[P.C. (49) 103
29th September, 1949]
ANNEX
Production Committee
PUBLICITY ON THE ECONOMIC SITUATION
MEMORANDUM BY THE CHANCELLOR OF THE EXCHEQUER
We are all agreed that steps must be taken quickly to rouse both sides in industry to a full realisation of the present emergency and the actions it requires.
To this end the Foreign Secretary, the President of the Board of Trade and I propose to address two national meetings, one of employers and the other of Trades Unionists, in London, on two consecutive days, as soon as the Foreign Secretary returns.
These meetings will be preceded by another with senior Civil Servants concerned with production.
2. These national meetings can, and in my view should, become forerunners of an intensive series of private conferences between Production Ministers and the two sides in a substantial list of industries, some engaged in export and others with considerable influence on the general level of costs. This series was planned, and considered by officials, in August and plans were then deferred until the result of the Washington talks was known.
3. The officials concerned took the view that it is essential for such a drive to be preceded by a frank statement of the Government's attitude towards the national emergency, the main issues of policy involved, and the measures required of both sides in industry. This has now been amply done in the three days' debate in the House of Commons which has just taken place. The speeches at the two national meetings will further serve this purpose. They can, if desirable, be published at the time, and then printed and distributed to the delegates at the later private conferences.
4.
Some of the officials have taken the view that any substantial improvement in productivity in the industries for which their Departments are responsible would result either in some general redundancy in these industries, or in the need for greater mobility between one section and another. This matter has been dealt with explicitly in the House of Commons debate. It is felt by some that any further general statement by the Government on redundancy and mobility might create or reinforce the impression that improved productivity was evidently associated with increased unemployment and that the better course would be for Ministers to deal with the question frankly and fully in private conferences with appropriate industries. In view of what has already been said I think that this matter should be dealt with in public, but I should be glad to know the views of my colleagues.
5. I would add the following further points
(a) Whatever earlier discussions with industry on these lines have taken place, further action is now necessary. Devaluation has not altered the fundamental nature of the productivity problem, but it does create for many industries new circumstances, new immediate tasks, and a new and greater need for speed. In this situation there are fresh things to be said. The report of the steel foundries' group, which recently visited America shows how much there is to be done and how important it is to break through the complacency of British industry. (b) The socialised industries must be included in the scheme, both on merits and for obvious tactical reasons. There would be fully justified criticism if we confined ourselves to energising the private sector of industry.
(c) The prospect of some retrenchment and redundancy in a particular industry is no reason for not including it in our propaganda. The Page 6need fo6higher productivity in such ingerlisf2as great, in the national interest, and the need for frank discussion of the problems of industrial mobility and redundancy is all the greater. This is not
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ledsagu If the respect of retrenchment arises age amminative actions or policy decisions by the Government itself, such as cuts in the investment programme.
(d) The need for cost reduction applies not only to the industries in the fore- front of the export drive, but to many others, especially those indus- tries and services whose costs and prices play a large part in deter- mining the general level of industrial costs.
6. The conferences with industries should get down to bedrock, and should not be allowed to develop into a recital of reasons why nothing can be done. There is a good deal now to be said about costs, labour problems, market openings and methods of sales promotion. Special difficulties and individual cases can be examined in a spirit of determination to find a solution to the problems involved. I am sure that my colleagues will find means, in their addresses, to present the situation so as to carry full conviction and convince their hearers of the need for urgent action.
7. At employers' conferences the aim should, I suggest, be to get them to resolve formally to set up self-help panels or committees' for the spread of technical know-how, and the sharing of information about matters like cost control, labour management, &c.
8. At Trade Union Conferences, Ministers will be able to speak very frankly on the issues involved. They may be able to induce their audiences to set up Trade Union productivity committees with the immediate aim of implementing the resolution passed at the T.U.C.'s conference with Union Executives on 18th November, 1948. The education of the rank and file towards wholehearted acceptance of the need for increased productivity has still far to go. It will be helpful if as a result of these conferences workers receive more active encourage- ment from their unions to co-operate with management in their own factories, works or mills in order to achieve higher productive efficiency. The need for restraint in claiming increased personal incomes can also be emphasised, with chapter and verse.
9. Conferences should be on the basis of works' representation as far as possible. They will need to be organised by Trade Associations and Trade Unions, and those bodies must, of course, sponsor the suggested self-help panels and committees. But it is on the floor of the factory, works or mill that the policies advocated will be applied, and the closer we can get to the people ultimately responsible, the more fruitful our discussions are likely to be.
10. The whole of this programme must be carried through before the end of November at the latest-as we must impress upon people the great urgency of the situation.
R. S. C.
Treasury Chambers, S. W. 1,
29th September, 1949.