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Orders of the Day — Prices and Incomes Bill

Part of the debate – in the House of Commons at 12:00 am on 9th August 1966.

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Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees 12:00 am, 9th August 1966

This is a difficult issue, because my hon. Friends and I very much agree with the general sentiments which have been expressed and which were also expressed in Committee. We want to see the growth of productivity and we do not want to place needless obstacles in its way. As the hon. Member for Barry (Mr. Gower) said, it is essential to have rising productivity if we are to achieve a dynamic economy. Whatever problems we now face we all hope that within a reasonable period—when we have got over the immediate difficulties with which the Bill, among other things, is designed to deal—we shall be able to move forward again, because so much depends upon the growth of the economy. This has been said time and time again. When we were formulating the policy upon which the Bill is based, we made it clear that it was a policy for productivity, prices and incomes and that it would work in all three fields because they were very closely related.

In deciding to tighten the policy, we have still had in mind that we should not do anything needlessly which would impede the growth of productivity. The very fact that we have felt obliged to bring in the Bill is a measure of the extent to which, despite all our hopes, productivity has not risen fast enough. We all know, and it was said very clearly by the right hon. Member for Leeds, North-East (Sir K. Joseph) in Committee, that many so-called productivity agreements have not been productivity agreements at all. The language has simply been used to dress up something which was in other ways indefensible.

It is very interesting that at the present time we know of very few examples of productivity agreements which have been caught by the new policy. One was mentioned by the hon. Member for Oswestry (Mr. Biffen), but it is a measure of the extent to which these agreements have not been reached often enough that we are not aware how many of them will be affected by the decisions we now feel obliged to take.

The point was made in Committee that the work of the National Board for Prices and Incomes is also directed towards the growth of productivity, and many of us consider that its success should be measured less by the immediate impact of its reports have on an individual price or incomes problem than by the effect they have on long-term productivity considerations. We see in the reports which have come from the Board that it has regarded this long-term problem as central to all its work on the references which have been made to it.

When we come to the consideration of the proper criteria for the second six months, after discussion with the T.U.C. and the C.B.I., the question of productivity agreements should be borne very much in mind. It would be wrong to anticipate our decisions because consultations must take place first, but representations will no doubt be made to us and we shall no doubt be sympathetic to the view that if the second period of six months is to be flexible genuine agreements on productivity should be taken into account.