Cost of Living

Part of the debate – in the House of Commons at 12:00 am on 11th March 1964.

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Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West 12:00 am, 11th March 1964

The hon. Member for Ilford, South (Mr. Cooper) has placed before the Committee one or two of the serious problems that we have to face. In the first minute or two he rightly said that above all else we must increase our export potentiality, and in the latter part of his speech he said that we must have an incomes policy. The two points are related. The middle part of his speech was a knockabout turn—to which he was entitled. As the Prime Minister said, our speeches and actions from now on must have an election bias—and the Prime Minister is leading the way in this regard.

I was interested in the hon. Member's further point, which is also true, that if we do not increase our export potentiality we shall never solve the problem of stabilising the cost of living. But I would remind him that this is not what his party said in its election manifesto in 1959, to which he presumably subscribed. That document said: We have now stabilised the cost of living, while maintaining full employment This was the cry of his party in the 1959 election, but it has done neither. We have neither stability in the cost of living nor full employment. In fact, we have the worst of both worlds. I could quote facts and figures to substantiate that.

Why have we not achieved that objective? Neither party has achieved stability in the cost of living. It is very easy, but pretty pointless, to contrast the record of the Labour Government, in quite different circumstances, with that of the Tory Party. This gets us nowhere. We might convert some political illiterates—and on this question I think that the Prime Minister is one. I have here a transcript of his interview in the programme "This Week," from which my hon. Friend the Member for Cardiff, South East (Mr. Callaghan) has already quoted. He was interviewed on 20th February by William Rees-Mogg, Bryan Magee and George ffitch—two interviewers of Tory inclination and one of Labour inclination.

They were asking him questions related to the cost of living and our current economic difficulties. They referred to interest charges to local authorities, which vitally influence rents, and land prices. I want to quote verbatim, otherwise hon. Members may think that I am telling lies. What the Prime Minister said verges on political and economic illiteracy—and, indeed, grammatical illiteracy.

When he was asked about the present economic situation, he said: Well, I've no doubt that the Chancellor of the Exchequer will be considering this. If we thought that our prices were becoming uncompetitive, this has been always I think the danger, I've always felt that for instance that if we could exercise a reasonable wage restraint, that there's no reason why our exports shouldn't go on rising. I think in the last two years in particular we've had the edge for instance on our Continental competitors, and that's been very valuable. And the only thing that really can threaten I think our export performance is if wages go up too fast. So I hope that in Neddy and in other places we shall be able to convince the trade unions that there should be a reasonable advance in wages and not an excessive one. In the space of half a minute, in giving that answer, he mentioned wages three times. He referred to wage restraint, the responsibility of the unions and the necessity to avoid excessive wages increases.

The hon. Member for Ilford, South, went out of his way to say that, although we must have an incomes policy, we could not forecast and control profit margins, and therefore presumably could not influence them in any way. But profits are incomes to some people. The hon. Member for Louth (Sir C. Osborne) referred on many occasions to the control of wages, but he never suggested any control on profits, still less on dividends and Rachman rents.

This is the climate in which we are discussing a national incomes policy. The overall climate in this respect is one that we must create, and it can be created only by Government action. Until it is created we cannot persuade the unions to accept a measure of limitation to their demands. It is impossible to talk about an incomes policy in the context of controls. I do not believe that in a free society such as ours we shall ever get anybody voluntarily to agree to a control on the demands for increased incomes which are constantly made by shareholders, wage earners, salary earners and the rest. All that the Government can do is to create a social climate in which every section of the community feels that it is being treated fairly and justly, and is getting a fair share of the national income. Then, and only then, will we get people to accept a measure of restraint.

Our argument—and it is a legitimate one—is that if we ask any of the rank and file workers of this country if they think that the economic and social policies which the Government have been pursuing over the last 12 years have fulfilled the necessary conditions, namely, the creation of social justice and equity, the answer is a resounding "No".

I want to deal with some of the Prime Minister's other answers in his television interview. He referred to wages, but never at any point to dividends, profits and rents. Despite the denial of the hon. Member for Ilford, South and other hon. Members about their attitude of hostility to the trade unions, there is no doubt that one of the tactics of the Conservative Party from now to the election will be to pin upon the workers the blame for the economic crisis that the Government have created.

It is not coincidental that the Motion on the Order Paper asking for an inquiry into trade union law and practice appears a few months before the election. It is not coincidental that we have had speeches from the Chancellor—he said the same thing today—suggesting that the wage-cost element is of vital importance to our export trade. Nobody denies that, but if we compare the wage-cost elements of our competitors overseas with our own we find that ours is rather less than most others.

We have had other evidence which suggests that the Government have been seeking to incite workers to strike action. The Postmaster-General went out of his way to deny to Post Office workers what most people regarded as a reasonable wage demand for one of the most dedicated and underpaid sections of our community. The Postmaster-General said, "If you strike, your pension rights will be threatened." What a stupid man! But this is all part of the tactics of the party opposite to build up the feelings of the public against these men, who are doing a really worth-while job.

The Prime Minister has made the same kind of approach to the problem. He asked why my right hon. Friend the Leader of the Opposition did not appeal to the trade unions for restraint. It is interesting that he should make that suggestion. Why does not he himself appeal? He became a trade unionist recently. Recently, the right hon. Gentleman joined the National Farmers' Union. Why does not he appeal to it? It is because he cannot, because his Government is tainted. An hon. Member opposite suggested that the courage of the present Leader of the House in imposing a wage restraint policy when he was Chancellor of the Exchequer was the reason for success, but that was wrong. It was the reason for the failure of the Government to get a response from the trade unions.

Which sections of the community were hit by the pay pause? There were the nurses, who would not strike. So the Government said to them, "No, you are not going to get your 6d. a day"—or whatever the miserable sum was. There were the probation officers, worthy members of the community who would not strike. There were the Health Service workers, they would not strike. The Government did not tackle any of the big boys. There were the teachers; they were too respectable to strike—and I belong to them. These are the people that the Government tackled at that time. That is why they are crying for pie in the sky, for the support and co-operation of the trade unions in that context.

There is no suggestion in the pay policy that Mr. Rachman should restrict his demand to 3½ per cent. per year. There is no suggestion that rent increases should be restricted to 3½ per cent. per year. We take the view that if there is to be an incomes policy it should relate to all incomes, or none. Mention of Rachman and the land racketeers leads me again to the remarks of the Prime Minister when he was quizzed in the programme "This Week". There was no mention of restriction there, by heaven. My hon. Friend the Member for Cardiff, South-East quoted some land price figures.

I have here an enormous number of such figures and I propose to quote some of them. There is the case of a piece of land at Luton which was referred to in The Times of 5th July, 1960. An investment company has paid £250,000 for a site of just over half an acre now used as a car park in the centre of Luton. The price paid is believed to be the highest price an acre recorded in Britain". Then again n Reading, A maisonette site of one and a half acres at Reading has changed hands at £37,000 by auction. That is quoted in the Builder of 5th May, 1961. At Wilmslow, a favourite (Manchester) dormitory area, for middle and upper income group families, 20 acres of farmland, valued at £100 an acre five years ago, recently fetched £3,000 an acre—30 times as much. That was quoted in the Daily Mail of 20th June, 1961.

There are literally scores of these figures which I could quote. When discussing this in that wonderful broadcast, the Prime Minister, the "matchstick economist"—and by heaven, he is all that—talked about confiscation of land, and said that land nationalisation was confiscation. The right hon. Gentleman should know all about the confiscation of land; he has lived on it. Where do the Government think that the Prime Minister got his land? Did he pay compensation for his land? He stole it. His family stole it. And when they talk to us about the confiscation of land, and nationalisation meaning confiscation, I would say that never at any time did a Labour Government nationalise without paying compensation. One of the chief beneficiaries from the nationalisation of the coal industry was the Prime Minister's family. He and his family have lived on the backs of the workers in the coal mining industry all their lives. And they got far too much compensation at the time when the coal mines were nationalised. Let us hear no more nonsense about that.

Obviously, the Prime Minister had not been told what his own colleagues had been saying. In that broadcast he said that we either nationalise, which meant confiscation, or allow the market forces to work. But he could not have read what his own Minister of Housing and Local Government had said on 18th November in the House: What troubles people most is the profit that individuals are making—in some cases big money—out of land transactions. This is because land, which is so necessary, is scarce and because it is made scarcer by planning control. He went on to say: It does seem right that that increase should be collected by the public. He added: It is a corollary of regional development that land planned for major development should be bought well in advance by a public authority for disposal to private enterprise or to public enterprise as required, both to control and phase the development and to help in meeting the cost of bringing it into development. We may well have to devise new machinery for the purpose."—[OFFICIAL REPORT, 18th November, 1963; Vol. 684, c. 654–56.] I wish to ask the Minister whether that new machinery has been devised. When are we to get the Government's public ownership of land to deal with these betterment costs which must and should approve to the public instead of to private landlords? These are points which we are seeking to put into a national context. We shall never get a national incomes policy unless and until we tackle all these facets of the problem.

When the hon. Member for Ilford, South and several others, including the Chancellor of the Exchequer, ask how we are to solve this problem and other problems and where we are to get the money for our schemes, I would answer frankly that no hon. Member on this side of the House is under any illusion about the difficulties involved in getting a national incomes policy. All that we say, in general terms, is that we still seek to create the social atmosphere of which I spoke earlier. That will convince the vast majority of the workers that they have a Government who are interested in them and not in the land racketeers, the Rachmans and the rest.

National Health Service charges have been mentioned, I think rightly, in this context. The hon. Member was about 300 per cent. out in his estimate of this figure. I think the figure for National Health Service charges is about £50 million. He said that this would mean increased taxation, but that is a lot of rubbish. It would mean nothing of the kind. The £50 million is taxation now. It is coming from old-age pensioners and the chronic sick. We say that that £50 million burden on the chronic sick and the old will be transferred to sounder shoulders which are better able to bear it. It will mean a transfer of a burden rather than an increased burden. Is that fairly clear to the hon. Member, or has he to get his matchsticks out?

The same applies to the pensions scheme. Someone asked, from where should we get all the money for the national superannuation scheme? The answer is laid out in considerable detail in our policy programme. We said frankly and openly that some workers in the upper income brackets will have to pay more in increased contributions and those with lesser incomes, below the average, will pay less than they currently pay. For them a surplus will be built up which will be invested by the trustees of the scheme, thereby ensuring that the workers of the country get a share of the increased productivity which we hope will come from industry and the national plan which we shall put into being.

It comes ill from the party opposite to ask us where we are to get the money from in view of all the promises we have had in the last six months. The Robbins Committee proposals are to cost £3,500 million over the next 10 years and the Government accepted that within 24 hours of the Report coming out. I do not think the Prime Minister had even opened its cover in Kinross before he accepted it. Hon. Members opposite should not come that lark of saying, where is the money to come from? If we had had an increase of 4 per cent. per year in the national product over the last 12 years we could have done a lot more than has been done. That is the fault of the Government.

On the question of the cost of living, no party can say with its hand on its heart that it has a solution. No party can claim a better record than the other because conditions in which we were working were completely different. Anyone who faces the problem honestly knows that that is so. We claim, and passionately believe, that we can produce social policies, economic policies which will expand the economy at a much steadier and faster rate than the Government have done in the last 12 years. Having expanded it, we believe we can distribute the products in a much more equitable way than the Government have done in the last 12 years. In that context we believe we can get the organised workers to play their part with us, which they will certainly not do with the right hon. Gentleman and his colleagues. We are to have a General Election soon; I wish that it would come tomorrow.