Letter written by Minister to Chancellor of the Exchequer on 16th February, 1940.
Letter written to Minister by Lord Stamp on 2nd February, 1940.
16th February, 1940.
In the last paragraph of your Note to the War Cabinet of 16th January (W.P. (G) (40) 10) covering the Reports of the Inter-departmental Committee on Economic Policy on the Control of Imports and Consumption, and of the Ministerial Committee's consideration of that Report, you drew attention to the need for making people aware of the sacrifices which will be required of them.
The view was that this could best be done by means of a carefully devised publicity campaign to be undertaken by this Department; and in the minutes of a Treasury Conference on 16th January it was stated that the Ministry would supervise the campaign if so requested and if the Treasury and other Departments supplied the necessary material.
We have heard nothing further, but Lord Stamp wrote me (copy enclosed) on 2nd February, on the allied subject of guidance on the direction of spending. If we undertake this campaign on your behalf, his suggestion might be considered by the Inter-departmental Committee the formation of which the conference suggested.
Meanwhile, I should be grateful if you would consider the following points.
1. Sir Richard Hopkins, at the conference, said the objective was “the best means of carrying out a campaign of popular education on the connexion between wage increases and rises in the cost of living”; and there was much discussion on the possibility of restricting wages.
May I say that we feel that the utility of this Ministry would be prejudiced if it comes to be associated with what might appear to be wage restriction. The Inter-departmental Committee's recommendation, as summarised in paragraph 2 (g) of your Note does not refer to wages; and in planning the campaign I am sure you will agree that we should be free to lay as little stress as possible on this point.
2. Indeed, if there are now two million workers with wages directly linked to the cost-of-living index, I do not see how we could make effective play with an argument that rests on the danger of the vicious spiral, because if prices rise these two million wages must rise also - unless special legislation is passed to prevent it. This seems to point to a policy combining stabilisation of prices, on an extended scale, with some device for compulsory restriction of consumption generally. If this could be made effective, it provides both the answer to the higher wage demand and the savings you want.
The Rt. Hon. Sir John Simon, G.C.S.I., G.C.V.O., O.B.E.,
Chancellor of the Exchequer,
11, Downing Street,
S.W.1.
3. The Inter-departmental Committee emphasise the need for “a general acceptance of sacrifices”. For this to be recognised people must feel that sacrifices are being borne equitably by all classes alike, and the publicist has to be sure of his ground before a critical public. If we think we see any ‘snags’, you would expect us to tell you them. Here is one: that many people do not believe that the scales are evenly held. They believe that profiteering is unchecked in many places; they see little evidence of restriction of consumption among the rich who, whatever may have happened to their incomes, are still able to maintain standards by drawing on capital; they know that control may mean that the only goods obtainable are of better quality and higher price than those which make up the cost of living index. Publicity must follow policy, and our task in persuading people to accept sacrifices will be lightened if you can launch the campaign with a statement of policy which showed that this problem was to be dealt with.
4. I doubt if the campaign can be effective unless we can enlist the support of Labour, especially Trade Union leaders. And I should think this would only be possible if they are convinced that the equality of sacrifice policy will be carried out.
5. In this connection I hear that the Labour Party says in effect: “We will not urge our members to save unless we have an assurance that should a person afterwards claim assistance he will not be compelled to disburse his war savings before Assistance is granted”.
6. A positive slogan is usually better than a negative one. Thus “Do Save” is preferable to “Don't Spend”. Here we are near National Savings Committee ground, and collaboration between us will be essential. I have accordingly seen Sir Robert Kindersley. I suggest that he should be represented on the proposed Inter-departmental Committee dealing with this “Reduction of Consumption” campaign, and that a representative of this Ministry should be associated with the National Savings Committee in the planning of their publicity.
7. You will have seen Professor Pigou's letter in the “Times” of 8th February arguing that it would be premature to urge reduction of consumption till there has been a further substantial reduction in the number of unemployed. It would be helpful if you could give me the answer to this. I imagine it is that the Government's war industry programme is so great that, so far from there being a surplus of labour there will soon be a shortage, and that there is no time to be lost in effecting the reduction of consumption necessary to provide the means of making good this shortage. If so, would it not be wise to make the position clear as part of the campaign. Knowledge of the Government's plans should not only hearten our own people and encourage our Allies by revealing the magnitude of our war effort, but should help to make it clear for what ends they are being asked to reduce consumption and how essential is the sacrifice. The more objective information we can give the better.
