HL Deb 14 November 1985 vol 468 cc388-98

3.27 p.m.

The Earl of Stockton rose to call attention to the economic and social consequences of new technologies; and to move for Papers.

The noble Earl said: My Lords, it is a strange phenomenon, which I have now twice witnessed in my life, that in the closing period of any long and devastating war, when the nation has lost hundreds of thousands of its finest young men by death or mutilation, and squandered vast masses of its treasure, there is a general opinion covering all classes of degree that the days of peace must inevitably bring about a period of unexampled wealth and prosperity.

After the first war, the illusion did not last long. The great depression began about 1922 and continued until 1938 when rearmament began to have its effect. During all those years, Britain was not, alas, a land fit for heroes. It was demoralised and depressed by the longest and greatest industrial collapse in our history up to that date. It produced unemployment on a prodigious scale, more even than today. Since the methods of relief were primitive and parsimonious, the result has left a deep mark in the memory of working-class tradition.

I was particularly affected by it, naturally, since I was a Member for a constituency in the North-East of England which was particularly affected. After the second war, we were more fortunate; for, although naturally, during the first four or five years there were great shortages of all such needs as clothing, heating, housing and food, there was little or no unemployment; and as, gradually, these shortages became remedied, it became possible to put into effect that great scheme of social reform, which was initiated in the closing years of the great war coalition under Lord Woolton, by the driving effort of Sir William Beveridge.

Those schemes, first a Labour Government and then, successively, Conservative Governments carried into effect, and we were able to finance them because of the favourable balance of trade and the favourable state of our economy. This was due partly to good fortune.- British industry made a fairly rapid readjustment from war production to peace production. It had always prudently kept, even during the war, part of its effort on what were called exports. Other countries, swept by the devastation of war, right through the whole of Europe, and indeed almost throughout the whole world, were desperately short of goods and services. Therefore, almost anything that could be made, could be sold; and British industry enjoyed a boom—sometimes an excessive boom that needed not so much the spur as the curb.

But budgets were balanced, taxation was gradually reduced and interest rates varied between 4 per cent. and 5 per cent. The gold exchange system initiated by the Bretton Woods scheme stood up well to the pressures, and for nearly 13 years this happy situation lasted. It was only at the end of the 'sixties and the beginning of the 'seventies that clouds began to appear upon the horizon. The older countries of Europe had begun to revive from the pressures and destruction of war. They had the advantage of new industries, new plants and new traditions. Their productivity was high and we began to see, in the early 'seventies, our goods becoming more and more replaced by foreign manufactured goods, and what had been our overseas markets and even our home markets invaded.

A great and crashing blow to the whole of the Western economic structure came in 1974 with the sudden and dramatic rise in the price of oil. This had three devastating effects. First, it enormously increased the cost of production of goods at home and in all countries in Western Europe. Secondly, since these goods could not be sold at prices which the new and emerging countries could afford to pay, the industries concerned became depressed and consequently, thirdly, the emerging countries, which largely depend upon the export of raw materials, found the demand and price of these falling.

Finally, the enormous sums of money, of floating money, uninvested money, produced by this huge demand of the Gulf countries produced a great cloud that moved uneasily about the capitals of the world, disturbing the monetary systems, upsetting the economies, destroying the general structure and leading to higher and higher rates of interest. So the various governments, all in the best of faith, faced with these difficulties, adopted various policies which are now familiar to us. Would the old Keynesian policies be applicable? Could the creation of more credit and of more money in the market stimulate the industries which were beginning to decline? That was tried in major and minor degree. Could special schemes of government employment and work organised and paid for by the government directly be of use to the unemployed? That was tried. It will be remembered that the result of both of these ideas was unsatisfactory. The pressure upon sterling, upon the exchanges, became greater and greater; since under these plans prices rose and wages rose without any corresponding increase in productivity. Both of these, I understand, are still the plans of two of the great parties of state.

Finally, the Labour Government which had bravely striven to meet this storm and had courageously carried out an attempt to control both prices and wages, collapsed and the present Government took office, at a period of grave crisis. It must never be forgotten to their credit that they dealt with this situation courageously and, if only by conventional means, at any rate at the time successfully. Money rates were raised—to 18 per cent. if I remember aright; money and credit became more and more difficult to get on the market; many great firms fell out of business under this pressure; others just survived. But in the long run, in the ensuing years, these conventional methods of deflation at least produced some order into the economy and into the general industrial system.

They used a combination of two methods. First, the general deflation and, secondly, the saving on every possible account both in public and in local government expenditure. Cuts were made or increases reduced in the great social services. But now, after five or six years, that policy becomes rather barren. In the early days, there was always a little fat to be scraped off. But as the years pass, it becomes more and more difficult to achieve economies in Government expenditure without, in defence, endangering national security or, in the great level of social services which we have come to call the welfare state and which is now demanded by all the people, it becomes more and more difficult. You can put on a little charge here or there on some bit of medicine, or you could make a little deduction here and there, but it becomes less and less; and, indeed, the truth is that the demands for growth cannot for ever be resisted.

We have cut the health service, we have cut the educational services, to a dangerous extent. We cannot prevent the increasing charge in the future on pensions and old age. A large number of old gentlemen, among whom I and others of your Lordships are some of the worst offenders, insist on living to an absurd old age; and nothing can stop them. When our statisticians look at the figures of what pensions will cost us in the next 10 or 20 years, they hesitate even to publish them. Therefore that method is almost coming to an end and, indeed, must soon be reversed. Still we remain.

What is the policy? I venture very humbly to suggest that the leaders of all the parties and the economists on all sides have failed to grasp the real issue. What we are worried about is the gap between what we are spending and what we are earning. Every year we are earning less than we are spending and, much as we try to cut our expenditure, that remains true. There is no cure for this by savings. There is no cure of any kind for it, except by the increase in real wealth. That is the only method open to us: no tinkering with currencies or monetary systems would have any lasting effect, and no great schemes of public employment will be more than just alleviations, short-term.

A complete new approach is needed to the problem with which we are confronted. At present this gap is being met in two ways: first, by the sale of national assets on to the market, bringing large sums of money which help to support the Budget of each year. When I ventured the other day to criticise this system I was, I am afraid, misunderstood. As a Conservative, I am naturally in favour of returning into private ownership and private management all those means of production and distribution which are now controlled by state capitalism. I am sure they will be more efficient. What I ventured to question was the using of these huge sums as if they were income. I have learned now from the letters I have received that I am quite out of date: modern economists have decided that there is no difference between capital and income! I am not so sure. In my younger days I, and perhaps others of your Lordships, had good friends—very good fellows indeed, too—who failed to make this distinction. For a few years everything went on very well and then, at last, the crash came and they were forced to retire either to some dingy lodging-house in Boulogne or, if the estate were larger and the trustees more generous, to decent accommodation at Baden-Baden.

What is the other thing that will help to bridge this huge gap? Why, my Lords, this extraordinary windfall that has come to us, which we could never have hoped for or dreamed of—the coming of the North Sea oil. This country, which was living for years on the product of the countries in the Persian Gulf, has suddenly become a great oil producer itself. And here both the Government and the industry are to be congratulated on the skill and rapidity by which these new resources have been developed. But these immense sums help to fill the gap. Many of your Lordships will have read the Aldington Report. A committee of your Lordships' House has produced a very remarkable document. If your Lordships study this you will see that should either of these supports fail—the sale of capital assets is bound to grow smaller—and with the reduction of the oil revenues, we should indeed be in great difficulty: almost in a state of collapse.

Meanwhile, hardly known, understood or even realised by the mass of our people, there has been taking place a complete new revolution of the world, equivalent to and even greater than the industrial revolutions of which we read. Today it is not coal and the steam engine; it is not oil and the motor engine; it is the silicon chip, the robot and the fully-automated plant. This extraordinary process has been going on, hardly with our own knowledge, in the East and the West—in the Far East with remarkable rapidity.

In Japan, it has been brought about by the application of scientific knowledge and not, as many people think, by means of laissez-faire or a new kind of Condemns, but by active partnership between a very strongly organised government and a highly organised industry. In the United States, where almost equal progress is being made, they have to their advantage the tradition of being to some extent still a pioneer people, where the movements of men and women in large numbers are still possible, and expected, and where new, small industries easily start and are given the maximum support.

Here I must pay tribute to what this Government have tried to do for small industry here. But there is there nothing strange or new about the development of whole new areas and new systems. At any rate, in this development we have fallen gravely behind. Of course there are many modern, well-managed and highly competent firms operating in the new technique; but those come into something which is wholly different in kind from anything we have known before.

So the new technology to which I have tried to draw attention in this debate is a matter to which many of my noble friends have given deep study, and it is one about which already important reports have been published by committees of your Lordships' House. There is no doubt at all in my mind that the only possible way of making an increase in real wealth is by true productivity: that is, by the creation of goods and services at prices that will command the foreign markets and regain our own. But that can be brought about only by the increasing adoption of the new technology.

The old systems are out of date and cannot be revived. Of course, to say this is easy, but to remedy it is vastly difficult. When the first industrial revolution began 150 years ago, it brought in its train not only a great increase of wealth but, alas, at the same time, great trouble and suffering. It allowed to be destroyed, without making any attempt to replace it, the great system of rural industry which had for centuries depended on the product of the spinning wheel and the loom from the village, from the cottage home. It was followed by a rush of rural population to work in factories ill-devised and ill-lit, living in mean, jerrybuilt houses hastily put together in sprawling streets surrounding the new factories that sprang into existence. All this brought with it an infinity of trouble and sorrow. Perhaps it was understandable, since men of the time had no experience of anything on that scale; but we cannot allow that to happen again. When, as is necessary, the new system takes control, it must be by the most careful consideration, by the most careful and sympathetic planning.

It will perhaps alter the whole concept of industrial life. I think that great factories may be a thing of the past and that the new methods will be used in smaller institutions. If so, that will affect town and country planning and all kinds of other problems that we have. It seems to me more than likely that the very expensive capital-intensive plant, which pays out money in interest and shrinking fund on its initial cost all the time, day after day, week after week, will not, as now, work only seven-and-a-half to eight hours a day for perhaps five days in the week, or 220 days in the year, and that this plant will have to operate, as in the industries that depend on hot metal where the method requires it, upon an almost continuous process of working.

Machines should, in my view, work longer, and men and women less. There will have to be organised shorter hours, with more shifts; all kinds of new combinations and organisation of Labour. There will have to be a retraining of operatives upon a prodigious scale, which experience in both Japan and America shows to be both feasible and effective.

There will have to be far greater expenditure upon universities and research. It is an illusion to believe that we can spend money on what is called applied research. Applied research has no existence except from pure research, which is the spring and fountain, and, if we allow that source to dry up, gradually applied research will become fossilized.

The changes that will have to take place we can hardly imagine. They will be completely different—as different as the world that Mr. H. G. Wells used to draw in his early scientific novels is from the world as we see it today. And yet we cannot resist it. If we try to do so, we shall just go slowly back and sink like a great galleon in the seas, living only in our past glory and not in our present authority and power.

To achieve it will require the greatest possible combination of all our people in a single effort. It needs a policy, not of confrontation but of co-operation in every field—in the workshop, between the managers of industry and the proprietors of money, between the managers of industry and the trade unions representing Labour—in working out a whole new system of life, sometimes to spread work as much as possible, sometimes to create new work.

In the short run, we must accept the fact that these new methods, being capital-intensive rather than Labour-intensive, will produce not more employment but less. On the other hand, if real wealth is produced then that, in its turn, as all wealth does, will produce the corresponding prosperity of industries and services which are ranged around the great production systems. These will be all sorts of services feeding the wishes, the lives, the hopes, the ambitions, the energy and the health of our people. They will concentrate on new conceptive education, on the development of music and the arts and on all sorts of new aspects of life that are now known only to the comparatively few. It is within our grasp, difficult as it may be.

It is one of the few advantages of being removed from all contact with affairs and, in my infirmity, particularly my blindness, from any close knowledge of moving events, that one is forced to spend much time in reflection. I have thought much and instructed myself, as well as my friends and colleagues have been able to do, on the issues involved. This is something as new as, and perhaps more revolutionary than, the industrial revolution of 1840. It cannot be stopped. It is the tide coming in: it will sweep forward. If, on the other hand, we accept its inevitability and in all parts of our life—in industry, in trade, in commerce, in finance and everywhere—work together to solve the ensuing problems with something of the spirit that animated our country through two long and terrible wars (when, conscious that we had had great political disputes before the war and would revert to them again, we were yet, for what we called "the period", united in a single purpose) we shall have every hope of seeing our country regain its place in strength and authority throughout the world. My Lords, I beg to move for Papers.

3.58 p.m.

Lord Bruce of Domingo

My Lords, your Lordships' House, in the normal conduct of its business, is accustomed to consider legislation in very great detail. It is accustomed to devoting its attention to specialized subjects, whether they be enshrined in a Bill or whether they arise because of the necessity for considering a report from your Lordships' House or elsewhere, or on specific subjects that are brought before your Lordships from time to time. This afternoon, owing to the moving of the Motion by the noble Earl, Lord Stockton, we are afforded the opportunity of standing back and looking at the national scene as a whole, of contemplating the nation in its entirety, of contemplating with a broader brush perhaps the activities of the nation, whether they are industrial, whether they are social or whatever. For that we are most grateful to the noble Earl, Lord Stockton, who has given, if I may say so, in a tour de force this afternoon an accurate resumé of the way in which our country has proceeded since the industrial revolution.

As I listened to him, except perhaps in regard to one small matter to which I shall return later, I found myself in almost entire agreement, with the whole thrust of the argument that he so cogently and fluently delivered—the necessity for this nation at this time to have a joint and purposeful and co-operative effort to solve the problems that afflict our country and which lie more particularly upon that very large section of our population of some millions who are, in many cases, at present living in deprivation and abject misery.

The Motion refers to the, economic and social consequences of new technologies", upon which the noble Earl touched very briefly but nevertheless very cogently in the course of his speech. It is true that the progress in technology that has been made in the past 40 years has been staggering; moreover, it is accelerating. In the war I remember being shocked on one occasion while attached to military intelligence to learn of Operation Crossbow, which as your Lordships will remember dealt with this extraordinary and almost unbelieveable rocket programme in which the German government were involved. Since that time there has been enormous progress not only in that field but in the field of nuclear physics. We did not know at the time what would be the result and what would be the practical consequences of the work of Kapitza, Rutherford and Oliphant in the field of atomic and nuclear energy. Now we have progressed to a point where, at any rate in the nuclear field, the march of technology itself has accelerated so quickly that we are in the presence of a threat which lies like a shadow over the whole of the world, in that two of the leading powers in the world have sufficient nuclear bombs at their disposal to devastate the whole of the world and render it uninhabitable for mankind. This development is something that we try to sweep under the carpet. But it is a real threat nevertheless and adds an urgency to the words of the noble Earl this afternoon.

Following that there has been tremendous progress in the field of nuclear energy, which offers mankind and offers this country the prospect of having supplies of energy from renewable sources as distinct from fossil fuels, although not without the environmental cost. With it has come the problem that still remains and requires to be urgently solved now, within months rather than within years: the whole question of the disposal of nuclear waste which is still accumulating at an alarming rate without any real plans being made so far for its disposal. Progress in this field, in rocketry, in nuclear physics and in space technology—there is now the possibility of a star wars programme—has of course had its spin-off, a spin-off which in the march of progress has brought great benefits to us: the benefits of miniaturisation and the benefits that arise from the computers whose principal parts consist not of thermionic valves but of microchips. There is computer aided design which is of enormous help to industry and saves an enormous amount of time too. There are computer controlled manufacturing plants which, in his reference to automation, the noble Earl outlined. Then there have been isotopes which have been of enormous help in medicine. So in this field alone, and there have been others, there lies very great hope for the future if the benefits can be realised.

The social and economic effects of the new technology—they cannot be separated because the economic effects are social and the social effects are economic—and of this particular part of the new technology are that labour has been diverted away and has gone from the older manufacturing plants to the new. For the housewife there have been many improvements in labour-saving devices. One of the minor spin-offs of the NASA programme has been the non-stick frying pan which has been of enormous benefit. This has come from space research and space practice. There has been a greatly increased manufacturing potential as a result in order to meet effective—I underline the word "effective"—consumer demand. In the absence of the full potential effective demand—I shall return to that a little later—being made available, or appearing, or being encouraged, there has been not only a transfer of labour from the old industries to the new but large-scale unemployment. The potential for manufacturing in this field alone is enormous.

I now turn to the other sphere of the new technology, which is called information technology, and which in itself has in part been associated, particularly in the United States, with the defence programme and NASA. Here again, in the information technology field we have had enormous progress over the past 40 years, particularly in radio and television. It seems only yesterday that one was messing about with a cat's whisker and a crystal and wearing earphones. Now we have radio and television on a very large scale, and the prospect of cable television as well. We cannot possibly under-rate the enormous field of expansion here and in telecommunications. The old telex is giving way rapidly to facsimile transmission and the new telecommunications system with a sophisticated switch gear and storage facilities is obviously speeding up the whole operation of communication between people, between companies and so on.

The effects of these, apart from the increase in employment in these areas, has been that it is now possible for most people, including those who have not the benefit of owning their own television sets, to have the visual impact of world events as they occur. This, which we now take for granted, is comparatively new but still has a very great impact upon the human mind. We now take it for granted that, during what are called "natural breaks", we are exposed to massive persuasion techniques commending our attention to the purchase or otherwise of numerous and varied commodities. I shall return to that point.

We are exposed also to pornography and violence, and this might have particular relevance for younger people. I entirely agree—and it must be the only point on which I do agree with him—with the observation made by Mr. Norman Tebbit when he referred to that aspect of the media. Moreover, your Lordships in particular will have noticed that, over the past 20 years, we have been exposed to almost continuous mutilation of the British language. There is a battle the whole time now between teachers of English in this country and what children see and hear on television from star performers whose ability to speak the British language, not with plums in their mouths but ordinary straightforward English, appears to be entirely absent. It is something that requires governmental attention, by suggestion or otherwise—and the Government do not appear to be loath to give advice from time to time to the television authorities.

Moreover, the telecommunications system itself offers not only speed of communication but also speedy access to data. The economic effects of that include a considerable increase in employment in the service sector, particularly within the telecommunications industry itself, which is now with us and developing so quickly. Another consequence is the ability, which was formerly a little cumbersome even in the days of telex, to transfer large funds from one corner of the earth to another in split seconds. There is a greatly increased facility, particularly in the financial centres of the world, for people to make money out of money at a very fast rate indeed—not always with a beneficial result for the community as a whole.

We shall progress even further than that. Within the next 10 years—I sincerely trust, within the continued lifetime of the noble Earl—there will be further changes for which we have to prepare ourselves. Within 10 years, there will come a time when instead of the populations of large cities commuting into city offices day after day with all the transport and social difficulties that arise, the employees of larger institutions will have video screens, facilities for facsimile transmission and reception and their own computer keyboards with full conference facilities, so that it will no longer be necessary for a mass ingress into our larger cities in the mornings and a mass egress in the evenings. It will be possible to conduct conferences with people still in their homes and to actually see to whom one is speaking. It will be possible to produce documents as though the people concerned were all in the same room.

Those are the kind of developments which will take place. In trying to deal with such changes in society, we must remember that the new technology is not a thing on its own. It cannot or should not be regarded in the abstract. It is the result of human activity. As the noble Earl pointed out so well, it is not only the resources of applied science that are required in order that research will continue into the future and in order that developments may allow our country to keep up with the other countries of the world. It will require the academics as well.

It will require even more than that, because the latent abilities of most of the people in our country and in other countries of the world have been only lightly tapped. It has been estimated that of the ordinary working population who are not employed on what are euphemistically referred to as more intellectual tasks, only about 10 per cent. of their real abilities are used; and that even in the professional and academic classes, only 20 per cent. of people's latent abilities are used. We must take every step we can to ensure that the latent abilities of all our people are utilised to their utmost. That needs changes in education and, as the noble Earl pointed out, an intensification in the education field. It is not enough merely to educate people to perform tasks in factories or within the technology. One must educate them to prepare themselves for a balanced life within the whole community in which their faculties may be properly used.

Some noble Lords may have had the good fortune to read a work by Arthur Koestler published in 1964 and entitled The Act of Creation, in which he points out, and quotes many authorities learned in their field to support his view, that it is precisely those people to whom some purpose and vision has been given who are best able to use their creative faculties and to continue the process of innovation that we require.

What is the Government's reaction to the terrific potential that is unfolding even while we talk and which will continue at an ever-accelerating rate? What is their attitude? What attitude do they take towards the undoubted fact that, in the process of effecting technological change, man changes himself also? Just as the new technologies produce a different economic and technological climate, so too, inevitably, must social institutions, attitudes and organisations adapt themselves. What is the attitude of Her Majesty's Government to all of that?

The noble Earl was very kind to the Government, but then he is of course a very loyal member of the Conservative Party—as he was at the time when he made his famous speech as the Member of Parliament for Stockton, when he called his own Front Bench a row of extinct volcanoes. What is the Government's answer? Their answer is that market forces will do everything for us. I have never heard anything quite so pitiful in all my life as that admission. It is as though the laissez-faire practices adopted before the war and before the technological revolution in its current sense took place—that the weakest will go to the wall and the devil take the hindmost—are an adequate form of organisation within which the modern society can propel itself forward within the new technology.

In the course of his speech the noble Earl referred to the degree of unity of purpose in defiance of market forces that this country practised in the course of the last war, when there was indeed co-operation because there was a common purpose. All that the noble Earl is really saying is that there is no common purpose any more beyond the harsh dictates of the cash box. We have to take account, I respectfully suggest, of the fact that the colossal advance in the technical field needs advances in the social field. Indeed, the whole relationship between men and women and their place of work and the extent of their participation in what goes on in the factories and workshops or institutions of the new technology needs to be looked at and needs to be carried into effect. Above all, in the interests of the nation as a whole—and we in this House, not having constituency interests can, I suppose, hold ourselves capable of looking at the national interest beyond constituency levels—the use of technology requires broad planning.

Members of the Government seem to be under the pathetic illusion that business—commerce—in the United Kingdom is at present carried on in the form of market force. It is not. Three-quarters of British industry is at the moment planned. Its progress is planned—very often over three years. The larger companies have their corporate plans. They do not operate within the market system at all. In fact, they very largely dictate what the market is going to do. They spend thousands of millions of pounds in order to persuade the public to buy their products at the prices they fix some three years before the product is produced. There is very large-scale planning. Therefore, we have to attempt corporate planning within the Government themselves; and we must have the appropriate participation of the Government in that. We must ensure that national objectives are planned within their broad context.

This does not mean that in the case of small and medium-sized firms the market place should not continue to operate, because freedom in that field—and all freedom must have its economic base and we have often said so from these Benches—is vitally necessary for continued innovation and renewal. But it must be within an overall plan that gives some sense of direction.

That brings us to the role of the politician. The politician in this House or in another place, or even outside these places, is charged with the determination of policy and its implementation. This is no mean task. I do not share the very often derisory remarks about the role and the status of the politician. The politicians have to determine what the national priorities are, and together—if necessary after argument—they have to plan and discuss the objectives for the country as a whole.

Those are the objectives. They can only be set out in general terms but their meaning is unmistakeable. To consider for one moment that we can go back to the market system in modern times is quite unthinkable There has to be a re-think. It was the late Lord Butler who said on one occasion soon after the war that we are all socialists now. In many ways, and without its party overtones, that is what we have become, and have to become. We have to make sure that the social advances that are made and the plans that are made for our country as a whole march hand in hand with the new technology so that there can be an effective demand for the present under-capacity of all our industries and so that the miserable queues of the unemployed can disappear and men can live their lives with straightforward purpose and honest integrity once again.