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I beg to move Amendment No. 4, in page 4, line 14, after "Act" to insert:
as shall be amended under subsection (2) of this section".
The object of the Amendment is to ensure that Schedule 2 to which this Clause refers, which sets down the principles to be applied by the Prices and Incomes Board, shall be amended in accordance with the provisions and powers which are given by subsection (2) of the Clause. The reason we do this is that we are quite convinced that the Schedule as it stands is an absurdity. We hope that when we consider the Schedule it will be possible to amend it. We move this Amendment to ensure that if the Schedule itself is not amended by the House of Commons there shall be an obligation on the First Secretary to amend it before any further references are made under this Clause to the Prices and Incomes Board.
The Clause which we seek to amend is in a very real sense the heart of the Bill, because it sets down the principles to be considered by the Board when considering any price or wage increase and therefore it is of the greatest importance. We are not at the moment clear, even following the deliberations in Committee, whether this Schedule will also be applicable when orders are made under the second six-months' period in which severe restraint is to be imposed by the First Secretary.
I should be grateful if the Under-Secretary, if he is to reply to the debate, will make clear whether eventually Amendments will be made to this Clause and to the Schedule which will govern the judgments the First Secretary or the Prices and Incomes Board will make exclusively in the second period of incomes restraint. It is not clear whether these principles are to be applied only after the period of standstill and severe restraint or in the period of restraint as well.
The trouble which we on this side of the House have felt about the whole Clause is that it refers to a Schedule which is based partly on the Declaration of Intent which the First Secretary had signed by the representatives of both sides of industry, and partly on the White Paper. We have been very worried indeed, because the Declaration of Intent and the White Paper had been regarded as sacrosanct by the First Secretary and incorporated in legislation even though it is perfectly clear that the figures set out in the Declaration which are based on the same assumptions and forecasts which were in the National Plan have proved completely invalid, and even though the First Secretary himself has had to admit that he will have to sit down again with his advisers and determine what alternative set of figures are relevant in the present economic crisis into which the Government have plunged us.
It seems totally wrong that we should not have amended a Schedule which still embodies much which can be regarded merely as an historic myth, a series of figures which were never achieved are not achieved at present, and are not likely to be achieved in future under a Labour Government. To start with, the Clause and the Schedule attached to it based on those quite irrelevant figures is very foolish indeed. We should much have preferred to see a situation where the figures themselves were eradicated although we should be happy for the First Secretary to bring out from time to time what easily could be numerical criteria for the Prices and Incomes Board to consider.
That is the main reason why we are suggesting that the Clause should be amended. This whole concept of putting figures into the legislation is anyway misguided, because it has been based in the past, and apparently will be in future, on the idea of the National Plan. Some confusion has arisen as to whether the National Plan is a target or a forecast. It is perfectly clear that the National Plan was based on an assumption which the First Secretary made about the growth rate we are likely to get in this country, and he then asked businessmen to fit into that overall target figure the implications that it had for their industries, but they did not agree at all with his initial assumption. Merely to have built into the legislation an hypothetical figure which the First Secretary thought up and then to ask business to prepare a plan on the lines I have mentioned in this prices and incomes legislation, is the wrong way of going about it.
We are not in the least happy about the qualitative criteria which appear in the Schedule. These too are quite inadequate. They set out a series of platitudes in regard to economic analyses which the Prices and Incomes Board and its chairman and members must be aware of, but those so-called criteria do not give any overall guidance as to what basis the Board should consider for an increase in wages or prices placed before it. For this second reason we think this Amendment should be accepted. It should be quite clear that we are not to have a series of criteria which are quite irrelevant and inadequate to enable the Board to do its job properly.
The fact that in the next six months the First Secretary himself in the freeze period may be adopting similar criteria, whether they be numerical or qualitative, as those set out in the Schedule, is quite terrifying. I should be grateful if the Under-Secretary would make it clear whether we are to have published what the criteria are to be over the next year or so; and, if so, whether it is proposed to make them explicit.
As it stands at the moment, we think that the Clause and the Schedule must be amended. It would be unreasonable to base our future plans for the country's prices and incomes policy on a Schedule which is clearly obsolete and mythical. For this reason, I hope that my hon. Friends will agree that the Amendment should be argued and debated, but at this stage it would be wrong to divide on it, because we shall come to it later in the Bill when we can consider the matter in greater detail.
Typically, the hon Member for Worthing (Mr. Higgins) made a moderate speech, even when he was being rather perverse, because we went through this exercise fully in Committee and explained, to the satisfaction of many people, if not to his, precisely where the criteria applied and how far Schedule 2 was relevant to the present situation.
The hon. Gentleman referred to a hypothetical figure which my right hon. Friend the First Secretary had thought up. I was not clear whether at the time he was talking about the 25 per cent. growth between 1964 and 1970 or whether he was referring to the norm. At the time that these figures were devised, they were the best which could be deduced on the evidence available. They were the subject of full discussion with both sides of industry. The White Papers we published were endorsed by the National Economic Development Council. If there is any failing, if we were all too optimistic at that time, the failing must be accepted to be not only that of my right hon. Friend the First Secretary and of the whole Government, but also of many informed people of great experience who worked with us in this exercise of producing a plan and trying to discover a policy which would substantially contribute to economic stability and growth.
Would not the Under-Secretary agree that this points out the complete folly of saying that wage increases should be granted on the basis of what one thinks increases in productivity may be rather than on the basis of what they have actually been?
I do not think so. If one is trying to develop a policy for productivity, prices and incomes, some indication must be given; some criteria must be produced by which the Board can reach its judgments. We thought that there was every prospect of productivity rising at a rate which would make 3½ per cent. tolerable. As it turns out, we were wrong, but there had to be criteria. The whole burden of much of what the hon. Gentleman has said is to the effect that there is still the need for criteria, but he believes the ones which we will be applying may be the wrong ones.
The hon. Gentleman said that he was not clear whether Schedule 2 would be applied in the second six months. The proper way of viewing this is that Schedule 2 will in effect come into operation when the present period of standstill and then the flexible period have passed. In other words, it is there for the period after the twelve months with which Part IV deals. We make clear in paragraph 25 of the White Paper that
During the six month period of severe restraint"—
that is, the second six-month period in the total period of one year—
the criteria for consideration of new proposals for improvements in pay and hours will be much more stringent than those set out in Part I of the White Paper …".
That is the part which is embodied in Schedule 2. So, for the second six months, the criteria will be much more stringent than those set out in the Schedule and, as we say in the White Paper, for the time being the incomes norm must be regarded as zero.
The Amendment is unnecessary, in view of what the Clause says. The
Amendment would add nothing, because subsection (1), which obliges the Board to have regard to the considerations set out in Schedule 2, already contains the words
'subject to the following provisions of this section".
"The following provisions" include subsection (2), which sets out the means by which the Secretary of State can vary the criteria by Order and after consultation. Therefore, provision is fully made already in the Clause, and in particular in subsection (2), to vary the criteria as maybe seen to be fit, depending upon the circumstances of the hour.
For this reason, the general point which the hon. Gentleman makes is met. I am glad, for that reason, that he does not intend to press the Amendment to a division.
The Under-Secretary in referring to the White Paper said that there would be more stringent criteria during the second six months of the second period of excessive restraint. Which of the four criteria outlined in paragraph 15 of Schedule 2 does he think will disappear during the second six months and be disregarded by the Board?
This would not be the right time for me to speculate on what the criteria may be. It would be wrong to anticipate the discussions which, as we say in paragraph 25 of the White Paper, we intend to have with the Confederation of British Industry and the trade unions about the specific question of criteria for the second six months.
It is probably rather dogmatic to say that it is possible to devise any criteria which represent an intelligent effort to get a standstill on prices and get reasonable settlements on incomes which will endure through all time. Until the present time, we have been discussing the criteria which shall apply on the incomes side. The criteria for prices are rather different. I would be willing to concede that it is more arguable here that it might be possible to devise criteria which would be more enduring than those which are designed to deal with increases in incomes.
Amendment proposed: In page 4, leave out lines 32 to 35 and insert:
Provided that in the period of six months beginning with the passing of this Act an order may be made under subsection (2) above without any prior consultation as required by the foregoing provisions of this subsection.—[Mr. William Rodgers.]
On a point of order. We are in an extraordinary position. The Under-Secretary of State rises and says, "I beg to move", but it seems clear that he has no idea of what he is proposing and of which Amendments are linked with it. He has failed to give any explanation of the Amendment. One is forced to the conclusion that he has no idea what it does. I hope that he will say clearly which Amendment he is proposing that we should now consider, which he considers are linked with it and whether he thinks there are any arguments in favour of any of them.
On a point of order, Mr. Deputy Speaker. I apologise to you for the misunderstanding. It is due to the fact that there was a mis-typing whereby Amendment No. 61 appeared in our papers as Amendment No. 16 with which it was understood we were to consider several others. I apologise to you and to the House. Have I your permission to say something about it?
This Amendment substitutes a new proviso for the existing one to Clause 4(3). The existing proviso, which was moved and accepted in Standing Committee, provides that subsection (3) of Clause 4 shall not apply to an order made within the period of twelve months after the passing of the Act. Its effect was, firstly, to disapply during the 12-month period the requirement for the Secretary of State to consult interested bodies—the T.U.C. and the C.B.I.—before making an Order varying the conditions now specified in Schedule 2, to which the Board is required to have regard.
This was considered necessary in order to enable an order to be made under Clause 4(2) varying the considerations in Schedule 2 as soon as the Bill becomes law. An order which refers to the considerations to be observed during the present temporary standstill period as set out in the White Paper, Cmnd. 3073, will be required on the passing of the Act without any delay for statutory consultation. The Government have, of course, already had consultations with the T.U.C. and the C.B.I. on the considerations to be observed and, as my hon. Friend the Under-Secretary of State has just said, these will be continuing.
The second and accidental effect of the proviso as it stands was to disapply during the 12-month period the provisions in paragraphs (a) and (b) of Clause 4(3), which enable any such varying order itself to be varied or revoked and which make the order a statutory instrument subject to negative resolution procedure.
In the discussion in Standing Committee, my right hon. Friend the First Secretary of State agreed that it was possible that the existing proviso went rather further than was really necessary and undertook to consider a further Amendment at Report Stage.
The Amendment is designed to limit the maximum period during which the statutory consultation requirement may be waived to the first six months, instead of 12 months, and to ensure that any orders made under subsection (2) of Clause 4 will be subject to the provisions of paragraphs (a) and (b) in subsection (3). It is designed to meet points made in Standing Committee about the need to consult these bodies in the second six months and the Government hope that it will be acceptable to the House.
I am not very happy about these price fixing suggestions. Price fixing is a very ancient method. It goes a long way back in history, but as far as I know it has never worked without draconian methods. Wage fixing has never worked without the direction of labour and industrial planning has never worked without industrial exchange control.
The basic issue here is that one is trying to do three things without accepting the necessary conditions. Thus, what we are particularly dealing with here is price fixing which always moves to more draconian methods. Indeed, my right hon. Friend the First Secretary of State had a predecessor in the third century in the person of the Emperor Julian and I think a short passage from the book "Julian" may be of interest in explaining the Emperor's experience and that of his Senate.
He summoned a meeting of the chief people, and ordered them to find a remedy for the prevalent distress. During three months, however, their deliberations led to no effect. At the end of that time, Julian took the matter into his own hands, and drew up a list of prices, by which corn was to be sold at a moderate rate. This step naturally led the dealers to restrict their sales still further. … As the hoarding continued, and in all probability the wealthy citizens set themselves to buy up the stores so liberally provided, in order to sell again at the most profitable time and place, Julian had another and a stormy meeting
with the Senate
which ended in the whole body of senators, over two hundred in number, being ordered into custody.
That is a certain signpost on the road to where one goes with this kind of policy. I have for a long time prophesied what would happen. One just cannot work price control if one is not prepared to ration. One cannot fix wages if one is not prepared to direct labour. One cannot plan one's economy if one is not prepared to control the exchange rates.
If one does not control the exchange rates, then it is not the Government or the planners who can decide the level of production but the dealers in currency because, the moment they decide to move against one's currency, one's planned production has to be put into reverse. This seems to be the basic fallacy on which we are working, and for my part—and I have taken this opportunity to express my own position—it seems to me that the whole Bill is following entirely the wrong track.
I intervene very briefly in order to understand this. It seems that the hon. Lady said that the original wording went unduly far and that it is the intention of the Amendment to restrict it
somewhat but, in fact, the new wording widens the scope considerably. Under the old wording, as I understand it, the subsection would not apply to an order made within 12 months—that has now been reduced to six months:
… if it is expressed to cease to have effect at a time not later than the expiration of that period
—that is 12 months. Under the Amendment now moved the order can be made under this Clause at any time during the first six months, which need not necessarily be within the time of expiry. This seems to widen matters. Orders can be made in the first six months of this Bill coming into operation, having an indefinite life, without any consultation, either with the trade unions or the C.B.I.
Since we are talking about Part I of the Bill, what we are considering here are orders which, by the nature of things, can apply for only the three months, so far as an order concerning a price or wage increase is concerned. This will not alter the length of time for which the order will apply. It will merely limit the time to six months instead of 12 months, during which the First Secretary can make an order without consultation with the bodies listed.
The hon. and learned Member for Northampton (Mr. Paget) has given us two historical examples, one of the Hundred Years War and another relating to Emperor Julian. I was hoping that the hon. Lady, in reply, would explain to the House just how she would counteract the comments made by her hon and learned Friend. We on this side have said all along that a Socialist Government would introduce controls, and that these controls would breed more controls. Controls can work only if rationing and the control of labour is introduced. The hon. and learned Gentleman has prophesied what we have always known would happen. Would the hon. Lady explain why he is wrong, because I fully agree with him?
The debate has been the occasion for a notable intervention by the hon. and learned Member for Northampton (Mr. Paget) and we should like to have some comment from the hon. Lady on what he has said. If the Government are going to invoke Part IV they are going to get into the sort of mess that the hon. and learned Gentleman prognosticates. The Government Bench have messed up the introduction of this Amendment, perhaps we could at least have an answer to the comments made on this Part of the Bill.
In view of the way in which the Amendment is framed it would be quite inappropriate for me to reply as the right hon. Gentleman has suggested. My hon. and learned Friend went well beyond the terms of the Amendment and he will have a further opportunity to raise this matter on a more appropriate Clause.
I beg to move Amendment No. 5, in page 4, line 35, at the end to insert:
(4) The Board shall submit to each House of Parliament in the month of November of each year a report stating its views and experience as to the suitability, relevance and appropriateness of the considerations to which by this section it is directed to have regard and may suggest in such report such additions to or variations or amendments or replacements of such considerations as it may consider necessary in the public interest.
This is an Amendment to add a further subsection to Clause 4, allowing the Prices and Incomes Board to comment on the principles guiding it. The purpose of this non-controversial Amendment is to enable the House to benefit from an account of the activities of the Board and the effect it has upon the economic affairs of the country. We have no shortage of advice on how the economy is behaving, or how it should behave or
might behave. The quality of such advice varies enormously. It would not be amiss if the Prices and Incomes Board, which is carrying out a limited but useful rôle, was able to comment annually on the conclusions that it had drawn from its experience during the preceding year.
It is useful to have such a commentary in November, because that is normally the time when Parliament reassembles and when discussions are taking place on the Gracious Speech. It is a particularly apposite time to have the benefit of the Board's annual report. It is clear from the debate that we had a short while ago that Schedule 2 is in constant need of updating, as my hon. Friend the Member for Worthing (Mr. Higgins), has shown. If this is not done, one would pay regard to a norm which would be totally inconsistent with the actual performance of productivity and the gross domestic product.
It is also true that one wants to keep a fairly careful eye on the criteria which are expected to guide the Board. There are four principles contained in the criteria concerning incomes and there are a number of principles governing prices. The sort of thing that I see the Board being able to comment on with particular value is the experience provided by its studies in judging the value of those criteria. At the end of the year the Board might feel that it had sufficient experience of productivity deals and their value or otherwise to judge whether the way in which productivity deals had been conducted might lead to a revision of some of the criteria governing incomes increases. The experience of the Board on the extent of low earnings might also lead it to comment upon the principles to which it has to pay regard concerning low earnings.
The Ministry of Labour is unable to offer very much evidence on earnings, although it can offer a great deal of evidence on rates. A body such as the Board may be able to help us. It would be very useful to have the comments of the Board upon certain time-honoured institutions, like wage councils and various forms of statutory negotiating machinery, because again I feel that the conditions leading to the establishment of those wage councils have long since changed. I am not saying that we are in a position to judge whether wage councils are desirable, or whether they are relevant, but our knowledge of the conditions in which wage councils work is sadly deficient.
Something like the Prices and Incomes Board could help illuminate this matter and very suitable method of illumination would be the annual report, as suggested in this Amendment. I very much hope that the Government spokesman will appreciate the constructive spirit in which this is brought forward and that he will feel able to accept the Amendment.
The hon. Gentleman the Member for Oswestry (Mr. Biffen) has made some interesting and helpful comments. I hate to say that I agree with much of what he has said, because he may not believe me and may imagine that this is just a courteous and rather obvious means of getting round the points that he has been making. He is quite right in saying that the work of the Board is substantially contributing, through its reports, to a clearer understanding of our economy and of how we can overcome obstacles to efficiency in industry and eventually achieve the sustained growth which we all want. He will also know that there is inevitably a dialogue between Government and the Board. It is not a dialogue which infringes the proper independence of the Board and it could not be so. We recognise the great experience and knowledge which the members of the Board have and we find it very helpful to discuss issues with them from time to time. Obviously, some of our discussions might in the natural course of events be related to the considerations of which account has to be taken in trying to get an effective policy for productivity, prices and incomes.
Whether the hon. Member realises it or not, the Amendment would go a great deal further than simply to say that the National Board for Prices and Incomes should produce an annual report. The effect of the Amendment, if pressed to a Division and carried, would be to oblige the Board to comment on its own terms of reference in an annual report to Parliament. This would be quite without precedent. There is no case at all of a board which has been set up in this way by Parliament being allowed to come back to Parliament and say that it does or does not like its terms of reference.
I do not wish to be conservative in anything, and precedent by itself is never an overwhelming argument against the course of events, but let us also consider what it means. The Government are responsible for the policy, as they are responsible for placing the Bill before the House and carrying it through. The Government are responsible in the last resort for determining the criteria. We have made it clear in the Bill and we have said often that the considerations to which the Board shall have regard will be considerations determined by the Government only after long and exhaustive discussion to make sure that they carry a large measure of consent with them.
I return again to the Declaration of Intent of 18 months ago. Although it is inclined to produce derisive noises on the benches opposite and to excite cynicism which is not required or desirable in present circumstances, the fact is that that declaration, historic as it was, represented the coming together of both sides of industry with the Government to agree upon a policy which was in the interest of the nation as a whole.
There was discussion then of the Declaration of Intent. There was discussion in preparation of the February White Paper, which announced our intention to set up a board. There was discussion again which resulted in the April White Paper, which determined the criteria. There was further discussion before the Early Warning White Paper, which was published in November last year. This discussion will continue. As a result, we shall, I hope, determine criteria which not only are effective for the period after August next year, when Part IV of the Bill comes to an end, but which will enable us to vary those which are set out in Schedule 2.
When I last had the opportunity of catching your eye, Mr. Deputy Speaker, I made the point in particular that the new criteria which would apply to the second half of the current year would be discussed with both sides of industry. Our discussions have begun tentatively and we shall push them ahead as soon as possible, the proper time being when the Bill has received the assent of Parliament. We can then go forward to devise criteria which will apply under Part IV. I am seeking to satisfy the hon. Member for Oswestry beyond all doubt that there will be very full discussion.
I also say to the hon. Member that all that the Government are doing in the Bill and that we discuss in the House is not done within a vacuum. We carry it on under the full spotlight of public discussion. We do it in this way because inevitably, the community at large being involved, the community at large is entitled to have a say.
For that reason, if those who are interested in the work of the Board wish to express and publish their views, they can express them and they can be published. Again, therefore, discussion will not go on within a public vacuum, and we shall be able to collect the voices and decide what the policy should be. For all these reasons and many others that I would give were I able to detain the House longer than I have done, I think that the hon. Member will recognise that the purposes which are designed to be served by his Amendment are already met.
It will, however, be encouraging to the hon. Member to know that we have already made arrangements by which the National Board will make a general report from time to time. We have said to the National Board that this would be in the general interest, and we hope that a report will shortly be published covering the period since the Board was set up. Hon. Members will, I think, find this a useful commentary on the Board's experience so far. In addition, it may well help the hon. Member with his problems.
As I have mentioned on a number of occasions, we want a full and useful dialogue. Certainly, we wish to do nothing which would inhibit the Board from making its proper contribution to discussion. As I have said, a narrow point only is involved in the Amendment. Because it is concerned with only a narrow point and in the light of all that I have said, I hope that the hon. Member will withdraw his Amendment and accept the undertakings which I have given to him.
Being a back bencher, I can offer a warmer welcome to the suggestion put forward by the hon. Member for Oswestry (Mr. Biffen). I even go so far as to say that my hon. Friend the Under-Secretary is being ultra-conservative. I should hate to contradict him on a point of fact, but perhaps he is wrong in saying that there are not instances of independent boards or commissions which have revolted against their terms of reference. The Local Government Boundary Commission, which published its 1947 Report, was an extremely clear example of this.
More relevant, however, is the Monopolies Commission, which said to the Board of Trade after publishing a number of reports within its restrictive terms of reference, "Please permit us to publish a report of a general kind assessing the value of our work." It published this under the title of "Collective discrimination". I think I am right in saying that that report laid the foundations of the work of the Restrictive Practices Court. I am sure that this is what will happen eventually, but I hope that the Government will think this over and do what they can to meet the point.
I assure the Under-Secretary that there is never much danger that he will find himself in agreement with me. Between the hon. Gentleman and myself there is politically a great gulf and I cannot see it ever being bridged. The hon. Gentleman gave a quite agreeable answer, but I must take exception to his aside about there having been full public discussion. That is rubbish.
The first that one ever knew about the questionnaire for the National Plan was when it was published as an appendix in John Brunner's book on the National Plan. One knows that the Stationery Office started threatening legal noises about infringement of copyright. If my hon. Friend the Member for Worthing (Mr. Higgins) had got his hands on that document, which said to industry, "If we grow at 4 per cent., what figures can you produce consistent with that", he would have played merry hell with it. It was completely contrary to any proper scientific, detached approach to getting a national plan to have all that kind of pap.
I do not want to be controversial over this, but again all this business that "We are all in this together" makes one ask, what happens about the National Economic Development Council? We are never told what comes out of that Council. The Government say, "We have talked to industry, we have been to N.E.D.C." But the House of Commons? No; we do not come into this at all. We do not know, for example, what communications are sent from the National Economic Development Council to the Government. How many times have the Government said to us, "We are consulting industry "? This afternoon we had it again from the Parliamentary Secretary when she said, "This will be discussed with the National Economic Development Council". The Amendment is to ensure that a report shall be submitted to each House of Parliament. We want this House brought in on the act.
That is a point which I do not think the Under-Secretary of State was fully seized of. However, he said at the end of his remarks that they were producing a report, and I do not want to take up unnecessary positions; there are people more skilled in acrimony on the benches opposite. I realise that these debates lie between them and something which is of much more substance. I beg to ask leave to withdraw the Amendment.