Clause 4. — (Principles to Be Applied by the Board.)

Part of Orders of the Day — Prices and Incomes Bill – in the House of Commons at 12:00 am on 9th August 1966.

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Photo of Mr Terence Higgins Mr Terence Higgins , Worthing 12:00 am, 9th August 1966

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.

7.45 p.m.

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.