Clause 25. — (General Provisions as to Operation of Part Iv.)

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 Sir Keith Joseph Sir Keith Joseph , Leeds North East 12:00 am, 9th August 1966

I beg to move Amendment No. 25, in page 21, line 35, to leave out Clause 25.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I suggest that with this Amendment we take the following ten further Amendments: Government Amendment No. 26, in page 22, line 33, after "order" to insert "or direction".

Government Amendment No. 27, in page 22, line 38, after "order" to insert "or direction".

Amendment No. 70, in page 21, line 35, to leave out subsection (1).

Amendment No. 71, in page 21, line 44, to leave out subsection (2).

Amendment No. 72, in page 22, line 4, to leave out subsection (3).

Amendment No. 73, in page 22, line 6, to leave out subsection (4).

Amendment No. 74, in page 22, line 12, to leave out subsection (5).

Amendment No. 75, in page 22, line 22, to leave out subsection (6).

Amendment No. 76, in page 22, line 29, to leave out subsection (7).

Amendment No. 77, in page 22, line 42, to leave out subsection (8).

The right hon. Member for Leeds, North-East (Sir K. Joseph) asked me about the scope of the debate on Amendment No. 25. It seems to me that what he said was quite sound, that we should have a broad debate on that Amendment dealing with Clause 25. After that, there will be two much narrower debates, one affecting the next two Clauses on prices and one affecting the two Clauses after that on pay. I hope that is clear.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Thank you, Mr. Speaker, for that very helpful Ruling.

Clause 25 is, as the First Secretary of State called it in Committee, the master Clause of Part IV, and it is time now for us to register once again our view, and, I think, the view of all hon. and right hon. Members on this side of the House, that the Government behaved very scurvily to Parliament in failing to give Parliament proper time at a Second Reading stage to discuss the principles of Part IV. But now, after a notable debate trenching on the issues on Part IV, we come to the notorious Part itself. First, I shall state, as objectively as I can, where I think the Government have gone completely wrong in finding it necessary to introduce Part IV at all. We are continually told by Government spokesmen that the voluntary prices and incomes system has failed, and they go on to say that because, in their view, it has failed, it is necessary to move straight to the Draconic compulsions in Part IV.

We believe that that reasoning conceals an error of diagnosis which has been, and, perhaps, will be under this Government, fatal to the progress of the country. What they have failed to realise is that no prices and incomes policy born of man or woman could possibly have had any success in the climate of raging inflation which the Government allowed during their first 21 months of office. It is quite wrong for them to conclude that a prices and incomes policy is necessarily a failure because it failed during their first 21 months.

1.30 a.m.

We believe that a prices and incomes policy has a relatively small part to play in the totality of Government economic strategy, and we have always pressed the Government to recognise that that small part to be played, on a voluntary basis, could only be realised within the context of better control of demand than this Government have achieved. That means that the Government side can charge the Opposition with wishing to introduce deflation so as to reduce the state of inflation which existed in the economy and which nullified the prices and incomes policy. That was all very well a few weeks ago, but now the Government have introduced belatedly, and because belatedly, an excessively severe package of deflation. Now we have deflation and a compulsory prices and incomes policy, whereas up to now they were presented as alternatives.

We believe that the right level of demand did involve a measure of deflation, but we believe that the Prime Minister's package is far more than would have been necessary with any Government which carried more credibility. We do not accept the views of the Parliamentary Secretary to the Ministry of Labour, who accuses us of wanting still more deflation now. We accept her opinion, and it is ours, that however justly the Government regulates the level of demand, it is an extremely difficult task to do, and that there is still sense in having, as an ally, a voluntary prices and incomes policy. We do not regard it as proper in any way to deflate so that there is no enterprise in the economy, but we regard the pursuit of the right level of demand in conjunction with a modest productivity, prices and incomes policy as the right strategy for the Government.

I apologise for having spelt this out, but we have been charged on the one hand with having no alternative and on the other that our alternative is excessive deflation. We believe that the Government's measure of deflation goes further than would have been necessary had we been in Government.

Having briefly set the scene, I come to Part IV. We have, of course, dealt with it at some length in Committee, but it has not been within our capacities to exhaust fully the lunacy of Part IV if it were ever activated. Even the right hon. Member for Nuneaton (Mr. Cousins) has been unable to quarry all the absurdities which would be the result of trying to enforce wages, and we can imagine the trouble that the Government would get in if they tried to regulate all prices. We believe that this part is largely unworkable and to the extent which it is workable it will damage the economy. The only possible comfort for any patriot, if that overworked word can be used, is that the Government would bring these powers into operation only for a brief time.

The Government talk of six months for the freeze and they hope, and we hope with them, that they will never have to operate Part IV or, if they do, only after several weeks or months. The shorter the time the less will be the damage to the economy by way of distortion. But the damage to morale, working relationships, mutual confidence and accumulated good will built up in many parts of the economy will be damaged just because the Bill is on the Statute Book although it is never activated.

Part IV includes infamous Clauses which allow the Government to call back pay and price increases already made; a Clause to allow employers to break a moral or legal contract into which they have entered and protection from workers if they do; and a Clause to nullify wage council and agricultural council awards. This part includes so many infamous Clauses that I only need to mention them to invoke the fury of this side and most of the House against them.

At this hour my main task is to set the scene and allow the debate to follow. I repeat that a large section of Part IV is unworkable. I say again that to the extent that the Government try to work it, it will discredit the law, the instrument of Government and will thoroughly debase the relationship between worker and employer, with consequences reaching far into the future. My hon. Friends and I will oppose it as hard as we can, but we can only hope that the Government will not think fit to use it.

We naturally hope that the Government's deflation will operate with the minimum necessary results to take the heat out of the economy. We hope that that deflation, which we fear may have been, and may prove to be, excessive, will be such that this provision will not be used. We remain unutterably opposed to it, and I hope that all hon. Members will succeed in persuading the Government at all costs not to use it, even if it is on the Statute Book.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

I believe in Parliament, even at this late hour. Hon. Members who listened to the earlier debate on the so-called penal Clauses will agree that that discussion was to the great credit of the institution of Parliament. One of my reasons for objecting to Part IV is because I believe it to be offensive to Parliamentary institutions.

Some of my hon. Friends with whom I have had arguments on these matters have, in my view, been occasionally contemptuous of Parliamentary procedures, and on many matters they have a strong case. There are, of course, many features of our Parliamentary procedure which ought to be radically reformed, but there are some which we must jealously preserve—and I am sure that some of my hon. Friends who may have disagreed with me have come to witness, particularly tonight, that there are great advantages in an institution which compels the Government to listen to minority points of view. The procedures of the House which I wish to protect above all are those which ensure that minority opinions, however small—although I am not suggesting that on this occasion our minority is very small—always have the right to be heard.

That is one reason why I object to Part IV and the way in which it has been presented to the House, for it has been presented in a manner which has deprived us of some of the forms of debate. I may be told, "You may debate it now, so what are you complaining about"? At the beginning of this discussion you said, Mr. Speaker, that we could have a wide-ranging debate, and I am sure that my hon. Friends will extend it to the outermost frontiers. However, there are many matters I would wish to raise about Part IV which would be out of order.

My objection to Part IV and the White Paper on the subject stems from the fact that what is considered to be the sort of prices and incomes policy we need to deal with the nation's economic disease has got that disease out of perspective and out of proportion. It suggests that this is the principle remedy for the country's economis disease. It is only a minor remedy: there may be a case for it, but it is a side issue. Other measures could have a much bigger and more immediate effect on the Government's problems. Our most inflationary expenditure is on defence. If that were cut away, we would deal with the economic situation much more radically and swiftly than with these proposals.

I should like to list several other measures, but therein lies one of my criticisms of the fact that the Government denied us a Second Reading, to put the Measure into the wider context of the economic policy. We are not entitled to do that in this debate, unfortunately, and I therefore hope that the Government will never again resort to this procedure of putting a measure of this kind into another Bill which has already passed Second Reading. This deprives us of certain essential rights.

I hope that the Government will seriously consider our proposal. For reasons very different from ours, hon. Gentlemen opposite wish to remove Part IV, partly for Parliamentary reasons, but partly for economic reasons which are laissez-faire and doctrinaire and which we do not, of course, accept. The Government could remove Part IV from the Bill and find no difficulties for their policies. They could accept the proposal and still carry forward their own proposals. I hope that the Government will not treat these debates as if everything were cut and dried in advance, because that makes a mockery of Parliament.

My right hon. Friend made a powerful speech in our last debate. It was one of the best which I have ever heard him make, and that is high praise. But he could have made exactly the same speech in accepting the Amendment. It would have underlined what he said about the voluntary system. So powerful was his speech that we all expected him to say at the end, "I have convinced myself or have become convinced that the penal Clauses should be removed, and we will all be united." That would have been helpful to the country and to Parliament. People would have understood that the right argument had carried the debate.

But the same applies to our proposal on Part IV. If the Government accepted it, what would be the consequence? The Government say that they will carry out Part IV entirely by voluntary means, and do not wish to resort to the powers there. There is one way to ensure that, and that is to remove it from the Bill. If they found later on that the voluntary method was not working, they could introduce Part IV as a separate Bill, with a proper Second Reading incidentally.

What would be wrong with that? They would not even lose much time, because according to their own protestations, the Government would lose only 28 days under the Bill. If they wished to use the compulsory powers they would have to make the order to call Parliament together in 28 days when the law was varied.

1.45 a.m.

If the Government accepted the proposal that many of us are making on this side of the House, all they would be surrendering would be the possibility of resorting to these compulsory powers which they have said they do not want to resort to in any case for a matter of 28 days. Therefore, I say that our Amendment should be considered seriously. That is why some of us for several days past have been urging upon the Government that they should not come to these debates with cut-and-dried proposals but that they should listen to the arguments and should be prepared to accept Amendments. Certainly, if the Government accepted some of the Amendments, they could have done so without any inquiry to the other parts of the Bill, or if they were to accept this Amendment it would certainly have a great influence on what I should do on the Third Reading, for instance.

I think this is what Parliament is for. We should be able to discuss these Amendments on their merits. That is what we are here for. I hope the Government will be prepared to consider our proposal on that basis. If they were to remove the whole of Part IV they would still be able to proceed exactly on the lines on which the First Secretary says he wishes to proceed in the next six months; that is, to achieve his standstill on a voluntary basis.

Unfortunately, it may be that one of the reasons why the Government will reject my proposal is not a reason which they like to state. I do not suggest that it is a reason of dishonesty or anything of that sort. But I believe that there is a double meaning in the way that the Government are presenting Part IV. I have read most of the proceedings in the Committee stage and the First Secretary said—if he said it once he said it 100 times—" I wish to ensure that the whole of this standstill shall be operated on a voluntary basis." I heard the First Secretary say it when we discussed the new Clause this afternoon.

He says that these powers are mild and reasonable. He roars as gently as a sucking dove. He says that everything is to be done on a voluntary basis as far as possible. But on the other side, in other places and in other contexts, these measures are described as extremely tough. In the United States when the Prime Minister talked about these measures he said, "We are taking sterner measures than any democratic Government have taken in peacetime." The Leader of the House said last week that these are extremely tough measures. Which do they want the world to believe? I think they want one story to be believed here and the other story to be believed elsewhere. They have to tell us an intelligent story here, but they tell an unintelligent story to the central bankers. Believing what I believe about central bankers, I am not surprised that they have got it that way round. I am not saying anything against bankers. I am in favour of borrowing from them. In fact, that is the only function that bankers perform, so far as I know. I cannot think of any other useful service that they perform.

I have no objection to the way in which the Government have arranged it, but they really should make up their minds to tell the same story. It is, unfortunately, the fact in my opinion that this standstill on wages and incomes has been introduced not primarily because of the economic effects in this country but because of the supposed psychological effects that it will have upon other people outside the country. I do not think that that is a very good reason for proceeding with economic measures.

I come to another reason why I think it so foolish for the Government, in their own interest, to proceed by pushing Part IV into the Bill and being determined to press forward despite our offer to assist them if they remove it. Although I disagree with many aspects of the Government's incomes policy, I agree with my hon. Friends that some form of incomes policy is required. It should be an incomes policy that carries out the promise that the Labour Party made at the General Election, that what we wished to secure was a planned growth of wages. That is not merely official party policy; it is also good sense. But I should have thought that if the Government wanted planned growth of wages they would have gone to extreme lengths to ensure that their long-term policy for planned growth of wages would not be mixed up with an immediate short-term policy of a standstill on wages. The two things are contradictory, and to get them muddled up together is to injure both.

Parts I, II and III of the Bill are for long-term purposes, parts of permanent legislation, but Part IV is to be temporary, to be finished within 12 months. That was a further reason why, in their own interest, the Government should have kept the things entirely separate. It is not too late for them to do that now if they take out Part IV and follow my advice. I have shown that they would not be surrendering any of the situation that they wish to sustain in the country in the months ahead. All they would have to do if they wanted compulsory powers later in the autumn would be to introduce a separate Bill. If they did that, I believe that they would strengthen acceptance in the country of this Bill. This is the advice that some of us have given them throughout the controversy, and we think that they should have listened to it. Maybe they will discover in the end that it was good advice.

But there is a further reason, a most important reason, why I am opposed to Part IV. It involves flagrant breaches of contract. It involves bargains being broken, the bargains of several millions of wage earners, some of whose claims are especially powerful. In particular, I would refer—hon. Members may have other cases that they wish to cite—to the railwaymen. What is being done to the railwaymen is outrageous. It was absolutely agreed that they should have their increase. It was on the basis of that that a strike was called off. Now they are told that the bargain is to be made null, is not to be carried out till later on. The railwaymen have to pay under all the other measures introduced by the Government, but over and above that they take a capital cut that they will never regain. It is serious when employers break bargains, but this is a bargain broken on the responsibility of this Parliament. It is a very serious matter indeed. One of the troubles about breaking bargains is that it makes it much more difficult to conclude fresh bargains in the future. The whole of our society and particularly the ameliorations for lower paid workers, about whom we have heard a great deal today, are based on many of these bargains. I was taught about the history of the Labour movement by T. D. H. Cole and others and about how collective bargaining had been one of the main processes by which we had introduced some civilised standards into our society. If bargains are broken, how are bargains to be made in the future?

Supposing some 12 months hence there is another threat of a rail strike, supposing railwaymen again go to Downing Street to make an arrangement at the eleventh hour, and supposing an agreement is on the point of being signed, will not the leaders of the railwaymen say, "We must have a special clause in this bargain to the effect that it will not be upset by some six-months wages standstill "? If the railwaymen demand that, all the others will demand it, too. Or they may say, "We are not prepared to accept what we might otherwise be prepared to accept. We demand more now." Therefore, I believe that at the end of the six months or the twelve months, partly because of the breach of bargains, the demands from different trade unions to ensure that they recover what they have lost, if they possibly can, and to guard themselves against similar injuries in the future, will be overwhelming.

I wonder whether the Government have fully considered this. It is not the first time we have had a wage freeze or a pay pause. I want to quote some of the words which were used in the debate on the pay pause imposed by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd). I do not quote these words of the Prime Minister's in order to gloat over them. I quote them from the debate which took place on 23rd October, 1961, because I think that those of us who are critical of the Government's policy on these matters have the right to ask the Government who is being consistent in these matters. I do not say that consistency is the greatest of all virtues, but I do not think it should be dismissed. Consistency, like keeping bargains, is one of the ways in which the health of politics is sustained. When people change their minds, for whatever good reasons, they should explain themselves.

I will read what the Prime Minister said. I could read many other passages from his speech. In a debate on a Motion proposed by him, in which he attacked the Conservative Government, not merely for the pay pause, but for the breach of bargains which was involved in the pay pause, my right hon. Friend the Prime Minister said this: We have said time and time again that in the long run we cannot afford increases in any personal incomes, wages, salaries, dividends and rents greater than the national increase in productivity. He was consistent about that. That is precisely why we say that the first priority is to increase productivity. There are two ways of doing it. This sounds almost like a speech by my right hon. Friend the Member for Nuneaton (Mr. Cousins). The Government's approach is to hold production down, cripple productivity, and then try to tailor the wages system to fit it, using every instrument—deflation, high Bank Rate, broken agreements, short-time working, and even the threat of unemployment—to achieve their end. Later, speaking about the dangers of breaches of bargains, which is what we are talking about, my right hon. Friend said this: We warn the Government with all the emphasis at our command, while there is yet time, that if the Chancellor's policies and pressures lead to intensified strife, with all the damage it would entail to this country and its export orders, the responsibility will be his. Do not let him blame the trade unions. Do not let him look for Communist plots; he will not need them. The Chancellor's policy plays right into the hands of trouble makers and fomenters of unofficial strikes. This is the Lloyd-Gollan axis"— what is now the Gunter-Gollan axis, maybe. They are not allies, but they are certainly co-belligerents in an assault on industrial peace and the established machinery for negotiation and arbitration in British industry."—[OFFICIAL REPORT, 23rd October, 1961; Vol. 646, c. 618–19.] 2 a.m.

I quote those words, not out of mockery, but because at some point there has been a suggestion that when my right hon. Friend the Member for Nuneaton (Mr. Cousins) defended so strongly the right of negotiation and objected to the interference with the proper processes of negotiation, he was taking an old-fashioned view as though he were defending some kind of jungle law. But it was my right hon. Friend the Prime Minister who, when we were discussing the previous pay pause, objected so strongly, quite rightly, to the interference with the processes of negotiation and pointed out the hazards which would follow from it.

So some of us take the view that we should adopt the same attitude to the breach of these bargains today that he adopted and which was adopted by the whole Labour Party when bargains were breached in 1961. In my opinion, lasting injury to the process of collective bargaining will be done by what is proposed and therefore lasting injury to the trade union movement. That is a further reason why I ask the Government to consider seriously the withdrawal of Part IV, partly on the ground that I have stated—that if their predictions are correct they can execute all they want through voluntary appeal—and partly because it is an extremely serious matter that, when agreements have been reached and expectations aroused on the basis of undertakings given by the Government and approved by Parliament, all these matters can eventually be changed and that it should be thought that, by a Clause in a Bill, such bargains can be abandoned.

That is what has happened in the case of the railwaymen, the doctors and millions of other workers whose cases are not so prominent but who would have been entitled to increases under bargains already sealed and signed many months or years ago. I do not wish to be a party to this Parliament accepting a breach of those bargains. I was opposed to it in 1961 and I am still opposed to it in 1966.

Photo of Sir Henry Legge-Bourke Sir Henry Legge-Bourke , Isle of Ely

I was not a member of Standing Committee B and this is the first time I have said anything in connection with this Bill in the House. Having listened to the debate on Clause 16, I feel that it is becoming more and more embarrassing for some of us on this side of the House to remain in the Chamber while a grand debate on party philosophy goes on opposite.

If I had ever thought of being a Socialist, I think that I would have favoured the Socialism propounded by the right hon. Gentleman the Member for Nuneaton (Mr. Cousins) rather than the form coming from the Government, because Socialism surely must depend upon logic for its success—and the logic of Socialism is, I fear, that eventually there is complete control of everything, certainly the Government taking unto themselves the right to control everything.

The men I feel most sorry for, having listened to that debate, are those who still fail to see that this is the logic of Socialism, because Socialism is based on the assumption that there is something wrong about profits, to start with. Yet if this country is to be financed in administering itself it has to have profits from which to do it. I believe that the true trade unionist is better championed by what the right hon. Member for Nuneaton said than by what the First Secretary said.

There ought to be a great difference between a trade unionist and a Socialist. The leader of a trade union has a duty rather different to that of the First Secretary. The leader of a trade union has a duty to his members to get the best conditions he can get for them and to increase the stature of his members in the community at large. That is his principal duty. The First Secretary seems to be getting him more and more closely linked with some governmental duty. In my conception of what a free trade union movement should stand for, I do not accept—and I do not believe that the right hon. Member for Nuneaton and some of the other hon. Members who are trade unionists really accept—the argument propounded tonight by the First Secretary.

We see in the Bill the awful consequence of getting these two things mixed up. Socialism leads, I believe, if it is to work effectively, to the full logic of State control in all its aspects. The First Secretary and his colleagues in the Government are taking these powers through Clause 4 to the Bill in the full logic of Socialism. I do not deny that having got themselves into this position, and believing in Socialism, it is inevitable that they start to take powers of this sort.

In reply to the hon. Member for Ebbw Vale (Mr. Michael Foot), who made an extremely appropriate speech on this occasion—I say that with great humility to him—it is not only the trade unionist, not only members of the Socialist Party, who should be castigating the Government for breach of faith. It is the electorate at large who put them into power.

The things which the First Secretary and his colleagues now have to say because of the folly of their policies, because of the incompetence of their Administration, are not what they were saying at the last General Election. They condemned stop-go. They said "Let's go with Labour" in 1964 with the thumbs-up sign and all that. That is not the policy contained in Part IV of the Bill.

It may be that all of us have to ask ourselves when Governments find themselves in this jam, Am I my brother's keeper? The Christian answer to that always has to be "Yes". That is why I abstained in the vote on Clause 16. But I shall vote on this Clause, because if any of the arguments which the First Secretary propounded in favour of Clause 16 were correct, this Clause must be wrong.

The right hon. Gentleman had a part to play in sustaining morale during the war, but surely he must know by now that the way to get co-operation from Englishmen is not to say, "Let us all do it like this together, but because you may be so difficult I shall keep a sword of Damocles over your head should you not so operate". That is what this Clause of the Bill does. I do not believe that any decent trade unionist, any decent English man or woman, is going to co-operate on that basis. That is why, were I a trade unionist, I would say straight away I am with the right hon. Gentleman the Member for Nuneaton (Mr. Cousins). What undermines his case is that in almost the same breath he propounds the doctrine of Socialism, which leads him into the position in which the Government find themselves. This is the consequence of Socialism.

I say, therefore, that whilst I am quite prepared to try to follow what I believe to be the honourable doctrine which the Government themselves are trying, and that is to arouse the honourable voluntary effort of the nation—and that is why I did not vote against Clause 16—I cannot possibly bring myself to do other than vote against this Clause, because it is un-English, it is un-British; because it is giving the Government power which this Government have already shown themselves quite incapable of manipulating. I am afraid it is power of which this Government have shown themselves to be utterly unworthy, ever since they came into office.

Photo of Mr Frank Cousins Mr Frank Cousins , Nuneaton

May I first advise the hon. Gentleman the Member for the Isle of Ely (Sir H. Legge-Bourke) that, whatever else he thought it, it certainly is not Socialism. This Bill is certainly not that. That it is is an argument which can no more be sustained than can the comparison between my right hon. Friend and Keir Hardie. I do not believe that Keir Hardie had any idea that Socialism was setting out to perpetuate the imbalances between people—to leave the under-privileged in the position of under-privilege, and to leave those with power in the position of power. This Bill cannot, therefore, be regarded as Socialism, not can my right hon. Friend's approaches to it be regarded as Keir Hardiean.

The reason why I have Amendments, which are brought into this discussion, to leave out various subsections of Clause 25, appears to me to be a fairly simple reason. Of a series of very damaging Clauses, this is probably the most destructive of the lot. It is destructive because, as I said a little earlier, it destroys the whole basis of labour relations built up over a long time. It gives dictator rights to a Minister. Not only that, but we are now getting to a part of the Bill which embraces all the enabling rights in the other part of the Bill. It allows the Minister to be the determiner of remuneration, the assessor of comparisons, the judge of what is right and what is wrong. And it gives no right of appeal. I not only think that this, as the hon. Gentleman the Member for the Isle of Ely said, is un-English and un-British, but that it is also unworthy of the kind of consideration which this House ought to be giving to the idea of measures of control of labour relations.

It also brings up every one of the things to which many of us have been pressing for answers. I would at this point say to my right hon. Friend, he made a very good speech; it had nothing to do with the subject, but it was a very good speech; but one of the things we are constantly finding is, that answers are not given, and the reasons behind the decision to introduce the Bill are not portrayed. To those who are responsible for bringing it in, it is, I suppose, justified. I always find it a little difficult to accept that my right hon. Friend is sincere in this, because I know how strongly he feels about the idea of compulsion and how strongly he has fought and struggled in many places to ensure that the rights of a free trade union movement in a social democratic system should be retained. He has put his views on this matter as forcibly as he could. Therefore, I find it a little embarrassing to hear him talking of the powers he wants.

2.15 a.m.

It has been said, too many times for comfort, "I need this power". I do not know who needs the power, but we had better ask some questions again. It has been said that if all that the trade union movement is about, is to get fodder for its members, it has failed in its purpose. It has never simply set out to get fodder for its members. It has always recognised that to be a very important part of its function, but besides having had to fight British industry to get fodder it has also had to fight Governments for certain rights. It has had to fight for a much broader group of people than its own members.

It is all too easy to adopt the attitude that all that the trade unions are concerned about are the interests of their own people. It is easy to forget that there was a period when these benches of Labour supporters were not strong enough to fight the Conservative Government, and when we, with the trade unions, had to bear the brunt of the struggle. I hope that this will not be forgotten.

I ask my right hon. and hon. Friends who feel that the Bill should go through to remember that there has never been a period when Governments did not tell trade unions that this was a quid pro quo for what was done in respect of the price system. How unreal are we becoming? If a man who is seeking a wage adjustment has his claim rejected by his employer it is difficult enough; if he is told that the Government are taking action to prevent his getting his claim and it brings him to a full stop, that is the end of the scheme.

Photo of Mr Frank Cousins Mr Frank Cousins , Nuneaton

That is not Socialism. It is far from it. It may be Fascism, but it is not Socialism. But if the man stops there he is told that the quid pro quo is that prices do not rise. Many large firms boast that their prices have not risen for a long time. Their efficiency has been improved and their investment has kept pace with what has had to be done, and their profits have risen tremendously. I am not against profits—they can be a stimulus in the society in which we are living—but I have said many times that there are alternatives to this system. I am not advocating that we should have Communism, but if we are to have a system that takes out by profits we cannot at the same time say that we have not got a free-for-all society. I cannot see why we should have restraints placed upon us by a Labour Government which cannot be placed upon us by a Conservative Government.

When my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) was speaking about what happened in 1961, it went through my mind that I was not then in the House. I was sitting in other offices talking with the representatives of the Conservative Government. I am one who, like the Prime Minister, used the same kind of argument. I still use the same kind of argument. I remember with a feeling of shame that I was violent towards the Chancellor of the Exchequer of that day in his attempt to introduce a wage freeze. I did not know that anything worse could be applied. There were no penal Clauses in his proposals. So if I could be at that time accused of being anything, it was of being over-aware that we had a struggle on our hands.

The change proposed in this Clause and the subsequent actions is that if I have the same feelings I should not portray them. I have to accept that, while it was done out of evil motives at that time, it is done out of good motives now. I have to accept that the way to stop me doing it is to make it an offence for me to oppose it. I cannot accept this sort of thing. Why should I?

The First Secretary made it clear that we have got into an inflationary situation; we have got to the stage of having inflationary price rises. I am sure that the Government feel that if they keep saying it often enough we shall believe it, despite the fact that information can be given to them as frequently as is required that in the competitive parts where we have to get our export trade going we are not in an inflationary situation. We are not getting the production we need. We are not getting the unit cost down as we could. But we are certainly not in an inflationary wage demand situation. If we talk of the only thing which measures whether we are in a real inflationary situation—that is, whether we are able to purchase more with the money we are earning—we find that that is not so.

There has been a great attempt on the part of the present Administration to bring deflationary measures into being. We cannot forget that the Chancellor of the Exchequer and the Prime Minister spoke in the House of what would be the effects of some of their proposals. I am very concerned, probably more than most people, that we cannot do as has been suggested in the last few years—turn the tap of inflation on and off. I argued this with a Conservative Prime Minister six or seven years ago. I repeated the same argument four years later. The assumption is that we have enough control to turn the tap of inflation on and off: we have the regulators, Purchase Tax, everything that does this. But it does not work in that way.

I have had to try to say in the past that the one thing which governs inflationary tendencies or production drives is confidence. If we take away confidence, we leave people in the position that they do not know what they can do properly to encourage growth. It takes more than exhortation to get it back again. The right hon. Member for Leeds, North-East (Sir K. Joseph) said that it has been emphasised that this is only for a short period, that Part IV is of limited duration. I suggest openly that we cannot introduce something like this for a short period. We cannot step back and say, "We have decided that we will not have the compulsory powers". If we do, we are simply saying that if we all stand still for 12 months we can bash the economy as hard as we like afterwards. Surely this is not what we are saying.

There is only one way to get out of any compulsory power, and that is to break it. I say this with a great deal of respect for the fact that my right hon. Friend appeals time and again for the voluntary system. If he wants a voluntary system, he does not need Part IV. He does not need the right to say, "If you do not, I will do something", if he really thinks we can get out of it by a voluntary system, because that is not voluntary at all.

What has been said to us over the past short period of time? It has been said that this has another purpose, that it gives us a breathing space, that it gives us time. My right hon. Friend said, in answer to a question I put to him in Committee, that of course this is not the solution, that of course this will not solve the problems, but it will give us time. Time to do what? Time to get a new system which compels people to accept the Government's decisions?

I have a great deal of respect for my right hon. Friend. He had a lot of experience in the trade union movement, although it was in a different period from now. He left active officering in the movement in 1945, and there were different situations in front of him. One thing he should recognise is that one cannot say to the British trade union movement, "The Government will tell you how much you ought to demand, how much you ought to get, or whether you ought to get anything at all".

I ask the House to realise the sort of situation normally faced by trade unionists and employers. You cannot put in an application for a 3½ per cent. increase and say, "Please give us 3½ per cent. That is what we shall be satisfied with". You would not get 3½ per cent. I can give examples of that. My union asked the bus companies to apply the 3½ per cent. increase that the Prices and Incomes Board said we should have. They said that they would talk about it, but that the amount should be less. Are we to talk about productivity to buy an even smaller amount? This is the first result of the kind of thing that comes from this Government approach.

We are creating here a background of confusion, probably irreparably. We are damaging the idea of productivity drives. I happen to believe very sincerely that if we are to get out of the problems that now face us it must be on the basis of improving our productivity. There has been a great improvement in productivity, and whoever says that there has not is being misleading.

There has not been a great growth in production, but some of the production has suffered because of Government action, some of it because of things over which the unions have no control. The trade unions did not close the mines; they appealed against that. They did not stop construction work; they appealed for it to go on. There has been a very marked increase in productivity. But when we asked whether we should continue to seek productivity agreements we were told, "No," that if they had to be bought by extra pay at this period it was not worth it. I do not know what sort of world we think that we are living in. If we are to get productivity increases, they must be on the basis of efficiency and incentive payments.

I did not create the system. It was here when I came. But I know that on both sides of industry in a mixed economy an incentive is needed, and this has been the basis of discussions over the past few months—to try to improve real productivity and to get paid for it.

Photo of Sir Tatton Brinton Sir Tatton Brinton , Kidderminster

When the right hon. Gentleman says that productivity has increased, is he talking about productivity per man-year or per man-hour? There is a very big difference between the two.

2.30 a.m.

Photo of Mr Frank Cousins Mr Frank Cousins , Nuneaton

In many ways it has improved in both. This is bound to be so. The use of new equipment has increased productivity per man-year beyond the conception of a few years ago, and will continue to do so. To take one example, electricity generation, one can see how output per man-year has increased. The Clause now before us provides that somebody else, not the trade unions and not the employers, should be the determiner of whether the change has taken place.

There are references in this Part of the Bill to people not having greater remuneration and not having it for the "same kind of work". Both in the House and in Committee I have put the inevitable question: Who is to determine what such meaningless phrases mean? Our society can be divided not quite down the middle but fairly broadly into separate groups, and certainly in the fairly high income bracket no one can determine what the remuneration is. What about payments in kind given to many people? What about the attractions of gifts at the end of the year? What about the provision of accommodation and domestic facilities? What about participation in schemes created by the employer in order to give incentives? What about the provision of cars? How are these things measured? If I am given a bigger car, is that a better incentive? These things cannot be measured.

What does "the same kind of work" mean? Is it the same kind of work if an employer moves a man from one job to another? Is it the same kind of work if he does it deliberately? Is he trying to breach the agreement? These are just examples of the difficulties which phrases like this create for us. When I have asked questions about it, my right hon. Friend has said, "I am not asking to use Part IV. I am asking for the voluntary system to be worked". But, if we work the voluntary system not to the satisfaction of those who are to bring in Part IV, questions of this kind must be answered because they are there in the Bill itself. I have said that we shall not get out of our problems unless we give a great deal of thought and decision—my right hon. Friend and his colleagues must give some answers—to these questions. Only then will it be possible for us to go ahead with what is needed if we are to improve the country's economy.

It has been said that this standstill is more rigid than any other ever imposed in the world. Certainly, it is much more rigid than anything I know of anywhere except in Fascist or Communist countries. In the United States there is an example to which we should have regard. There have been some stringent measures there. A stage has now been reached when the trade unions have openly defied the President, and the employers are defying the President. Do we want to create such an atmosphere that the only solution left for the two sides of industry is to defy the law?

I was brought up to believe that a law which had to be defeated was a bad law. It does not mean that the people are bad. It is a bad law. We ought not to reach a stage when it is assumed that I am non-patriotic if I set out to ignore a law which I regard as bad. I have a greater responsibility than to accept that somebody has come with a heaven-sent idea on how to resolve our economic problems in this way. I do not believe—I am back where we started—that these provisions touch our economic problems.

Our economic problems are not related to a wage movement. It has an effect if we drive the economy to a point at which it is overheated. But we can overheat it with things which we ought not to be doing, by unnecessary defence spending, by illusions of grandeur which we cannot sustain, by things which we all know are wrong. If we would rather control wages than imports, then we are heading for a further balance of payments crisis. It is up to us to choose. There is nothing which says that the employer or agent cannot continue to import materials, and, in fact, he can get away with price changes for these. If we do not develop a readiness to realise what our rôle is, what part the unions and employers can play in making Government policies work, if we say to them both that they are irresponsible, and if we threaten them, then we are heading for a very serious setback.

I hope that the First Secretary does not assume, if I say that this is a bad Bill, that I stand for a free, untrammelled approach of beating the economy as hard as I can to a state which suits me or my organisation. There are substantial steps which can be taken to improve output, to make a better society, to make our real standard of living increase, and to make our economy thrive. I do not accept that the only alternatives are unemployment or devaluation.

Photo of Mr Peter Crowder Mr Peter Crowder , Ruislip Northwood

I propose to detain the House only for a few minutes, and I do not propose to make a Second Reading speech. We have had the advantage of hearing some quite excellent Second Reading speeches from the other side, to which I have listened with great attention. Those who made them were entitled to make them, because the House has been denied a proper Second Reading of the Bill. I wish merely to take up a point made by the hon. Member for Ebbw Vale (Mr. Michael Foot) about the breaking of bargains.

I would have thought that the word "bargain" was a kind word and the word" contract" nearer the truth. Where a contract is made and broken damages must always go to the aggrieved party. Certainly in equity thousands and millions of pounds are due in damages because of the Government's broken contracts in respect of the bargains to which he referred.

The First Secretary is a very humane person, and I want to give him one illustration of how the breaking of these contracts is affecting an individual. A young doctor came to me the other day and said that a fortnight ago he signed a contract with a third person which, he said, was to cost him £600 a year which he could not afford. He asked me if the First Secretary meant to break his contract with him because it meant that he would go bankrupt.

What is he to do? Because he has signed a contract, is he to be liable for damages if he breaks it, and should not the Government be liable because they have broken their contract with him?

Photo of Mr James Dickens Mr James Dickens , Lewisham West

I want to speak on three main themes. I am one of the hon. Members whose name is down, with several of my colleagues, to Amendments to Part IV. I want to make it clear, because Mr. Speaker said that this would be a wide ranging debate, that the three points I am speaking on have a direct connection with Part IV.

I begin by speaking about the impact of Part IV on Parliament as an institution and the Government's handling of this Part. I hope also to respond to the challenge that the First Secretary throws out from time to time that there is no alternative to the programme that he has set out in the Bill.

Serious damage was done to Parliament because of the way in which the Government introduced Part IV. On Second Reading we passed a totally different Measure and the Government should not have amended the Bill qualitatively in Committee but should have reintroduced a new Bill and brought it forward in the usual way for Second Reading so that the principles of it could have been discussed. It is deplorable that a Labour Government should undermine Parliamentary democracy in this way at a time when the institution of Parliament is under attack in Asia, Africa and elsewhere. We should ensure that this House is beyond reproach in these matters.

When we debate an issue as important as this we should place on record the fact that many of my hon. Friends were gravely disturbed by the way in which the Government introduced Part IV last week. It was partly for this reason that I and a number of my hon. Friends abstained from voting, which, for many of us, is a matter of deep seriousness. It tears the heart out of us because we do not want to abstain. We want to see this Labour Government succeed, by fully implementing their election programme because we feel we still have a chance, starting now, to build a new type of democratic socialist society which could be the envy and admiration of the world.

I abstained basically because the Government are moving away from these paths and are moving in wrong directions. It is, therefore, reprehensible that the Government should have introduced Part IV in the way they did last week. Tonight we have taken the opportunity to not merely make this point, but to discuss the whole function of Government policy as seen against the background of the Bill.

It is a tribute to my hon. Friends that the debate we had earlier, and this one, has reached such a high standard of good natured, well reasoned argument. A number of solutions to the nation's problems exist and there is, perhaps, no one right answer. It is only by having a fair, open and free dialogue that we can reach a conclusion and press forward with a policy on that basis.

I contested the last election and won Lewisham, West with the help of the First Secretary, who made an excellent speech on my behalf to a large audience of people who had travelled from all over South London to hear him. He advocated a programme very different——

2.45 a.m.

Photo of Mr James Dickens Mr James Dickens , Lewisham West

—from that outlined in Part IV. We both advocated planned economic expansion. It was on that policy that the people of West Lewisham sent me here, and not to advocate the deflation of which the Bill is a part. The Government's attitude towards procedure and their riding roughshod over Parliament is not designed to meet the clamant needs of the British people. We have not had postbags of letters asking for a Prices and Incomes Bill: on the contrary.

We know that the unseemly haste in Committee last week was to appease influential financial interests in Central Europe and North America. That, more than anything else, undermines Parliamentary democracy. If I were a professor of political theory at a Communist university, I would not have to seek far for subjects for students' essays on the limitations of Western liberal Parliamentary democracy. I am sure that these professors are rubbing home the lesson.

I have always supported the conception of a prices and incomes policy and the establishment of the Prices and Incomes Board is our greatest single step forward in economic policy since the war. However, it will be significant only if we change the Government's attitude towards the Board and make it a vehicle of social change. One can support a prices and incomes standstill in a certain climate, in which there is a battery of Socialist measures designed to change society and deal with our economic problems. However, Part IV will inhibit wage and salary negotiations——

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

The hon. Gentleman says that he would support it if there were a whole battery of Socialist measures. What are they?

Photo of Mr James Dickens Mr James Dickens , Lewisham West

If the hon. Gentleman will bide his time, I hope to outline them in general terms later in the debate——

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

Order. The hon. Gentleman must realise that he cannot have a general economic debate on the Amendment. Mr. Speaker ruled that the debate could go widely, but on Part IV only.

Photo of Mr James Dickens Mr James Dickens , Lewisham West

Part IV will inhibit trade unionists' activities in wages and salary negotiations. It is worth remembering that only 40 per cent. of incomes in the country are negotiated by trade unions and that only one wage-earner in three belongs to a trade union. Therefore, we have to be assured by the First Secretary that the Bill was designed to cope with the 60 per cent. of incomes that are not negotiated by unions and, for that matter, with the 15 million or 16 million wage earners in this country whose incomes are decided in that way.

I feel that the whole emphasis of Part IV will be placed on the comparatively narrow area of wage and salary negotiation in certain large industries in the private and public sectors. I think that pre-eminently employees in the public sector will suffer as a consequence of this.

I believe that there is a policy that one could adopt to meet this country's basic economic difficulties, which is altogether different from that which is contained in this Bill. I think that Part IV could be withdrawn and the Government's whole attitude to this changed if the emphasis were on a number of other measures. I am not putting forward these measures in any dogmatic or doctrinaire way. I am putting them forward as a constructive alternative to the Government's present policy. I will not elaborate them in detail because if I were to do so I am sure that I would fall outside the confines of order.

I would have thought that the things to look at are, first, the very low level of capital investment in this country, because this is the key to low productivity. I do not think that one can really deal with the problem of capital investment in Britain unless one is prepared to set out something in the nature of a Treasury criterion for large-scale capital projects. We really have to get away from the conception that people can——

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

Order. I think the hon. Gentleman is getting away from the Amendment. He can speak of his broad objections to Part IV of the Bill, but he is going too wide of the Amendment. Will he please come back to it?

Photo of Mr James Dickens Mr James Dickens , Lewisham West

Yes, indeed, Mr. Deputy Speaker. I am sorry that I was traversing rather wider than this Part permits me. Part of the background to the introduction of this Bill and of Part IV is the misconception that we in this country are living in a high wage economy. I do not think that the facts bear this out. Between 1960 and 1965 productivity in this country increased by only 14 per cent. Industrial output increased by only 17 per cent., the cost of living by 19 per cent., national wages and salaries by 37 per cent.——

Photo of Mr James Dickens Mr James Dickens , Lewisham West

—and dividend distribution and unearned incomes by 59 per cent. over the same period. The First Secretary said "Hear, hear". I wonder if he has compared these figures with the figures for other advanced industrial countries in Western Europe. I recently asked the research section of the Library to prepare for me a paper setting out movements in incomes and productivity in these countries. Without wishing to weary the House with a long succession of statistics, the facts as they relate to Sweden, Austria, Belgium, Denmark, France, Holland and Norway are as follows: In the four years from 1960 to 1964 this country had the lowest increase in national wages and salaries, the lowest increase in the cost of living, the lowest increase in industrial production, the lowest increase in productivity and the highest increase in dividend distribution or in unearned income. This is the essential economic background against which the Bill must be considered. Is there in this country such a basic economic weakness to justify this when one compares our situation with that of other West European countries? I think not. As I have explained, the basic problem in this country is the very low level of capital investment. The level of capital formation in this country between 1960 and 1964 compared with Germany——

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

Order. The hon. Gentleman must not persist in going as wide of the Amendment as he is. He must come back to Part IV or I must ask him to resume his seat.

Photo of Mr James Dickens Mr James Dickens , Lewisham West

I shall try to conclude briefly, Mr. Deputy Speaker, by indicating that I think that these are some of the basic problems that the Government should be tackling.

I have not had the opportunity, as I had hoped, to set out an alternative policy to Part IV of the Bill as a whole. The Bill is part of a general deflationary package. It can be justified only as part of an overall socialist package. It was wrong to introduce it on its own. Because of that, it becomes utterly indefensible and something that I and many of my hon. Friends cannot possibly support. It means, for example, if we support it that we are supporting a piece of legislation brought in directly to appease foreign financial interests and that we are ignoring the alternatives that confront the Government.

To sum up, on the one hand, the Government could face up to a head-on clash with the financial establishment in this country and with international financial interests. On the other, they could face up to a head-on clash with the British trade union movement. They have chosen, I am sorry to say, the latter course. Thus, I feel that the Bill, and especially Part IV can only bring about in the next few months a succession of avoidable industrial disputes. I very much hope that even at this late stage the Government will reconsider their attitude and withdraw Part IV.

Photo of Mr John Biffen Mr John Biffen , Oswestry

I shall not trade on the good nature of the House by speaking for more than a few moments. I have four points that I want briefly to draw to the attention of the Government.

First, by Clause 25 one is employing a master Clause to bring into action all the legislative requirements to put the freeze into effect. Many of us think that a freeze is not a sensible economic policy anyway. We argue this because the Government have already deflated by some £500 million through their recent measures on top of a number of other measures over the last 12–18 months. In the words of the Prime Minister, this is supposed to bring about a redeployment. The Chancellor of the Exchequer, when on the continent, talked about the freeze as being a bonus, as though it was something in addition to the deflation. But it is likely to prove the contrary. By attempting a freeze at a time when one has pursued a policy designed to bring about redeployment, one may hold back that redeployment. It is the balanced view of a number of economists that the freeze is likely to be mildly inflationary and, therefore, counter-productive. Therefor, it is tenable to hold this opinion and on that basis alone to seek to reject Clause 25 and Part IV.

3.0 a.m.

Secondly, the argument has been that the voluntary system has failed. The First Secretary told us that earlier today. Certainly by the measurement of the settlements it has failed. No one has doubted that. As a matter of fact, hon. Members on this side have spent a great deal of time during the last twelve to eighteen months pointing out the failure of the settlements to conform with the voluntary policy. What the Secretary of State has not informed the House, and what the House is entitled to know is: has the voluntary system of notification failed? Has the T.U.C. vetting committee under Mr. O'Hagan of the blastfurnace-men's union been unsuccessful or inadequate in fulfilling the task of vetting and notifying the Department of Economic Affairs of wage claims? Unless that point can be answered, part of the First Secretary's charge that the voluntary system has failed does not stand examination.

Thirdly, under Part IV, which the First Secretary tells us he wants to work voluntarily, invoking his powers in the 6-month freeze only as a last resort, when will he know that it has failed so that he must invoke the powers? It cannot be by virtue of the volume of information which will come to him from the private sector, because the information he will have from the private sector will be testimony that it has succeeded. All the information he will be getting from the private sector, I imagine, will be to the effect, "We would like to put up our prices. May we do so?" As long as they are notifying him and he is then able to advise them, the system is succeeding.

The First Secretary will be able to judge that it has failed only by the lack of information or from the statistics internally available to the Government. We all have our opinion about the statistics internally available to the Government. On the wages front, will it be done on wage rates published by the Ministry of Labour? How long after the end of the month do they come out? Wage rates tell only part of the story. What one would like to know about, is earnings which take into account drift, which is terribly important. Only one study will be done during the 6-month period. That will be done in October. How many months after October will we know the answer to that? Certainly it will not be until the new year, after the end of the statutory standstill period and in the period of excessive restraint.

What about salaries? There will be no information about salaries available to Government Departments until long after the whole period of standstill has ended. Therefore, the whole thing is bogus and nonsense. The First Secretary has no reliable information by which he can say, "Gentlemen, the voluntary system has failed. I must invoke the powers". Whatever it is that will persuade the First Secretary to invoke the final sanctions, it will not be on account of evidence that is placed before him.

My fourth point touches on the point which was made with such eloquence by the right hon. Member for Nuneaton (Mr. Cousins) and the hon. Member for Ebbw Vale (Mr. Michael Foot) about the constitutional aspects. The hon. Member for Ebbw Vale rightly objected to the way in which Part IV was inserted into the Bill. I think that there are even more serious implications in this Part of the Bill, and, indeed, in the whole way in which the incomes policy has been pursued. That is the trend of government by suggestion or government by invitation. This is something of which we should be very well aware. To my mind, it seeks to give to the Government an immense power without the responsibility of having to come and argue in the House for the law itself. We know what Mr. Stanley Baldwin once said about power without responsibility. I think that the message is as relevant and valid today as it was when he spoke of the Press battle. The power of the Government is undoubtedly immense, and it is acceptable only if it is harnessed to the law. It is certainly not acceptable if it aspires or presumes to rise above that.

Photo of Mr Ken Lomas Mr Ken Lomas , Huddersfield West

I am grateful for the opportunity to intervene in what appears to be a three-cornered fight between the Official Opposition on the benches opposite, the unofficial opposition on this side of the House and the Government. It is time something was said in support of the Government and of the policies they are seeking to pursue. I reluctantly accept the necessity—and it is with a heavy heart that I do so—for the measures they are introducing, because their aims are in the long-term interests of the country, the trade union movement, the Labour Party and the people who support the party in the country.

If I were to stale my qualifications for intervening on this subject, I would say that for 30 years I have been a member of the trade union movement and for over 20 years a member of the Labour Party. My roots are deep in the working-class movement and the trade union movement. Those roots are a lot deeper than those of hon. Members opposite and, with respect, a lot deeper than those of some of my hon. Friends who signed these wrecking Amendments.

I have, because of these things, an in-built sense of loyalty to ordinary people in the trade union movement and the Labour Party. I have at the same time an in-built sense of loyalty to the Labour Party. I helped, as all of us on these benches helped, this party to become the Government that would govern in the interests of the people as a whole. Many times have I been critical of the leadership and of the party's attitudes both at home and abroad, but I have tried to confine my criticism to within the ranks of the party and not take them outside. My criticisms have been muted. But there comes a moment—and this is such—when I am not prepared to remain silent and allow some of my hon. Friends to exercise their consciences at my expense, for that is what it comes to.

It is all very well, with a majority of 90-odd, for some people to abstain while the loyalists go through the Lobbies with heavy hearts, as my hon. Friend the Member for Lewisham, West (Mr. Dickens) mentioned while he abstained. But I go through the Lobbies because, above all, I want the Government to survive and those who stay seated on these benches and adopt postures as though they are the guardian angels and protectors of the party conscience should realise that we also have a conscience and are also concerned for the party and the nation. We are as concerned as anyone else.

I am reminded of the story told of Oscar Wilde when he presented himself at the New York customs. He was asked if he had anything to declare and replied, "I have nothing to declare but my genius." There are hon. Members on this side of the House who have nothing to declare but their martyrdom, but I am not prepared to assist them to become martyrs because we are in this party to keep the Government in power, for all its faults, and see that they govern in the interests of all and get on with the job they have been seeking to do over the last 20 months.

Why do we need Part IV and Clause 25? Because, in the short-term, we are in a desperate financial position. Whether we like it or not, there is a convulsive spasm in the world capitalist system. It is something which happens and we are a vulnerable nation. We are susceptible to the to-ing and fro-ing of international finance, and in the very short-term something has to be done in order to put the balance right and rectify what has gone wrong before. Under the Conservatives we drifted for far too long off course. Now, after 20 months in office, with all the lurching of international finance, we have to take immediate steps to put the ship of state back on course.

These provisions, however, have been written into the Bill, and Clause 25, which it has been agreed is a key Clause, states categorically that the provisions can only last at most for 12 months and then they will lapse automatically. It states that if it is decided to bring these provisions into operation, within 28 days of the making of an order the House of Commons must meet, when it will debate and argue. The arguments can be thrashed out then if the voluntary system fails. That will be the time to start talking of exercising conscience. All that we are doing at present is writing into the Bill a possible provision for the future in case something should go wrong.

It should be recognised that we had the firm promise last Thursday from my right hon. Friend the Leader of the House that if it is necessary to invoke Part IV of the Bill, the House will be recalled during the Recess so that this issue can be debated. There is, therefore, full scope for debate. No provision is made in the Bill to extend the operation of Part IV beyond the 12 months. Indeed, the Government could not do it. They would have to bring in an entirely fresh Bill to do that. It is, therefore, wholly logical to suggest that the Clause would be invoked only if all else failed.

When the Conservative Party link up with this side of the House, I begin to wonder what has gone wrong. When they want to get rid of a Clause and some of those on this side have the same intention, we must look at the matter a little more closely. The Conservative Party seem to be convinced that our prices and incomes policy will fail. [Hon. Members: "No."] Hon. Members opposite are concerned with the Bill and its effect upon prices; they are more concerned, perhaps, with prices than with wages. We on this side take the reverse approach. [Interruption.] Do not hon. Members opposite want this policy to succeed? Do they echo the words of one of their Front Bench spokesmen that it is "a nonsense?—a dangerous nonsense".

Are my hon. Friends in the trade union movement saying that they cannot control their own numbers and that they cannot make them see that there has been a change of government and that there is a world of difference between a Tory Government and a Labour Government? Hon. Members opposite can ask any of the pensioners or anyone else what is the difference between the two parties. The pensioners and others have benefited from what the Government have done. When the trade union movement wakes up to the fact that there has been a change and that we have made great progress since 1964—[An HON. MEMBER: "Progress backwards."] It is no use hon. Members opposite saying "Backwards" when one has only to look at the tremendous social reforms which we have already forced through in the teeth of opposition from hon. Members opposite. We spent long nights doing it to make it possible to build the foundations of some kind of social justice for the future.

All that we ask from the trade union movement in return is co-operation, understanding and tolerance. We are one and the same. The Labour movement came from the trade unions. They cannot opt out like separate units. One is part of the other. We are asking for that understanding, co-operation and tolerance so that we can work together. We have proved since October, 1964, that we are concerned with establishing social justice.

If we can obtain the voluntary cooperation that my right hon. Friend the First Secretary and many others have been seeking to obtain, Clause 25 will be snuffed out because both industry and the trade union movement will have recognised that it is the only way out of the terrible economic crisis in which we find ourselves. It is not a crisis of our making but was forced upon us by circumstances entirely outside our control. If we can get that co-operation between the two, Clause 25 flies out of the window, and we can then begin to have this planned growth in the economy, this planned growth of wages. This is what we really want to get down to—to be able to plan our economy in the fullest sense.

3.15 a.m.

Of course, I have reservations. My own trade union is the National Union of Public Employees, and if I honestly thought that the measures envisaged by the Government would in the long term make worse the position of, for instance, nurses, or porters, and ancillary staffs with take home pay of £9 or £10 a week, I would not support the Government. It is because I believe that this is the way to extricate ourselves from the terrible chaos in which we find ourselves that I go along with the Government in the long term. We want to see the lower-paid workers' pay raised, and there is no point in merely treading water and making no progress towards the shore, and so we have got to get it clear that this is not a measure of attack either upon the trade union movement or the workers of this country. There is no power of retrospection in Clause 25. It does not say one can take back what has already been given when the Bill comes into force. If we remember that these are merely reserve powers, in case they are needed, I think we shall probably be able to see the matter in a better way than we do at the moment.

The point has been made, and very rightly made, and I agree with my hon. Friends, about the long-term aims, and the things we want to do. Of course we want to do those things, and I am 100 per cent. with my hon. Friends in that, but this is not a long-term Measure, and I am concerned essentially at the moment with the short term. When my right hon. Friend the Member for Nuneaton (Mr. Cousins) talks about productivity, I wonder whether it would not be a good idea to begin with the liner trains and do what he can about that as General Secretary of a leading trade union. Again, on the defence expenditure argument, for twenty years I have argued that the defence expenditure of this country should be cut and that we ought to put a limit to the vast sums of money we pour out on weapons of war, and use that money in other ways. But as I said, and I repeat and urge upon the House, this is purely a short-term Measure for 12 months so that we can get on an even keel again.

We want the voluntary method to succeed. Of course we do, and we want the Government to allow it to run its course, but if, from selfishness or all kinds of reasons, that method begins to fold up, then, if we really mean what we say and want to put this country on its feet again, we must have available means to make certain that the country is put on the right course. I would prefer to drag the 1966 child screaming and Kicking into the 'seventies, whether it likes it or not, than leave it as it is, because it will turn round at later date and thank us—for the work we did in Parliament in 1966 really to put things right. We would then deserve the thanks, and not the kicks from the people of this country.

It should be remembered—and this is a point which has been overlooked in much of these debates—that Clause 25 is concerned as much with prices as it is with incomes. That is important. We cannot divide the two; the one is part of the other, if we try to have any planned system at all; the two must be related if we are to work out any prices and incomes policy. We want to plan our economic life; we want planned growth; and I believe the system of this Clause is the answer if the voluntary system fails. It is like the lifeboat carried in a ship; it is not there necessarily to be used, unless it is absolutely essential in an emergency; but it must be there to make sure we have the means we need if necessary.

I passionately want this Government to succeed. No one on this side of the House wants to see this Government fail. We passionately want them to succeed. We know in our hearts this Government of the people are working for their betterment. I passionately want to see a planned economy, and I passionately want to see a society which is based on social justice and equal opportunity, and the people getting the benefits long denied them by the party opposite.

I say to my friends in the trade union movement, and I say to my hon. Friends here, let us trust this Government; let us give them the opportunity to get on with the job; let us back them in the country; let us try to unite the whole of the trade union movement behind them. If we do that, and work together, I believe we can build a better Britain, and be able to play our part in building a better world.

Photo of Mr William Worsley Mr William Worsley , Chelsea

I make no apology for intervening in this debate, though it is late and the debate has gone on long. Nor do I criticise hon. Gentlemen opposite who have spoken sometime at inordinate length, because this is one of the most important—perhaps, the most important—issues debated in my time in this House. The proposition is to give to the Government powers more striking and dramatic than those given to any Government, certainly in my time in the House. I wish merely to say this about the speeches which have been delivered by hon. Gentlemen opposite, that there has been a curious theological air about them. It seems to me quite extraordinary, as an outsider to the internal argument in the Labour Party, that they should have devoted quite so much time to the proposition what Keir Hardie would or would not have done in present circumstances and so little to the economic situation which we are facing. It shows the fundamental aridity of the party opposite when confronted with the present situation.

What I want to say can be said quite shortly. This Clause gives enormous powers to the Government. It makes not a jot of difference to say that the intention is not to use these powers; the powers are there to be taken, and the fact that they are there makes all the difference in all that the Government do. The Government are involving the country in a situation like that in which the drug taker finds himself. He starts off on soft drugs, and then goes on to hard drugs. I put this point as strongly as I can and I hope the Government will bear it in mind. They are taking hard drugs in the Bill—very hard drugs—and they will find it difficult to get off the hook and give these powers up.

The right hon. Member for Nuneaton (Mr. Cousins) was right when he referred to the difficulty of doing this. That is why I thought it important to intervene even at this late stage in the debate. These powers are very strong drugs indeed, and it will be very difficult for the Government to give them up in the years ahead. What we need is not these increased powers of the Government but a radical and dynamic policy such as that put forward by my hon. and right hon. Friends.

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

The hon. Member for Chelsea (Mr. Worsley) described hon. Members on this side of the House as arid. That is the last thing we are. Aridity is not characteristic of what goes on on this side of the House. The reality of the discussion in the debate has taken place on this side of the House, whereas the Opposition have been going through the traditional motions of opposition.

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

My right hon. Friend tells me not to provoke the Opposition. I was merely saying that they were acting as an Opposition. I should have thought that that was a compliment rather than provoking them. My right hon. Friend does not want the debate to go on much longer, and I share that view. There are, however, one or two points I should like to make. I shall endeavour to emulate the brevity of the hon. Member for Oswestry (Mr. Biffen), but not in any other way.

One document in this matter which has received too little attention is the report of the T.U.C. I detect in the wording of the report and its comments on this Clause the hand of the Research Department of the T.U.C. When my right hon. Friend the First Secretary ceased to be a full-time trade union official in 1945, the loss to the trade union movement was so great that I thought I had better fill the gap in a very small degree, so in 1946 I became a full-time trade union official.

Photo of Mr George Brown Mr George Brown , Belper

I have never yet ceased to be a full-time trade union official. Like my right hon. Friend the Member for Nuneaton (Mr. Cousins), I am a full-time trade union official on leave of absence from the same trade union.

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

Possibly by "full-time" we do not mean precisely the same thing.

I worked for a trade union from 1946, first with the National Union of Bank Employees and then as Assistant General Secretary of Equity, a post which I relinquished on becoming a Member of the House. Therefore, my experience has been in the non-manual side; but if anybody imagines that the struggles on that side are not as real, vital or vigorous as the struggles on the manual side, he does not have much experience of the non-manual trade union movement.

I should like, as the Americans say, to write a part of what the T.U.C. statement says into the record. It reads: The General Council regret that the Government felt compelled to announce publicly, without prior consultation with those who had signed the Joint Statement of Intent on Productivity, Prices and Incomes, so violent a departure from the principles on which the Joint Statement was based. That "violent departure" is the Clause we are discussing. It is this which the T.U.C. felt bound in this statement to regret.

The statement also says: It was apparent to the General Council that one defect of the approach adopted by the Government is that a complete standstill will give rise to situations where it is patently obvious that injustice would result from its rigid application. The T.U.C. goes on to say that the alternative is even more difficult. It adds: A further consideration that was in the General Council's mind was that the imposition of a standstill would make it exceedingly difficult to resume thereafter an agreed incomes policy of the type that is being currently attempted. The T.U.C. believed that this freeze, so far from being the pad from which we are to launch out after it is over, will make the prices and incomes policy even more difficult.

The final quotation which I want to make from the statement is this: When the General Council discussed the issues with Ministers they were assured that the standstill was regarded not only by the Government but by foreign Governments as an integral part of the measures. They were also left in no doubt that if the T.U.C. opposed the standstill it would leave the Government no option but to take other measures to enforce it …". The T.U.C. was, therefore, in the position that it felt that it had no alternative but to "acquiesce", as it says. In these circumstances, we are entitled to ask: what is the Government's position?

3.30 a.m.

I think that the secret is this: as the Government told the T.U.C. the standstill is regarded not only by the Government but by foreign Governments as an integral part of the measures. I think that the words, "by foreign Governments" are the key to the situation. They are the reason why the Government have felt it necessary to add these powers.

My right hon. Friend the First Secretary has said that it is not his intention to utilise them, and I believe him. The T.U.C. has acquiesced, but there is a fairly clear indication in the T.U.C. document that it feels that the powers should not be invoked at all. I very much hope that my right hon. Friend's intention and the T.U.C.'s views will prevail, and that the powers will not be invoked.

If, therefore, this is the position, and it is not the intention to invoke the powers, what action will my right hon. Friend take if the standstill is not effective? I was not among those who felt that the procedures of this House made it necessary to bring Part IV before the House on Second Reading. Some of my hon. Friends did feel that, and I respect their views, but on that occasion it was my view that the Government were entitled to get their business done in an emergency fashion if they could, and I supported them in the Division Lobby then. I greatly fear that I shall not be able to do so this time. I wish that I could.

I put the following point, which is very important, to my right hon. Friend. If a situation arises in which he contemplates the use of these powers, will he not consider, before taking that step, which is so much feared by the trade union movement and by many hon. Members on this side of the House, the possibility of contracting out of this country's traditional financial position in the world, even if that contracting out and this country's ceasing to operate a reserve currency were to involve—I come to this extremely reluctantly—the act of devaluation?

I hope that we shall never arrive at that choice. But if we did would not the right choice be to accept devaluation rather than to introduce a measure which would go so much against the whole tradition of the trade union movement in this free society of ours?

Photo of Mr John Horner Mr John Horner , Oldbury and Halesowen

A number of hon. Members, and my right hon. Friend the First Secretary himself, have expressed sorrow during the debate at the steps the Government have felt obliged to take. I share in the sadness which has been expressed from these benches. I am sad that the Government were unwise enough to tack Part IV on to the original Bill. The arguments have already been stated, and I shall not repeat them at this time of the morning. But in consideration of the whole question of mounting some sort of prices and incomes policy in this mixed economy that the Government are trying to manage I have sought to indicate, both inside this Chamber and outside, that I do not share some of the views that have been expressed by my hon. Friends below the gangway tonight.

I have sought to indicate that I am a "Woodcock man", that I believe that if an incomes policy is to work it must be on a voluntary basis. What really saddens me tonight is that I believe that Part IV has slit the throat of that infant child which was born a weakling some 12 months ago. The infant voluntary system undertaken by the Trade Union Congress has, I think, been murdered by Part IV. There will be little hope of going through the exercise once again. I promise that I shall not mix my metaphors any more.

The First Secretary of State is sad and shares my sorrow that he has been obliged to present to the House a Measure which sets aside trade union agreements and settlements which are arrived at through the processes of collective bargaining. Some of my hon. Friends have said that their roots are deep and they have had long experience of these matters. I can only say that for about 25 years now I have, with others, been responsible for training the up-and-coming generation of trade union officials. One basic tenet upon which we have rested the whole fabric of collective bargaining in this country is that, when an agreement has been arrived at, it is honoured. No matter how distasteful it may be in some of its consequences, until it is revised that agreement is honoured. I have been engaged, as other hon. Members have, in bitter battles, but I am proud that, when I entered the House, I could say that any agreement reached with me was honoured.

Part IV, this blunt instrument, will not be put into effect, we are told by my right hon. Friend, unless it is necessary. But it has had an immediate effect in the public services. In the sectors of employment in which the Government are directly responsible, local government employ and central Government employ, there is a wage freeze. It does not require Part IV. There are adequate powers already to impose a wage freeze.

To illustrate one of the saddest aspects of the problem facing us, I take the example of my own union. Five years ago, in 1961, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) imposed a pay pause. All public servants were at once affected. Some hon. Members have talked about the nurses, and one was kind enough to link the fire fighters with the nurses. Immediately, these public servants were embroiled in the pay pause. Along with my right hon. Friend the First Secretary—I acknowledge the help I received from him at that time—we were able to break the pay pause for fire fighters, so unjust did we feel it that a commitment entered into was not being honoured. We wished that we could have broken it earlier for the nurses.

Over the past ten months, the wage and salary structure in this important public service—which can never take strike action, so one does not talk about striking—has been the subject of renegotiation, after being fixed five years ago. These negotiations would have been concluded at 11 o'clock on 21st July. It would have been a mere formality by the Joint Whitley Council. But at 20 minutes to five on the Tuesday afternoon the Prime Minister sat down and at half-past five my successor in this union was seeing the Home Secretary. It had not needed Part IV. The pronouncement had been made and the negotiations were at an end. The whole issue, after ten months, is to be referred to the Prices and Incomes Board, and what finally emerges will emerge under the new criteria in operation for the next six to nine months.

The firemen would not complain if they were in the queue for six months. They would not like it, but if all public servants were in the queue the firemen would join it. But because of 18 hours the firemen are not in the queue because there was no settlement, and under the terms of Part IV no settlement can now be reached. This would be bad enough, but some of these men were anticipating retiring. They joined the London Fire Brigade with me 30 years ago and they are reaching the age of 55, as I am in a few months, which is the compulsory age for retirement. Because of the action of the Government these men are to be required to forgo for the rest of their lives, unless other extraordinary measures are taken, pension increases which they were anticipating of up to £180 a year. These firemen have put it to me that this is not a pay pause, it is confiscation.

I speak with some feeling because we have expressed our emotions. Five years ago we would have been able to deal with this problem, but today I can talk economics to my colleagues in the fire service until the statistics come out of my ears and they will ask why, because of 18 hours, an agreement which would have been reached and which would affect some of them for the rest of their lives was snatched from in front of their eyes. They will ask how this can be just. They say to me that I was their general secretary for 25 years and, with the First Secretary, we were able to overcome a situation not dissimilar from the one they are presented with now. If my successor were to do half what we did in 1961 in order to express displeasure at what was being done to the public sector and if he allowed himself to engage in the activities of that kind, he might find himself in danger under this legislation to which I am expected to subscribe.

I hope that the House and the Government will understand some of the difficulties which are immersed in trade union activity. When we talk about loyalties and the need to sustain the Government in this difficult period by our loyalties, it must be realised that there are other deep-rooted loyalties built up through comradeship which cannot be shrugged off by saying that there are problems and we must give the Government support. I hope that I have shown some of the residual issues which arise through Part IV which we are being asked to accept.

3.45 a.m.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

When replying to an earlier discussion, my right hon. Friend the First Secretary expressed his concern for lower paid workers. I invite him, when he replies to this debate, to comment on the position of lower paid workers in a number of industries in which some sections of workers have received higher pay and in which, particularly recently, applications for higher pay for lower paid workers had either been granted or were about to be granted.

One such case is pending in the steel industry. Another case involves members of the National Union of Railway-men. These are concrete examples on which my right hon. Friend should comment, although at this late hour I will not argue the general principles again but will merely comment on the principle involved in the cases to which I have referred.

We are about to go through a period during which those who are able to live on capital and very large incomes will feel no effect whatever from the powers to be taken under Part IV while those whom we accept my right hon. Friend wishes to help and protect will bear the full brunt of this policy. This cannot be reasonable.

The powers being assumed by the Government under Part IV will absolve any employer from paying increases already negotiated by the process of collective bargaining. Why is it not possible, in such cases, for that money which the employer will save to be set aside in a special fund so that the workers will not for ever forgo the operative increases that they would otherwise have had?

I need not, particularly at this hour, reiterate what has happened in the industrial areas. Consider, for example, the area of South Yorkshire, of which I represent a part. Many people, at the end of their working lives, have no savings—because they have lived through a number of freezes or have been unemployed—with which to supplement the pensions which they receive. Is it not unjust that the Government should do nothing to try to ameliorate their position?

I must comment on the change that occurred from the time when the original announcement was made by my right hon. Friend the Prime Minister about the application of this policy by voluntary means and the time when, a few days later, that policy became compulsion. Although many of my hon. Friends and I have put questions to the Government—these questions have been repeated several times in the last few days—we have not yet been given a detailed explanation of why this change has come about. I again invite my right hon. Friend to provide the House with that explanation.

The Government are now assuming some of the powers which were originally to have gone to the Prices and Incomes Board. Does the First Secretary consider it wise, at a time when he is trying to build up a prices and incomes policy, that he should become so directly involved? When I refer to my right hon. Friend in this connection, I am referring to powers being assumed by the Government and not by the First Secretary as a particular Minister. Is this uncertainty about what will happen in the second six months right and wise? New criteria will have to be worked out; there is equal uncertainty about the end of the 12 months. Should we give these substantial powers to a Minister and Government without a clear indication of those criteria? Might not some of the effects of the Bill be hostile to the general policy of expanding production again after the 12 months? In the absence of clear answers to these questions, it is difficult to see where this policy will lead us.

Photo of Mr George Brown Mr George Brown , Belper

I have listened to the debate for a long time and I was anxious not to rise until everyone had had a chance to speak. The introduction of Part IV was an extension of the discussion and the considerations which we took into account earlier. I said in the earlier debate and must import into this one that, given that things have not gone as we wanted and that inflation has gone higher than we could support, we have to face the fact as a nation and not merely as a Government that steps must now be taken—immediately. They can be taken by agreement, because we all understand the immediate gravity of the situation.

I hope and believe that, having brought it home to the country, steps will be taken by agreement. I am very encouraged by the messages which we receive from very important bodies with every reason to be cautious and think twice, who are committing a good deal on the altar, but who are nevertheless supporting us in holding the situation. If we can encourage this trend, the position will be held by voluntary agreement. I am certain that if we can get a breathing space, a pause, by voluntary agreement we can then work out the steps to be taken from there on. This is what Part IV is about.

Those of my hon. Friends who have expressed doubts and worries—I share them all—can help to overcome those doubts and worries if they help to ensure that this is done by voluntary understanding and agreement. I said in Standing Committee and repeat now that there are moments in all this when our people understand better than we give them credit for understanding and our business is to give them leadership and encouragement.

None of us can have any doubt but that we need a pause. In the last 20 months—the period for which we were responsible—we have cashed more than we earned. We therefore need a period for our productivity to catch up with what we have already encashed. This is indisputable, and this is the period for which we have to provide.

What Part IV of the Bill does is to provide that if we can get it by voluntary understanding and voluntary co-operation, O.K. We think we need six months for catching up with what we have encashed already. If we cannot get it by voluntary co-operation or, to put it even worse, if a small group, any group, go and break what other people want to do, then we must have powers by which we can pull them up and prevent the small group taking advantage of the majority who want to co-operate. Part IV is really about all that. I do not think this House really would be doing justice to itself or to the people whom we represent if we were content simply to exhort people to do the right thing and were not willing to take powers to deal with a minority who cheat on those who listen to us.

There are two periods envisaged in Part IV, to which my hon. Friend the Member for Huddersfield, West (Mr. Lomas) referred. If he will not mind my saying so, he made a speech right after my own heart. I loved every word and minute of it. I made speeches for a number of hon. Members during the election. I heard some of those hon. Members tonight, and I am bound to say that I wondered why I went. When I heard my hon. Friend, I knew exactly why I went. The night when I spoke for him I had a croak like nobody's business. I could hardly get a word out. I was so delighted tonight that I went, croak and all, up to Huddersfield for him.

As my hon. Friend the Member for Huddersfield. West said so very clearly, we have got to ensure that during the six months where we stand still, the period where we catch up with what we have already encashed, we have got to work out the criteria against which we can judge the claims that ought to go through in the second six months. It is in that second six months that the claims of social justice for the lower-paid workers, all those who can really show that they are earning their increased earnings from productivity, can get through.

We have six months to catch up with what we have already had. We have six months to work out a set of criteria by which we can judge the claims of social justice and productivity. This I believe we can do. This the Government, the C.B.I. and the T.U.C. are already sitting down to. If we can do it, as I believe we can by agreement, none of these powers will ever be brought into account. But I would be much less a man than I would like to be thought to be if I did not say that if we cannot do it by agreement, I think we shall have to call the powers into being and see that it is done. I think it is the Government's business to see to that. But I do not believe that we will need them. I believe that so long as people are told the situation, so long as they know that we are resolute, people will themselves be resolute, and I believe trade union officials will be resolute.

So I ask for this Clause. I ask for the powers under it in order that we can get it done in that way—I repeat myself, but nevertheless the House might forgive me, so I put it straight on the record—so that we can move from a period of six months during which we are catching up with ourselves, to a period of six months in which we are testing all the claims that go through against very severe criteria, and then at the end of the second six months we can get out into the open country again and deal with things, expansion and growth, in a proper sense of criteria.

Hon. Friends of mine have wondered whether dividends, unearned incomes and other things were caught by this. Yes, indeed they are, and caught just as severely as anything else, and, indeed, rather more severely. My business now must be to see that unearned incomes, dividends and prices are tested as severely as anything else could be tested against the standstill and the new criteria.

4.0 a.m.

Photo of Mr John Horner Mr John Horner , Oldbury and Halesowen

Might I remind my right hon. Friend of public service pensions? I am sure that he has them in mind. I said that they would be confiscated unless some measure to protect them was introduced.

Photo of Mr George Brown Mr George Brown , Belper

I have them very much in mind. Arising out of having to do such an operation—I much regret that we have to do it; had things gone differently in the last year we should not have had to do it—there will be a number of complications, and one of them concerns people coming up to retirement. By affecting their last six months of earning, one affects their continuing income. This is being looked at at the moment. We shall do our best to see whether we can help in that situation. There are a number of complications of that kind. Nobody would pretend that this is an operation that one can do without difficulties. On the other hand, it is not the business of the Government to make those difficulties any worse than they need be. We shall look at this.

I was asked by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), whom, unhappily, I did not hear—he was so kind to me the other night; I regret I did not hear him—how I reconciled the voluntary system with Part IV. I think that I have really answered that. I believe that it is our business to provide the powers to show the country that we think that this is necessary and that we shall, if need be, do it, but I believe that if we make that clear the country will do it.

The hon. and learned Member for Ruislip-Northwood (Mr. Crowder) asked an important question about a doctor who might go bankrupt. The answer was given by my right hon. Friend in the House on Monday when he said that expenses of this kind are being allowed for under the new arrangements that we are making. There will not be, therefore, any risk of the doctor going bankrupt or being improperly treated.

Like the previous one, this has been an important debate. All my right hon. Friends and I thought that it was important to let it go the full run and not seek to interfere. I cannot promise, of course, to carry everybody with me. I only say that, given that we believe that this is the right thing now to do, that this is the right way now to organise the country to pull itself up sharp, I think that the powers that we are asking for under Part IV and, in particular, in Clause 25, which is the master Clause in this Part, are the right ones to ask for, and I hope that the House will now give them to us.

Question put, That the words proposed to be left out, to "under" in line 33 in page 22, stand part of the Bill:—

The House divided: Ayes 157, Noes 115.

Division No. 169.]AYES[4.4 a.m.
Albu, AustenHamilton, William (Fife, W.)Page, Derek (King's Lynn)
Anderson, DonaldHannan, WilliamPavitt, Laurence
Atkins, Ronald (Preston, N.)Harrison, Waiter (Wakefield)Peart, Rt. Hn. Fred
Barnes, MichaelHaseldine, NormanPentland, Norman
Baxter, WilliamHenig, StanleyPrentice, Rt. Hn. R. E.
Benn, Rt. Hn. Anthony WedgwoodHerbison, Rt. Hn. MargaretPrice, Christopher (Perry Barr)
Bennett, James (G'gow, Bridgeton)Houghton, Rt. Hn. DouglasPrice, Thomas (Westhoughton)
Binns, JohnHowarth, Robert (Bolton, E.)Probert, Arthur
Blackburn F.Hughes, Roy (Newport)Randall, Harry
Blenkinsop, ArthurHunter, AdamRedhead, Edward
Boardman, H.Hynd, JohnRoes, Merlyn
Boston, TerenceJanner, Sir BarnettRhodes, Geoffrey
Bowden Rt. Hn. HerbertJohnson, Carol (Lewisham, S.)Richard, Ivor
Boyden, JamesJohnson, James (K'ston-on-Hull, W.)Roberts, Gwilym (Bedfordshire, s.)
Bray, Dr. JeremyJones, Rt. Hn. Sir Elwyn (W. Ham, S.)Rodgers, William (Stockton)
Brown, Rt. Hn. George (Belper)Jones, J. Idwal (Wrexham)Ross, Rt. Hn. William
Brown, Bob (N'c'tle-upon-Tyne, W.)Kelley, RichardRowland, Christopher (Meriden)
Buchan, NormanKenyon, CliffordRowlands, E. (Cardiff, N.)
Butler, Mrs. Joyce (Wood Green)Lawson, GeorgeRyan, John
Cant, R. B.Leadbitter, TedSheldon, Robert
Carter-Jones, LewisLedger, RonShore, Peter (Stepney)
Conlan, BernardLever, L. M. (Ardwick)Short, Mrs. Renée (W'hampton, N. E.)
Crawshaw, RichardLewis, Ron (Carlisle)Silkin, Rt. Hn. John (Deptford)
Crossman, Rt. Hn. RichardLomas, KennethSilkin, S. C. (Dulwich)
Cullen, Mrs. AliceLoughlin, CharlesSilverman, Julius (Aston)
Davies, Harold (Leek)Luard, EvanSkeffington, Arthur
Dell, EdmundLyon, Alexander W. (York)Slater, Joseph
Dewar, DonaldLyons, Edward (Bradford, E.)Small, William
Diamond, Rt. Hon. JohnMabon, Dr. J. DicksonSnow, Julian
Dobson, RayMcBride, NeilSteele, Thomas (Dunbartonshire, W.)
Donnelly, DesmondMcCann, JohnSummerskill, Hn. Dr. Shirley
Dunnett, JackMacColl, JamesTaverne, Dick
Dunwoody, Dr. John (F'th & C'b'e)Macdonald, A. H.Thomas, George (Cardiff, W.)
Edelman, MauriceMcKay, Mrs. MargaretTinn, James
Edwards, Robert (Bilston)Mackintosh, John P.Varley, Eric C.
Edwards, William (Merioneth)Maclennan, RobertWalker, Harold (Doncaster)
Ellis, JohnMcMillan, Tom (Glasgow, C.)Watkins, David (Consett)
English, MichaelMcNamara, J. KevinWeitzman, David
Ennals, DavidMallalieu, J. P. W.(Huddersfield, E.)Wellbeloved, James
Ensor, DavidManuel, ArchieWhitaker, Ben
Evans, Ioan L. (Birm'h'm, Yardley)Marquand, DavidWilley, Rt. Hn. Frederick
Fletcher, Raymond (Ilkeston)Mayhew, ChristopherWilliams, Clifford (Abertillery)
Floud, BernardMillan, BruceWilliams, Mrs. Shirley (Hitchin)
Ford, BenMolloy, WilliamWillis, George (Edinburgh, E.)
Fraser, John (Norwood)Morgan, Elystan (Cardiganshire)Wilson, William (Coventry, S.)
Fraser, Rt. Hn. Tom (Hamilton)Morris, Alfred (Wythenshawe)Woodbum, Rt. Hn. A.
Freeson, ReginaldMorris, John (Aberavon)Woof, Robert
Gardner, TonyMoyle, RolandWyatt, Woodrow
Garrett, W. E.Mulley, Rt. Hn. FrederickYates, Victor
Garrow, AlexNorwood, Christopher
Gordon Walker, Rt. Hn. P. C.Oakes, GordonTELLERS FOR THE AYES:
Gourlay, HarryOgrlen, EricMr. Alan Fitch and
Greenwood, Rt. Hn. AnthonyO'Malley, BrianMr. Edward Bishop.
Gregory, ArnoldOswald, Thomas
NOES
Alison, Michael (Barkston Ash)Clegg, WalterGiles, Rear-Adm. Morgan
Allason, James (Hemel Hempstead)Crouch, DavidGilmour, Sir John (Fife, E.)
Batsford, BrianCrowder, F. P.Glover, Sir Douglas
Berry, Hn. AnthonyDance, JamesGlyn, Sir Richard
Biffen, JohnDavidson, James (Aberdeenshire, W.)Goodhart, Philip
Birch, Rt. Hn. NigelDean, Paul (Somerset, N.)Coodhew, Victor
Blaker, PeterDeedes, Rt. Hon. W. F. (Ashford)Gower, Raymond
Body, RichardDoughty, CharlesGresham Cooke, R.
Boyle, Rt. Hn. Sir EdwardEden, Sir JohnGriffiths, Eldon (Bury St. Edmunds)
Brewis, JohnElliott, R. W.(N'c'tle-upon-Tyne, N.)Grimond, Rt. Hn. J.
Brinton, Sir TattonFarr, JohnHall, John (Wycombe)
Brown, Sir Edward (Bath)Fisher, NigelHarrison, Col. Sir Harwood (Eye)
Bruce-Gardyne, J.Fletcher-Cooke, CharlesHastings, Stephen
Bullus, Sir EricFortescue, TimHawkins, Paul
Carlisle, MarkFoster, Sir JohnHeseltine, Michael
Carr, Rt. Hn. RobertFraser, Rt. Hn. Hugh (St'fford & Stone)Higgins, Terence L.
Hill, J. E. B.Maxwell-Hyslop, R. J.Royle, Anthony
Hobson, Rt. Hn. Sir JohnMaydon, Lt.-Cmdr. S. L. C.Russell, Sir Ronald
Hooson, EmlynMiscampbell, NormanSharples, Richard
Hordern, PeterMitchell, David (Basingstoke)Shaw, Michael (Sc'b'gh & Whitby)
Hornby, RichardMore, JasperSinclair, Sir George
Howell, David (Guildford)Morgan, W. G. (Denbigh)Smith, John
Hunt JohnMunro-Lucas-Tooth, Sir HughSummers, Sir Spencer
Hutchison, Michael ClarkNeave, AireyTapsell, Peter
Jenkin, Patrick (Woodford)Noble, Rt. Hn. MichaelTurton, Rt. Hn. R. H.
Johnston, Russell (Inverness)Nott, JohnVickers, Dame Joan
Jones, Arthur (Northants, S.)Onslow, CranleyWainwright, Richard (Colne Valley)
Jopling, MichaelOrr-Ewing, Sir IanWard, Dame Irene
Joseph, Rt. Hn. Sir KeithPage, Graham (Crosby)Webster, David
Kaberry, Sir DonaldPardoe, JohnWells, John (Maidstone)
King, Evelyn (Dorset, S.)Peel, JohnWhitelaw, William
Kitson, TimothyPercival, IanWilson, Geoffrey (Truro)
Legge-Bourke, Sir HarryPike, Miss MervynWood, Rt. Hn. Richard
Loveys, w. H.Pink, R. BonnerWorsley, Marcus
Lubbock, EricPrice, David (Eastleigh)Younger, Hn. George
Mackenzie, Alasdair (Ross&Cromarty)Prior, J. M. L.
Maclean, Sir FitzroyPym, FrancisTELLERS FOR THE NOES:
Macmillan, Maurice (Farnham)Ramsden, Rt. Hn. JamesMr. Reginald Eyre and
Maddan, MartinRawlinson, Rt. Hn. Sir PeterMr. Anthony Grant.
Marten, NeilRossi, Hugh (Hornsey)

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

I beg to move Amendment No. 26, in page 22, line 33, after "order", to insert "or direction".

This is a purely drafting Amendment. It has the force of bringing in the words "or direction", and this means that the two terms which apply at the present time to orders under Clause 26 shall also apply to terms under Clause 27—namely, that the recent price in the period specified shall be that taken and, secondly, that the latest price shall be that which is chosen as the basis of comparison. The Amendment therefore brings the directions under Clause 27, applying to application figures on 20th July, under the same arrangements as at present apply to Clause 26.

Amendment agreed to.

Further Amendment made: In page 22, line 38 after "order", insert "or direction".—[Mrs. Shirley Williams.]

Photo of Mr Richard Wainwright Mr Richard Wainwright , Colne Valley

I beg to move Amendment No. 57, in page 23, line 8 at end to insert: (9) In cases where an order refers to the same kind of work being paid for before and after a specified date, work at an ascertained rate of output higher after the specified date than before it, shall not be regarded as the same kind of work. This comes to the rescue of unfortunate but key words in the Bill, namely, "the same kind of work" and provides that work at a higher ascertained rate of output shall not be regarded as "the same kind of work".

The precision of the words was challenged in Committee, but no satisfactory answer was given. One purpose served by the Amendment is to extract from the Government an explanation of what these words mean. Any answer they provide may help deal with what would otherwise be the constant riddle of the mill or the jest of the canteen.

4.15 a.m.

The words show an extraordinary remoteness from conditions of modern factory life, giving the idea that work ambles on from month to month in the same pattern. In a modern, well-run factory, the pattern of work is continually changing and it is a most important job of union negotiators to keep up with the changing pattern of work. We hope, therefore, that as a result of our discussion, these less imprecise words will appear in the Bill.

The other purpose of our Amendment is to bring the Bill a little more into line with the White Paper on the Prices and Incomes Standstill, on which it is supposed to be based. The White Paper states that The country needs a breathing space of 12 months in which productivity can catch up with excessive increases in incomes which have been taking place. The use of the words "the same kind of work", which would exclude any outcome of productivity bargaining during the period of the freeze, suggests that the object of letting productivity catch up with incomes can be attained simply by freezing incomes and hoping that productivity will come trotting along to catch up.

It is extremely unlikely, however, that in the two years that now face us of deflation, unemployment and a growing feeling of insecurity, productivity will catch up unless the most vigorous and, indeed, adventurous measures are taken to encourage it to do so. But instead of vigorous and adventurous measures to encourage productivity bargaining, we have this curious form of words which will slap down all productivity bargaining during the period of the freeze. If the wording is not changed, the clear danger is that productivity will stagnate.

In Committee upstairs, the Government made it clear that they regard productivity bargaining of a genuine kind as thoroughly desirable, and they admitted that the standstill would be greatly to its disadvantage. Hon. Members will be aware that there are many bargains which masquerade under the title of productivity bargaining which are not truly so, but I doubt whether there would be any serious dispute that genuine productivity bargaining has at last begun to make advances. We on this bench are very concerned that this process should not be brought to an untimely stop.

In addition to the well-adduced arguments that were used upstairs in Committee about the threat to productivity bargaining, union leaders have been eloquent in recent weeks about this threat. Perhaps it will suffice if I quote an article by Mr. Bugler from the Sunday Times of 31st July, stating: Jack Jones, number three in the Transport and General Workers' Union, veteran of the International Brigade in Spain and a man with a good record in developing piecework bargaining, told me with unequivocal bluntness that in a total standstill 'It's not going to be possible to continue productivity bargaining.' Neither he nor Frank Chapple"— of the Electrical Trades Union—— hold any hope for suggestions that productivity pacts could be enacted now and the rewards settled later. … Furthermore, it has been made clear from the Government side that one of the results for which they earnestly hope, and for which we must all hope, from the present measures is a good deal of positive and constructive redeployment of labour, but how is this redeployment to take effect unless the concerns which, in the national interest, should have much more labour are enabled to beckon labour from declining industries by offering modern, genuine productivity bargains and, in effect, to welcome people with the slogan that if they come to their works they will have to work jolly hard, to take a good deal of responsibility and prove themselves adaptable but that at the end of the day they will be very well paid for doing so. That is the way to achieve redeployment. Instead, if we are landed with this slackening down form of words, insisting that there is no escape from this formula, "the same kind of work", there will be no hope of further redeployment or increase of productivity bargaining.

I hope that the Government will accept this Amendment in order that the fetters may be at least prised open.

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

The hon. Gentleman the Member for Colne Valley (Mr. Richard Wainwright) made it clear that the problem is not one of understanding. I think he does understand the meaning of "the same kind of work", and any attempt on my part to expand upon or to clarify a very simple phrase would only lead to a confusion which I do not believe exists. If it exists in his mind, I am sure it does not exist in the minds of most hon. Members, or will exist in the minds of those outside.

In a very clear and very proper way he tried to hang a further argument about productivity upon this Amendment, and of course the temptation even at this hour is to cover the ground again which we covered very well not only in Committee but also earlier today. He did, however, misrepresent, albeit unintentionally, what was said by the Government in Committee.

We did not admit that the standstill would work to great disadvantage as far as produtivity bargaining is concerned. On the contrary, we said in Committee, and we said only a short while ago in this House, that, partly because productivity bargains take such a very long time to negotiate, and partly because, I regret to say, there have been so few genuine productivity bargains in the past, we consider that the period of standstill is one in which productivity bargaining will go on. In fact, we would hope that one of the results of the short-term steps we have found to be necessary will be to give incentive to more productivity bargaining in the belief that in the second half of this year, and more particularly after July, 1967, those who have genuine productivity bargains are more likely to get something rather better than the zero norm which is mentioned in the standstill White Paper. So we think that bargaining will go on, and we think this will be to our advantage.

Photo of Mr Richard Wainwright Mr Richard Wainwright , Colne Valley

Does not the hon. Gentleman recall that in Committee on 4th August he said that the Government elected to have an absolute standstill, which ruled out productivity bargains?

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

Indeed. There is no misunderstanding about this. There are two different matters to be considered. One is the question whether productivity bargaining can go on in the standstill period. The answer is "Yes". We want it to go on. One of the ironies of this legislation may be that the standstill will create an incentive for more productivity bargaining, which would be to the general advantage.

The second matter concerns the extent to which we have felt it necessary to enforce the standstill on the payment of remuneration which is the outcome of productivity bargains. Our view there, as expressed in Committee and on an earlier Clause this evening, is that if we had made the standstill period less than absolute we would have opened the flood gates and it would have been impossible to make our policy effective, on a voluntary basis. We have said that productivity agreements cannot be honoured during the standstill period. The standstill arrangements must apply to them as to all other kinds of agreement.

I think that our decision is right, and I hope that it will be accepted by those who honestly think that our attempt to get a standstill is right. We had to be firm and determined about this.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

Does the hon. Member mean that unions and employers would be able to work out productivity bargains for payment in 12 months' time? After what has happened in the case of the doctors and the railwaymen, when agreements have been solemnly broken, how can they negotiate productivity agreements which will not come into operation for 12 months, especially when the freeze may be continued by the Government?

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

I hope that hon. Members are considering the Bill in an intelligent, thoughtful and constructive way, and that on reflection they will see that we are trying to ensure that if people continue to try to negotiate and reach genuine productivity agreements they are more likely to get them in the second half of the standstill period. We have taken these measures with the greatest reluctance, and generally, with all their disadvantages, I think that they are supported in the country.

Amendment negatived.