Rising Prices

Part of the debate – in the House of Commons at 12:00 am on 11th May 1965.

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Photo of Mr Ken Lomas Mr Ken Lomas , Huddersfield West 12:00 am, 11th May 1965

This is playing with words again. Our share of the world markets decreased during the time when the Conservative Party was in power.

I was saying that the Conservative policy of allowing prices to rise and doing very little about it meant that those who could least afford it were affected most. When we came to power, therefore, we decided that, as a matter of social justice and priority, we had to do some- thing to help those least able to stand the rising cost of living. This is why we immediately began to do something for the sick, for the aged and for people in need. Hon. and right hon. Members opposite scoff at this and say it is nothing, yet we have challenged them over and over again to say where they would have got the money from.

The right hon. Member for Leeds, North-East (Sir K. Joseph) said that they had voted for the increase in National Insurance contributions. I remind him that the increase in sickness payments started in January; we made that gesture and gave something for Christmas to people who were on National Assistance. We did what we could as at a time when we were faced with a terrible economic crisis which we had inherited because the Tory Government had been fiddling and juggling with the whole financial machine of this country in the hope of gaining some election advantage. We decided what the priorities were and we tried to do something about them.

Soon after taking office, my right hon. Friend the First Secretary of State acted on the realisation which he had had for a long time that it was essential to have some sort of sustained growth and some kind of joint determination on the part of both sections of the community in order to create a climate in which an incomes policy necessary to our economy could survive. In December, the Declaration of Intent was born. Some firms heeded the directions and advice given to them and realised that, to get this country out of the economic mess we had inherited, they must co-operate; and they did so. But there were others who were prepared to let the country go on as before—down the slippery slope leading to economic disaster.

In my view, we must first try persuasion with the industrialists, but, if persuasion does not work, the price review body must have power to act against those firms which refuse to work in the national interest. The price review body is now beginning work and the results will come before the House in a fairly short time. I hope that it will not be necessary for the whip to be used. I should much prefer the carrot to be used every time. But we as a party realise that these things must be tackled firmly. We must attack the giant monopolies which by their price rings, cartels and secret agreements tend to hold the housewife and the consumer to ransom. This is the line we are following. We are taking positive action wherever we possibly can.

The right hon. Member for Grantham (Mr. Godber) seemed to imply that wage rates should remain as they are or move only at a steady 3½ per cent. per year, but, as I have said, our aim is to secure some kind of social justice, apart from anything else, for the people of this country. Therefore, wages must not only be related to the job done by the worker but must be related to the needs of the individual and the benefits which he should be entitled to have in any decent civilised society. It follows, therefore, as night follows day, that some people must have greater wage increases than others.

I have personal experience of these questions in one of the public services, in the National Health Service. In 1961, it was people in the public service who felt the axe of the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) first of all, at the very time when he demonstrated the true philosophy of Conservatism by saying to the nurses that they could have only 6d. in the £, while giving £84 million to the Surtax payer.

We believe as a party—and I certainly believe as a trade unionist—that it is essential for people at the very bottom of the scale to be assisted, and by this I mean not only people in the hospitals, local authority workers and manual workers, but everyone below a reasonable and decent standard of life. As members of a community, we should do what we can to raise their standards. But, of course, this is something which the Conservative Party cannot begin to understand.

By their policies over the past 13 years, and by their attitudes, right hon. and hon. Members opposite have constantly attacked the public sector, the weakest sector, the sector where workers are not so well organised as they are in some other employments. These were the people the Conservatives went for, and we are now trying to put things right. We are trying to spread the load of taxation wherever we can. This is where I disagree emphatically with the hon. Member for Eastleigh, when he argues for a sales tax. Indirect taxation on the necessities of life tends to penalise the very people at the bottom of the scale, the people whom we on this side are seeking to help in every possible way.

My right hon. Friend the Chancellor of the Exchequer can take credit for his Budget and what it is designed to do within the limits in which he was forced to work to. His proposals on expense accounts, allowances for cars and the Capital Gains Tax are what stamp his Budget has entirely different from anything we have had during the past 13 years. It is part of the Government's policy to create a climate in which it will be possible for our incomes policy to thrive.

I accept, of course, that one cannot have an incomes policy just by Government directive. It calls for co-operation from the trade union movement. It puts a great responsibility on the trade union movement, and it is to the trade union movement that we must now look for cooperation and understanding. I suggest to my right hon. Friend the First Secretary that he might adopt this rough and ready yardstick to determine which people should, as it were, slip through. Taking an average wage of, say, £15 or £16 a week, people who are well below that level should be entitled to much more than the 3½ or 4 per cent. People on the average wage should have the recognised figure of about 3½ per cent.

People with £25 or £30 a week, on the other hand, should realise that, in the interests of those at the bottom, there must be some give and take; they must be content to accept a sightly smaller increase in their pay packet. This is the only way. What we are seeking to do is to carry through a levelling-up process and, until we have done that, we cannot hope to have any semblance of an incomes policy. We must level up to a much greater extent than we have at present and then, having done that, we can move on to make the incomes policy work.

It is the duty of the Government to ensure not only the right to work but the right to live—to live a decent life with all the benefits and advantages that the second half of the twentieth century should bring. After 13 years, we now have a Government who are doing something constructive about it, who are really tackling the problem as it exists, who are seeking the co-operation not only of management and trade union but of the whole nation in order to evolve a system under which, using all the modern methods of production and mechanisation, we can build a better kind of society in which everyone will enjoy its benefits. The Government are planning priorities. Many years ago, Aneurin Bevan said that Socialism is the language of priorities, and indeed it is. That is what we are trying to do. We are trying to decide the priorities that should go into a just and decent society.

I want to see management doing all it can to assist in creating a situation in which the manual worker, the man on the shop floor, will be able to enjoy a decent three weeks' holiday with pay, to step up fringe benefits to which the workers are entitled and to do away with class distinctions of "blue collar" and "white collar".

I believe that this is the kind of world we can move to and I believe that the people elected this Government because they believed that the Labour Party wanted and believed in expansion and modernisation and that it would apply modern minds and modern methods to modern problems. If we go ahead on those lines, then the nation, the trade union movement and the employers will in the long run be eternally grateful that, last October, the nation was wise enough to get rid of 13 years of stagnation and elect an energetic, dynamic, and forceful Government.