Orders of the Day — Incomes Policy

Part of the debate – in the House of Commons at 12:00 am on 4th July 1962.

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Photo of Sir Edward Boyle Sir Edward Boyle , Birmingham Handsworth 12:00 am, 4th July 1962

I do not want to avoid that point, but I am not an expert on the Rome Treaty, and, with time so short, I must ask to be excused from developing it. I do not believe, however, that there would be anything in the Treaty that would prevent us from developing an incomes policy.

My hon. Friend the Member for Brighouse and Spenborough (Mr. Shaw) made an excellent speech. I agree with what he said about information. He is quite right about this. The Government, by one means and another—by speeches, by appearances on radio and television and by interviews with national and provincial newspapers—have done a good deal more to publicise this policy than is often realised. Sometimes rather unfair things are said about this. In addition, of course, the Government's policy has been spelled out at considerable length in correspondence with the T.U.C. and representatives of the white collar workers and the Civil Service unions, including the complete and important statement made on behalf of the Government before the Civil Service Arbitration Tribunal.

I should like to take up one point in the speech of my hon. Friend the Member for Harrow, West (Mr. John Page), who spoke about the Glacier project and whether more could be done in the way of job evaluation. I would not wish to cast scorn on this, but it is illusory to think that the application of any one or more of the schemes to which my hon. Friend referred can provide the solution of the problems raised by a national incomes policy.

But there is some rather valuable material on this subject in the evidence which the Treasury presented in its memorandum to the Royal Commission on the Police. One point in the memorandum which struck me as strong was the principle not only that market situations change constantly, but that social judgments as to the value of certain kinds of work and professions change all the time. This is the very great difficulty of trying to achieve too much by the sort of means which my hon. Friend the Member for Harrow, West had in mind.

I should like to say something on the subject of the Amendment of the hon. Member for Grimsby. I absolutely agree with him that the subject of long-term growth is at the heart of our economic problems today. In other words, the important point is not just achieving a rate of increase of produc- tion in one year as a result of an increase in home demand, but of achieving a steady rate of long-term growth over a term of years.

It was just for this very reason that the Government set up the National Economic Development Council. I would not for one moment wish to suggest to the House that the Government can pass on any of their own responsibilities to this Council. On the contrary, the more the Government can be seen following policies which are conducive to growth the greater the value of the work that the N.E.D.C. can do. But the opposite is equally true—that it is surely of value that these considerable problems of how we can speed up technological change and develop competitive management and achieve a more rapid training and mobility of labour are matters on which the Government can gain a great deal from the advice which they will receive from the Council.

It is worth remembering that the N.E.D.C. today is not only considering the implications of a 4 per cent. growth rate, but is also to assess over a wide field of public policy and industrial practice the conditions which are likely to be favourable for a sustained rate of growth.

Growth is a matter of both sufficient demand and a response on the side of supply. Home demand in the United Kingdom throughout the 1950s was usually ample, but the response of industry on the supply side has not always been as elastic as we could wish. There is surely a need to modernise throughout British economic life. I was not able to listen to the hon. Member for Grimsby on the wireless last night, because I was otherwise engaged on the Report stage of the Finance Bill, but I would not quarrel—in fact, I would very much agree—with the emphasis which he laid, and always lays, on the importance of expert ability in all aspects of our national life, and the need to realise where specialist knowledge and expert ability are clearly required.

True economic growth is not simply a matter of statistics of output. It is one of the aspects of a growing economy that more of its members will spend their income not just on acquiring more goods, but on enjoying more services as well. When one is considering differences in living standards, they are marked very often more than anything else by differences in the ability to enjoy certain services, and again, we ought not to overlook the importance of quality and variety of consumer goods.

On both sides of the House there is more realisation than ever of the importance of trying to promote an open economy. I have no doubt that we could achieve high statistics of production by shutting ourselves off from the rest of the world, provided that we were prepared to accept a very low level of consumer choice. But I do not believe that that is the sort of economy which most people wish to see.

The economic outlook today is reasonably good, despite uncertainties in the United States. As we have a more moderate trend in prices during the rest of the year, consumers will have more purchasing power and there will be the increase in consumer demand which my right hon. and learned Friend has forecast. Public expenditure is rising and the trend of exports is favourable. There is still every probability of a satisfactory expansion over the current financial year. We have made the necessary readjustment which had to be made as a result of last summer's balance of payments crisis.

The hon. Member for Grimsby made a number of points. First, he expressed the need for confidence, and, of course, I entirely agree with what he said about the need for industry to feel that we intend to promote a steady rate of growth based on a first-class competitive performance. He spoke about what we have neglected to do with regard to the reform of the international monetary system. I cannot speak with any specialist knowledge of the various plans —the Triffin Plan and the Bernstein Plan, and so on—which he mentioned, but we have taken two separate initiatives recently to increase the resources of the International Monetary Fund. We supported, and, indeed, took considerable initiative in supporting increased quotas and we also have supported an increase in borrowing powers from the Fund. I can assure the hon.