HL Deb 27 March 1974 vol 350 cc600-18

3.9 p.m.

LORD ERROLL OF HALE rose to call attention to the urgent need for the policies of the new Government to give full encouragement to British industry and commerce; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion which stands in my name on the Order Paper. I think it is clear that a new Government, whether it be a Conservative or Labour Government, in the first few weeks of its formation is very sensitive to the views which may be expressed to it. Although it will be very busy with programmes and proposals, it is also prepared to listen. I therefore tabled this Motion last week because it seemed to me that it would provide an opportunity of putting to Her Majesty's Government points of view regarding the encouragement of British industry and commerce which are of great importance at a time when the Government might be prepared to listen. As a Government moves into a longer period of office—and again this applies to whichever Party it may be—there comes a certain hardening of the arteries, a certain inflexibility of point of view as commitments are honoured and others are undertaken. So this seemed to me to be a very valuable opportunity of making points to Her Majesty's Government at a time when they might have some effect.

All of what I have just been saying has, unfortunately, been overtaken by the speech of the Chancellor of the Exchequer in another place yesterday which, from the point of view of my Motion, shows that Her Majesty's Government have already arrived at a rigid point of view. I appreciate that this debate is not a debate on the Budget, although I understand that it is quite proper to make some reference to various parts of the Budget speech—I am glad to see the noble Lord the Leader of the House acknowledging that this is in order. So I will deal with certain aspects of yesterday's Budget speech which particularly affect the topic of my Motion.

In that long and very skilful speech by the Chancellor of the Exchequer there was, disappointingly, very little reference to the wealth-creating activities of our island. There was a great deal that was said, and is to be enacted, for the benefit of the old and infirm; for the sick and the weak; and there are to be considerable hand-outs to those who are in need. I am not quarrelling with all this; indeed, there is a measure of justice in what is proposed. But all of this has to be earned. I was surprised to find that very little reference was made in that speech to productive industry and commerce. Here I would include, of course, the nationalised industries as well as the industries in the private sector, because in their own way the nationalised industries, too, are able to contribute to our national wealth. This omission from the Chancellor's Budget strikes me as most extraordinary, because unless industry and commerce are to be encouraged to do that little bit extra there will not be the wealth to distribute under the Budget proposals; it will be a country that will be becoming progressively poorer instead of progressively richer.

The urgent need to-day is to maximise our resources, to put them to the most profitable uses, and particularly to do that everywhere in the world. The Budget speech does nothing to give encouragement to industry and commerce. After all, industry and commerce, at all levels, are a matter of people; whether they be represented by trade unions or, at the other end of the scale, by the Institute of Directors. They are all people, all wanting to do better for themselves and their families, and to do well for the companies or the businesses with which they are associated, in whatever capacity. Only if this effort can be maximised can we hope to generate the increasing wealth that Britain needs, and also the increase in foreign currency earnings. All this was glossed over. I for one, am very sad that a Chancellor, who may have shown some promise yesterday, should have ignored the real source of Britain's wealth. I hope, therefore, that Her Majesty's Government will pay some heed to what I am going to say to-day.

My Lords, I think we all accept that a measure of cutting back in personal consumption, personal ambitions and improvements for our families and our social life are necessary at all levels. But I think that it was particularly unfair to hit so hard those in middle management, those earning from about £2,000 to £6,000 a year upon whom the future of British industry and commerce, managerially, is particularly dependent. I think they have been hit harder than any other section. On percentage points and the like, it may be that the very rich have been hit proportionately harder, but I am not going to plead their case to-day. It is the young middle manager and his family who are going to feel the Budget impositions harder than any other group. It is on the young and enterprising managers that the prosperity of British industry and commerce depends.

I feel particularly sad that in this great speech by the Chancellor of the Exchequer there was no reference, or virtually no reference, to the wealth-creating elements of our society. Could that have been because the Government do not understand what it is all about? Would it not be possible for them to try to learn? It was interesting to note that in the interview which Mr. Benn gave to Mr. Groser, reported in The Times about W days ago, Mr. Benn said that the Labour Party had been having a considerable dialogue with the trade union leaders over the past two years. Excellent! I wish he had also had a similar dialogue with industry and commerce—not just with the established bodies, such as the Confederation of British Industry, but with the management and directors of individual business and companies. I would put to Her Majesty's Government: Please, first, understand the point of view of the businessman; and then, please, have some regard for it, for it is in the private sector that the greatest opportunities exist for increasing our resources and increasing the wealth which the Government wish to distribute.

I should like to develop this theme briefly. Let us take the hardest question of all first; namely, the profits. I know that for many people on the other side of your Lordships' House the word "profits" is an emotive word; but it is profits which in fact must be secured by any enterprise if that enterprise is to continue to exist. Indeed, it is the profits which provide most of the additional capital for further investment and expansion. If there is a failure to generate profits the business suffers and probably collapses, and that leads to further unemployment. I was going to make a rather more detailed reference to the problems of the Express newspapers, where failure to generate profits is causing the closure of important plants and the unemployment of 1,500 or more people in Scotland. That illustrates that the first call is to have an efficient business which can make, and continue to make, a profit. Let us be quite clear about the importance of profits in the private sector. I hope that Her Majesty's Government will realise that the ability to produce profits is of the first importance in any business. Pure profit seeking on its own is not enough, of course. Profits come when other things are right as well; when the business is efficiently run, when the employees are contented and keen, and when good service is given to the customers. Profit is merely the end product of all the other things which a successful business should achieve.

Then comes the question of the disposal of those profits: the question of how much should be reinvested in the business and how much distributed. A certain distribution, of course, is right if further risk capital is to be attracted into the business. I hope, therefore, that Her Majesty's Government will bear in mind the importance of a business being profitable; and the importance, too, at the right time, of permitting proper distribution of dividends when the company so decides. In connection with the running of a business, I hope that Her Majesty's Government will realise that what is entailed is a co-operative effort at all levels. It is not just the workers on the shop floor; managers, too, have their responsibilities, and in particular the directors have theirs: because, while the managers may have many responsibilities, it is the directors who are the custodians of capital invested in the business and it is they who have responsibility for deciding to what use the profits will be put, when profits can be earned. But the difficulty to-day, apart from the few fortunate exceptions, is for a company to earn the profits which are needed.

I thought it was typical but unfortunate that Mrs. Shirley Williams (I think it was) should say that she was going to stop businesses in the retail trade from selling old stock at the new prices. I know this is a good example of a misunderstanding of the importance of capital and profits, because if one sells the old stock at the old prices there is not enough money to buy the new stock at the higher prices, and so in the event the capital is handed out to the customers and is lost to the business. This is a point which is not widely understood or appreciated, but I thought it worth making to-day to demonstrate the great gulf there can be between those who are in business and those who prefer to attack and sneer at it from the outside.

I referred to the hard position of middle management. It is important to appreciate that salaries are high in business because of the responsibilities which are carried. A playwright or an author may not make a great deal of money, but that person is not carrying the day in and day out responsibility of those who are in the top echelons of business and industry. It is responsibility which wears people, and it is responsibility which should be rewarded. The reward is not at a high level in Britain. One has only to look across the Channel—ignore what is paid in America—to see that the rewards are considerably greater, after tax, in mainland Europe than they are in this country; and the growth rates in mainland Europe are correspondingly greater as well.

I want now to turn to one or two specific items which I hope Her Majesty's Government will consider in the course of the coming months. I urge Her Majesty's Government particularly to have regard to the position of small businesses, those which are proprietor-owned. A great deal of good work was done by the last Government in providing meaningful help for small businesses which are beset by the complexities of modern government and modern intervention from Whitehall. The small businesses of this country have a very important part to play in creating the wealth which this Government seek to redistribute. Do not ignore, I suggest to Her Majesty's Government, the important part that small businesses can play if given the chance. I know that my noble friend Lord Strathcona and Mount Royal, who is going to wind up for our side, will say rather more about this topic than I, but it is a subject of great importance since so many small businesses become large businesses, and very successful ones as well.

I should like to urge on Her Majesty's Government the proposals for the reform of company law which already appeared in another place before the Election. There are many sensible proposals in the Bill that existed up to the Dissolution which could well be enacted on a non-controversial basis. But, unfortunately, I read that the Under-Secretary in another place was not very interested in that Bill because he said that it was concerned only with the interests of shareholders and creditors and barely dealt with the responsibilities of a company to its employees and to the community. I am sorry that thinking of that kind should have already started to generate itself in the minds of Her Majesty's Government. Creditors are very important people, as anyone who has been a creditor to a business that has gone bust will fully realise. Her Majesty's Government may well be finding in the course of the coming months there will be a number of businesses which are going bust through the policies and attitudes of Her Majesty's Government.


My Lords, if I may interrupt the noble Lord, since he has been good enough to read Hansard of another place. I wonder whether he would also read Hansard of this House. He would then see that last week his noble friend Lord Limerick raised this point and I did my best to answer it.


My Lords, I apologise to the noble Lord because it has not been possible for me to read the enormous stream of material which has been coming out in the last few days. That particular reply of the noble Lord I will certainly read, and if I have made the wrong point I will gladly withdraw. Nevertheless, I hope that a non-controversial Companies Bill can be introduced in order to clear up certain technical matters which could be improved by fresh legislation.


My Lords, if the noble Lord will allow me to intervene, before he begins to be controversial and to blame one side or another, may I ask whether he is aware that more small firms are on the edge of bankruptcy because of the three-day week than because of anything the present Government have yet done or have said they are going to do?


My Lords, that is a point which has been made a number of times. My information is very much to the contrary: that small firms were in fact able to cope with the problems caused by the three-day week far better than was expected. Indeed, I know some cynics have called it, not the three-day week but the four-day weekend, which was very congenial to many people, since so much additional work was done in the three working days that it surprised everybody, including the workers themselves. The problem for the small business is much more the problem of finding sufficient working capital to finance the higher cost of raw materials, to finance pay increases, to finance fuel and electricity increases, which all have to be paid for before the goods, having been manufactured, are themselves paid for. The real strain for small companies and big ones alike will be in the coming months, not in tidying up the short disruption caused by the period of the three-day week.

In the one or two other points I wish to make in the course of my opening speech I would ask Her Majesty's Government to make up their minds about the nuclear energy programme. The previous Administration were taking a long time about it. This action Government of ours might take a little action here as well. The postponement of a decision on the grounds that the 30 per cent. increase in electricity prices will damp down demand for electricity and so reduce the need for new stations is tempting, but many companies, particularly in development areas, would be enormously benefited if they knew what system was going to be decided upon by Her Majesty's Government and the Central Electricity Generating Board. This is not a controversial matter. I am sure that the new Minister for Energy will have access to all the documents of the previous Administration at official level, so none of the earlier work will be wasted. A decision of this kind made quickly could do a great deal to help engineering and other companies which are wondering how their order books are going to be filled in the coming years.

Another matter, which again is of a non-controversial nature, but well worth looking into, would be to review the policy of investigating proposed mergers. This has been a very clumsy operation in the past. It was introduced by the former Labour Administration and continued by the Conservative Administration. A clean-up here is clearly required, and an opportunity arises from the early retirement of the existing Chairman of the Monopolies and Mergers Commission to have a face-lift in this aspect of procedure, which does so much to slow down, and indeed possibly negate altogether, useful and desirable mergers which would improve the efficiency of British industry.

In a more general way, I urge Her Majesty's Government, before hardening of the arteries finally sets in, to try to look at the economy of Britain from the point of view of setting general guidelines and avoiding detailed intervention. The will to create wealth is there; the desire is there; the potential is there; but if decisions are delayed, if there is to be petty detailed interventionism in individual companies no good will be done but a great deal of damage may be caused. I suggest to Her Majesty's Government that British industry and commerce are very willing for a dialogue to start and to continue at all levels with individual firms, and not always with institutions, about what should be done and how it should be done. This is an opportunity for Her Majesty's Government to show themselves as fully understanding the importance of the private sector of industry and commerce, the importance of profits, the importance of dividends, too, when the time comes to increase them, to rise above narrow Party sectarianism and to be what they could be, a great Government. Alas! the speech made yesterday gives me very slender grounds for hope. My Lords, I beg to move for Papers.

3.31 p.m.


My Lords, I do not exactly enjoy making a speech and certainly not twice on the same subject, in the same House, within practically the same week. As I still have the same views that I held last week, and as the Government's policy remains the same, there may well be an element of repetition in what I have to say. But as this time I am speaking early instead of winding-up I thought it might be useful if I spelled out, in response to the noble Lord's Motion—rather than getting involved in a debate on the Budget—some general lines of approach inherent in this Government's industrial policy. Then if the noble Lord, Lord Erroll of Hale, will agree, I shall take up some of the more specific points he made when I come to wind up. Again, I fear, I have to inflict a second speech on your Lordships.

My Lords, one undoubted bonus of having this second debate is that it enables me to welcome back to our deliberations the noble Lord, Lord Erroll of Hale. I have no doubt that he has been using his time well, and we all welcome him back to this House. The noble Lord always has a most conciliatory approach to our political discussions, even though he usually contrives to conceal it beneath a veneer of agreeable controversy. He started off, I thought, as if he was going to abandon his controversial posture when he spoke of the open-mindedness of this and other Governments, but then, after about the first sentence and a half, he was accusing us of premature hardening of the arteries, that we did not know what we were talking about and—I do not really think he meant this, and I take it in a friendly fashion from him though I would not from anyone else—that some Members of the Government were sneering from the outside at the efforts of industry. I am sure he does not really mean that.

May I tell the noble Lord about small firms, though I am going to say something more about them later on? He really should not say that this Government ignore small firms, when after all it was my right honourable friend Mr. Crosland who appointed the Bolton Committee. Much has been done since that Committee reported although the work was taken on by another Government. I assure the noble Lord, Lord Erroll, and the House, that we start off to-day with an agreed proposition, that industry—and I mean "industry" in every sense of what I regard as a good solid sound English word—is to be encouraged. I absolutely agree with him about that. There is no future for this country unless we can establish—or should I say "reestablish"—this industrial base. That, my Lords, is common ground. The question is, how do we go about it?

Let me first deal with two general anxieties expressed by the noble Lord. Of course there has to be consultation, genuine consultation, with all those involved—employed and employers alike. I know that some noble Lords opposite are concerned—and the noble Lord himself expressed this anxiety—that we on this side may underrate the contribution of directors and managers. I admit that the caricature of the fat cigar-smoking director still exists, in the same way as certain noble Lords opposite seem to think that all workers are agitators or spend their time driving up to the local social security office in a taxi to draw some immense uncovenanted sum in social benefits. Neither picture truly reflects the facts, and I should like to think that in this House at any rate we can do something about that process of mutual understanding which we said in last week's debate was absolutely essential if this country is to take a path of really effective social and economic progress. I can assure the noble Lord, Lord Erroll, that there will be intensive consultation with all those concerned on all sides of industry, and that it will be carried out in the spirit I have tried to indicate.

My Lords, there is then the question of profits. In general, I would say that those people who declare, as did the noble Lord to-day, that the Labour Government are against profits as such are just being old-fashioned. I come from a generation and from an area where certainly there was, to use the term employed by the noble Earl, Lord Limerick, last week, a hatred of profits. When there was a controversy between the miners and the mine owners then it was a question of the division between one lot of people who owned and managed a company and those who worked for them. Those days are gone. Political thinking has got beyond that stage. Of course some profits may be criticised as being excessive. Of course some profit margins should be cut. But a sophisticated discussion about profits really raises the question as to how they are allocated. I beg the noble Lord to think that there are some on our side (I am not including myself, but some of the younger people coming along) who are just as sophisticated as anyone on the opposite Benches, who discuss this subject in a completely different way. They are concerned not with attacking profits but with deciding what the allocation should be between one use and another. So, my Lords, despite what some may be disposed to say about an emergency Budget to deal with an emergency situation not created by the present Government, the fact remains that we believe that there must be a partnership with industry and we hope and intend to do our utmost to encourage and guide the expansion of industry.

The noble Lord asked how the guidance should take place. An essential tool of this expansion policy will be a new Industry Bill. This was stated in our Election Manifesto and it was specified in the Queen's Speech. I cannot give details of that Bill at this stage, and in any case we must have further consultation with the C.B.I., with the T.U.C. and with other interested parties. Broadly, however, we shall want to develop the powers in the present. Industry Act and, in addition, we shall want to set up a system of planning agreements and a National Enterprise Board. A good deal of preparatory work has been done; some exciting prospects are open and I would tell the noble Lord that the enthusiasm and the deeply informed nature of the leadership given by my right honourable friend Mr. Wedgwood Benn is truly exhilarating in this matter. I hope that the noble Lord will come along some time and take part in the discussion; I am sure that he too would find it exciting. This work has started, but much further study and consultation has to take place.

My Lords, the planning agreements system is intended to help British industry to make its maximum contribution to strengthening our economy. The basic idea is a simple one. It is to give the leading firms in this country, on whom our prosperity depends—and here I agree with the noble Lord—a better opportunity to contribute to the attainment of certain economic objectives. These objectives may be an increase in exports, replacement of imports, an increase in investment, or an acceleration of technological development in some key sectors.

It is intended to be a constructive partnership. The leading firms will give information about how they see the future in their particular sectors and about the plans which they are making for the future. The Government, with the general economic information at their disposal, which will be reinforced by the flow of information from leading firms, will seek to give these firms clearer guidance on how they can help the attainment of economic objectives. The approach will not be one of detailed interference. The aim will be to ensure that there is a greater consistency between the strategies of the major firms and the strategy for the economy generally. If the firms are willing and able to help in the way the Government suggest, it will be for the Government in turn to smooth their path in whatever ways are open. It is of course an important feature of our proposals that there should be appropriate participation by the trade unions. They indeed have a major contribution to make to the success of these proposals.

It may be said that although the idea is attractive, all past experience of attempts at economic planning in Britain suggest that it will not work in practice. My answer to a criticism of that kind is the answer that was once given by Robert the Bruce. Arrangements of this kind have operated successfuly in several European countries. A system of this kind, called the "programme contracts system" was introduced in France in 1965 and is still operating. Similar systems were introduced in Belgium and Italy in 1969. I think it is generally recognised that in France considerable industrial progress has been made over the past decade, and there are many who believe that a major factor in this has been the way in which the Government, management and the unions have been able to co-ordinate plans for the future development of particular sectors of industry. The system certainly seems to work there, and there seems to be no reason why it should not work in Britain. At any rate we have to try, and we intend to try.

I may be asked whether this involves an element of compulsion. I may be asked what sanctions the Government intend to introduce. We have recognised that there may well be a need for reserve powers to make a planning agreements system fully effective. The Secretary of State, my right honourable friend, has referred to powers to obtain information and to intervene temporarily in the management of a particular company. There are certainly precedents for this. For example, I believe the last Government were taking similar powers to regulate insurance companies. The view might be taken that some reserve powers are needed if only to ensure that companies who co-operate have some reassurance that they will not suffer at the hands of their competitors by doing so. But the point here is that if the planning agreements system is to work properly it can do so only in a co-operative spirit, and it is voluntary agreements which the Government will be seeking.

Fears may be expressed that the National Enterprise Board proposal implies a massive extension of public ownership. The Government certainly contemplate some extension of public ownership. But the previous Government also, despite their philosophical attitude, found it necessary to extend public ownership. I have only to recall the setting up of Rolls-Royce (1971) Limited and Govan Shipbuilders Limited. It is surely recognised by now that public ownership is sometimes the only way of ensuring that some particular sector of the national economy develops in a way consistent with the national interest. And there remains the argument that we ought to aim at more equality of ownership of important assets in our nation, and that is an argument which should not be underestimated.

The National Enterprise Board proposal recognises that nationalisation of whole industries on the traditional pattern is less likely to be appropriate in the future. It is more likely that a need will arise to take into public ownership a particular enterprise of national importance. Where such individual enterprises are taken over, it is clearly desirable to have proper machinery for managing these publicly owned assets in the national interest. That is where the National Enterprise Board proposal would come in. It is too early to go into details about the kind of organisation which will be thought appropriate or to forecast which enterprises will be brought within its sphere of responsibility. In certain cases, however—and the Labour Party Manifesto details those cases—we have set out our objective of full public ownership in certain industries.

My Lords, in all this I am of course looking to the medium and long-term future. It is unlikely that the impact of a new Industry Bill will be felt within the lifetime of the present Parliament. While we are working upon a new systematic approach to this crucial problem of investment in the manufacturing and service industries, it is important to ensure that there is no let-up now in our efforts towards recovery. There is much that we can do now towards achieving a high—and this time a sustainable—growth of our economy. Equally, we have to maintain, and indeed intensify, efforts to eliminate the disparities in employment and development that have built up over the years in Scotland, Wales and the English assisted areas. Our broad intention, therefore, is to maintain the priority which those areas receive over the whole field of Government policy and to continue and develop financial and other incentives now available for the location of new industry and the expansion of existing industry in those areas. The need for continuity is accepted, but there must be no doubt that this support will require a wider, more active and, we hope, more fruitful role for the Government.

I hope there will be no disposition to say that we should not try a new or more developed form of partnership. I hope there will be no attempt to point to the past as an example for policies of the future. I am not going to quote again the figures that I used last week about the budgetary deficit and the balance-of-payments failures of the previous Administration. But probably it is worth bearing in mind—all of us—one figure that I quoted last week. I have myself spent some little time brooding over it. I said then that our manufactured imports now amount to 90 per cent. of our manufactured exports. And this for a country which made its name and owed its position in the world as a leading industrial nation!

I make no Party point of it when I say that in 1968 the ratio was one of 67 per cent. If one goes further back, we find that at one time manufactured imports were only 50 per cent. of our manufactured exports, and thus we had 50 per cent. of our manufactures helping to pay for our raw materials and essential foodstuffs. The fact is that a deterioration which has been taking place over the years has to be reversed. Clearly some new attempt has to be made; some new methods have to be tried. I suggest that the case for trying some new form of partnership within industry is obvious. I say to the noble Lord that it will be a partnership resulting from full, genuine consultation. Where additional public ownership is indicated, the right of Parliament to say "yea" or "nay" will be completely respected. I end by saying I should like to think that in all the discussion and controversy which the Government's policy will inevitably involve, this House will play a full and constructive part.

3.50 p.m.


My Lords, may I begin by apologising for the fact that, owing to an engagement this evening from which I am unable to escape, I shall be unable to be in the Chamber to listen to the winding-up. As I say, I apologise, but it is inevitable.

My Lords, I should like to repeat what the noble Lord, Lord Beswick, has said, in that a great deal of the ground to be covered to-day was gone over in our debate last week. I do not intend to waste the time of the House by repeating the arguments and facts advanced in that debate, but after listening to what the noble Lord has said, I would pick up one point that he made at the very beginning of his speech—and I hope that it was more than a throw-away line. He said that perhaps at least in this House it would be possible for all of us, in all parts of the House, who are deeply concerned with these questions of economic development, industrial efficiency and relationships in industry to work together in the closest possible way. If this is in any sense an invitation to collaborate on these matters, I am sure (although I have not consulted all my colleagues) we shall be delighted to take part in any consultation in any way that it is possible for us so to do.

Since the debate last week, there have been two events which underline, though I do not think they basically change, what was said in the previous debate. There have been the worst ever balance of payments figures for the month, and there has been the Government's statement of policy in the Budget Statement in another place yesterday. To me, of course, and to Members on these Benches, there are certain aspects of that Budget speech which we greatly welcome. We welcome, as I am sure noble Lords opposite knew we should, the increase in pensions and the extent to which some of the worst-off sections of the community have been safeguarded by the provisions of the Budget. I will repeat, but not elaborate, what was said last week: that we do not think the way in which the money is being used to redress and avoid hardship is the wisest. It would have cost something like £340 million to give family allowances for the first child. The Government have chosen instead to spend £500 million on food subsidies.

I am fully aware of the argument that using the money for food subsidies helps to keep down the retail price index and therefore postpones—though only for a short period of time—the moment at which the threshold agreements are brought into operation, and therefore a considerable inflationary influx of money is put into people's pockets. But this is only a very temporary and superficial way of dealing with the problem of inflation, which needs a far more drastic effort to deal with it than merely holding back for a few weeks what is, in our view, an extremely wasteful use of subsidies by paying them to all people for their food, whether they need the subsidies or not. We discussed this last week, and I do not intend to go into the matter at any length.

My Lords, another matter in the Budget speech yesterday, and indeed in what we have heard so far to-day, which I find of deep concern is the absence of any sense of urgency to deal with the really critical situation in which we find ourselves at present. We must increase our export trade, and increase it very quickly. We are living "on tick", and we are doing so to a most alarming extent. We have become so accustomed to living "on tick" that our balance-of-payments loss for one month, which in previous years, if it had been for a whole year we should have found of the greatest concern, is passed by as if it is something that we can live with, given that we have been able to work out how many noughts there are on the end of the sums that we are talking about when told of the size of the loss. I ask the Government a direct question: what are the Government proposing to do?—because I do not find it in the Budget speech. What are the Government proposing to do now—not in some middle-term or long-term, distant future, but now—to increase exports? Something on a really drastic scale is needed if no other increase is to take place from this present moment on.

The second sense of urgency which seems to be lacking in the Budget speech—and here in some ways I am echoing what the noble Lord, Lord Erroll of Hale, said, but with, I hope, a slightly different emphasis—is a sense of urgency in the need to increase the total volume of production in this country, and to increase productivity and efficiency in industry. To do this (and I am sure we were all agreed about this last week) we have to stimulate investment. What is there in the Budget proposals to encourage investment in industry? We are presented with the 52 per cent. corporation tax; we are presented with a rigid, and in the minds of many people very ill-understood, control over price increases. I am all for controlling price increases where it can generally be done without restricting the amount of money available for investment. But there is considerable discouragement in the Budget to save, and therefore to invest.

A great many of us over a number of years have been pressing for savings from the small saver. I know that this represents only a relatively small proportion of the total saving to be done, but it is a matter of getting the right proportion. What is there in the Budget to do anything other than discourage saving—particularly by the small saver, who has been hideously "clobbered" both from saving in Government securities and in the attempt to get into equities over recent years? Will the Government do anything about this? Industry must invest more. We all know that the proportion invested in the gross national product has gone down and down, and compares very un-favourably with our competitors. We all know that our growth rates are deplorable in relation to our competitors. We are in a situation that our balance of payments and prosperity at home will be in a very sorry state indeed unless somehow or other we manage to get a large share of contracting world trade; and this will be done only by an increasingly efficient industry.

We are entitled to receive from the Government precise answers to our questions, not just schemes for planning, systems of collaboration with industry in a middle and distant future, but answers as to what is being done now to restore the confidence of industry. We all know companies which are cutting planned investment programmes because of the present state of the economy. What has the Budget done to reverse the attitude that has grown up over recent weeks, and which is disastrous from the point of view of the general economy? What are the Government proposing to do?

There is also the huge increase in prices of commodities coming through the nationalised industries. Maybe it is necessary, but all the way round industry is being "clobbered". I know that the noble Lord, Lord Beswick, speaks so that we are persuaded that he understands as well as any managing director the necessities of industry, but that understanding is not reflected in the Budget. It is not reflected in the speeches of many of his supporters, and the mood engendered in the country is that the future of industry is very bleak indeed. My Lords, may I close by saying, Thou shalt not muzzle the ox when he treadeth out the corn. That is what the Government are doing.


My Lords, before the noble Baroness resumes her seat, may I ask her a question? I found her observations on the constructive side intensely interesting. For example, I accept 100 per cent. what she said about the need to boost exports. That seems to me the pièce de résistance of the whole subject. The two points she emphasised were the need to boost exports and stimulate investment. I noted what she said earlier on, following the very fine speech of my noble friend Lord Beswick, that the Liberal Party would like to be consulted in this dialogue. Would it not be even more interesting if she could tell us, in a sentence or two, how to boost exports and how to stimulate investment, instead of asking what the Government are going to do?—because I tell her quite frankly that I do not believe the Government themselves know what should be done. If she could tell us, it would be most interesting.


My Lords, the noble Lord, Lord Shinwell, has made very well the point that I was making. I do not think the Government do know; but we are entitled to hear whether they know or not. It is, after all, their responsibility.