§ 2.55 p.m.
§ Debate resumed on the Motion moved yesterday by the Lord Windlesham, That this House takes note of the current economic situation with particular regard to the grave shortages of energy and the need to conserve supplies of fuel.
§ LORD BESWICKMy Lords, yesterday, in a notable speech, my noble friend Lord Diamond said that our national position was now so grave that we should establish an all-Party committee to whom, on Privy Council terms, all facts should be given and where all ideas should be pooled. The sincerity of my noble friend was widely acknowledged, but I should like to think that the more open the discussion and the more widely known the facts, the better it will be for our democracy. Moreover, I hope it is possible in this House—and indeed yesterday proved it so—to pool ideas and analyse them deeply and dispassionately, as the noble Lord, Lord Windlesham, phrased it. In that spirit I offer my ideas, with candour, but I hope without undue rancour.
My Lords, in the first place we need to reach agreement as to the root causes of our problem. On that point, there was no agreement yesterday. I should be false to everything I have argued from this Box this past two years if I did not say, emphatically, that in my view it is a crime against the truth to lay the blame for our present crisis upon the miners. The industrial disputes we are now enduring are a consequence and not a cause of our economic trouble. Of course, as the noble Lord, Lord Orr-Ewing, often tells us, and as was said by my noble friend Lord Chalfont and 338 the noble Lord, Lord Hewlett, there are communists trained to exploit grievances, but our task is to remove those grievances.
I greatly admired yesterday the quiet way in which the noble Viscount, Lord Amory, dealt with the fashion, as he called it, of pretending to ourselves that failing to pay our way in oversee s trade does not really matter. In the first quarter of this year our trading deficit was £360 million; in the second quarter, it was £420 million; in the third quarter, £550 million, and in the last two months it was £625 million. The bigger the deficit, the broader the smile, the smoother the words and the more sickly the optimism from Mr. Peter Walker. Not since Mr. Neville Chamberlain's day have we had so many retreats dressed up as glorious victories. Every £100 million to our trading deficit, every £1,000 million to our budget deficit, every pound note churned off the printing presses has brought us nearer to the day when we could not afford to buy our essential food and raw material; overseas. Undercover borrowing abroad, and exorbitant interest rates lured foreign hot money here, which we dressed up as reserves; this is no way to run a self-respecting country. Certainly it is no way to run Britain.
My Lords, I spent last week in the Nottinghamshire coalfield, and came back from there greatly encouraged. I found there no spirit of grab or selfishness. The miners genuinely believe that they will save our country by compelling the Government to face the facts. One miner's wife—a woman whom I have known for long years, who is no economist but has enormous reserves of common sense—said to me: "We have had this coming to us; we could not go on as we were". She saw this situation as a challenge, and that, as I see it, is the way we should accept the present situation.
Superimposed upon that basic weakness is the revolt of the Arabs, which at one time we should have put down with troops and with gunboats. Now we do not think in those terms; but we have to contend with that situation. If we are thinking in months rather than weeks, it is probably the cost rather than the amount of oil which will prove more decisive: another £1,000 million, it is 339 estimated, on our import bill. May I remind the House that we shall be paying for that dearer oil with a devalued currency, probably 20 per cent. or up to 40 per cent. more than some of our European competitors? If I can also remind the House that our adverse trade deficit with the E.E.C. Six went up from £499 million in 1972 to over £1,000 million in the first eleven months of this year, we can see the danger of this aggravation of, to coin a phrase, the self-inflicted wound of our E.E.C. membership.
I will say no more about the challenge. But how do we meet it? First, there are the ambulance measures to deal with immediate needs. I am glad that the noble Lord, Lord Drumalbyn, accepted last night that sensible adjustments of the 3-day working week can be considered. No one could have put more seriously or responsibly than the noble Earl, Lord Dudley, the consequences to industry of carrying five days' overheads on a 3-day working week. Every improvisation, every ingenuity must be exercised to get the maximum effort from the reduced working hours. If the Government had confused rigidity with strength in this area, then catastrophe would indeed have been nearer. I am glad, as I say, to see that they are prepared to consider what the noble Lord called sensible adjustments. I gather that the answer to the question which the noble Lord, Lord Orr-Ewing, put, and which I had previously nosed to the noble and learned Lord the Lord Chancellor, about the use of private generators has, with understandable qualifications, been answered in the affirmative.
I have also given notice in writing to the noble and learned Lord the Lord Chancellor (and I hope he will be able to answer) of a question about the possibility of spreading a given power consumption over more than three days; for example, 60 per cent. over five days instead of 100 per cent. on each of three days. I hope that if it can be shown in a given case that improved output would result, the Government will consider this sort of arrangement. I hope, too, the Lord Chancellor will spell out the legal position, about which I am a little confused—but it may be I am just ignorant—on those contracts which give a 340 guaranteed 5-day week. Can employers be released from that contract, and, if so, will the Government make special provision for the payment of the other days as social security benefits?
Those are the ambulance measures. But we need to improve the whole industrial climate if our recovery is to be achieved. Again, it was the noble Viscount, Lord Amory, who had the courage to raise the issue of the Industrial Relations Act. What a difference between the approach of the noble Viscount Lord Amory, and that which the noble Lord, Lord Drumablyn, was obliged to adopt! I put it to the noble and learned Lord upon the Woolsack, if it is recognised that the Industrial Relations Act has not worked why not make a virtue of a possible amendment? Why adopt the sort of bazaar bargaining attitude of the Government and say. "It is up to you to make a bid"? Why not say to the T.U.C., "Let us put it on ice and together work out an agreed system of conciliation"? If the body of Selsdon is dead, let us bury the corpse because the smell is polluting the atmosphere.
Now I come to the unfortunate Phase 3. I thought that the noble Earl, Lord Onslow—whom I do not see here; I expected him to be here, otherwise I would have given him prior warning—was less than fair when he accused Opposition Front Bench spokesmen of humbug on this issue of a wages policy. In public, and in less public places, I have argued for a prices and incomes policy, and so, I know for a fact, have colleagues who sit beside me. But, as I said in the last economic debate, one cannot have a pay policy that works if at the same time we rely upon the printing press to finance Government expenditure. The truth is that Phase 3 was wrongly conceived and is now stillborn. We have a situation in which companies who play the rules, who observe the rules, are poached by less ethical competitors. Moreover, there has been a quite intolerable spread of this disease called the "lump". Not only construction workers, but typists, telephonists, electricians, draftsmen will leave a permanent job on a controlled pay scale and then probably come back, breaking all Phase 3 limits, maybe doing exactly the same job, but employed by an agency. This sort of thing is typical of the kind of society inflation has created, and it is a practice which has to be taken into 341 account when we are laying down the law with the miners. With hindsight, and I think I probably carry a good many people with me here, one might also say that Phase 3 was wrong when it established a norm. The norm was too high, and it has been used, especially by those most strongly organised, not as a ceiling but as a springboard; and with prices going up as they have, who can blame those who have tried to get as much as possible?
So I am suggesting that a fresh start is needed here, and Mr. Whitelaw may well be able to conciliate more effectively if Phase 3 is completely scrapped and we move to something more appropriate to our present economic circumstances. I believe that his hand will be even more strengthened if we can show that the days of the property speculator are really over. Again the noble Earl, Lord Onslow, spoke—and I agree with him so much on this—of the evil of some of the wage payments to building trade workers, and I approve of the adjectives which he then used. As to the figures he used, I think he was being very moderate. I am informed on good authority that on some construction projects weekly wages are being taken home of from £80 to £130 a week; that is normal, with overtime, of course. But such payments are possible only because ultimately the developers can recoup their costs and make much more for themselves.
The prolonged public crucifixion of Mr. Poulson does not mean that his kind of lavish spending was confined to his corner of the construction world. Every miner with whom I spoke last weekend brought up the question of this property racket. At last—we might say at long last"—the Government are doing something about it. The question is: have they done enough? Enough, for example, to convince the miners that the real wealth they produce is not going to be creamed off by those who deal in land and property. I am sure that the House would like to know what the noble and learned Lord who sits on the Woolsack thinks of this because, as I know, he has a really radical streak running through him. I should like to put the question to him: does he think that enough has been done in this respect? 342 Is £80 million yield properly commensurate with the huge profits that are being made?
I must say that the diffident way that the Government have dealt with the property world reminds me of the incident described by my noble friend Lord Shinwell in his latest book. He recalls the anxiety expressed in Parliament about the reluctant way that we were waging war in 1939 and early 1940. The late Mr. Leo Amery asked if we could not at least drop incendiary bombs on the Black Forest, only to be told by the then Minister that he must bear in mind that the Black Forest was private property.
Would not Mr. Whitelaw's hand be further strengthened if the Chancellor had done more about taxation? I believe that the Chancellor has misjudged the mood of the nation over personal taxation. It may help Mr. Barber's self-esteem to say that he has refused to increase income tax, but there are many good, careful citizens, probably sitting around me now, who have lost maybe one-third of their capital in recent weeks because of the Government's reluctance to increase taxation earlier this year.
In the last debate that we had I spoke of the thousands of millions of pounds that have been lost by those who invested in the National Savings Movement, and only to placate the obstinacy of cur present Chancellor of the Exchequer. The noble Lord, Lord Roberthall, suggested yesterday that many of us expected, and were prepared to pay, increased amounts for our car licences and petrol tax, and he and others asked for a tax on luxuries. The noble Lord, Lord Windlesham, said that all experience shows that a tax on goods leads to wage claims. But, my Lords, experience in fact shows precisely the opposite. Certainly the indiscriminate V.A.T. will lead to wage claims, but experience that we have had of a discriminating tax on luxuries, with the revenue used to subsidise essentials or, as the noble Baroness, Lady Seear, said, possibly to increase family allowances, can help abate wage claims.
I raise again, on taxation, the point made by the noble Baroness, Lady Seear, and the noble Viscount, Lord Amory, about the exemption of those over sixty-five from the 10 per cent. surtax surcharge. Would the noble and learned 343 Lord the Lord Chancellor tell us the principle behind this exemption? Was it hardship? If so, would he tell us at what levels those over sixty-five now pay, or did pay, surtax? I could understand it if those over sixty-five were to be exempt from the tax payable from January 1 on imported tinned foods and imported mutton, for that would include those living on State pensions alone. But this 10 per cent. affects the surtax bracket, and it would be really helpful if the noble and learned Lord could give us the benefit of his thinking upon this point.
I make only a passing reference to the so-called cuts in public expenditure. My noble friend Lord Diamond, and the noble Viscount, Lord Amory, both with first-hand experience, doubted whether this was really the most effective and fair way of taking excess heat out of the economy. But I leave that because before I sit down I want to say something about the creation and the use of energy. We all agree that a maximum effort is needed to expand new energy sources. It would have been good to hear of the possibility of gasification of the newly-found coal seams North of the Humber. I hope that news about that will not be long delayed.
I wonder whether the noble and learned Lord can tell us, when he winds up, something about the machinery envisaged for getting the most fruitful collaboration with Europe on a nuclear power programme. It is now 27 years—in 1946—since I first asked in this House (although it was occupied then by the Commons), about the need to internationalise nuclear power for peaceful purposes. I have always said in later years that this and other forms of advanced technologies were a much more hopeful growth point for European collaboration than the harmonisation of effort for the production of dearer beef and butter. There are now immense new possibilities for nuclear power development, and I gather that the Prime Minister touched on this yesterday. If the noble and learned Lord can amplify something of that, we shall be pleased indeed.
Here again we see that temporary adversity can yield permanent gains if we meet the challenge aright. But what 344 of the use of energy, for that can be as important as the other side of the same coin? Ought we not more carefully, and much more deliberately, to plan our use of energy? Could we between us agree about priorities there? Time prevents me now from offering my own list and what I would put at the top of that list, but may I just indicate how, in my view, we have allowed an inflated, affluent society to distort energy use? In my local High Street the other day I counted, within a radius of about 100 yards, no fewer than seven estate agents—four of them set up over the last year or so. Can this be right? Can this be the right way to deploy our efforts? And what will the two-thirds of the world's people who now live under the poverty line think of the fact that this year we have chosen to set up two new radio stations in London? Have they added to the quality of our life? If this happens in the green tree, what then in the brown?
I make no excuses for mentioning these detailed but, I believe, significant pointers, for if we really are to have a fresh start, if we are to have the sense of a new society to sustain us in the difficult days ahead, if Mr. Whitelaw is going to get the wholehearted co-operation, as he could, of some of the finest public servants in this country, the coal-miners, then this new spirit must seep down right to the roots of our daily lives. If that new spirit is honestly engendered then we can tap new sources of the oldest and most important, the most potent of all energy sources, that of human beings in a free society. In the days ahead we may well have to rush about a little less, and we may be poorer in some respects; but, my Lords, with the right spirit we could yet live fuller, richer and happier lives.
§ 3.20 p.m.
§ LORD THOMASMy Lords, I am sure we are all grateful to the noble Lord the Leader of the House for giving us an opportunity to take part in this very important debate. I, for one, rise in a spirit of humility and honour. I have listened with benefit and much increase of knowledge to what noble Lords said yesterday and to-day, and to me there is a distinct feeling emerging that, as always happens in a time of stress, we are developing a more emphatic spirit of community and a less vicious opposition 345 purely for the sake of opposing. That, anyhow, is the impression I gained yesterday in this great House, and I would that it would spread throughout the whole body, both public and politic. By confluence and coincidence of events a worldwide situation has developed which looks as though we have reached a watershed in history and that nothing will ever again be the same as it was yesterday. To-day we in Britain and all over the world are in an economic situation that is woefuly underpowered and grossly overheated. In a sense it is a new situation, for when previously we had war problems and were exhorted to tighten our belts we knew what the enemy wanted. Now we seem to be warring among ourselves, with no focal point of attack.
All we have is the realisation that we are woefully short of energy. Energy can be either muscular or can come from thermal sources, but whether it is fossil fuel, oil or natural gas it inevitably must become more scarce as time goes on and therefore more valuable, and we are obviously drawing on limited resources. I think it was Mrs. Barbara Castle who said that power is now on the shop floor—quite right; but big power, universal power, now seems to be largely in the sands of the desert, and clearly we shall have to pay more for it—a situation that we might as well accept with as much grace and ingenuity as we can.
So to my mind two things need to be done: first, to economise in the use of energy, and, secondly and more importantly, as the noble Lord, Lord Beswick, has said, to create more of it. I do not propose to involve myself in the economics of Phase 3; other speakers more voluble than I have debated and will debate that. All I would suggest is that our Government have already offered a wage structure to the muscle men in the coal pits which deserves to be recognised by them as a substantial increase and enables them to earn a far better standard of wages and living than before. Withdrawal of effort in order to force more money out of the Government or the Coal Board—which in effect means us, the public—is surely the wrong approach and unacceptable. I deplore this idea of cutting back to a three-day week, particularly in so far as steel is concerned, because if we have a three-day week in steel manufacture that seems to me to be a recipe for stagnation 346 of the economy. Anyhow, that situation is so axiomatic that I am not going to occupy the time of the House in tying to develop it. Rather allow me to get on with what seem to me to be worthwhile avenues for exploration and future savings of energy, both muscular and chemical.
One thing I think we can do without with no discomfort at all, is the Maplin project. I am assured by chambers of shipping, oil companies and other functional authorities that it is not needed as a seaport. It is certainly not essential as an airport, because it is in the wrong place in relation to traffic generation, and by the time it is built, in 10 or 12 years, aeroplanes will be larger and quieter and so all the old arguments against Maplin become more and more valid. I hope that Her Majesty's Government gill have another close look at the Maplin project in principle and certainly not let it absorb energy and money in the medium term future.
Naturally, while we are talking about Maplin someone will ask, "What about Concorde?". Its tremendously high fuel consumption means that that particular aspect of its operation will need to be looked at afresh. But do not let us forget, my Lords, that the rise in fuel costs is applicable to all aeroplanes, whether Concorde, Jumbos, 707s, Tridents or what else, so that the comparable position of Concorde is in that respect unchanged. In any case I put it to you that Concorde is too far developed to allow it to be scrubbed. There are already on order and partly fabricated long lead time materials for 22 aircraft, and major fabrication has begun on the first 16. True, that is only against nine firm orders (five from British Airways and four from Air France) but I think we ought not to panic about Concorde and start trying to drop it as we did with so many British aircraft in the past—the V-1000, TSR 2 and the VC 10, to give but a few examples. But I do think it would be wise to slow-time its building, so that the energy absorbed by Concorde is spread over more years; and I should hope to see this aspect discussed with our French partners in this venture. But please do not let us cancel the most promising British project we have had for years. To do so would be to shed all vestige of European prestige. If the airlines do not take up all those on the production line at the moment, 347 surely the Services (Army, Navy, Air Force) could use them for high-speed transportation of their officers.
Not quite the same position applies to the Channel Tunnel. We have got along without a Channel Tunnel quite well for so many years that no one can think to-day that it is essential, and while we are scraping the bottom of the barrel for every ounce of energy and money that we can get I really cannot see the point of pressing ahead with the Channel Tunnel which, after all, will only do something which is already being done by other forms of transportation. It could also exacerbate the mining situation, for the technique of tunnelling under the Channel must absorb some of the skills and energies that could be more usefully applied to coal-getting.
So much for some of the energy saving proposals, but what about getting energy from other sources? Ought not the scientific and training departments that are run by Government schemes to be applied more emphatically to this end? The obvious one, of course, is North Sea oil and gas, which has already started. I am told by an authoritative oil executive that if his company had 300 trained welders to-day he could shorten the time of getting gas and oil ashore by something like 10 months. He is perfectly conscious of the fact that he could hire these welders from America where they are reasonably available, but he is equally conscious that to do so would be to raise a furore among the affected British trade union. But, my Lords, that surely does not prevent the scheme for training welders in this country to be put in hand. It takes only three months to instruct an experienced fitter to become competent in what is graphically described as down-hand welding. This, surely, is one small way to ease our difficulties, but there must be many others like it.
Again I ask, my Lords, whether we are really putting forward an all-out effort to generate nuclear power. I listened with great interest and attention to what the noble Lord. Lord Beswick, said, and I agree with him on this point. There are already a number of half-built stations in the British Isles that seem to me to deserve more energy being put into them before they can produce energy themselves. I get the impression that there is 348 a great deal too much time being spent in talking about different types of new actors. Of course one must be chosen which is dependent, reliable, economic and that sort of thing, but in the history of technical and technological developments there are always choices between two or more types of mechanisms or systems; and I know from my days of producing war munitions that it always required a strong personality to cut through the dreary technical jealousies of the highbrows and get something into production that actually worked, and something sent to the battlefield. I think the same applies to nuclear energy.
Then there are other ideas that ought to be looked at. Could not more use be made of solar power? This, after all, should be a spin-off from all the money that has gone into satellites and space programmes. Again, there is tidal power: not merely the energy which can be extracted from the normal rise and fall of the water level around the coast, but there is also scope for exploring power that may be obtained from the deep tides that regularly flow well below the surface of the seas, rather like the one that was discovered by mariners years and years ago beneath the Straits of Gibraltar. All this is power, and it is there for the getting. All this, my Lords, to my mind suggests that we have a need for a Ministry of Fuel and Power. It might of course be called the Ministry of Energy, but that would be open to the wisecracks of the would-be humorist. I think the old name of Ministry of Fuel and Power is perfectly valid, and as a one-time practical Producer of machinery and mechanical systems, I believe that we ought to rethink our Ministerial priorities, to discuss this and give greater emphasis to a Ministry which looks after fuel and power particularly, because those two things are going to become more and more important with every day that passes. If this great nation could get the core of public opinion to realise that widespread high standards of living can be achieved only by all workers—and that means management as well as workpeople—putting out more useful energy, instead of some people withdrawing effort in order to ransom higher rewards, this land would rapidly bloom and smile again.