Continued from page 1
works or expanding credit (which contains its own evils). Selwyn Lloyd took the orthodox road, and created some depression. The clock can't be put hack in five minutes. Maudling is doing his best.
One thing that might he done to increase consumer spending would he to increase the unemployment benefit, but this would mean creating a new permanent charge while the immediate crisis can he met up to a point by the supplementary help given to the unemployed as a temporary measure by the National Assistance Board.
You can have a planned economy if you like, involving the direction of labour from one part of the country to another, But if you want freedom you have to stand the strain of occasional readjustments. We might have expanded credit earlier, and produced more goods, but the question is: could we have sold them?
We now have to meet heavy foreign competition in external markets, often because other countries. like Japan in the shipbuilding field, have lower labour costs.
One of the difficulties in inducing industries to expand in the hard hit areas is that we have come to asso date those areas so much with one type of industry that it is difficult to persuade managements to teach them new tricks. Some tax concessions have been offered by way of inducement. but obviously far more is needed in this respect.
But basically, the trouble is that we are not competing well abroad; in fact, our national economy is only just breaking even. We need higher production, more efficient and cheaper production, new designs, and better salesmanship.
MR. ROBERT MELLISH, Labour M.P. for Bermondsey: A slump in the docks is always a good indication of how things are going generally, and, although the unemployment areas are in the north, there is a nine per cent unemployment rate in the docks down here as well. What we need is another government, with a better sense of priorities and planning.
An immediate remedy might be a crash programme for Scotland and the north of England, but the decline has been dragging on for too long already, and companies have been holding back on expansion while waiting for the government to settle the Common Market issue.
What do I mean by planning ? Well, for instance, 800,000 tons of coal is to be taken off the Thames in April and put on to the road. This will put 400lightermen out of work. This is free enterprise gone raving mad.
And as for priorities, when Mr. Clore is allowed to borrow #5,000,000 while one of my constituents can't borrow £250 to get a house, it's time we made a radical change. Another classic example is this mad rush on office building, while the housing crisis is ignored.
I'm not an economist, but, having known what unemployment means,
would be prepared for a bit of inflation every time, if at least it means full employment.
PROFESSOR MICHAEL FOGARTY, Professor of Industrial Relations, University of Cardiff: The economy needs to be speeded up as a whole. Priority can be given to securing the balance of payments and imposing restrictions to avoid inflation, or else to the expansion of employment. I would prefer the latter, because there is no real conflict between expanding employment and preserving the balance of payments. The one helps the other.
The long run problem is the discrepancy between the prosperous south and the hard hit north. The difficulty of inducing industries down here to move northwards is incidental because the expanding industries just happen to be at this end, and most industries tend to expand where they are, to develop on the spot.
The government is exercising a "get tough" policy by refusing applications for licences to expand in the south, but this only tackles the marginal industries that wanted to move elsewhere anyway. The question is how to winkle the others out.
One way would be, not simply to offer tax. inducements to go to the heavy unemployment areas, but to impose tax pressures in the prosperous areas to drive industry elsewhere.
Many ingenious ideas are being suggested for this, including additional charges on season tickets, on haulage licences, on road licences— and even a suggestion for electric computers in private cars so that car users can be charged for the mileage they clock up.
The heat should also be put on to managements to avoid the sort of labour troubles they have been having during the construction of the new Ford plant at Halewood, for the prospect of these troubles is a serious factor holding firms back from expansion in new areas. An example of what can be done was given by the &so company at Fawley, where, before construction on the site began, agreements were tied up to ensure uniformity between the various contractors and sub-contractors in wage rates, bonuses, redundancy arrangements and so on.
When this is done, there is no scope for endless unrest among workers because other workers in other firms on the same site are earning more money or working under better conditions.
MR. JOHN BIGGS-DAVISON, Conservative M.P. for Chigwell: I think our troubles stem from an
over-liberal economic policy. which results in our importing, not only machinery, but even consumer goods which we could be manufacturing ourselves. I think the imbalance of trade between the United States and ourselves is something like six to one in their favour.
We have hung on to this worldwide idea of a liberal economy, instead of developing a sound preferential framework, on a reciprocal basis, with the Commonwealth and with Europe, though we could have done so at any time since the end of the war. We have simply dismantled our defences.
I would simply add that housing must be a priority if we are to attract workers down here. and this must be done in parallel with efforts to aerate industrial expansion to the north.
FOOTNOTE: Some 81,000 workers migrated from north to south between 1959 and 1961, There are 19,000,000 people in the north and 12,000,000 in the south. The southern population has grown five times as fast as the northern over the past few years. While the overall unemployment rate is 2.4 per cent, it is highly concentrated in some areas where it even reaches 13 per cent. At present there are nearly half a million unemployed.