Orders of the Day — Prices and Incomes

Part of the debate – in the House of Commons at 12:00 am on 25th October 1966.

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Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames 12:00 am, 25th October 1966

In so far as he resisted the temptation to refer to the Order, I thought that the right hon. Member for Leyton (Mr. Gordon Walker) talked a great deal of sense. I fully share the views which he expressed about the importance of encouraging exports. Where I found some difficulty was in relating that argument to what the Government are actually doing, and doing under the Order.

The right hon. Gentleman will appreciate that it will be the effect of the Order—which he indicated he intended to support tonight—that export industries desperate for labour, will find it very difficult to raise their bids in order to attract it. It has been the policy of the Government to impose the Selective Employment Tax on those invisible exports which, as the right hon. Gentleman knows extremely well, are an important part of our export effort and contribute so much to our balance of payments.

Therefore, when the right hon. Gentleman talks, as he did, very sound economic sense, the House will find that the one gap in his admirable speech was that he did not relate it at all to the view that the Order should be supported. Indeed, he went almost the other way. He said that there needed to be some kind of thing like this to deal with the inflation created by full employment. We do not have full employment. Does the right hon. Gentleman think that we will have full employment by next August when the Order will, in any event, expire?

The right hon. Gentleman was really addressing himself to an unreal situation, a situation in which—he knows the City of Oxford well and I therefore give him this example—the local labour exchange is now sending letters to women's hairdressers suggesting that they provide opportunities of employment for displaced motor workers. In those circumstances, the right hon. Gentleman's speech seemed to be quite irrelevant to this issue.

The right hon. Gentleman under-rated enormously the complete change which has taken place in the Government's attitude. If, seven months ago, during the General Election campaign, any of my hon. or right hon. Friends had prophesied that on 5th October three peers and a distinguished Queen's Counsel—the right hon. and learned Gentleman the Attorney-General is here—would be flying to Balmoral to put into operation—perhaps in the circumstances I should say trying to put into operation—provisions to make it a criminal offence in certain circumstances for an employer to raise his employees' wages, would anybody have believed us? Would we not have been told in the word inevitably associated with my right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg) that we were "bonkers"? Can the House visualise the indignation of the Prime Minister at yet another Tory smear?

Yet this is what happened within seven months of a Labour victory. Indeed, it was announced as an intention within less than four months of a Labour victory. Why, if this was to be done, were the electors not told? There are only two possible explanations. One is that the Government were so incompetent that they could not foresee, even a few months ahead, that a continuation of their policies would produce a situation in which they at least would think it necessary to do this. The other is that they did foresee it and concealed it from the electors and, in the case of the Prime Minister, went out of their way to deny it.

The House is left with those alternatives and it is no use the First Secretary blandly saying something about stopping people from jumping the queue. I repeat the words which my right hon. Friend quoted—these are steps which no democratic Government have ever taken even in time of war, and the right hon. Gentleman must do a great deal more to satisfy the House that it is necessary in these circumstances to take this extreme step.

I want particularly to emphasise the attack which the Order involves on the sanctity of contract. I asked the right hon. Gentleman a Question about this, as did some of my hon. Friends, last week, and he seemed to brush it aside. I put it to him again. We are here concerned with cases—the right hon. Gentleman this afternoon mentioned that there were many of them—in which, by agreements freely entered into before 20th July, employers undertook to make increases after that date in the remuneration paid to their employees. In many cases those were contracts in return for good consideration—the abandonment of restrictive practices, increased productivity, and they were sometimes part of long-term agreements which it used to be the policy of the Ministry of Labour to encourage.

To come in as the Government have and to say to employers that, under the threat of criminal sanctions, they must not carry out the bargains which they willingly entered into is a very serious step to take. We are told that we are in a crisis of confidence. Surely that cannot but be made worse than by undermining the belief, as the philosopher Hobbes put it, that it is basic to society "that men abide their covenants made", or, as the Good Book puts it: The man who promiseth his neighbour and disappointeth him not, even though it be to his own hindrance". That is not only good morality, but good commercial sense and the old doctrine of the word of the Englishman was a considerable part of the reason for the country's great commercial prosperity in the last century. From his answers to questions, I do not think that the right hon. Gentleman has understood what damage he is doing to the clear doctrine that if one makes an agreement, one keeps it.

The last Government were trying, in the sphere of labour relations, to get longer-term agreements between unions and employers, with arrangements for increases in wages at different stages and with arrangements for conciliation and the avoidance of disputes. All of this kind of good healthy social progress, which hon. Members on both sides of the House welcomed at the time, is being placed in jeopardy if the Government come along and interfere in this way.

Look at the extraordinary anomalies which the Government are creating. Last Thursday the right hon. Gentleman, in answering a Question, said that it was all right to pay increases in pay after 20th July under a scheme for periodic increments but that it was all wrong to pay them after 20th July if a specific agreement to make that payment had been made, equally before 20th July. I find it difficult to appreciate—and I am sure the people concerned will find it equally difficult—how this logical distinction can be maintained.

Then there was the reply in a Written Question by the Minister of Labour yesterday that eight wages councils Orders made before 20th July, were being put into operation to increase the remuneration of about 300,000 men. This is very good, but if that is so why is it that not only the award of the wages council but also the free agreement of employer and employee, as between the same dates, should not also be carried out?

I put the same point in respect of dividends. The Chancellor was asked at Question Time last week about the action of the Government in compelling Great Universal Stores to pay a dividend 4½ per cent. less than it had earlier stated it would pay.