. They have expert knowledge of industry in their localities. I sincerely hope that they will be used to the full in the new machinery of regional advisory councils which is to be set up. I know that the boards are anxious to co-operate to the full. Both sides of industry are anxious to play a fuller part than they have been able to play in the past.

I am sure that these points will be given full consideration. I thank the House, as other hon. Members making their maiden speeches today have done, for the tolerance which it has shown to me. Now that this hurdle has been overcome, I look forward to making contributions to our wider discussions in the future.

6.34 p.m.

Mr. Gilbert Longden (Hertfordshire, South-West)

I can assure our new colleague, the hon. Member for Norfolk, North (Mr. Hazell) that he was not asking too much when he requested tolerance for his speech. It is no good disguising from you, Mr. Speaker, that on occasions one has to listen to speeches and one is glad that it does not fall to one's lot to offer the traditional words of praise to a maiden speaker. I thank the hon. Gentleman because he has made it a genuine pleasure for me to tell him that the whole House listened to his speech with interest and admiration. I am certain that at this moment he is feeling great relief, but I assure him that the rest of the House is not. Obviously, he will prove a worthy successor to his late lamented predecessor who was so highly respected in all quarters of the House. Although it would be insincere for me to hope that the hon. Gentleman will be with us in many more Parliaments, I can assure him that in this one everyone will be glad to listen to him as an authority on industry and agriculture.

Denigrated and derided on radio and television, and regularly by most of the national Press; criticised continually by "life-long supporters" who blamed it for everything except the weather, the late Conservative Administration has been dismissed, and even where, as in my constituency, a Tory Member has been reelected, it has been, with the exception of some hundred devoted supporters, with a marked lack of enthusiasm. It might seem as though the British public, aghast at their own affluence, had resolved to show the world once again that they shine best in adversity.

Nevertheless, the electorate has spoken, and the Labour Party must be given a fair chance to show what it can do. If the right hon. Gentleman the Prime Minister will place his country before his party, he will have my support. For example, to take three items from the Gracious Speech, if he succeeds in keeping prices steady, if he succeeds in getting enough teachers of the right calibre, and if he succeeds in bringing more creature comforts to those of our fellow citizens who have not "had it so good", then I, for one, shall not oppose him.

I must say, in parenthesis, that the Government have not made too good a start. I greatly deplore, as several previous speakers have done, the manner in which they have torn up so many international agreements, to the detriment of our friends abroad, without prior consultation. I find it strange that they should have appointed Mr. Cousins and Sir Charles Snow to lead this country out of tie Conservative night into the dawn of Socialist modernity. It seems to me rather as though one were to enter a Suffolk Punch for the Derby and expect it to win. This is no criticism of those two gentlemen because the Suffolk Punch is a noble animal.

I found it strange, too, yesterday that the Prime Minister should have made his astonishing outburst against my hon. Friend the Member for Smethwick (Mr. Peter Griffiths). I suspect that it came as a result of the aura of holiness emanating from the Peers Gallery where at that moment his friend the Right Reverend Prelate, the Bishop of Southwark, was sitting. I wish that he were there now. I should like to tell him that one of the issues presented to the electors of Smethwick was whether there should or should not be control over immigration. I should like to remind him that when, at long last, the late Conservative Administration did bring in a Measure to restrict immigration, the then Member for Smethwick did all he could to prevent its reaching the Statute Book.

Rightly or wrongly, the people of Smethwick voted for control. Presumably, they did so because they realised that we live in a small island which is already overcrowded and because the statisticians tell us that, by the end of the century, our population will have doubled. The Bishop, I am sure, would be prepared to give the vote to every African in Southern Rhodesia tomorrow, but when the people of Smethwick exercise their vote in a manner which displeases him he gives a dreadful exhibition on television of hatred, malice and all un-charitableness. The best I can say of the Bishop is that he is no better a Christian than I am.

Mr. Speaker

Order. In the interests of comity between the two Houses, the hon. Gentleman must speak respectfully of Members of the other House.

Mr. Longden

I am sorry, Mr. Speaker. May I return to the Gracious Speech and to the three items in it with which I wish to detain the House because I believe that they are of primary importance?

The first is steady prices. Nobody has to be told why. Not only because, if our prices soar, our exports are priced out of the market but also because ever-rising prices make life miserable for those who have to live on fixed incomes here. What is the remedy? The remedy suggested in the Gracious Speech is: My ministers will work for more stable prices …". But it will need more than Ministers to work for this. What are the causes, for we must diagnose before we can prescribe? I believe the causes are at least four. First, there is the price of imports and no Government here can control those. Secondly, there are monopolies and other rackets on the management side. The Government, in the Gracious Speech, say that they will take steps to improve industrial efficiency by dealing more effectively with monopolies and that it what the Conservative Government would have done had it been reelected. But the Labour Party were strangely unkeen on the abolition of resale price maintenance.

And what are they going to do with steel? They are going to monopolise it! The third and fourth reasons for rising prices are the restrictive practices in the unions and the automatic annual pay increases, irrespective of productivity, merit or hard work. The unions, as indeed it is their job to do, ask for higher pay every year, and the employers, because it is easier to grant it, do so and pass it on to us in price. What will be done about those two reasons? Her Majesty's Government are going to "call on" the unions and employers to co-operate. But Mr. Attlee called upon the employers and the unions. The late Sir Stafford Cripps in this House in September, 1949, said: Any worker by hand or brain who goes slow, or is an absentee, or demands more money for no more output, is, in fact, doing his best to put up his own household bills, and to put somebody—quite possibly himself—out of a job."—[OFFICIAL REPORT, 27th September, 1949, vol. 468, c. 31–2.] Since Sir Stafford Cripps, every Conservative Minister of Labour from my noble Friend Lord Monckton on, has also "called on" the unions and the employers to this end. What makes Her Majesty's present Government think that their call will be better heeded? Why, for example, is the price of so many of our newspapers going up? We are told it is because of higher production costs. Why are production costs higher? Because of the notorious restrictive practices in the printing industry which none of the Press barons has the will to do anything about.

Then there is shipping and the docks. I beg the right hon. Gentleman who has now become Minister of Labour to read Mr. Donald McLachlan's open letter to him in last Sunday's Sunday Telegraph. I quote one passage from it. Your party"— that is the Labour Party— and the Tories were equally frightened during the election of mentioning the unions—the excessive power of some, the restrictive practices of others, their old-fashioned and inward-looking habits of mind". But one Tory at least was not afraid to mention the unions. I said in my election address: According to the Daily Mirror 'Spotlight', ' the trade unions are running into the risk of sacrificing their most valuable asset … the sympathy and good will of public opinion'. It is certainly time that in the national interest, and in the interests of the individual trade unionist, the law and practice governing these essential bodies was reviewed. The right to strike must be preserved: but various other 'rights', which enable individuals to be victimised and the nation to be held to ransom, must go. There need no longer be one law for the Unions and another for everybody else. The brakes upon efficiency of unofficial strikes, or restrictive practices, and of the activities of the Communists (whose primary objective, according to 'Spotlight' is 'to further the influence of the Soviet Government') must be countered, preferably by the commonsense of most of the leaders and rank and file; but if necessary by Government.

Mr. W. Griffiths (Manchester, Exchange)

The hon. Gentleman was quoting, I gather, from his election address. Did he say anything about the restrictive practices indulged in by some employers? Has he heard of trade rings and monopolistic practices?

Mr. Longden

Certainly, but I would not weary the House with further extracts from my election address. At the moment I am applying my mind to restrictive practices in the unions. I agree that they exist on the other side, too, and said so just now.

This leads me to what I thought a somewhat sinister statement in the Gracious Speech. A Bill will be introduced to give workers and their representatives the protection necessary for freedom of industrial negotiation. We all know perfectly well that no such protection is necessary, and this sentence presumably is intended to threaten the judgment of the House of Lords in Rookes v. Barnard. Let me remind the House that in that case the trade union organiser, admittedly a Communist, said to Mr. Rookes: No man has the right to resign from a union. You get back in or I will call out the whole labour force and they will be striking against you". Mr. Rookes, having guts, did not get back in and the B.O.A.C. management having none, sacked him. The House of Lords gave him damages, and quite right too. I hope that nothing will be done by the Government to upset that. If they are thinking of any such thing let me remind them of a further sentence in the Gracious Speech: In all their policies My Government will be concerned to safeguard the liberties of My subjects Something will have to be done about this and perhaps the Labour Government will succeed where we failed. They will have also to revise their very old-fashioned views about profits. Profits are not income. What they have to apply their minds to when it comes to profits—and without profits there would be no work—is how the profits are used. They can be used in many useful ways such as ploughing back, research and rewards for those who produce them and, too often forgotten, in reducing the price of the goods or service turned out.

So the success of the incomes policy is vital to us all. It will need more than Ministers working for it. What is certainly not the answer is more public ownership, because that means less competition. The Prime Minister and his Deputy did not seem to realise that, although at the moment there may not be competition in the steel industry, the industry consists of 260 individual companies and they are amenable to the Restrictive Practices Court and the Monopolies Commission. That will not be so if the industry is nationalised. We shall then have to take what they give us and like it because there will be no other source—and no other boss.

Secondly, on the question of teachers, every hon. Member is agreed that we must have more teachers. I should have liked to see in the Gracious Speech some stress put on their quality. I think that the National Union of Teachers, second only to the National Union of Mineworkers, must be the most conservative body in the country and will have to be prepared to accept, more readily than they seem now to be, auxiliary teachers and more automation.

The third factor in the Gracious Speech about which I want to say a few words is the all-important question of aid to the needy. What does the Gracious Speech say about this: My Government will have particular regard for those on whom age, sickness and personal misfortune impose special disabilities. They believe that radical changes in the national schemes of social security are essential to bring them into line with modern needs. They will therefore embark at once upon a major review of these schemes. So far so good. But why does it go on to say: Meanwhile, they will immediately introduce legislation to increase existing rates of National Insurance and associated benefits. Why?

I know that we have done it on five separate occasions. But is it not a dreadful waste of our resources? Must it not be as clear as a pikestaff that the more we give away of the taxpayers' money to people who do not need it the less we shall have to give to people who do. We in our party were going to have given help to the "older" pensioners, as if age and need were synonymous. They are not synonymous. The Labour Party said in its manifesto that one person in four among retirement pensioners has to go to the National Assistance Board. I accept that. The Labour Party said that a large number of people ought to go but are too proud to do so. I accept that. Let us say that 3 million out of the 6–7 million retirement pensioners now ought to go for a supplementary pension. I thought I detected a gleam of common sense in the Labour Party's manifesto. It said: For those already retired and for widows, an incomes guarantee will be introduced. This will lay down a new national minimum benefit. Those whose incomes fall below the new minimum will receive, as of right, and without recourse to National Assistance, an income supplement. That seems to me to be sound common sense. The only thing I would say to the Government now—I shall be saying it to them again from time to time—is that I hope that among those "already retired" who are in need they include the Service pensioners, who have had a raw deal.

As a matter of fact, it is just what happens now, only the terminology is different. I do not care whether it is called the National Assistance Board, a supplementary pension or a supplementary income. The trouble with the present system is that the supplement is not enough. But, assuming that the Labour Government's national minimum will be enough—and we do not yet know what it is—we are still brought slap up against the age-old—perhaps I should say "the old-age"—bugbear, the means test, for if there is to be a national minimum income up to which all incomes are to be brought, there must be some means of ascertaining what the income is which needs to be brought up to the national minimum. Hitherto all parties have funked this.

I hope I shall not be misunderstood when I say that the pride which forbids people from asking for supplementary pensions if they need them is a false pride. They see nothing wrong in accepting an increase in their pensions so long as every other pensioner gets it as well. But in such a case it is just as much an unearned gift from the taxpayer as if they had got a supplementary pension from the National Assistance Board. So, if we are to give to each according to his need, we must first ascertain need.

I would remind the House of what the former hon. and learned Member for Kettering, Mr. Mitchison, said in the last Parliament: This is not a matter to decide on a play of words … All we have to find out here is what a man's income is, or a married couple's, and make it up to the required amount. In a sense one can say that it is a means test, just as an Income Tax return is a means test, but it is in a quite different sense from what it has been in the past and, in practice, it comes to a very different matter indeed. I could not follow the subtlety of that at the time, and have not been able to do so since. The majority of people who will be concerned in this will be subject to this means test, if we like to call it that, under their existing P.A.Y.E. arrangements. All that we have to do is to turn our Income Tax arrangements in reverse. Instead of taxing people according to what they get, let them receive according to what they need."—[OFFICIAL REPORT, 10th December, 1963; Vol. 686, c. 244.] That is sound common sense. Moreover, just as it is waste to hand out taxpayers' money to those who do not need it, so it is waste not to expect "from each according to his means". The removal of the prescription charge, already far below the true price, simply means that we shall have less to spend on the National Health Service. It is doctrinaire stupidity.

Communal aid must be selective, and as it must always be found by those who are still in work, which I think are about three-fifths of the population at any one time, we must encourage everyone who can to be self-supporting. I hope that the "major review" which is promised in the Gracious Speech will be based upon those principles.

To return to what I said at the beginning, if Her Majesty's Government will do these things and several others like them—there is not time for me to detain the House any longer dealing with them—which are in the Gracious Speech, then I for one shall be glad to give them my support.

6.57 p.m.

Mr. Edmund Dell (Birkenhead)

Like previous speakers, I crave the indulgence of the House in making my maiden speech. I represent Birkenhead, the constituency represented in many previous Parliaments by Mr. Percy Collick, whose gallantry in overcoming physical disability and personal tragedy will be known to many hon. Members.

Birkenhead is one of the towns created by the industrial revolution of the nineteenth century, and it has all the characteristics that many such towns have, such as far too many slums and far too many slum schools, and with those go, as in the rest of Merseyside, a very high unemployment rate—very often around 5 per cent.—low average wages and an absolutely appalling situation in the field of apprenticeships. At present, only about 10 per cent. of school-leavers in Birkenhead are able to secure apprenticeships, a figure only about one-third of what it was a few years ago. Therefore, I welcome the prospect under the new Government of regional planning and the special attention which will be given to industrial training.

Much attention has rightly been given in recent years to the problem of the North-East. The problems of the North-West, and of Merseyside in particular, are no less and merit at least equal attention. Birkenhead has two main industries. The first is shipbuilding and the second is the dockyards. Therefore, the people of Birkenhead are doubly bound up in the problem of exports, first, as citizens of a country which is particularly dependent on exports and, secondly, as people deeply engaged in the actual mechanics of exports; and it is upon exports that I want to speak this evening—the problem of how to increase our exports. I speak on this problem not as an economist, but as one who has for many years been engaged in the practical business of exports. The Government will soon, I hope, give us further details of what they propose to do to encourage this country's exports.

First, I want to say a word about the import surcharge. I think that it was essential to restrain imports in current circumstances. If imports had to be discouraged, then I think that an imports surcharge was the best way of doing it. Certainly, it is a better and more flexible way than a quota or licensing system. Nevertheless, there is no disguising that it can have an adverse effect on our exports, and, therefore, it must, as the Government have promised, be temporary. I say that it can have an adverse effect on exports for three reasons. First, there is the danger of retaliation. I speak here not of retaliation from Governments, although that is important, but of retaliation by customers. I know of one Commonwealth country, for example, where firms that import from us will be deprived of their import licences if they cannot export to us.

Secondly, one silver lining in the cloud of manufactured imports was that it made sedentary boards of directors taste the nip of export air and perhaps begin to understand the problems of exporting and what it is necessary to do to achieve exports. Thirdly, the surcharge must be temporary because of its probable effect on the delivery of exports.

I want to say something about some of the factors governing the success of our exports. First, there is the question of price. Many firms find, or claim, that export sales are less profitable than home sales. This may be true of some, although in certain cases I suspect that they have not worked out their sums properly. Nevertheless, in cases where the problem is that of lower profitability from exports then I am afraid that the export rebate proposed by the Government, although it will have some slight influence, will not do the job necessary. I believe that far greater incentives will he required and, if necessary, amendment of international regulations will have to be secured to effect this.

Secondly, there is the question of credit. We must review the credit facilities we provide and which are guaranteed by the Government. I am glad that the Government propose to do so. I sometimes feel that credit facilities, particularly those provided to what one might call "marginal" countries, make too narrow an assessment of the risk involved.

The Chairman of the British Chamber of Commerce in Argentina wrote to The Times recently complaining about the status allotted to Argentina in British exports. I sometimes feel that the Brazilian default of 10 years ago has had too great an influence on thinking about credit in this country. In the 1964 review of the work of the Export Credits Guarantee Department, the Brazilian default is referred to no less than three times within about six pages.

As a result, the subsequent performance of this country in Brazil has been very poor. Yet the subsequent history of other countries shows differently. The United States, Germany and Japan have all invested very large sums in Brazil and as a result are exporting very large quantities there. Our investment in Brazil is negligible as are our exports there.

Of course, it is important in exporting to ensure that one will get paid. It will not help solve our balance of payments problem or any other if we do not get paid for what we export. But I beg the Government to remember that, especially in this modern technological age, when we are exporting to a large extent—I hope that it will be an ever larger extent—highly technical products, that the man who makes the first sale is very likely to make the second, the third, and so on. The country that supplies the machinery is likely also to supply the raw materials and to go on doing so.

I suspect that some of our failures in exporting have been due to the fact that we have been unwilling to make the first sale. What I have said, true as it is in general, is especially true in dealing with the developing countries, where the technical level is often so low that they have to continue on the basis on which they originally started.

I hope that the Government, in looking at credit facilities, will take a less stringent and more realistic view of risk than has been only too characteristic in the past. They should also look at our commercial information services and the assistance provided to our exporters by embassies abroad.

I very much welcomed and, indeed, enjoyed, the suggestion made by the hon. Member for Harrow, East (Commander Courtney) in a letter to The Times some time ago, in which he suggested that our ambassadors should no longer be called simply "ambassadors" but "ambassadors and trade commissioners". At any rate, that would help to get the priorities right.

In almost every country with which this country has relations trade comes first and this should be the priority in the minds of our ambassadors to a far greater extent. I do not blame the people concerned. There is inadequate staffing of commercial services abroad. The result of this is lack of confidence among exporters in the services they can secure abroad. I repeat that I do not blame our people abroad. Very often it is a matter of inadequate staffing and priority given to these problems.

In my travels I have often found that a British community, when an ambassador retires from his post, congratulates him on his work and refers to his travels throughout the country to which he has been accredited. I often wonder whether perhaps a better measure of success might be the movement of trade during that period. I realise that this would be quite unfair. Trade depends on many other things than ambassadors, but it would be as fair a measure of ambassadorial success as the sort of measure provided now.

Once when I visited a customer in a far-flung part of a far distant country he told me, "We had the British ambassador here only last week—a very nice chap. But I have not the faintest idea why he came." I think that ambassadorial peregrinations should have some point. The most important activity of our ambassadors should be the encouragement of British trade.

Then there is the question of organisation. The Government propose to attempt to organise co-operative selling arrangements overseas. I welcome this and hope that it will succeed. I hope that they will attempt to avoid the danger of competition between firms which are represented by one selling agency overseas. They might also examine how far existing selling organisations of British firms abroad could be used to take on additional agencies and the sales of smaller firms which cannot afford to set up their own overseas selling organisations. This, in fact, is already done. It could be done with great benefit to our exports on a far wider scale however.

The success of the Government will be judged on many counts, but in no activity will their success be more important than in exports, because on success in exporting British goods depends the future of our economy and our ability to solve the many social problems which we face.

7.9 p.m.

Mr. A. E. Cooper (Ilford, South)

In the fifteen years that I have been in the House, this is the first occasion that I have had the opportunity to follow a maiden speaker, but the waiting has been well worth while. The hon. Member for Birkenhead (Mr. Dell) spoke with an authority, vigour and knowledge of his subject which the whole House found refreshing and exciting. As he goes through his life in the House he will find that the House will always lend a ready ear to the man who knows his subject. I shall look forward with great pleasure to taking part in debates with him on trade and industry. There was much he said on which I should like to speak, but the traditions of the House do not allow it. Again I offer many congratulations on a first-class maiden speech.

I have one or two things to say, some controversial and some not. Considering what I suppose we can call "The First Twenty Days of Harold", we have an extraordinary situation to face. Let us consider what has happened in those 20 days. First, the Prime Minister has slapped the Parliamentary Labour Party in the face. He has said, "There are 100 of you chaps who are worth-while members of the Government, but there are 200 of you who have not 'got it', and we will therefore have to look outside you 200 to fill some of the great offices of State". We even find that a Member of the House who was rejected by his electors is still called to the high office of Foreign Secretary, a man rejected by his people and unpopular with his constituents, with no home in the Mother of Parliaments and no responsibility to anybody. He, together with Mr. Cousins, has to sit in the wilderness outside the House which the Prime Minister sets up his rotten boroughs.

Then we have a slap in the face of the Civil Service. To the men in the top jobs in the Treasury, some of the finest economists in the land, the Prime Minister has said, "You are not good enough and so we have to find two comrades from Hungary who have lived here a long time", Comrades B and K, both of them known to be extreme Left-wing. I ask the right hon. Gentleman questions which the Government must answer. What vetting of these two men has taken place for security reasons? What is their position within the Civil Service? Are they paid servants of the State, or simply advisers? Will they have access to all top secret documents? What is their position? The House is entitled to know and so is the country.

Then we have a slap in the face for all British-born economists—and we have some pretty bright men in this country. The Prime Minister has said to them, "Not one of you is good enough to look after the affairs of our country and so we shall go outside".

By all standards, according to the Press this morning, the Prime Minister's performance yesterday in connection with my hon. Friend the Member for Smethwick (Mr. Peter Griffiths) was disgraceful. It was probably one of the lowest performances by a Prime Minister in this or any other generation. If the Prime Minister wishes to hold the respect of the House, he should take immediate steps to apologise to the hon. Member for Smethwick. To do otherwise will only exacerbate the feeling in the House, and if this Parliament is to work properly with its very slender majority, it has to work on the basis of mutual respect between the two sides of the House, or we shall be in for a very difficult time.

I had the fortune, or misfortune, to listen to the Prime Minister's television broadcast after the announcement by the right hon. Gentleman the Chancellor of the Exchequer and the right hon. Member for Belper (Mr. G. Brown). As I listened I thought that he must be joking. He said that we must put young men in the board room, and then the Government set the example of having one of the oldest Governments on record. He said that we must not overman the job, and we have one of the biggest Governments on record. He said that we must trim our costs in order to be competitive, and we have the most costly Government on record. He said that we must get our prices down, and the first thing the Government did was to put up prices by varying percentages according to the price of material.

I assure hon. Members that the 15 per cent. surcharge is a very serious matter for British industry. I do not believe that the scheme has been thought out in any depth. The effect on wages will be considerable and in consequence our competitive position in the export market will be embarrassed.

I declare an interest in that I am engaged in the chemical industry. When the Finance Bill, in which, presumably, these things will be embodied, comes before the House, it will be necessary to introduce Amendments to secure relief for a wide range of products within the chemical industry. There are examples of products, not available in this country but basic to industry, which cannot be produced here. The first is mercury. Then there are iodine, bromine, silica, silicon, potash, essential oils, resin, calcium, carbide, hydro-carbons and, curiously enough, methane, a product which the Gas Board wants to import to bring its industry up to date. However, as soon as the first shipments come to the country, a 15 per cent. surcharge will be slapped on, making it very difficult for the gas industry to be competitive. This scheme cannot have been thought out in depth, or those items would not have been included in the list.

I have today placed an order in America for some raw materials which cannot be made in this country. This is not a question of restricting supplies. The result of the 15 per cent. surcharge will be an increase in price of more than 6s. a 1b. on this item which will put up the finished cost of the material, used by the decorative trade, by more than 3s. a 1b. These are matters which must be thrashed out during the Committee stage of the Finance Bill, and I urge the Government to consider them with sympathy.

We all recognise that there must be some cut back of imports in some way, but do not let us penalise an industry on basic materials which we must have and which we cannot buy anywhere else. That is all I ask. The case with superfluous imports, semi-manufactured or manufactured goods, is different. I am simply arguing the case for the basic raw materials which industry needs and which in many cases form the basis of our export industry.

One of the curious side effects of the charge, as the Economic Secretary to the Treasury will understand very clearly, is that if one is making a product which is quite common in this country, it may have two or three imported items, each bearing the 15 per cent. surcharge, so that the raw material cost becomes higher by varying percentages. If one is competing with another country which is trying to sell its products here, the net result may be not to reduce imports but simply to raise the general level of prices of both goods manufactured in this country and imported goods. This cannot do anybody any good, and the immediate effect of this sort of thing is to raise the general cost of living, with a consequent demand for higher wages. That is why I come back to my point. I am not arguing against the general principle of placing a restriction on imports, I am simply saying that the basic raw materials of industry which are not available in this country and must be imported, should be excluded from this surcharge.

We have not been helped by the manner in which this has been done. We have broken international agreements. Let us not be mealy-mouthed about it. We have broken our agreements with G.A.T.T.—I see from the tape today that the Economic Secretary to the Treasury has not had a happy time—we have broken our agreement with G.A.T.T. and with E.F.T.A. This has been an unconstitutional act by the Government which has cost us dearly in prestige, not only in respect of other countries, but with would-be customers overseas.

Not only are we trying to reduce imports—which is important—but we are also trying to increase our exports, and this is vital for this country. To do this we have to make it possible for our would-be customers abroad to have more funds available to buy goods from us. But we have done the reverse. By this procedure we have restricted their ability to buy from us, and they will tend to look to other countries to supply them with their goods as—if hon. Members wish—a way of paying us back.

Mr. F. H. Hayman (Falmouth and Camborne)

A few moments ago the hon. Member said that he had no quarrel with the decision to reduce the import of goods which could be made in this country. Now he is making a general condemnation of the whole import duty. Will he say exactly where he stands?

Mr. Cooper

I wish that the hon. Member for Falmouth and Camborne (Mr. Hayman) would listen to what I am saying. Perhaps it would be better if he read my speech in the OFFICIAL REPORT tomorrow and then he would see that I am advocating no such thing. I said that I dislike and I resent the way in which this has been done. I am sure that by negotiations and discussion we could have made other countries aware beforehand of what we were intending to do and have obtained some measure of support and co-operation from them. According to the Press, only one country was informed. The Government said they did not have time to tell anyone else, but they had time to send someone from the Board of Trade to America. All our friends in Europe, including those in E.F.T.A. with whom we have a close association, were told nothing. They were left to hear about this from a Press conference in London.

I am sure that we could have done this in a better way and secured some co-operation with these countries. They would have understood our problems and helped us although they would not have liked what we were doing. But people do not like to have agreements torn up and thrown in their faces. This is not the way in which a British Government should conduct themselves.

Mr. Hayman

Did the hon. Member's own Government do that in 1961 with regard to the older civil servants, the teachers, and so on?

Mr. Cooper

I do not know to what the hon. Gentleman refers. He manages to dart about all over the place from one thing to another.

The Government could do one very important thing. They could get rid of their pathological hatred of Spain, Portugal and South Africa. The ridiculous vendetta which the Labour Party has pursued against those three countries over the years has cost this country millions upon millions of £s worth of trade. These are the guilty men who have hindered our export trade over the years. These are the guilty men who have caused the loss of jobs on Merseyside and in Scotland. These are the men who could have had an order amounting to about £30 million from Spain. But no, they threw it away. So we ask the hon. Gentleman and his friends in the Government, what sort of rules do foreign countries have to subscribe to before we are allowed to trade with them? This holier than thou attitude does not extend to Communist countries. We can always trade with them. We can send Ministers rushing about the world trying to promote trade with those countries, but when it comes to dealing with South Africa or people close at home—oh, no. Those countries have Governments which we do not like. That is very bad. We must trade with them—

Mr. Rankin

rose—

The Economic Secretary to the Treasury (Mr. Anthony Crosland)

rose—

Mr. Cooper

To which hon. Gentleman am I to give way?

Mr. Crosland

If the hon. Member is so much against vendettas, will he give up his vendetta against Hungarian economists?

Mr. Cooper

I am not conducting any vendetta against Hungarian economists. I am simply saying that we have better economists in London and in England, and the Conservative Party has always been in favour of quality.

On the ground of pure economics—although I am not suggesting that this is the right thing to do at the moment—if we are to build up a sound industry in the country there are very solid reasons for not putting up our tariffs but for reducing them substantially. We should like to know from the Government what is the current position regarding what has become known as the Kennedy Round of tariff reductions. When is it thought likely or possible that we may be able to achieve some agreement between all the countries on this matter?

There is no doubt that this proposed surcharge is bad because it protects and prolongs the existence of some inefficient industries. If we are to live in this modern world, inefficiency in industry is something which we cannot tolerate. It seems to me that the fresh air of competition must be allowed to blow through industry as quickly as possible, and the sooner we can get some assent or consents regarding the Kennedy Round of tariff reductions the better it will be.

The Labour Government seem to have a pathological "thing" about office building. For some reason as soon as office building is mentioned the Labour Party works itself into a lather. There is only about 4 per cent. of the construction industry engaged in office building. Can any hon. Member opposite tell me why the black-coated workers should have to work in Dickensian office conditions? Why should not they be permitted to work in decent conditions in this modern Britain? I remind the hon. Gentleman that it was his hon. Friend the Member for Greenwich (Mr. Marsh) who, in the last Parliament, introduced a Bill which became an Act and which was designed to improve office conditions. Now, of course, the hon. Member for Greenwich is a member of the Government and so I suppose that times have changed and he no longer wants better office conditions. With a growing population, growing industry and growing administrative competition we need proper accommodation for our office staff. I hope that the Government will not be stupid about this and, simply for the sake of getting rid of office building, restrict a form of building which is really very necessary.

I wish to refer to the Concord project. We all appreciate the necessity for a reexamination of a lot of what I believe is now called prestige projects. But is the Concord project only that? I think that it is much more. It represents some of the greatest technological advances that this country has made for a long time. It puts us years ahead of the United States not only in respect of aircraft construction, but in engine design and all the electronic equipment which has gone into the project.

Do not let us throw that away just for the sake of a little economy. There must be other ways in which we can economise, if we have to. This project represents a great advance by British industry and it has been achieved by British brains. They are the greatest in the world. If we do away with this development we shall so discourage people in the three industries concerned that we may well witness a further brain drain away to countries where their knowledge, experience and expertise is appreciated.

Obviously, this Parliament will be a difficult one. It has a slender majority. Many of us remember the conditions which existed in 1950–1951. I do not anticipate that we shall experience such conditions again. I believe that a great deal of most useful work could be done by this Parliament. We are all agreed that our trade position must be improved. Our exports must be increased. We have to examine objectively, and in an atmosphere free from doctrinaire ideas, how we can expand our export trade. I wish the Economic Secretary well, but I hope that it will not be long before he is hack again on this side of the House.

7.30 p.m.

Mr. A. Blenkinsop (South Shields)

I do not ask for the indulgence of the House because, although I have not been here for an enforced break, I have been here before.

I feel it rather tragic that we should have had a speech from the hon. Member for Ilford, South (Mr. Cooper) that seemed to display so much racial intolerance, which has been detected in the speeches of a number of hon. Members from that side of the House. I do most strongly hope that before this goes further the right hon. Gentleman the Leader of the Opposition will take the opportunity to dissociate himself quite openly and frankly on behalf of his party from the kind of smear and innuendo which is coming from that side, which can do very great damage in the country as a whole. I hope this will be recognised.

I would first like to pay my own—and I think it would be the House's—tribute to my predecessor as the representative for South Shields, Mr. Chuter Ede, who was a very respected Member of this House, not only for what he contributed to the constituency but also for his very great contributions to the country as a whole, both as Home Secretary and, of course, to education and local government. I can only hope that I can make as useful a contribution in one way or another in the House as he certainly has been able to do.

We all accept, I think, the fact that in this country we face a very bitter economic battle ahead. We know this. Indeed, the constituency I now have the honour to represent can, in common with several constituencies on Tyneside and in the North-East as a whole, make a very great contribution through its seamen, its shipbuilders and ship repairers, its miners and some of the workers in the new industries which are beginning and only just beginning, to develop in that area. Therefore, we are particularly pleased by what we have heard from my right hon. Friend the Secretary of State for Economic Affairs today, and some of the new hopes that he has kindled amongst us in what he has had to say.

For example, we are particularly pleased that he is referring to the new possibilities that he is seeing in the redevelopment of an area like the North-East and the attention he is hoping to be able to pay to a new kind of regional organisation, a devolution of authority I think it would be fair for me to say that we can claim in the North-East that we have led the way for that regional planning and development and have, indeed, some of the framework already established ourselves. We believe that that framework will be built up.

We have the example in the North-East as in other parts of the country of the great developments in modernising our mining industry which has created records in productivity over recent years. It is a very happy thing indeed that public enterprise in this difficult industry, as it has always been, has achieved such very exciting new targets and with a new concern for its workers that certainly was not displayed in the old days when I used to be employed by a coalmining firm.

I am also particularly pleased that my right hon. Friend the Secretary of State for Economic Affairs has made so clear that he recognises that this is not the day for making an empty appeal to the workers in industry without a full contribution from the Government side. He realises that we must give a new assurance to many working in industry of a better security of employment. The new proposals that are suggested in the Gracious Speech and have been outlined in the economic White Paper all show that Her Majesty's Government do understand the close relationship of insecurity, which many workers still fear and indeed still suffer from, and the contribution that they can make and which we agree they must make towards a new approach in industry. New outlooks and new methods and techniques are needed to overcome all kinds of barriers which were in their day felt to be essential to give protection and security.

I wanted to quote one example, and I am sure there are very many, of what we are talking about in my own constituency—this is common on Tyneside and in the North-East. We still have very many cases of men who have no kind of security of employment at all in spite of the Contracts of Employment Act. Hundreds, indeed thousands, of workers in my own constituency, particularly in the ship repairing industry, are still subject to the old hire and fire system. There are continuously cases of men who have worked their whole lives in the industry but who cannot claim any protection at all, have no notice, or, rather, who are every day liable to an hour and a half's notice; that is all they get. One cannot possibly appeal to men under these conditions to act, as it is said in inverted commas, "responsibly" towards their industry. How can they be expected to have responsibility for an industry that treats them in this way? Yet this has been accepted over the years, but we can no longer accept it in our modern day. We know that in industries of this nature very big changes are required if they a re to play their full part as we want them to do. We know there are all kinds of practices that must be reviewed and the unions accept this, but they cannot be expected to do anything about it unless this problem of the insecurity of the workers is fully taken into account and some new assurances can be given. I am satisfied that my right hon. Friend the Secretary of State for Economic Affairs and my right hon. Friend the Minister of Labour are prepared to do this. I have a letter already from my right hon. Friend the Minister of Labour showing his interest and concern in this specific matter. I am delighted that this new hope can be given to many of our workers on Tyneside. They will, I know, make a very valuable contribution to the revival of Britain that we all want to take part in.

I want to take this a little wider. I think we recognise today in the North-East that the revival we are looking for cannot be on a narrow basis. We cannot think purely in terms of the physical conditions, vital as they are, if we want to improve conditions and get the fullest contribution from workers in industry. Today we insist, as we have every right to do, not upon a second-class standard of living but on a new quality of living which gives new opportunities of expression to our people which they are eager to obtain.

By that I mean that we want to see in an area such as the North-East a new flourishing of the arts, as well as in other fields of leisure activities, and that we realise that this has a contribution to make to the quality of living in an area. I have had some experience of this over the last year or two in contacts with local authorities and others, and I think that there is a new upsurge of interest in and excitement about the possibilities of men and women finding new avenues of expression which they have for too long been denied by general economic conditions. I hope that in our reviews of these areas and our new planning projects we shall take full account of this wider need in our communities as well as of the essential basic physical needs.

There is no doubt that something has crippled many of the more imaginative spirits in our regions in the past, and that has been the relics of snobbery which still hang about in our community. I am happy that some of these are being removed and that before long we shall be removing more, in our educational system and other ways. Let us not forget that these relics of the past have psychological effects upon the community. I urge the House at some stage in its life to look at some of the other relics of the past, for example the conferment of honours. I do not think that this should be excluded from our review. I do not know what priority we might give to this subject, but I seriously suggest that we must look at it in order to ensure that for the future the awards and honours to people are for practical contributions which they make to our new society in this age. We must get rid of some of the relics, such as the prefixes to people's names, and look much more at the contributions which they have made or are making to our new society.

I am delighted by the start which the Government have made in these new projects. They are bringing a badly needed breath of fresh air into our community, and I wish them well in their attempts to tackle the serious economic problems which we face today.

7.42 p.m.

The Earl of Dalkeith (Edinburgh, North)

I understand that, strictly speaking, it would not be proper for me to offer congratulations to the hon. Member for South Shields (Mr. Blenkinsop) for a maiden speech because, technically, he is not a maiden. I should, however, like to congratulate him on the generous tribute which he paid to the work of the last Government in laying the foundations to improve the prospects of industrial expansion in his part of the country. He referred to the framework which had been built, and it was good of him to do so.

Mr. Blenkinsop

I should like to make it clear that this was the natural outpouring of good north-eastern ebullience. It owes little to anyone else.

The Earl of Dalkeith

Nevertheless, I was delighted by the hon. Gentleman's spontaneous expression of satisfaction that something was happening there as a result of the previous Government's work.

I suppose that it is only human nature that a new Administration should try to paint as black a picture as they can of the conditions which they inherit, be they good or bad, in the hope that when they go to the country again they can show an improvement. One of the most difficult tasks of any Administration is a balancing act of seeing to it that our exports and our imports keep roughly in balance. I certainly add my voice to those of many others from this side of the House in offering good wishes to the new Administration for the sake of the entire population, and wishing them success in coping with difficulties which clearly would lie ahead of any Government in dealing with the balance of payments problem.

Everyone agrees that an industrial island such as ours is more vulnerable than most countries to outside changes. No one doubts that unless we treat our economy in rather the same way as a delicate child—to be neither over-cossetted or over-protected, on the one hand, nor over-exposed to sudden and excessive chills and outside competition on the other—we could well find ourselves in grave difficulties. It is clearly inevitable that at some times we shall do better than at others, for there are always fluctuating periods of boom and recession. Throughout the world this is the same.

We would do well at a time such as this not merely to look at the position as it is now, but to take a more objective appraisal of the situation over a longer period. When we claim that the economy is basically sound, and has been basically sound for some years, we have every justification for so doing. Indeed, this is reflected in the high living standards of our people compared with those of many other countries. But to pretend that this is not a moment for action to boost our exports would be foolish to a degree. We can only hope that the steps which the Government are taking are the right steps to achieve what we all want to see achieved.

Nothing was more nauseating in the last Parliament than hearing the outpourings from the Opposition consisting almost entirely of unconstructive criticism. I shall, therefore, do my best to try to avoid laying myself open to the same charge, and I shall offer what I hope are constructive suggestions and appeals to the new Chancellor of the Exchequer in the hope that at least some of them will be worthy of his consideration when he is making plans to deal with difficulties in the future.

Before I do so, I want to remind him, in case it has escaped his notice, that the position in exporting today is very different from the position when the Labour Party was last in power in the late 1940s. Exporting at that time was child's play compared with the present time of intensifying competition from abroad. At that time it could get away with inflation and rising prices, but inflation today on half that scale could well prove fatal to us in 1964–65.

My first appeal, therefore, is one in which I join my voice with those of some of my hon. Friends—that we should stabilise costs and that the Chancellor should do everything in his power to see that he stabilises the cost particularly of those goods on which we depend for our exports. My second appeal is linked with it—that he should recognise that healthy competition is one of the most natural, satisfactory and effective ways of seeing that we keep down the costs of production. Does he seriously consider that imposing a 15 per cent. tariff surcharge is the best way of keeping down prices? Not only is this isolating our industry from outside competition but in many cases, as we have heard from some of my hon. Friends, it is adding to the cost of the raw materials which go into our manufactured goods for export.

My third appeal is that he should recognise that full capacity production tends to reduce unit costs and that the best way of achieving this is by lowering rather than raising trade barriers, particularly against overseas trading nations. This is quite the reverse of what he is now doing.

My fourth appeal is one which I have made to previous Chancellors of the Exchequer with a limited degree of acceptance. We must press on faster with the development of our national resources, manpower and talents, in those areas where they are still under-employed. Much will depend on how this is done, and however much one might dislike the idea of stop-go policies, one must face the fact that the dangers of inflation, and acute dangers they are, arise from too fast an expansion in the over-booming South and Midlands. The day may come, even though the Labour Party swears black and blue that it will not indulge in stop-go policies, when the Government may be forced to face this fact and may have to act to damp down the over-booming economy of the South and Midlands.

This brings me to my last appeal. Whatever shape or form the damping down or restrictionist measures may take, it is vital that they should be applied in future geographically so that we can continue to boost the under-developed and developing parts of the British Isles, the areas which need to be boosted further in future.

The exact methods of achieving this are a matter for the Chancellor of the day, but there are several short and long-term alternatives. The first and most obvious is that he should extend the principle of the 1963 Budget, which introduced the new principle of fiscal discrimination on a geographical basis whereby industries in certain parts of the country derived certain tax benefits and advantages over industries elsewhere. This could be extended a stage further.

The longer-term alternative is to consider introducing a different scale of Income Tax in the North and South. I know this involves great difficulties, such as where the line should be drawn, but it is something seriously worthy of consideration. Whatever methods are used, it is clearly to the advantage of the whole of the United Kingdom that every part of the country is engaged in a maximum, all-out effort to manufacture and export.

It may be that references in the Gracious Speech to regional planning authorities and the Highland Development Board are aimed at achieving what we want to see achieved by developing parts of the North. If the Highland Development Board is to be a really workable scheme, rather than a pie in the sky scheme aimed chiefly at pacifying Scottish nationalist sentiments, we would welcome it, but until we know the full details it is not possible to pass comment or judgment on it.

While on the subject of development and boosting the economy in Scotland, could we have more information on what is happening about the Post Office Savings Bank which, it may be remembered, it was decided by the last Administration should go to Glasgow? Since then there have been ugly rumours that that decision may be changed. It would be in the interests of many people in Scotland to get a clear answer on this issue.

Several other questions need answering. What will happen over interest rates, about which we heard so much during the General Election campaign? I was surprised not to see much about this topic in the Gracious Speech. What about the staggering proposal we have had this afternoon condemning thousands of white-collar workers to spend the greater part of their working lives in substandard offices which we, in our recent enlightened legislation, tried to improve? I doubt whether many of those white-collar workers would have supported the Labour Party into Government had they known that this was part of their programme.

I would like to know how much of the Government's economic plans for the future so far announced have been thought up and provided by the experts from Hungary. It was bad enough, after the war, having to hear about the gentlemen in Whitehall knowing best. If it is now to be a question of the gentlemen from Hungary knowing best, things will be even worse. How much further will the Prime Minister extend this principle? Will he invite experts from the American aircraft industry to advise on the Concord, or, worse still, engage some Chinese to tell us what to do with our deterrent? There are all sorts of hideous possibilities. Who will be invited next?

Mr. Archie Manuel (Central Ayrshire)

It will not be a Scottish laird, anyway.

The Earl of Dalkeith

All these questions are being asked and the population is entitled to the answers. So far, the little information we have had about the future, information which has leaked out through the Gracious Speech, has been so limited that one can only assume that the caution of the phraseology was specially designed from the point of view of another General Election at an early date.

We all remember the success of the present Government in achieving office, largely thanks to the fact that they managed to keep their mouths shut on a great many subjects during the election campaign. I have no doubt that if we can get them to say more about what they will do in the future they will not be in such a good position to repeat their success of the past.

7.57 p.m.

Mr. T. W. Jones (Merioneth)

I am delighted, as a Welshman and a Welsh-speaking Welshman, to take part in this debate, for I am anxious, as one of the representatives of Wales and on behalf of Wales, to say a big "Thank you" to the Prime Minister. The people of Wales were thrilled yesterday to hear the special mention of Wales in the Gracious Speech and to hear Her Majesty use the words: New arrangements will ensure proper attention to the needs of Wales ". The Prime Minister has distinguished himself as being the first premier in this country in a practical way to recognise the nationhood of the people of Wales. The great Gladstone nearly did so and I have no doubt that David Lloyd George would have done so had he been Prime Minister in less turbulent days. However, the present Prime Minister has done it and in no uncertain manner. His name will be enshrined in the history of the Principality.

I have no doubt that the Prime Minister was prompted to act especially towards Wales for two reasons. I am referring, of course, to the fact that he has now established a Secretary of State for Wales with a seat in the Cabinet and with specific responsibilities. I am sure that he has taken this step for two reasons: first, his love of our people—I know that for many years my right hon. Friend has had a warm place in his heart for the people of Wales—and, secondly, because the Welsh people, the Welsh nation, is the most Socialist nation in the world. We send 36 representatives to this House, 28 of whom are members of the Labour Party and 13 of those 28 are members of the present Government.

In the last speech I made in the previous Parliament I stated, as I believe now, that if the people of England were half as politically-minded as the people of Wales the Tory Party would not be in power in this country for the rest of the century. The people of Wales and the people of Scotland are responsible for our having a Labour Government today.

The Prime Minister has recognised our nationhood by changing the Constitution and establishing, for the first time, a Secretary of State for Wales. I congratulate him on choosing for that office my right hon. Friend the Member for Llanelly (Mr. James Griffiths). My right hon. Friend's name is revered throughout Wales, and he is a man whom all of us in the Labour Party in Wales love. He is assisted by two other worthy gentlemen. I repeat that it was a bold and imaginative action on the part of the Prime Minister to bring about this constitutional change and, on behalf of the vast majority of the people of Wales, I congratulate him, and thank him for what he has done.

There is no need for me to try to prove to the House that the Welsh people are a nation apart. We have our distinctive language—a language spoken only in Wales and in Heaven. It might surprise hon. Members to know that at least 90 per cent. of my election campaign meetings were addressed in Welsh. We have our own distinctive traditions and way of life. We have our own distinctive territory—we have our own country. We were never defeated by a foreign foe. [HON. MEMBERS: "Oh."] Oh, no. Edward I believed that he had done so, but, poor lad, his castles in Wales have been in ruins for centuries. Even William the Conqueror did not defeat Wales. He defeated Harold, but the present Harold has conquered Wales not with an army, but by recognising our nationhood.

The Gracious Speech states: New arrangements will ensure proper attention to the needs of Wales. What are the economic needs of Wales? I refer, in particular, to the plight of Mid-Wales, which is a rural area covering some of the most beautiful country in the United Kingdom. The Brecon Beacons and the Snowdonia National Park come within its boundaries. Mid-Wales covers one-third of the Principality and has a population of 178,000. Because of the drift of population since the beginning of the century, its population has fallen by no fewer than 37,000 people. The young have left the area in search of work, and it stands to reason that the only way to stem the drift, and repopulate that vast area, is to bring new industries into it.

I know that nobody is more conscious of this fact than the new Secretary of State for Wales, and I know, too, that he has set his heart on tackling this problem in a very realistic way. I speak of it tonight only to encourage him in any plans he may have, and to assure him that we fully endorse the statement he made in Cardiff after his appointment. He will have the full support of every local authority in the area. Blaenau Ffestiniog is in the area. A few months ago the previous Government decided to establish a factory there. Unfortunately, the industrialist whom they proposed to have there has withdrawn, and I very much hope that the President of the Board of Trade will try to rectify the position by getting another industrialist to occupy the premises when they are built.

The prerequisite of any industrial development is transport. Transport facilities are absolutely essential to the tourist industry on which so many people in Mid-Wales depend. Thousands of people still depend on railway services for getting them to their holiday resorts. A singular situation has arisen in Merionethshire due to the stupid decision of the previous Minister of Transport. We have what we regard as a major railway connecting Ruabon with Barmouth. The closing of that railway will bring untold misery to the communities established right along the route.

When Dr. Beeching decided to close that line, the transport users' consultative committee held a two-day inquiry at Dolgellau. In the end, it was unanimously of the opinion that the railway should be kept open. I told the House in the closing stages of the last Parliament that to suggest closing that line was an act of lunacy. I called the previous Minister of Transport many names—it is, perhaps, better now not to repeat some of the things I said about him, especially during my election campaign.

In spite of the recommendation of the transport users' consultative committee, the former Minister decided to close this railway, and made his decision during the Recess, when we could not criticise it or question him about it. The closure is to take effect in January. I heard the statement made this afternoon by my right hon. Friend the Minister of Transport, and I beg him to consider whether new and varied conditions should not be attached to his predecessor's consent to the closure.

I have been a member of the Labour Party for over 40 years. I felt prouder of it yesterday than ever before. That was for a particular reason. Undaunted by the size of its majority the programme presented to the House yesterday was a programme of action which is fully in accord with our party's political philosophy. I am glad to see the Leader of the Liberal Party present. I warn him that he has to be very careful about his actions during the next three, four or five years. I am serious in this warning. We heard this morning about a censure Motion. I wonder what will be the Liberals' attitude towards that on the question of racial prejudice.

If the Liberal Party claims to be radical I am sure that we are entitled for the next five years to receive their support for at least 90 per cent. of the things that we shall be bringing forward in this House. On that assistance they will be judged during the next few years. The country will not suffer them to be in one and in the other of the two Lobbies on the same issue. It is they, not even the Government, who will he judged by the nation during the next five years for the nation has sent them here.

Mr. Grimond

Thank goodness.

Mr. Jones

They have been sent here to oust the old Government and to support the present one.

I thank the Prime Minister for what he has done for Wales in particular. On the next occasion we shall send here the whole 36 Members.

8.14 p.m.

Mr. Rafton Pounder (Belfast, South)

I shall be very brief indeed. In the last Parliament I believe that my longest speech was 11 minutes and I hope that I shall not exceed that time on this occasion.

I want to touch upon three matters. First, I make reference to the 15 per cent. surcharge on a wide range of imports. No one will deny that this country is passing through a period of balance of payments difficulties—I put it no higher—and that, clearly, some action has to be taken. Similarly, I should expect all hon. Members, on both sides of the House, to agree that the national interest at all times must surpass purely party considerations. We are surely all agreed, therefore, that something had to be done. It is when we come to the method to be adopted that we come to a point of confrontation, and perhaps at times, to some bitter disagreement.

I find absolutely no fault with the idea that something had to be done, but I challenge very strongly indeed the form that it has taken. In saying this I am not concerned in the slightest with whether these ideas were drawn up by the incoming Government or the outgoing Government. What I regret is that we should have approached this problem from the point of view of a form of import control, because this is unimaginative and sterile. Let us not forget that this is a trading country whose survival and prosperity depend almost entirely upon what we can sell overseas.

Therefore, to risk retaliatory action either by individual companies or national Governments against our exports, against the trade by which we must live, is surely dreadfully shortsighted. There is no doubt at all that if we use barriers against someone else it is only human nature that they will seek to do something on these lines where we ourselves are concerned. The root cause of our failure to sell as much overseas as we should like cannot be removed by governmental decree. Our failure surely, in part at any rate, is a reflection on those companies, of which I fear there may be many, which have been quite content to sell in the much easier domestic markets rather than to seek orders in competitive markets overseas.

The key to the solution of our balance of payments problem surely lies in salesmanship, in vigorous, imaginative, enthusiastic salesmanship. This was a point made by the hon. Member for Birkenhead (Mr. Dell), in an excel- lent maiden speech. I should like most sincerely to congratulate him. Having made my own maiden speech only 11 months ago, I remember only too vividly what an ordeal a maiden speech is. He was excellent.

Of course, a Government can hinder or assist in some measure the balance of payments position by its action, but in the final analysis it is salesmanship and industrial competitiveness which can solve the problem. That is something which I do not think that any Government, with the best will in the world, can seek to accomplish.

I welcome the proposal to extend some incentive to exporters. Whether the present proposal will be sufficient, time alone will show. I hope that it will be, and certainly it is a step in the right direction. Although I question the wisdom of the 15 per cent. surcharge, one thing is most important. It must apply to all countries from whom we import goods. We cannot start making exceptions of certain countries merely because they happen to protest fairly loudly. To exclude the protestors would vitiate any value which this measure might have. I should have hoped there would be no need for insisting on an import surcharge, but having got it, it is surely a case of all or none. I hope that whatever pressures may be brought on the Government to exclude certain countries from the effects of the surcharge they will not yield, but that its application will be comprehensive.

One point made by my hon. Friend the Member for Ilford, South (Mr. Cooper) when speaking of the chemical industry brings me back to a point referred to by my hon. Friend the Member for Antrim, South (Sir Knox Cunningham) yesterday in the context of a couple of firms in his constituency. In Northern Ireland, in recent years, we have established ourselves as probably one of the leaders, if not the European leader, in synthetic fibres. This has been a tremendous achievement for Northern Ireland. It would be tragic in the extreme if the 15 per cent. surcharge led to any falling off in our development in this field. I am led to understand that the synthetic fibre firms of Northern Ireland are extremely upset and aggrieved about the possible danger of the surcharge being applied to their goods. Month by month unemployment figures have been dropping impressively and it would be tragic if circumstances were to arise which led to an alteration of this trend.

This leads me on to the brief point in the Gracious Speech about regional development. This is, naturally, something in which all Ulstermen and women in general and Ulster Members in particular will be very interested. I hope that when the plans are worked out in detail they will be sufficiently flexible and that we shall not reach a stage where industry is being directed to any particular area. The experience of the Northern Ireland Government in recent years teaches us that there must be a measure of flexibility in allowing an industrialist the choice as to where he sets up. He must not be forced; he must not be told, "Take this site or not at all".

My last point concerns the very large question mark which currently hangs over the future of the Concord project and the Press speculation about the future of other aviation projects. Much has already been said and written, both inside the House and outside it, about the grave consequences which would accrue to the aviation industry as a whole from the abandonment of the Concord project. I share these misgivings, but I shall not waste the time of the House by repeating the arguments which have already been advanced on this point.

It has been reported in the Press that there may also be second thoughts about the future of the project known as the HS681. Any tampering with this project will clearly have the severest possible repercussions for the Belfast aviation industry, because some of the work on this plane has already been promised to that factory. I hope that the Government will give a categorical assurance that the HS681 will be neither axed nor delayed. This is a subject in which everyone in Belfast is keenly interested and many of my constituents are most anxiously waiting an answer to this point.

I have taken enough of the time of the House tonight. Many others wish to speak.

8.22 p.m.

Mr. John Rankin (Glasgow, Govan)

I listened with delight to my hon. Friend the member for Merioneth (Mr. T. W. Jones). He always entrances the House when he speaks. I sympathise with all that he said about Wales. After all, Wales and Scotland, for which I hope to say a few words tonight, have a common burden. They carry England on their shoulders, and in that way we are united. Wales had an overall majority over Tories and Liberals.

Mr. Deputy-Speaker (Sir Samuel Storey)

Order. The hon. Gentleman will please not turn his back on the Chair.

Mr. Rankin

I apologise, Mr. Deputy-Speaker. The trouble was that there were more people behind me than in front of me. Naturally everyone who rises to his feet turns to the more attractive quarter, without in any way implying any undue or unfair charge against hon. Members and the Chair on my left. My hon. Friend the Member for Merioneth claimed an overall Labour majority over Liberal and Tory of 20 in Wales. On that we congratulate Wales. In Scotland, we had an overall majority of 15 over Liberal and Tory. That beats some of the accidents connected with the second bench below the Gangway opposite. I am circulating, if you will observe it, Mr. Deputy-Speaker, so as not to offend any part of the House.

We in Scotland welcome the little gravitation from Toryism to Liberalism in the Highlands. We hope that the honourable solitary occupant of the Liberal benches opposite will continue his gravitation until he comes to rest finally beside his big brother. We shall welcome him then when he takes his final decision and terminates his movement. With an overall majority from the two smaller partners of 35, we have made a most significant contribution to the total majority of five which enabled my right hon. Friend the Prime Minister and the Members of the Government to produce this magnificent Gracious Speech. This is a ray of real hope.

I am sorry to notice that some hon. Members opposite disappear when they have delivered their speeches, because I wanted to say a word to the noble Lord the Member for Edinburgh, North (The Earl of Dalkeith), a Scottish Member like myself, who spoke, looked and went. If those three words can get outside the precincts of the Chamber and the noble Lord hears them and cares to return, I shall welcome his reappearance, because I want to say one or two things to him. I always prefer to say such things in the presence of the hon. Member whom I am criticising rather than behind his back.

I was interested in the statement of my hon. Friend the Member for Merioneth that the Welsh language is spoken in Heaven. We made the precedent claim a long time that it is Gaelic that is spoken in Heaven. It will be very difficult for those who ultimately arrive there who know neither Welsh nor Gaelic. They may feel that they would be better oft in another place. However, it encourages us to increase our educational efforts and expand our language courses so that all these who are finally destined for the upper House—I hope that is the great majority—will get on equally well with the Welsh-speaking Welsh and the Gaelic-speaking Scots. Then it will be Heaven indeed.

I come now to matters, following the excellent lead of my hon. Friend the Member for Merioneth, which are Scottish, because it is natural that a Scottish Member should say something about the troubles of Scotland. The noble Lord the Member for Edinburgh, South said that we on this side during the course of the day had painted as black a picture as we could of the position in Scotland so that in the end we might politically profit from doing so. That is a most unfair charge because it is untrue.

No picture, however black I painted it, could reveal the failure of Tory policy in Scotland. When they came to power in 1951 there were 51,000 unemployed in Scotland. When they gave up compulsorily the reins of power a week or so ago, there was 73,000 unemployed in Scotland. At the end of 13 years of Tory power, with a majority in the last Parliament of over a hundred Members, when, unlike us, they had total power, they left us in Scotland with 22,000 unemployed more than when they first took office. They hailed that as a triumph of Tory rule. During the period of their rule the 51,000 crept up and up until it reached 100,000. They then appealed to the electorate for continued confi- dence, which Scotland refused to give them. In fact, in my city out of 15 divisions there are only two Tory Members left, and at the next election they will lose one of those two seats. That is what Glasgow thought of what the Tories had done.

As I was saying, during those 13 years the number of unemployed crept up until it was 100,000. Then the Tories managed to bring it down to 73,000 before the election, and they said, "That is a great triumph. We have reduced unemployment in Scotland from 100,000 to 73,000." So they said in my own Division of Govan.

When the Tories came to power there were 10,000 persons engaged in the three shipyards in my constituency. When they left office they had managed to reduce that number to 5,000. Today I rose to interrupt the former Chancellor when he said that to help unemployment in shipbuilding the Tories had provided £75 million to the shipowners so that they could give more orders to the shipbuilders. But shipbuilding in Scotland and the north of England was so dry because of lack of work, that that £75 million disappeared like "sna' in the thaw". I am speaking a language that the hon. Member for Caithness and Sutherland (Mr. G. Y. Mackie) understands, and I assure my hon. Friends that it is not Welsh or Gaelic; it is Scots. That £75 million disappeared so quickly that one felt that it had not been given at all. That is what the former Chancellor prided himself upon. The Tories waited until the election before they made that final effort in ambulance work to try to give some life to this industry.

The hon. Member for Edinburgh, North said that one of the efforts we should make is to stabilise costs. He cannot have read the Queen's Speech, or have listened to the speech by my right hon. Friend the Secretary of State for Economic Affairs today. That is our own defined purpose, to stabilise costs. I do not know why the noble Lord did not welcome that part of the Queen's Speech. He then went on to criticise the 15 per cent. surcharge. So did the hon. Member for Belfast, South (Mr. Pounder). But I am sure it will be recalled that when the former Chancellor earlier today faced this question of the 15 per cent. surcharge on imports he was very careful indeed and did not commit himself. He did not condemn it, because he knew that the Government who had just gone out of office had left a mess behind them and somebody had to clean it up.

The challenge of the figure which we have put forward of a probable deficit this year on balance of payments reaching £800 million had to be dealt with, and quickly. While it may be true, as has been suggested in some quarters, that if we had taken the £200 million we hope to get from the surcharge and given it as an impetus to exports, and if the £70 million which will go to exports had been used to reduce imports, it might have occasioned less complaint, the result would not have been so effective. The problem which faced our Government when we came to power was that something had to be done at once.

The only thing that could be done with immediate effect to cut down imports temporarily without affecting food prices and without affecting basic raw materials and unmanufactured tobacco was to impose the surcharge. Again I emphasise that the former Chancellor of the Exchequer was careful not to commit himself in condemning this remedial action which was forced upon us by the inefficiency of the Government whom we have succeeded.

I should like to make one or two other points concerning Scotland. I welcome, as I am sure does all Scotland, the decision to create a Highland Development Board. I am sure that we all recognise on both sides of the House that Government action at times is one of the great imperatives in building a successful and happy regional authority. I say that with particular reference to the Highlands because it was the installation of the nuclear reactor at Dounreay which stopped the depopulation that was going on in Caithness. It not only stopped the depopulation but increased the population of Caithness and today, because of Government intervention, that county is the only county in the Highlands where there is an increase in population. That is the great justification of public action in bringing good to a county or part of my country which has been suffering from lack of attention.

This is one reason why in the last Parliament I regretted that the Government of the day did not intervene and say that a new university should be established in Inverness. I have said that in the House for years and years, because a university is not simply a point of academic growth. It is also a point of industrial growth and it would have brought a great saving grace to that part of Scotland which has suffered from depopulation all the years of my life. It would have arrested depopulation in the Highlands and in Inverness just as Government action has arrested it in Caithness.

Now, one or two other points in passing. I am compelled to say a word in support of the noble Lord the Member for Edinburgh, North. He has not yet appeared, but perhaps someone has told him that I am speaking about him. I agree with him on one thing he said, although he comes from Edinburgh. This is not an Edinburgh matter. The last Government agreed that the Post Office Savings Bank should go to Glasgow. There was a lot of argument about it, but that was the decision made last April. We are now in November. I have an observation to make to my right hon. and hon. Friends on the Front Bench, who, I hope, are giving me their close attention. I have no desire to interfere with the humour which, naturally, pervades the Front Bench today after such a magnificent Queen's Speech, but I know that my right hon. and hon. Friends will take note of the fact that we in Glasgow are a little disturbed at the seeming delay in the first steps in carrying out the decision made last April.

I do not know exactly how long I have spoken because I did not notice the time at which I started, and I do not like speaking too long. I shall finish with these two points, both of which are of great interest to me. The first concerns the supersonic aircraft. The second concerns the nuclear-powered ship. Yesterday, I listened with great interest to my hon. Friend the Member for Buckingham (Mr. Maxwell) saying a word or two about the supersonic aircraft project, supported, he said, by evidence from America, but he did not tell the House what his authority was in quoting American opinion. Of course, his being a maiden speech, I could not ask him about it then, but perhaps he will tell me.

Mr. Robert Maxwell (Buckingham)

The authority is that the American Government did not proceed with the manufacture of an aircraft such as the Concord, and they did not do so because their scientists advised them that it would be quite useless for them to do so and there was a good chance that it might end up the same way as the early Comet.

Mr. Rankin

I do not want to indulge in an argument with my hon. Friend now. Perhaps we might have one on the other side of the Bar. I am referring to the Bar of the House, of course. My hon. Friend has still not given the names of the authorities, although I thought that he would do so. My information is quite different.

I have long been interested in this matter, not only in the supersonic aircraft but in the whole range of aviation. Every new venture in aviation is a great experiment. A vast mass of people are employed in the experimentation. Many years ago, when I visited the experimental wind tunnel, the learned scientists engaged in research there told me what they saw in the future, and they told me in such a casual fashion that I thought that I must be in fairyland. At that time, I was travelling from Glasgow to London at 95 m.p.h., yet those scientists were thinking in terms of aircraft which would fly at 2,000 m.p.h., they said, in my lifetime. When I am travelling at 95 m.p.h. in an aircraft carrying seven persons when fully loaded, I think that I am entering the realm of fantasy when I am told by men engaged in experimental work that something will be produced to fly at 2,000 m.p.h. But what they said has come true. These aircraft are now flying. That is what we must get into our heads—every machine that we have in the air today carrying civil passengers is a version of its military prototype. That has always been one of my criticisms of this whole industry.

In this House I have asked that we should engage in the design and creation of aircraft for purely civil purposes, divorced altogether from the military machine—but, no, everything in civil aviation today has followed from military development. We have military aircraft today flying at those speeds. In this world of experiment, where we gain vast knowledge, we cannot lightly fling aside such a tremendous venture as the supersonic civil aircraft. I know that we have many obligations. I want to see the old folks in my division get a large increase in their pensions. I want to see better schools, better houses, and I do not want to see supersonic aircraft built at the expense of the old folk in Govan or of people in my division who want new houses. Therefore, I say that if we are to have any decision about the supersonic aircraft, let us not abandon it but suspend it. That is all I say at this moment: Do not give it up—[Interruption.]—I took £1 off the hon. Member for Exeter (Sir Rolf Dudley Williams) and he has never forgiven me. It is the first time I have ever won. It is the first time that I have ever betted, because as a Scotsman when I put out money I like to see something come in for it; I never waste it. He believed in the Tory Party and that they would win the election. I believed in the Labour Party. The hon. Gentleman lost £1 over it. He cannot take his defeat like a member of the gentlemanly party to which he belongs.

Sir Rolf Dudley Williams (Exeter)

Tell us about the scientific break-through.

Mr. Rankin

When the hon. Gentleman is speaking in the House he must articulate so that he is understood. I give way to him.

Sir Rolf Dudley Williams

I am very glad to have paid the hon. Member the debt that I owed him. He offered me three-to-one against the Tory Party. We nearly won. It was a worth-while bet. The point that I want to make to him is that this Government got into power on the basis that they would nurture science and give a great progressive look to this country. The first thing that they have done is to destroy the finest break-through in science that has ever been achieved.

Mr. Rankin

The hon. Gentleman has only just come into the debate. I am wondering if he knew that it was going on. Somebody must have told him that I was on my feet, so he came in at the last moment. I am not going back, because hon. Members on both sides of the House have been very patient with me and given me a great deal of time and latitude. I have perhaps spoken for too long, but the debate goes on tomorrow and Friday. We are not calling the House on Saturday and Sunday. We might come to that yet. That is a warn- ing. If the hon. Member for Exeter wants to bet on that, he can try it again. There is plenty of time to make speeches.

I recognise the difficulties in which the Government are placed because of the mess that we inherited. But today we have listened to a theme in which we are saying to Britain, "You are going to get busy". The Labour Government are going to show Scotland, Wales and England that we can produce more than unemployment, the only think that the Conservatives produced in Scotland, and Scotland gave them the answer—an overall majority of 15. At the next General Election we shall perhaps wipe them out altogether. That would be the greatest blessing that Scotland could get.

8.50 p.m.

Mr. Evelyn King (Dorset, South)

I am sure that the hon. Member for Glasgow, Govan (Mr. Rankin) will forgive me if I do not follow him. Indeed, I do not think that anyone who was not born in Scotland could possibly do so.

One of the joys of the Gracious Speech and the debate following it is that one is able to be discursive. I hope that the House will forgive me if I do not so much follow a consistent theme, but discourse about my constituency.

It also seems to me an appropriate thing if—many hon. Members, like myself have done this—after one has spent a solid year nursing a constituency one can come first into a Gracious Speech debate which enables one almost at one bound to get rid of all the many grievances one has heard felt and collected during that time.

One point that I should have thought must have struck many hon. Members is that during the last two days, when one considers either the Gracious Speech or the speeches that have followed from both sides of the House, we have heard practically nothing about rural England. London has been much in the news. In the last four speeches we have had one from Northern Ireland Member, one from a noble Lord from Scotland, another hon. Member from Scotland and one hon. Member from Wales.

Part of the plea that I want to make is this. The General Election was fought largely on the theme of prosperity. Many hon. Members on this side of the House pointed out that the average wage was between £16 and £17 a week. Many hon. Members opposite no doubt pointed out that it ought to be higher still. The plea I seek to make is that there are many parts of rural England—here I particularly include South Dorset—where no such point on either side was likely to be argued at length, because the average wage in those places was distressingly low and it was an embarrassment to mention the figures.

Here is a point made many times, but I must go on making it. It still seems to me outrageous that the wage of an agricultural worker should be in the neighbourhood of £10 as against the £17 which I have mentioned, the more so as increasingly he becomes a technician, a fitter and a man of mechanical skill. I have in mind not only the agricultural worker's wage, but the general conditions in which country dwellers live in the countryside. Hon. Members opposite are seeking to lead us into a technological age. How can we talk of a technological age when there are hundreds of cottages in my constituency where one still cannot turn on a tap?

I am making no party point; this has been true through four Governments, Labour and Conservative. The fact remains that the agricultural worker, the village and the country town are not getting a fair share. Let the blame rest where it may. I like to feel—indeed, I hope—that I have the support of right hon. and hon. Members opposite, just as I have the support of my right hon. and hon. Friends on this.

The point I made about taps and technology remains. In my constituency, Winfrith is a name to conjure with. Yet not far away there are cottages without piped water. That is the contrast to which I draw the attention of the House as a whole. I hope that it will not be turned wholly into a party matter.

My constituency stretches from Poole to Portland, from Dorchester to the sea. One finds sobering conditions in Portland, an island full of servants of the Crown—some employed in the prison service, some by the Admiralty and many in the Armed Forces. I learnt with horror when I first got there that the wage paid to many workers employed by the Admiralty in the dockyard is about £9 a week. I hope that the Secretary of State for Defence or the Minister of Defence for the Navy, as the months go by, will forgive me when I raise that point with him again and again.

This is not a low wage due to private industry. It cannot be argued that it is low because of the profit motive. It is a wage which Her Majesty's Government have the power to fix. I hope that they will not continue to defend that sort of wage in Government establishments.

I have referred to the countryside and to Portland. Now I want to refer to Weymouth, where there is an immense number of retired persons, many of them from all ranks of the services who deserve well of this country. They have two main grievances. The first is that of rates. But it is not concerned only with the general grievance about rates. We all wish that rates could be reduced everywhere. But here is a particular grievance which concerns the burden inflicted upon persons who no longer have the ability or have reached the age group when they are unable to meet demands by increased earnings.

Among them are men who retired 20 or 30 years ago on fixed pensions—which today amount to little—and bought houses which they thought would enable them to live comfortably. Now they are finding that expenditure on rates is getting beyond their means. The Gracious Speech said that rating reform would be introduced. I hope that special consideration will be given—the last Government gave such considerations—to those living in seaside resorts and to other places with a population older than the national average. That is a serious factor.

The second point that should horrify us all is that in Weymouth—and this is probably true of other seaside resorts—more than usual of my constituents were disfranchised during the election. The figure in some places was about 10 per cent. above the number normally disfranchised because they are late on the list or for other reasons. Weymouth's population is 40,000 normally, but during the summer it rises to 120,000. The inhabitants of the town work hard in the entertainment and hotel industries. In October they go on holiday. But October has been chosen for election after election. Thus an enormous number of people in places like Wey- mouth are disfranchised. I know that the Government have their own plans, but I hope that in this Parliament they will have time to give attention to this matter, as more and more persons now go on holiday. I know that hon. Members opposite welcome this increase. But it simply means that more and more people become disfranchised if an election is held while they are on holiday. I do not know which way those involved in Weymouth would have voted. That is not relevant. But it is our duty to see that each person gets the vote to which he has a right.

9.0 p.m.

Mr. John Hall (Wycombe)

The debate today has been notable for at least one thing—that there has been a great crop of maiden speeches. If I count that of my hon. Friend the Member for Dorset, South (Mr. E. King), it makes six, but I believe that my hon. Friend was in the House some years ago and I content myself therefore with welcoming him back and saying how much we listened to his brief, but very welcome, contribution.

We have had some five others, a complete "full house" in fact. It is the tradition of the House that mention is made in the winding-up speeches of the maiden speeches. I am doing so not to fulfil a tradition but bcause I mean what I say in congratulating all those who have spoken today. We had the hon. Lady the Member for Wolverhampton, North-East (Mrs. Short), who made a most thoughtful speech. I am sure, as has been said, that we shall look forward to hearing many contributions from her.

We then had the hon. Member for Carlisle (Mr. R. Lewis), whom I envy very much, for he seemed to have mastered the very difficult acoustics of the Chamber from the word "go". We then had the hon. Member for Liverpool, Walton (Mr. Heffer) who spoke with great assurance. Remembering my own very indifferent maiden speech of long ago I envied him that when listening to his. The hon. Member for Norfolk, North (Mr. Hazell) brought a breath of fresh air from his attractive but, at this time of the year, perhaps rather chilly county. We were delighted to hear him. I was sorry to miss the speech of the hon. Member for Birkenhead (Mr. Dell). I gather that it was very impressive and was received with admiration by all those who heard it. I know that I speak for the whole House in saying that we were delighted to hear those speakers and that we look forward to hearing them all on many occasions. One says that in a spirit of hope, because it is the experience of all of us that however much we may wish to speak, Mr. Speaker sometimes has different ideas.

I have to ask the indulgence of the House myself. I do so because I was elected to the House in a by-election some 12 years ago, on the same day as President Eisenhower was elected President of the United States, which happened to be Guy Fawkes day. Twelve years laver, almost to the day, on the day when the election of President Johnson of the United States of America is announced, I find myself elevated for the first time to the Front Bench. I find that this rapid promotion between two presidential elections is rather bewildering. The House will therefore appreciate that any shortcomings of my speech are due not to any weakness in the case which I intend to deploy, but to my own weakness as an advocate on this occasion, and on this occasion, I hope, only.

In last year's debate on the Gracious Speech, the Economic Secretary, who is to reply, I believe, and whom we are very glad to see back safely from Strasbourg, referred at the end of his speech to new men pledged to new measures. We certainly have the new men, if slightly ageing men, but I am not quite sure about the measures. I have a feeling that they will be rather reminiscent of the measures we had between 1945 and 1951.

Hilaire Belloc, the well-known poet, who apparently believed that the more things changed the more they remained the same, wrote a great poem called, "On a General Election". One of the verses runs: The accursed power which stands on Privilege (And goes with Women, and Champagne and Bridge) Broke—and democracy resumed her reign; (Which goes with Bridge, and Women, and Champagne). I cannot see, therefore, that we are very likely to have very much change from the old Government which we knew between 1945 and 1951.

I believe that the Economic Secretary is an economist. He made many thoughtful contributions to our debates when he was on this side of the House and we all listened to them with great interest. I cannot claim to be an economist. I am only an ordinary industrialist. When the economic theories of Government are translated into legislative action, I and many other, countless other, industrialists, have the job of trying to cope with the results while at the same time responding to exhortations to cut prices and export more.

I tell the House quite frankly that neither the short-term measures nor the contents of the Gracious Speech have brought any great smile of joy to the faces of most industrialists, except, of course, those who have been clamouring for much greater protection against foreign competition. I doubt very much whether the communications which have been addressed to the Minister of Economic Affairs, or the Chancellor of the Exchequer, or the President of the Board of Trade—we have a wide variety to choose from now—have been steadily benevolent in tone. Those communications which they may have received from other countries are likely to have been affected. I think it incredible that short-term measures which we have had announced should have been introduced without any prior warning, much less consultation, with our E.F.T.A. partners and with the signatories of G.A.T.T. for example, to mention only a few. I accept that it is not always easy to consult those countries on matters of this sort, but to have warned them would have been political common sense, quite apart from being courteous.

I understand that the President of the Board of Trade is to take the chair at a meeting of the E.F.T.A. partners in the near future. I fancy that he may find that his chair is turned into a dock. Let us look at the effect of the 15 per cent. surcharge. As I understand it, this surcharge wipes out practically the whole of the tariff reductions which we have negotiated over the months. In some cases, so far as I can ascertain, the tariff is now higher, as, for example, in the case of some specialised steels which we have to import. What a magnificent example we have given to other countries. Take, for example, the United States where there is constant pressure by a protection lobby to impose heavy duties against us. This will be a first-class example for them to follow. If they suddenly clap on a duty against some of our key exports to the United States in response to pressure from the protection lobby what reason should we have for opposing it?

What are the Government seeking to do? In the words of the Gracious Speech it is: … to maintain the strength of sterling by dealing with the short-term balance of payments difficulties … As was pointed out earlier by my right hon. Friend, the White Paper stated that sterling is strong and that its strength may be maintained with the facilities available, and presumably, therefore, without introducing any short-term measures. The Gracious Speech continues: … and by initiating the longer-term structural changes in our economy which will ensure purposeful expansion, rising exports and a healthy balance of payments. How do they propose to achieve this longer-term purpose? First, and apparently foremost—I understand this is something they want to get out of the way while the troops are still fresh—they are to achieve it by nationalising steel, an action which has already been described as entirely irrelevant to our economic problems and indeed likely to do very great harm to an industry which is responsible, directly or indirectly, for over 50 per cent. of our exports, and which has just completed a record year.

Then, apparently, they are to take steps to deal effectively with mergers and monopolies, but not State monopolies. They are going to ask trade unionists and employers to remove restrictive practices. But prior to that they are to give the workers full legal protection against almost any form of industrial action which they like to undertake. This apparently is almost giving them an industrial sabotage charter—[Hon. Members: "No."]

Mr. Cyril Bence (Dunbartonshire, East)

Really. That is disgraceful.

Mr. Maxwell

rose—

Mr. Hall

No, I cannot give way, there is too little time.

They talk about promoting reforms in taxation. What are they likely to be in the immediate future? They are likely to take the form of increased taxation—if we are to believe what we are told—probably on industry, which will make the present derisory export incentive even less significant. The Secretary of State for Economic Affairs, talked a good deal about the organisation for regional development. Listening to his explanation, it seemed to me that the regions are to suffer from the fact that they are to have too many planners. They will be more planned against than planning. I take it that this will not affect London and the South-East. I assume so, because I understand that the planners will not have any offices from which to operate—unless, of course, the restriction on office building is not to apply to Government buildings. It will be very interesting to know whether this is so.

I wish to turn my attention to the short-term measures which have been announced, the 15 per cent. surcharge and the export incentive written in the White Paper. One would not have thought that they were immediately necessary without the Government having given themselves time to give greater thought and more careful planning to this type of measure. It is said that the surcharge is temporary. How temporary is temporary? In my own personal view, if this surcharge is not off within the next six months we shall invite the retaliation of most of the countries affected by it. I think it is accepted on both sides of the House that this country benefits by having the biggest free trade area it can possibly have. This is what we should normally aim at unless we are not confident of our ability to compete against other nations.

The Prime Minister in a television broadcast, I think on 26th October, in justifying his policy, said: We are now importing £1,200 million more manufactured goods than we were 10 years ago. I think we ought to put this in perspective, however, and remember that we are also exporting more. In the past year we have exported £3,400 million of manufactured goods, enough to pay for our imported manufactures nearly twice over. Over half of the imports, anyhow in the last year, have been semi-manufactured for further processing in this country and in many cases for re-exporting. Are we to understand that we are now to follow a course of trying to become completely self-sufficient in manufactured goods, relegating the world to the status of primary producers only'? This was the sort of idea that was promulgated in the last century and led Mr. Benjamin Disraeli, as he was then, to say: The continent will not suffer England to be the workshop of the world. It is even more true today than it was then—and one can substitute "the world" for "the Continent". We have to have a free exchange of manufactured goods of all kinds if we are to have the kind of free trade area in which this country could flourish for years.

The volume of imports to which this surcharge will apply is over £1,300 million, as far as one can judge. It is between £1,300 million and £1,400 million. If it is believed that the surcharge is temporary—in other words, if some people go on importing believing that the surcharge will be on for only a few months, and being willing to accept the additional cost—we may be able to cut down the import bill into this country by about £150 million to £200 million in the course of a full year. This leaves a minimum import bill into this country at present prices of about £1,100 million. These figures are not exact; one has to make certain guesses. This would yield £165 million in a full year from the surcharge or in six months £80 million or thereabouts.

This includes taxes on goods which have already been placed. It includes, as the right hon. Member for Orkney and Shetland (Mr. Grimond) pointed out, a surcharge on shipping, orders for which have already been placed. In includes goods in bond and goods which are now on the high seas. I should have thought it possible, if the intention of imposing this levy were solely to discourage imports and not to raise revenue, to find some way of exempting goods already on the high seas and in bond, at any rate, from this surcharge. What the Government are doing is increasing automatically the price of goods which we already have agreed to take, and this will have no effect at all on reducing the import bill. I cannot believe that this is the intention of the levy. [HON. MEMBERS: "How would the hon. Gentleman deal with it."] I am asked how I should deal with it. The answer is quite simple. A very similar thing was done with restrictions placed on the importation of cotton textiles in past years when any goods which came forward on an irrevocable letter of credit were exempted from the restriction. Surely that is the best way of doing it.

There are various ways of doing it. but if nothing is done to help in this case—and there is every reason why help should be given to manufacturers affected in this way—then we shall be driven to the conclusion that the Government are prepared to take the advice of the hon. Member for Poplar (Mr. Mikardo), who I am glad is with us in the House once more, although I do not know whether he is in his place at the moment, and who wrote in Tribune last week that if the Chancellor of the Exchequer needs money for a substantial increase in pension rates I hope he will not hesitate to get it out of petrol, alcohol, tobacco and luxury imports ". A sum of £80 million for six months is a nice contribution towards the Government's high-cost programme. Can we be assured, when the Economic Secretary replies, that this surcharge really is temporary? Can he given any indication of what he means by temporary? How long does he think it is likely to remain? Six months? Twelve months? Two years? Can he give any indication at all?

This surcharge affects a great range of goods manufactured in this country out of imported raw materials or finished in this country. These goods range from furniture, with which my constituency is particularly concerned, to many other goods. For example, plywoods and veneers are imported in great quantity, and they cannot be obtained in the same quantity or quality in this country. The surcharge will put up the price of furniture. It affects a wide range of chemicals about which several hon. Members have spoken in the debate, and the range extends to something rather small but nevertheless significant—the skins of skinless sausages. These are among the small things that people rarely know about, but in fact such products are used more and more in the production of foodstuffs, particularly sausages, and the surcharge will put up the price of some foods, which is certainly not in accordance with the Government's intentions.

There is no doubt that it will mean a great increase in the cost of living. It will also mean throwing into the melting pot until the situation becomes clearer many plans for expansion which industrialists have. It will put up the cost of existing expansion schemes. For example, as we all know, it is necessary in many industries to buy specialised machinery, which we cannot get in this country, or in respect of which the manufacturers have very long order books and cannot deliver. Such machinery has to be imported from other countries, and the surcharge will have the effect of putting up the cost of existing expansion schemes and slowing down others. What is the use of industrialists in this country asking British manufacturers to supply them with the goods which they want when many of these manufacturers have such long order books that they cannot deliver for many months?

I have an example myself. We are trying to expand a rather new development in industry in which we are exporting about 45 per cent. by volume of our turnover. In this country we can get delivery of plant and machinery in about 18 months, but by buying overseas we can get delivery in six to eight months. The surcharge therefore delays our efforts to increase our exports still further—many of which are not unprofitable—by nine to ten months if it remains on.

What is the final result of all this? [HON. MEMBERS: "Buy British.") We should dearly love to buy British if the manufacturers could deliver the equipment. In fact, the surcharge will make the situation far worse by causing more and more demand on the British manufacturers.

Already, without any act on the part of the Government, there have been signs of a reduction in the country's import bill because the pre-stocking up, to which my right hon. Friend the Mem- ber for Barnet (Mr. Maudling) referred earlier, and the pre-election hedging has stopped. I think that there is likely to be a drastic reduction in imports over the next month or two, and it will have nothing whatever to do with the surcharge. It is accepted in the Government White Paper that there will be a much greater improvement in the situation next year, which means that the exports in the pipeline, especially in the heavy industries and engineering industries, will come forward in the later part of 1965. Again, without any export incentive or any action on the part of the Government, the export position will have improved quite considerably and probably quite outstandingly.

Will the Government take credit for any fall in imports which occurs in the months ahead? They certainly will do so if it occurs. Will they take credit for the almost certain rise in exports which will take place in 1965? And will they also take credit for the rise in the cost of living which will follow their proposals? Will they also take credit for the fact that although many orders now coming forward and due to come forward were placed before the surcharge was imposed, there will be a loss of some export markets because our costs will increase as a result of the imposition of the surcharge?

Are the Government aware, for example, that we will not be able to compete; that it will not be possible for us in many cases to reclaim the 15 per cent. surcharge on reprocessed goods? As is known, many goods lose their identity and it is practically impossible to get back in rebate from the Customs and Excise amounts of duty paid unless the Customs can identify the passage of the goods on which duty has been paid throughout their stages of manufacture. This is bound to make the cost of our exports higher.

Mr. Manuel

rose—

Mr. Hall

I normally give way, but little time remains for me to complete my speech.

I turn to the subject of export incentives. We are told that they are raised from between 1 per cent. and 3 per cent. It is said that they will average out at about 1½per cent. and I suppose that this is a mathematical calculation. When the figure is netted up and taxed, and Profits Tax and so on taken into account, the net yield to the exporter will be something under ¾ per cent. This will cost, we are told, about £70 million in a full year, although I am not sure whether this is a gross or net figure, allowing for Surtax and other calculations.

Despite this there is one fundamental factor; that the effect of this on exporters will not be felt until the financial year 1965–66, whereas the effect of the surcharge on imports will be felt at once. We all know the problems we must face when dealing with exports. They are difficult problems and I am certain—at least, I think I am—that the Government would not wish to follow a restrictionist, protectionist policy. They would, I am sure, like to see an expansionist policy by which we can do everything possible to encourage and develop our exports in overseas markets.

Certain things should be done to achieve this. First, we should give immediate attention to restrictive practices, wherever they are and whoever practises them, to remove one of the greatest causes of increased costs in industry today. This is the first essential. Secondly, the Government must find a way of stopping the kind of disputes which paralyse the docks of this country and which have a tremendous effect on our exports.

All who are engaged in industry know the frustration of sending goods through the London docks; of day after day vehicles returning, having not been unloaded. We cannot allow certain sections of the community, whoever they are, to hold this country to ransom—[Interruption.]—I said "whoever they are" and I mean anybody. We cannot allow them to do the economy so much damage, as has been done in recent unofficial action.

To give one example, I cite the postal strike. Companies which which I am concerned and which do a great deal of business found during the time the postal strike was in progress that they could get only about 10 per cent. of their normal export orders through. Despite the fact that the backlog was eventually caught up, they had lost a high proportion of their orders because the people with whom they were dealing would not wait for the strike to be settled. If we are to get down and tackle the problem of exports, these are the sort of problems which must be dealt with.

We must investigate the root causes of why we are not getting our proper share of overseas markets. Why is this happening? Are there any advantages which our competitors enjoy and about which we do not know? It has been suggested to me, for example, that contrary to all the international agreements it is possible for exporters from France and Italy to get preferential rates of interest, below those which are ruling, to finance their exports. Here, however, we must pay the full rate. In addition, our exporters must probably pay the Export Credits Guarantee premium as well, which makes our exports more expensive.

There are other problems, and I suggest that one of them is that we do not sell hard enough; that we suffer because we do not have enough representatives going round the world. There are many honourable exceptions amongst companies we all know, but, taking the export effort as a whole, I am quite certain that we do not match up to some of our major competitors in the toughness and ruthlessness of our selling, and in the methods and imagination we put into the selling effort.

I also think that we have to induce—and this is a problem of management—greater cost-consciousness, not only in our offices but on our factory shop floors. If one goes to some of the competing countries and looks at their well-run industries it is fascinating to see how very cost-conscious the people are not only at the top but in the lower ranks as well. They have a keen realisation of the cost of the things they are handling.

That leads me to the question of better management. There are some examples in this country of outstandingly good management—as good as or better than anything in the world—but in large sections of industry we do not always find that to be true. I am quite certain that the moves initiated by the previous Government, which I am sure, will be carried on by this Government, to arrange training courses and university courses in management are on the right lines. However, whatever the answers to the problems are, we have to use every tool in our hands.

To sum up, I do not believe that there is a crisis. The Prime Minister himself has said so. In an interview before, I believe, the General Election, he said that there was no crisis, but during the General Election he said that there was. I am never quite sure when a crisis is not a crisis. It is a little like Humpty Dumpty, who said in answer to questions by Alice When I use a word, it means what I choose it to mean, neither more nor less. I take it that when the Prime Minister uses the word "crisis" it means what he chooses it to mean—neither more nor less.

I take it that there is a balance of payments difficulty, with which we shall be faced in one way or another for many years, but it is no cause for panic measures. We are covered, as we knew we were covered and as is admitted by the Government, by the loan and credit facilities that were arranged beforehand. If we get our priorities right, if we concentrate on abolishing restrictive practices first instead of setting up another State monopoly, if we keep within the programme that the previous Government laid down which absorbs for some years ahead future foreseeable growth revenue, and do not discourage savings and do not discourage industry by increasing taxation to meet the cost of an overambitious programme, I am sure that we shall overcome our present temporary difficulties.

Speaking personally and, I feel, for my colleagues on this side, we will support the Government in any measures that are designed to strengthen still further the economy of the country which under a Tory Government reached the highest standard of prosperity in our history.

9.27 p.m.

The Economic Secretary to the Treasury (Mr. Anthony Crosland)

I must start by apologising to the House for not having sat throughout the whole debate, but, as I think hon. Members know. I went to Strasbourg to try to explain to our friends in the Consultative Assembly of the Council of Europe the reasons why we had taken the measures we have taken. In consequence, I missed a large part of the debate.

In particular, I was very sorry to miss a number of maiden speeches, which, I understand, were very well received—I think almost all by my hon. Friends the Members for Wolverhampton, North-East (Mrs. Short), Carlisle (Mr. R. Lewis), Liverpool, Walton (Mr. Heffer), Norfolk, North (Mr. Hazell), and Birkenhead (Mr. Dell).

I heard the speech of my hon. Friend the Member for Birkenhead, an old friend of mine, who speaks with great authority on matters concerned with South America. He made a number of very important suggestions which the Government will certainly take up. Only one of his suggestions seemed to me to be dangerous. He seemed to suggest that ambassadors should be judged by the amount by which exports to their countries increased or decreased, in which case we might perhaps find that our redundancy proposals would need to be enlarged very rapidly.

We were also very pleased to welcome back, not as a maiden speaker but as a very experienced ex-Member of this House, my right hon. Friend the Member for South Shields (Mr. Blenkinsop) and also, although more curiously, the hon. Member for Dorset, South (Mr. Evelyn King). I am not quite clear at what point in the political spectrum he now rests. At one time he was a leading member of the Labour Party. Then he went over to the Right wing of the Conservative Party, but the whole of his speech this evening was a blistering attack on his own party when they were in office. So it is not quite clear where he will come to rest.

The debate today—and I have been told all points which have been made—like the debate in Strasbourg, has largely centred round the questions, first, were we right to impose the import charges, and, if we were, could we not have consulted other countries before we did so?

The hon. Member for Wycombe (Mr. John Hall) addressed himself to some extent to this point. I am sorry that he did not welcome at least one thing which the Government have done. He shares with me an interest in Grimsby, for he once stood as the Conservative candidate there. I am happy to say that he was unsuccessful and that Mr. Kenneth Younger was elected. He shares an interest in the fishing industry and he might have mentioned the striking innovation brought about by this Government, which is the first to appoint a Parliamentary Secretary with special responsibility for the interests of the fishing industry.

The debate here and in Strasbourg has centred round two aspects: were we right to introduce the charge on imports, and, even if we were, should we not have consulted our friends more closely beforehand? On the first question it is necessary to remind the House of the position we found when we came into power. We were faced with a deficit on the balance of payments for this year running at a rate somewhere between £700 million and £800 million. Had that deficit been one which was likely to disappear in a few months' time, the situation might have been perfectly manageable, but all the advice we were given was that the deficit, although it might diminish, would certainly not disappear and, therefore, something had to be done.

The hon. Member for Wycombe rather gave the impression that despite this he would have continued either to have done nothing or very little and would have relied on borrowing facilities. Luckily—and we have said this publicly and I hope that we are not mean on this point—our borrowing facilities are perfectly ample, much more than a few years ago, but in our view there could have been no question at all of the Government simply going on borrowing and covering the deficit in that way. I personally think that had we done so, even for the month or two referred to by the right hon. Member for Barnet (Mr. Maudling) there would certainly have been increasing speculation against the £ and a rapidly growing volume of forestalling imports. Almost all importers would have guessed that something would happen at some point and would have tried to forestall it. The position would rapidly have become quite untenable.

We are not faced with a situation which is self-correcting. It may be perfectly reasonable to go on borrowing if the deficit would somehow remove itself. The hon. Member for Wycombe gave the impression that imports would decline naturally and exports would rise. There is no indication that this would happen to the point at which the deficit would disappear. The advice given to us, by the same people who advised the former Chancellor of the Exchequer, was that if nothing were done the deficit, although less, would next year be at a still unacceptable level, and the Government had to do something. The question was: what? There were various ways open to us, as would have been open to any Government, for correcting this very large deficit.

We rejected any policy which would have threatened the strength or stability of sterling. One thing we share with the former Government is a profound belief in the strength and stability of sterling in the growth of international trade. A fact which perhaps is not recognised abroad is that some measures which are open to a smaller country cannot be open to a large country which operates a reserve currency as we do. This rules out any measures which might threaten sterling. Secondly, we ruled out the classical Conservative method of the past few years of stop-and-go. We rejected this because we are totally committed to a period of continuous growth instead of stop-and-go.

We rejected it also because, for the reasons which my right hon. Friend the Prime Minister pointed out in his speech yesterday, stop-go is nut good for competitive efficiency, but bad for it. It discourages investment. It encourages restrictive attitudes everywhere. We rejected it also because there was no clear evidence that the economy was heavily overheated or overburdened. Indeed, the Tory Government have achieved a rather remarkable combination of putting us in a position of an enormous balance of payments crisis without even the promised boom, because the fact is that industrial production has been stagnant since the beginning of 1964. So we got the crisis without even having the boom.

At any rate, it is clear,—I do not think that the former Chancellor of the Exchequer would disagree with this—that there was no obvious sign of overheating, of excessive pressures on our resources, which would call in itself for a return to stop-go or deflationary action. It is quite true that, in so far as we eliminate the deficit and also in so far as we carry on with the social programmes which were announced in the Gracious Speech, an additional pressure will be put on our resources. It is for this reason that it has already been announced that my right hon. Friend the Chancellor of the Exchequer will introduce an autumn Budget next week to correct that additional pressure. That is something quite different from the idea of creating additional unemployment or reducing the pressure on home demand.

Several Hon. Members

rose—

Mr. Crosland

The hon. Member for Wycombe did not give way. I have much ground to cover, and I really must press on.

That is quite different from a policy of deliberate deflation and deliberate unemployment as a method of correcting the balance of payments. Such policies, again, were rejected.

Then, thirdly, we could have gone in for a policy of export subsidies. This, rather surprisingly, was suggested by the Economist last week very strongly. It was argued by one or two people at the Council of Europe that, instead of restricting imports, we ought deliberately to have subsidised exports. When we talk of subsidising exports, we do not mean merely taking off the limited kind of indirect taxation which we have agreed to do. We mean a remission of Profits Tax and social insurance contributions, something of that sort.

The overwhelming argument against doing this was that this would flagrantly breach the whole spirit and philosophy, not just the letter, of all our international trading obligations. All British Governments since the end of the war have tried as hard as they could to discourage other countries from introducing export subsidies and have tried as hard as they could to get them taken off where they exist. If we were to go back totally on that and ourselves introduced export subsidies, this could set a precedent of the most appallingly undesirable character. So, again, we rejected that.

This meant that we were left with the policy of import restriction of some sort. In this we have the support, I understand, of the former Chancellor of the Exchequer. Here the party opposite seems to be very schizophrenic indeed, judging by the speeches I have heard this evening. The former Chancellor of the Exchequer, the right hon. Member for Barnet, said that we were inheriting his solutions and, as such, claimed credit for all that we have done. Almost all of his hon. Friends who spoke today did nothing except violently attack the charge on imports and say what deplorable results it will have.

I think that the fact is that hon. Members opposite have not yet learned the art of opposition. They have not yet made their choice between claiming that all our policies are merely a carry-on of what they intended to do anyway, on the one hand, and, on the other, alleging that they are deplorable, appalling and thoroughly bad for the country. The schizophrenia came out strongly in a number of speeches—in that of the noble Lord the Member for Edinburgh, North (Earl of Dalkeith), and even more strikingly in that of the hon. Member for Ilford, South (Mr. Cooper). They will have to make up their minds by the end of this debate whether they approve of these policies as being the responsibility of the right hon. Member for Barnet or whether they think they are the most damning Socialist policies which could be thought of.

The hon. Member for Wycombe, in a rather unconstructive speech, I thought, asked for an assurance that these import restrictions were temporary and also wanted to know precisely when they would come off. I would guess that he could, in fact, answer both questions "Yes"—we can give an assurance that they are temporary. There is no question about this. They will be reduced as soon as the balance of payments permits and will be taken off completely as soon as possible.

As to the timing, the hon. Gentleman will understand perfectly well that one cannot conceivably give any timing whatsoever. Nobody knows precisely—hon. Members opposite certainly do not, to judge from their speeches—how quickly these will bite, how effectively they will reduce the import bill, and, therefore, when they can safely be either reduced or taken off. But that they are temporary and that they do not form part of a permanent Government policy of protection—that assurance we can give with complete certainty.

We all recognise on this side of the House that these import restrictions are bound to hurt other countries. But I think that one must take a realistic view of this. Any method of correcting a deficit of £800 million is bound to hurt other countries. It does not matter what method one chooses, one will reduce somebody else's exports. We know this. We ourselves have been at the receiving end of import restrictions imposed by all manner of countries, in Europe, the Commonwealth and all over the world. They have adopted many different methods of restricting our exports to them—sometimes devaluation, sometimes, deflation, sometimes quotas and sometimes tariffs. I think that we have had experience of every single method of restricting imports. It does not matter what method one chooses, of course other people must be hurt.

There seems to be an assumption that if one does not restrict imports by tariffs or quotas, but restricts them by stop-go and deflation, this is in some sense better for other countries. But, of course, it makes no difference what the method is. The whole object of restriction is to cut imports as we are trying to do, we suggest by a less painful method.

I found at the Assembly of the Council of Europe a curious failure to understand the basic fact that the method one chooses is not the critical point. It is the fact that one reduces the deficit which is the critical point. Although we shall affect other people's exports, the fact remains that we cannot bring our own position under control unless we do so.

I should like to turn to the criticism about consultation. We obviously regret very much that more elaborate consultation was not possible, but one must plead for a degree of realism. If, by consultation, one means something genuine and real and not just an additional 12 hours' advance warning, one must seriously consider what precisely it would have meant. Whom were we to consult? The Commonwealth, clearly—a very large number of countries with diverse interests. E.F.T.A., clearly, to whom we are bound in a special relationship. The Six, presumably, who are very close to us; and we also rely to a certain extent on them for borrowing facilities. The United States obviously. The International Monetary Fund, presumably. G.A.T.T., according to a number of hon. Members opposite.

Almost all of these countries or bodies—certainly all the countries that I have mentioned—would strongly have opposed what we are doing for the perfectly natural reason of protecting their own interests. Every single body or country that we consulted would have objected strongly to what we were doing. How long would this process of consultation have taken? A number of people in E.F.T.A. whom I met at the Consultative Assembly seemed to think that this could have been concluded in something like 12 or 24 hours. This seems to be utterly and completely unreal. It would have taken days, and the days would have lengthened into weeks, and we should have found the same effect which would have followed from inaction on our part—increasing speculation against the £.

The House knows that, at any rate on European questions, I cannot be accused of being a strong isolationist or an insular xenophobe. But however much sympathy we have with these countries—and I personally have a great deal indeed—the idea that we could seriously have confronted them with what we were doing, asked for their advice and reactions and so on, is simply out of the question. Therefore, much as we regret the fact that we could not do it, we remain on this point inpenitent.

There is one curious irony about this. Suppose that we had adopted the method of previous Conservative Governments and tried to cure the deficit by going back to stop-go and deflation, it would have had the same harmful effect on these countries and no plea would have been made about consultation at all.

Mr. Ridsdale

What is this but stop-go?

Mr. Crosland

The hon. Member is restless from being out of office. He must contain his soul in rather greater patience.

So much for consultation. The next serious criticism that has been made, and this is strictly correct, is that the decision to use a charge on imports was a breach of E.F.T.A. and of G.A.T.T. Here, we must distinguish between two things. I think that the notion that one restricts imports when one is in difficulties is totally accepted by E.F.T.A., G.A.T.T., the I.M.F. and every single international organisation. Therefore, we are not in breach of any of these bodies by deciding to restrict imports. Where we are in breach is by deciding to do it by a charge on imports instead of by quantitative restrictions. The primary reason for this was the simple and basic one of practicality. I think that the former Chancellor of the Exchequer will be again sympathetic, and this is certainly true of ex-Ministers of the Board of Trade.

We had at one time in this country a very elaborate system of physical controls over imports. That system has been completely dismantled now, and had we tried to re-establish it and restore the whole thing to do what we wanted by quotas and quantitative restrictions this would have taken a matter of months, and a matter of months is precisely what we could not have afforded. Once again we would have run into the same difficulties of growing speculation and of forestalling imports. Therefore, this issue of practicality was a decisive and determining issue.

I would make the point made by the Prime Minister yesterday that it is a curiosity that in 1964 of these two methods, quantitative restrictions and a charge on imports, the one that is most liberal, the one that is least arbitrary, the one that is least rigid and the one that allows the most consumer choice is the one ruled out by E.F.T.A. and G.A.T.T., and the other is the one permitted. There is something wrong with the rules of these bodies. There is no consistency with the trading philosophy of today in allowing quantitative restrictions and not allowing a charge on imports. There is a strong case for the revision of the rules of these bodies to take this into account.

The next and more general criticism is that this method on the part of the British Government represents somehow a return to the inward-looking insularity of protectionism. [HON. MEMBERS: "Hear, hear."] It is no good saying "Hear, hear" to that, because any method which hon. and right hon. Members opposite would have chosen to close this £800 million gap would have laid them open to precisely the same charge. One cannot close the gap by any method which does not make one vulnerable to those sorts of suggestion. The Government have made clear that this is not in any sense a revival of or beginning of a protectionist philosophy. These charges are intended to be temporary. They will be temporary and they will be taken off without any regard whatsoever to protectionist feelings or any demand for protection on the part of British industry.

There is a further point about our decision which shows that we attach great importance to the spirit of our international obligations, and that is that the charges are non-discriminatory. As hon. Members can imagine, we were under very heavy pressure to discriminate in favour of someone or other—in favour of the Commonwealth, or simply the Colonies, or E.F.T.A. All these things, for obvious political reasons, were attractive notions, but, despite that, we decided firmly, although we knew that we would attract additional protest from various countries, that these charges would be non-discriminatory between one area of the world and another.

It has been suggested that some of these charges would mean that we would go back on the Kennedy Round, or would prejudice the success of the Kennedy Round. In the case of some countries in Europe, perhaps not their Governments but certainly their Press comments, there is an element of hypocrisy about this. If we were to ask ourselves what are the biggest obstacles in the way of the Kennedy Round being successful at the moment we would not put a British charge on imports in the list of the top five obstacles. I get strongly the impression from reading some of the comments from some European countries that they are positively looking for a scapegoat, looking, as it were, for another country to take the blame for failures which more fundamentally are their own.

We can see no reason why these measures should jeopardise the Kennedy Round. The timetables are quite different. As I say, these measures are intended to be temporary. The Kennedy Round negotiations have not yet begun. They certainly cannot be concluded, with the best will in the world, till the end of next year, and, even when they are concluded, most of the major countries involved will then reduce their tariffs bit by bit over a period of four years thereafter. It is, therefore, highly unlikely that these charges on imports will have any effect on the Kennedy Round whatever.

Furthermore, as regards the Kennedy Round, it has always been and is our intention to table our industrial exceptions list on 16th November, which is the date earlier fixed in the G.A.T.T., provided that the other main participants are ready to do so, and this, we hope, will be the beginning of effective negotiations. We are, therefore, very glad to learn that the United States Government yesterday announced that they were prepared, together with other industrial countries, to table their industrial exceptions list from that date. We shall now go ahead and do the same.

I have tried to deal with a number of the points which were made on the balance of payments measures. I now turn to certain more particular points mentioned during the debate. The hon. Member for Ilford, South, in a very strong partisan speech—he, at least, is getting himself rapidly into training for the role of opposition—mentioned the question of a number of chemical raw materials. They will come up in the course of discussions on the Finance Bill, and I do not think that they need be dealt with now. The hon. Gentleman in company with the noble Lord the Member for Edinburgh, North, also made some very odd remarks about our proposal for office building, claiming a great deal of credit for what the Conservative Government had done and suggesting that our main desire was to insist on office workers continuing to work, in the hon. Member's phrase, in Dickensian conditions. When we remember how many years of opposition it took us to force the Conservative Government to do anything about working conditions in office buildings, the idea that they can now claim credit for it is, to say the least, peculiar.

The object of our measures regarding office building—it hardly needs to be said—is not in the slightest degree to make permanent bad working conditions for office workers. The object, which, I am sure, most hon. Members would approve, is to try to spread office building more evenly over the country. We want to do this partly because we want to bring more employment of all kinds to the areas which are currently the more depressed areas and partly because, if one is to talk about Dickensian con- ditions, we want to try to reduce the sub-Dickensian horror of commuter travel in London.

The inescapable fact is that the concentration of office building which has occurred in London and the South-East during the past 13 years or so has produced the most damaging and deplorable social effects not only in London and the South-East, but in the areas of reduced employment. This is the basic reason for what I regard as one of the most essential parts of our programme in proposing to do something to restrict office building in the overcrowded areas.

Several other points were made generally on regional problems. We had speeches from Scotland, Wales and Northern Ireland. I do not feel competent to comment in detail on the problems of any of those regions. Certainly, my hon. Friends who spoke from those parts warmly welcomed the various measures which we have taken.

Inevitably, in my speech and, to some extent, in the debate we have been discussing the short-term emergency measures which the Government had to take, but I wish to conclude by making absolutely clear that these are emergency measures only and do not constitute the more important part of our programme. The more important part of our programme by far consists of the longer-term measures announced by my right hon. Friend the Secretary of State for Economic Affairs this afternoon.

The crux of the matter was totally ignored in many of the speeches opposite. When hon. Members say that there is no crisis, they forget that, after 13 years of Conservative rule, we find two things at the same time, stagnant production and a £800 million deficit. Some British Government at some time must clear up the mess. We cannot go on year alter year having a rate of growth slower than that of any comparable country. We have had a rate of growth year by year of about 2½ per cent. while the principal European countries have had 4, 5, or 6 per cent. This is what has been happening, and we simply cannot at the same time live with a balance of payments situation so vulnerable as ours still turns out to be.

Every time we achieve anything like full employment we run into a balance of payments crisis. This is, and will continue to be until we solve it, the basic limiting factor on our doing what we want to do in this country. When hon. Members opposite take great credit for those years of Conservative rule and say, as several did this afternoon, that they left the economy strong and prosperous, the fact is that they have done nothing of the sort. They have left the economy basically weak; they have left us an economy in which whenever we have had full employment we have had a flood of manufactured imports coming in, and our exports increasing less than those of other countries. Whenever we have full employment, we have this large and gaping deficit in our balance of payments.

That is the crucial thing which they have been trying to solve for 13 years and to which we now have to address ourselves. It is no good, while they are in opposition, pretending that they ever found a remedy for this problem, because they did not. No advice from them at the moment, I regret to say, is of any use to us whatsoever.

It is for that reason that my right hon. Friend the Secretary of State for Economic Affairs this afternoon announced a number of extremely important policies which the last Government had not, in fact, introduced. These policies will gradually develop. Obviously, there is no time to go into them now, although they will be mentioned in the course of the debate. They were dealt with very fully in a speech lasting about an hour by my right hon. Friend, and will be dealt with again.

But the crux of the matter is the difference between talk and action. Hon. Members opposite had a very long time indeed in which to talk of expansion and of modernisation and in which to express their constant hopes of achieving rapid growth. The fact is that for all their talk they never did it. We propose now, with this Government, to have rather less talk and rather more action.

Debate adjourned.— [Mr. Lawson.]

Debate to be resumed Tomorrow.