§ The Chancellor of the Exchequer (Mr. Anthony Barber)Over the past week or so, many have described the situation which we as a nation now face as by far the gravest since the end of the war. They do not exaggerate. The duty of the Government is to take whatever action the national interest requires, however severe, but equally to avoid measures which could make an already forbidding situation even worse.
Before I come to the measures which are immediately necessary, I must describe to the House the economic outlook against which the decisions have been taken. During the past two months a series of deliberate acts have been taken, both abroad and at home, which are at present starving this country of energy. The one over which this country has the least control was the decision of the Organisation of Petroleum Exporting Countries on 16th October to bring about by unilateral action an entirely new price régime for oil. As I have already made clear on a number of occasions, this change alone must inevitably make all oil-importing countries worse off than they would otherwise be, though, for reasons I shall explain, this change in the price of oil, without any other developments, would not in itself have frustrated a policy of economic expansion. But the subsequent announcements by some oil producers of their intention to reduce the supply of oil to the rest of the world to a level which is well below present requirements has created an entirely new situation.
Although the supply situation in 1974 is unpredictable, it is now only too probable that there will be an energy shortage in all the oil-importing countries leading to stagnant, if not falling, output accompanied by rising unemployment. In all these countries output is expected to fall faster than purchasing power, with consequent increases in demand pressures for goods and services. We will share those problems.
953 But in the case of our own country these problems have been compounded by another factor, specific to the United Kingdom—the industrial action in the coal and electricity industries and on the railways. This, at a critical time when we are expecting inadequate oil supplies, has cut down the availability of the primary alternative fuel, has diminished our ability to get available oil and coal to the right places for consumption and has also made it more difficult when electricity supplies diminish to ensure that essential services are not threatened.
At this immediate point of time, by far the greatest issue facing the nation is the fact that it is this industrial action, not the future shortage of oil, which has put British industry on to a three-day week and threatened the security of employment of so many of our people. As far as the industrial situation is concerned, I must repeat what I have said before. In the general interest, it is inconceivable that any Government could agree to a dispute being settled by an offer outside the limits approved by Parliament. Because this is the case, and because many millions of people are now beginning to suffer not just inconvenience and worry but hardship and, indeed, danger, I cannot believe that the sound common sense of the British people will not prevail.