Mr. Speaker, it is one of the immemorial courtesies of the House of Commons that when a Minister has felt it necessary to resign his office, he is provided with an opportunity of stating his reasons to the House. These occasions are always exceedingly painful, especially to the individual concerned, because no Member ought to accept office in a Government without a full consciousness that he ought not to resign it for frivolous reasons. He must keep in mind that his association is based upon the assumption that everybody in Government accepts the full measure of responsibility for what it does.

The courtesy of being allowed to make a statement in the House of Commons is peculiarly agreeable to me this afternoon, because, up to now, I am the only person who has not been able to give any reasons why I proposed to take this step, although I notice that almost every single newspaper in Great Britain, including a large number of well-informed columnists, already know my reasons.

The House will recall that in the Defence debate I made one or two statements concerning the introduction of a Defence programme into our economy, and, with the permission of the House, I should like to quote from that speech which, I assumed at the time, received the general approval of the House. I said:

“The fact of the matter is, as everybody knows, that the extent to which stockpiling has already taken place, the extent to which the civil economy is being turned over to defence purposes in other parts of the world, is dragging prices up everywhere. Furthermore, may I remind the right hon. Gentleman that if we turn over the complicated machinery of modern industry to war preparation too quickly, or try to do it too quickly, we shall do so in a campaign of hate, in a campaign of hysteria, which may make it very difficult to control that machine when it has been created. It is all very well to speak about these things in airy terms, but we want to do two things. We want to organise our defence programme in this country in such a fashion as will keep the love of peace as vital as ever it was before. But we have seen in other places that a campaign for increased arms production is accompanied by a campaign of intolerance and hatred and witch-hunting. Therefore, we in this country are not at all anxious to imitate what has been done in other places.” [OFFICIAL REPORT, 15th February, 1951; Vol. 484, c. 738.1

1 would also like to direct the attention of the House to a statement made by the Prime Minister in placing before the House the accelerated armaments programme. He said:

“The completion of the programme in full and in time is dependent upon an adequate supply of materials, components and machine tools. In particular, our plans for expanding capacity depend entirely upon the early provision of machine tools, many of which can only be obtained from abroad.” [OFFICIAL REPORT, 29th January, 1951; Vol. 483, c. 584.1

Those cautionary words were inserted deliberately in the statements on defence production because it was obvious to myself and to my colleagues in the Government that the accelerated programme was conditional upon a number of factors not immediately within our own control. It has for some time been obvious to the Members of the Government and especially to the Ministers concerned in the production Departments that raw materials, machine tools and components are not forthcoming in sufficient quantity even for the earlier programme and that, therefore, the figures in the Budget for arms expenditure are based upon assumptions already invalidated. I want to make that quite clear to the House of Commons; the figures of expenditure on arms were already known to the Chancellor of the Exchequer to be unrealisable. The supply Departments have made it quite clear on several occasions that this is the case and, therefore, I begged over and over again that we should not put figures in the Budget on account of defence expenditure which would not be realised, and if they tried to be realised would have the result of inflating prices in this country and all over the world.

It is now perfectly clear to any one who examines the matter objectively that the lurchings of the American economy, the extravagant and unpredictable behaviour of the production machine, the failure on the part of the American Government to inject the arms programme into the economy slowly enough, have already caused a vast inflation of prices all over the world, have disturbed the economy of the western world to such an extent that if it goes on more damage will be done by this unrestrained behaviour than by the behaviour of the nation the arms are intended to restrain. This is a very important matter for Great Britain. We are entirely dependent upon other parts of the world for most of our raw materials. The President of the Board of Trade and the Minister of Supply in two recent statements to the House of Commons have called the attention of the House to the shortage of absolutely essential raw materials. It was only last Friday that the Minister of Supply pointed out in the gravest terms that we would not be able to carry out our programme unless we had molybdenum, zinc, sulphur, copper and a large number of other raw materials and non-ferrous metals which we can only obtain with the consent of the Americans and from other parts of the world.

I say therefore with the full solemnity of the seriousness of what I am saying, that the £4,700 million arms programme is already dead. It cannot be achieved without irreparable damage to the economy of Great Britain and the world, and that therefore the arms programme contained in the Chancellor of the Exchequer’s Budget is already invalidated and the figures based on the arms programme ought to be revised.

It is even more serious than that. The administration responsible for the American defence programme have already announced to the world that America proposes to provide her share of the arms programme not out of reductions in civil consumption, not out of economies in the American economy but out of increased production; and already plans are envisaged that before very long the American economy will be expanded for arms production by a percentage equal to the total British consumption, civil and arms.

And when that happens the demands made upon the world’s precious raw materials will be such that the civilian economy of the Western world outside America will be undermined. We shall have mass unemployment. We have already got in Great Britain underemployment. Already there is short-time working in many important parts of industry and before the middle of the year, unless something serious can be done, we shall have unemployment in many of our important industrial centres. That cannot be cured by the Opposition. In fact the Opposition would make it worse – far worse.

The fact is that the western world has embarked upon a campaign of arms production upon a scale, so quickly, and of such an extent that the foundations of political liberty and Parliamentary democracy will not be able to sustain the shock. This is a very grave matter indeed. I have always said both in the House of Commons and in speeches in the country – and I think my ex-colleagues in the Government will at least give me credit for this – that the defence programme must always be consistent with the maintenance of the standard of life of the British people and the maintenance of the social services, and that as soon as it became clear we had engaged upon an arms programme inconsistent with those considerations, I could no longer remain a Member of the Government.

I therefore do beg the House and the country, and the world, to think before it is too late. It may be that on such an occasion as this the dramatic nature of a resignation might cause even some of our American friends to think before it is too late. It has always been clear that the weapons of the totalitarian States are, first, social and economic, and only next military; and if in attempting to meet the military effect of those totalitarian machines, the economies of the western world are disrupted and the standard of living is lowered or industrial disturbances are created, then Soviet Communism establishes a whole series of Trojan horses in every nation of the western economy. It is, therefore, absolutely essential if we are to march forward properly, if we are to mobilise our resources intelligently, that the military, social and political weapons must be taken together. It is clear from the Budget that the Chancellor of the Exchequer has abandoned any hope of restraining inflation. It is quite clear that for the rest of the year and for the beginning of next year, so far as we can see, the cost of living is going to rise precipitously. As the cost of living rises, the industrial workers of Great Britain will try to adjust themselves to the rising spiral of prices, and because they will do so by a series of individual trade union demands a hundred and one battles will be fought on the industrial field, and our political enemies will take advantage of each one. It is, therefore, impossible for us to proceed with this programme in this way.

I therefore beg my colleagues, as I have begged them before, to consider before they commit themselves to these great programmes. It is obvious from what the Chancellor of the Exchequer said in his Budget speech that we have no longer any hope of restraining inflation. The cost of living has already gone up by several points since the middle of last year, and it is going up again. Therefore, it is no use pretending that the Budget is just, merely because it gives a few shillings to old age pensioners, when rising prices immediately begin to take the few shillings away from them.’

It is no use saying “Hear, hear’ on the opposite side of the House. The Opposition have no remedy for this at all. But there is a remedy here on this side of the House if it is courageously applied, and the Budget does not courageously apply it. The Budget has run away from it. The Budget was hailed with pleasure in the City. It was a remarkable Budget. It united the City, satisfied the Opposition and disunited the Labour Party – all this because we have allowed ourselves to be dragged too far behind the wheels of American diplomacy.

This great nation has a message for the world which is distinct from that of America or that of the Soviet Union. Ever since 1945 we have been engaged in this country in the most remarkable piece of social reconstruction the world has ever seen. By the end of 1950 we had, as I said in my letter to the Prime Minister assumed the moral leadership of the world. It is no use hon. Members opposite sneering, because when they come to the end of the road it will not be a sneer which will be upon their faces. There is only one hope for mankind, and that hope still remains in this little island. It is from here that we tell the world where to go and how to go there, but we must not follow behind the anarchy of American competitive capitalism which is unable to restrain itself at all, as is seen in the stockpiling that is now going on, and which denies to the economy of Great Britain even the means of carrying on our civil production. That is the first part of what I wanted to say.

It has never been in my mind that my quarrel with my colleagues was based only upon what they have done to the National Health Service. As they know, over and over again I have said that these figures of arms production are fantastically wrong, and that if we try to spend them we shall get less arms for more money. I have not had experience in the Ministry of Health for five years for nothing. I know what it is to put too large a programme upon too narrow a base. We have to adjust our paper figures to physical realities, and that is what the Exchequer has not done.

May I be permitted, in passing, now that I enjoy comparative freedom, to give a word of advice to my colleagues in the Government? Take economic planning away from the Treasury. They know nothing about it. The great difficulty with the Treasury is that they think they move men about when they move pieces of paper about. It is what I have described over and over again as “whistle-blowing” planning. It has been perfectly obvious on several occasions that there are too many economists advising the Treasury, and now we have the added misfortune of having an economist in the Chancellor of the Exchequer himself.

I therefore seriously suggest to the Government that they should set up a production department and put the Chancellor of the Exchequer in the position where he ought to be now under modern planning, that is, with the function of making an annual statement of accounts. Then we should have some realism in the Budget. We should not be pushing out figures when the facts are going in the opposite direction.

I want to come for a short while, because I do not wish to try the patience of the House, to the narrower issue. The Chancellor of the Exchequer astonished me when he said that his Budget was coming to the rescue of the fixed income groups. Well, it has come to the rescue of the fixed income groups over 70 years of age, but not below. The fixed income groups in our modem social services are the victims of this kind of finance. Everybody possessing property gets richer. Property is appreciating all the time, and it is well known that there are large numbers of British citizens living normally out of the appreciated values of their own property. The fiscal measures of the Chancellor of the Exchequer do not touch them at all.

I listened to the Chancellor of the Exchequer with very great admiration. It was one of the cleverest Budget speeches I had ever heard in my life. There was a passage towards the end in which he said that he was now coming to a complicated and technical matter and that if Members wished to they could go to sleep. They did. Whilst they were sleeping he stole £100 million a year from the National Insurance Fund. Of course I know that in the same Budget speech the Chancellor of the Exchequer said that he had already taken account of it as savings. Of course he had, so that the rearmament of Great Britain is financed out of the contributions that the workers have paid into the Fund in order to protect themselves. Certainly, that is the meaning of it. It is no good my hon. Friends refusing to face these matters. If we look at the Chancellor’s speech we see that the Chancellor himself said that he had already taken account of the contributions into the Insurance Fund as savings. He said so, and he is right. Do not deny that he is right. I am saying he is right. Do not quarrel with me when I agree with him.

The conclusion is as follows. At a time when there are still large untapped sources of wealth in Great Britain, a Socialist Chancellor of the Exchequer uses the Insurance Fund, contributed for the purpose of maintaining the social services, as his source of revenue, and I say that is not Socialist finance. Go to that source for revenue when no other source remains, but no one can say that there are no other sources of revenue in Great Britain except the Insurance Fund.

I now come to the National Health Service side of the matter. Let me say to my hon. Friends on these benches: you have been saying in the last fortnight or three weeks that I have been quarrelling about a triviality – spectacles and dentures. You may call it a triviality. I remember the triviality that started an avalanche in 1931. I remember it very well, and perhaps my hon. Friends would not mind me recounting it. There was a trade union group meeting upstairs. I was a member of ft and went along. My good friend, “Geordie” Buchanan, did not come along with me because he thought it was hopeless, and he proved to be a better prophet than I was. But I had more credulity in those days than I have got now. So I went along, and the first subject was an attack on the seasonal workers. That was the first order. I opposed it bitterly, and when I came out of the room my good old friend George Lansbury attacked me for attacking the order. I said, “George, you do not realise, this is the beginning of the end. Once you start this there is no logical stopping point.”

The Chancellor of the Exchequer in this year’s Budget proposes to reduce the Health expenditure by £13 million – only £13 million out of £4,000 million. No, £4,000 million. He has taken £13 million out of the Budget total of £4,000 million. If he finds it necessary to mutilate, or begin to mutilate, the Health Services for £13 million out of £4,000 million, what will he do next year? Or are you next year going to take your stand on the upper denture? The lower half apparently does not matter, but the top half is sacrosanct. Is that right? If my hon. Friends are asked questions at meetings about what they will do next year, what will they say?

The Chancellor of the Exchequer is putting a financial ceiling on the Health Service. With rising prices the Health Service is squeezed between that artificial figure and rising prices. What is to be squeezed out next year? Is it the upper half`? When that has been squeezed out and the same principle holds good, what do you squeeze out the year after? Prescriptions? Hospital charges? Where do you stop? I have been accused of having agreed to a charge on prescriptions. That shows the danger of compromise. Because if it is pleaded against me that I agreed to the modification of the Health Service, then what will be pleaded against my right hon. Friends next year, and indeed what answer will they have if the vandals opposite come in? What answer? The Health Service will be like Lavinia – all the limbs cut off and eventually her tongue cut out, too. I should like to ask my Right hon. and hon. Friends, where are they going? Where am I going? I am where I always was. Those who live their lives in mountainous and rugged countries are always afraid of avalanches, and they know that avalanches start with the movement of a very small stone. First, the stone starts on a ridge between two valleys – one valley desolate and the other valley populous. The pebble starts, but nobody bothers about the pebble until it gains way, and soon the whole valley is overwhelmed. That is how the avalanche starts, that is the logic of the present situation, and that is the logic my right hon. and hon. Friends cannot escape. Why, therefore, has it been done in this way?

After all, the National Health Service was something of which we were all very proud, and even the Opposition were beginning to be proud of it. It only had to last a few more years to become a part of our traditions, and then the traditionalists would have claimed the credit for all of it. Why should we throw it away? In the Chancellor’s Speech there was not one word of commendation for the Health Service – not one word. What is responsible for that?

Why has the cut been made? He cannot say, with an overall surplus of over £220 million and a conventional surplus of £39 million, that he had to have the £13 million. That is the arithmetic of Bedlam. He cannot say that his arithmetic is so precise that he must have the £13 million when last year the Treasury were £247 million out. Why? Has the A M.A. succeeded in doing what the B. M.A. failed to do? What is the cause of it? Why has it been done?

I have also been accused – and I think I am entitled to answer it – that I had already agreed to a certain charge. I speak to my right hon. Friends very frankly here. It seems to me sometimes that it is so difficult to make them see what lies ahead that you have to take them along by the hand and show them. The prescription charge I knew would never be made, because it was impracticable. Well, it was never made.

I will tell my hon. Friends something else, too. There was another policy – there was a proposed reduction of 25,000 on the housing programme, was there not? It was never made. It was necessary for me at that time to use what everybody always said were bad tactics upon my part – I had to manoeuvre, and I did manoeuvre and saved the 25,000 houses and the prescription charge. I say, therefore, to my right hon. and hon. Friends, there is no justification for taking this line at all. There is no justification in the arithmetic, there is less justification in the economics, and I beg my right hon. and hon. Friends to change their minds about it.

I say this, in conclusion. There is only one hope for mankind and that is democratic Socialism. There is only one party in Great Britain which can do it and that is the Labour Party. But I ask them carefully to consider how far they are polluting the stream. We have gone a long way – a very long way – against great difficulties. Do not let us change direction now. Let us make ft clear, quite clear, to the rest of the world that we stand where we stood, that we are not going to allow ourselves to be diverted from our path by the exigencies of the immediate situation. We shall do what is necessary to – defend ourselves defend ourselves by arms, and not only with arms but with the spiritual resources of our people.

Source: House of Commons Debates, vol. 487, cols. 34-43

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