Before I call the first speaker in the debate, may I announce that so far more than 40 hon. and right hon. Gentleman have indicated their wish to speak in this debate—including more than 30 Members on the Government side. I shall do my best to see that all shades of opinion are represented in the debate, but it will be possible only if hon. and right hon. Members make their speeches reasonably brief.
I beg to move. That the Bill be now read a Second time.
This is the third time that the Government have asked this House to support a Prices and Incomes Bill. I am well aware of the unhappiness that this is causing among so many of my hon. Friends, as well as the fact that it is being rejected by the Opposition. It is clearly essential, therefore, that I should begin by clearing up misunderstandings as to what our prices and incomes policy is designed to do, and where it fits into our economic strategy.
The starting point must be devaluation. This was designed to enable us to turn our backs on deflationary policies and to expand the economy on the only safe basis open to us—that of an export-led boom. The new Bill has, therefore, a very different economic parentage from the previous ones. We are no longer asking the people to hold down wage increases as part of an overall reduction in the level of economic activity. We are rather asking them to help us exploit the new opportunities which devaluation has brought to get our economy expanding again—not through a consumer-led boom, such as we had under the Conservatives in 1964, with the disastrous results of which we are all aware —but on a basis which will at last give us the economic independence that we have not enjoyed for half a century.
Time and again my hon. Friends have asked the Government to put themselves in a position where they could defy the "gnomes", whether of Zurich or the City of London.
Time and again they have protested against a situation in which speculators against sterling could jeopardise the standard of living of our own people. We have listened to them: that is why we devalued last November instead of deflating once again. But, when we did so, we warned that there would be inevitable economic consequences. One of them is that we have got to show that we can compete economically at the new parity. For, if we do not, we shall be under the same old pressures once again.
The problem with which the Labour Government have struggled ever since October, 1964 is that we inherited a country which had become industrially uncompetitive. On one economic front after another we could no longer hold our own: from shipbuilding to machine tools. This meant that every attempt to expand our economy ended in disaster, because our manufacturers and our consumers did not use their increased purchasing power to re-equip with British goods, but with imported ones.
During the past three years the Government's major preoccupation has been to deal with this basic uncompetitiveness. As a result, this country is in the middle of a major industrial transformation, as has been recognised by a wide spectrum of opinion, from the Daily Express to Marc Ullman, of France's L'Express. Typically, the only contribution from Her Majesty's Opposition has been to exploit the short-term discontents of the people during the period of transition, as it did from 1945 to 1951. In opposing the Bill today they are neither facing up to their own failures nor putting forward any constructive alternative policy.
That phasing-out of old technologies and the building up of new takes a lot of time, and time is what we have lacked in the last three years, thanks to our inherited burden of short-term indebtedness, to which this Government have, unfortunately, been compelled to add, pending the development of more constructive alternatives. If we now want to break free of this burden by eliminating the deficit in our balance of payments which is still hanging around our necks, we dare not let slip the opportunity which devaluation has given us: the opportunity now being seized by an increasing number of our industries; by the aerospace and motor car industries now facing an export boom, and by the machine tool industry, which has increased its export orders since devaluation by 50 per cent.
Where does prices and incomes policy fit into this? My hon. Friends, in their Amendment, protest against what they call the Government's "grossly mistaken theory" that wage levels are the cause of the nation's difficulties. If that were the Government's theory, it would indeed be a mistaken one. Wage levels in this country are not particularly high in absolute terms, certainly not for a number of wage-earners, and the Government eagerly look forward to the day when a high wage, low-cost economy will be within our reach—for all our people, not just a few of them.
No, in putting forward this Bill, we are not saying that wage levels are too high in themselves, but that they are too high in relation to what we are producing, and what we are managing to sell abroad, and also what we are managing to sell at home in place of imported goods. That is why we have always talked in terms of a productivity, prices and incomes policy, and, as the latest White Paper shows, productivity is the centrepiece of the new phase of incomes policy.
I do not think that there is any disagreement between us that what matters is not wage levels, but unit costs. "Ah, but", say some of my hon. Friends, "why put so much emphasis on the wages element?" Are not unit costs as much influenced by other factors, such as level of investment, economic activity and managerial efficiency? Of course, they are. The Government do not for a moment say that the salvation of the country rests exclusively on the shoulders of the trade union movement. What we do say is that the level of investment is closely linked to the prospects of growth, and that the hope of growth, which is our only hope at the moment, rests on our success in expanding exports. Here and now it depends overwhelmingly on our ensuring that the competitive advantage given to us by devaluation is not whittled away by increases in incomes that we have not earned. We must not have a repetition of the sort of growth that we had in 1964, when gross domestic product rose by 6 per cent., but, because our industrial home base was so weak, we also ran up the highest deficit in our post-war history.
I agree with my hon. Friends, too, that good management has a vital part to play in reducing unit costs, and that when we call for higher productivity, efficiency and cost-consciousness, we must look first and foremost to management to carry out its responsibilities. That is why we are pressing ahead with the long overdue expansion of management training, but we need also to build into the prices and incomes policy economic pressures on management to be efficient.
This is what we are doing by renewing the existing powers on prices in the Bill and by strengthening them. Of course, hon. Gentlemen opposite sneer at these powers and will vote against them with enthusiasm—there was no control over prices in their policy. All they did was to hold down wages. The right hon. Member for Enfield, West (Mr. Iain Macleod) was sneering last weekend when he said that I was trying to "con" the people of the country over prices.
That is a terminological inexactitude.
I have said bluntly time and again that we face inevitable price rises of 5 per cent. this year. But this is no reason for turning a blind eye to unnecessary price increases. Indeed, it would undermine our whole strategy, not least for import substitution, if the prices of home-produced goods were allowed to creep up unchecked and unjustified under the generalised alibi of devaluation or the Budget. The Prices and Incomes Board, exists to see, and will help us to ensure, that management is as public-spirited and as cost-conscious as we are asking wage-earners to be.
Many hon. Members who would go along with me thus far take issue with me on my next point, the need to take statutory powers to reinforce this policy, or, at any rate, they argue that we do not need statutory powers on the incomes side. The T.U.C., they say, is developing its own collective vetting of the processes of free bargaining. Leave them to get on with it. I am the first to pay tribute to the historic development of the T.U.C.'s positive rôle. I recognise that the T.U.C. has shown great statesmanship. But I believe that the trade unions recognise in their heart of hearts that, in this crucial situation, the Government cannot abdicate their responsibilities. They know their own machinery is not yet strong enough to work without some statutory underpinning, all the more because those unions who are most vociferous against the Bill reject the T.U.C.'s vetting machinery as well.
Would my right hon. Friend not agree that, by taking statutory powers in the Bill, it is made extremely difficult for the T.U.C. to operate its voluntary powers and that in fact the whole position is made far more difficult for the T.U.C. than ever before?
I think that the hon. and gallant Gentleman has answered his own question.
To my hon. Friends to whom this is a great issue of principle, I would say this. We have, first of all, to decide whether we agree that planning the growth of incomes should form part of our overall economic planning. If we do, we are already turning our back on traditional attitudes to wage bargaining. This is really the great divide in the trade union movement—far more than the question of statutory powers. For we all recognise—and the Government recognise—that an incomes policy cannot work if the whole concept is repugnant to the trade union movement and if it has to be imposed by the use of compulsory powers. But this is not what has been happening.
In recommending Part I of the Bill to the House, therefore, I want to stress this point. In Clauses 1 and 2, we are renewing until the end of 1969 the powers of statutory notification and standstill, where necessary, of pay and price increases which we possess under Part II of the 1966 Act and under Sections 1 to 3 of the Act of 1967. But in doing so, we recognise that these provisions are, and must be, in the nature of reserve powers. The policy itself can only work if the vast majority of firms and trade unions are prepared to co-operate—as they are prepared.
During the two years that the policy has been operating, it has never been necessary to invoke the penal clauses of the 1966 Act, but, even more important, it has never been necessary to make an Order requiring statutory notification of a pay or price increase, so successful has the system of voluntary notification been.
The same is broadly true of standstills. Out of about 80 references to the Board in the same period, of which about half were in respect of pay claims, there have been only three cases where we have had to order employers not to pay while the Board was investigating. In all the other cases, the reference, whether of a pay or price increase, was accepted by the parties concerned and, where standstills were necessary, they were accepted voluntarily.
In Part I, therefore, we are continuing the present powers, which have truly operated as reserve powers designed to encourage voluntary co-operation by ensuring that the vast majority who cooperate are not exploited by the minority who do not. There are only three new developments in Part I to which I should draw the attention of the House. The first is in Clause 3, subsections (1) to (3), which give power to increase the standstill period for both pay and prices increases to an overall 12 months, but only on a recommendation of the Board.
The second development is in Clause 3(4), which is a transitional provision to bridge the gap between the existing permitted length of a standstill and the new one proposed. It gives me power to make an amending Order in respect of a standstill under the 1967 Act that might still be operative when this new Measure becomes law. The third is the new provision in relation to wages councils awards, outlined in Clause 5 and Schedule 2. Since this has given rise to some misunderstanding, I would like to explain it carefully.
One of the key aims of our policy is to ensure that priority is given to the lower paid worker. Historically, this was the purpose of the wages councils, but they are under no obligation, as the Government are, to have regard to the consequences of their recommendations on other workers in their field who may not be low paid. Yet I am statutorily bound to accept their proposals and, indeed, to enforce them by law. It would be anomalous for me to be compelled to enforce pay increases contrary to the criteria on which we are insisting for other pay claims. The new provisions, therefore, put wages council and Agricultural Wages Board awards on the same basis as other settlements. I shall still not be able to amend them, but, after consideration and discussion, I shall be able to refer them to the Board and, if its report is adverse, postpone bringing them into effect.
I do not think that they do that for a moment. I think that that Board still has continuing and useful work to do. It is clearly incompatible with the purposes of the incomes policy that it should not be possible even to consider its proposals in the context of the consequences for other workers. That is all that the Clause enables me to do. In fact, I believe that the necessity for a reference will rarely arise, but, if it does, we will not be discriminating against the lower-paid worker. On the contrary, the Board must be guided by the criteria of the White Paper, which deliberately set out to give priority to the lower paid.
The rest of the Bill is concerned with extending our powers over prices, dividends and rents. In a previous debate, the hon. Member for Harrow, West (Mr. John Page) said that these powers would take this country over the hump and "into a Socialist State". Well, they are certainly designed to ensure that the operation of the policy shall be as socially just as we can make it. During the past two years, we have been steadily evolving and strengthening our watch over prices, with very welcome cooperation from the manufacturers. To-day, about 70 per cent. of the expenditure covered by the Retail Price Index is subject to the "early warning" arrangements for price increases of which the latest list is given in the White Paper, to the "constant watch" kept by the Ministry of Agriculture, Fisheries and Food over food prices, or to the review of price trends in non-food items carried out by the responsible Departments.
We are currently discussing with manufacturers and firms additions to the early warning list. Here again, the policy has been operating, as it must, largely on a voluntary basis and, as a result, the very real influence that the Government have had on price increases has very often gone unrecognised by the public—though it has been recognised well enough by the manufacturers who know full well in how many cases intended price increases have been dropped or deferred as a result of their talks with the Ministries—the cases, for example, of bread and flour, animal feeding stuffs, biscuits, chocolates and sweets, soft drinks, cement, to name only a few. Another example is beer, most of whose public bar prices, apart from increase in duty, have been held unchanged for over two years as a result of pressure from the Government and the Prices and Incomes Board.
But, much as we appreciate the cooperation we have had from firms, we have not treated them more lightly than anyone else, and indeed about half the references to the Board have been in respect of prices and charges. In all cases, except those where discussions are still continuing, the industries and firms concerned have acted in keeping with the Board's recommendations. But we have recognised, also, as has the C.B.I., that there may be cases in which price reductions should take place, and in the White Paper we spell out the criteria for such reductions, which have been agreed with the C.B.I. and the T.U.C.
The sort of cases we have in mind are those where the price of raw materials has fallen, where productivity is rising faster than wages or where profits are based on excessive market power. In other words, we want to encourage both trade unions and management to recognise that there is a third party to their bargains, the consumer, who has a right to share in the benefits of technological advance or changes in the prices of raw materials.
Clause 4, therefore, gives me power, when referring prices and charges to the Board, to direct the Board to take into account the possibility of price reductions and, where it recommends any reduction, I can enforce it by Order if necessary for a period of 12 months. Petrol and oil prices are an example which I have quoted of cases where price reductions might be possible. As the Minister of Power has emphasised, the Government have been keeping the surcharge element in the prices of petroleum products under close review and we are currently considering the situation as it has developed in recent months.
Nor do we say that the potential for reducing prices is to be found only in the private sector. There are publicly-owned industries that are making great technical advances and should be able to reduce their prices in due course. A classical example of this is in electricity supply. This industry has been installing plants of bigger and bigger capacity, which should have shown falling costs and, therefore, falling prices. In fact, as the Prices and Incomes Board has shown, delays in building and commissioning these plants have put off the cost savings which could have meant a smaller increase in electricity charges than the Government have, in fact, been compelled to endorse. We are now investigating the reasons for these delays, and will not hesitate to take action to prevent them in the future. I want to make one thing clear: prices policy will apply equally stringently to the public as to the private sector.
I cannot possibly answer such a generalised question. It is clearly a matter for discussion of specific cases. My hon. Friend will have other opportunties of raising the point.
Some of the most valuable work of the Prices and Incomes Board has been done in the context of general references. This was so in the case of retail margins, where the Board pointed out that
in most circumstances there is no need for an increase in distributors' cash margins when manufacturers increase their recommended prices as a result of devaluation.
This is exactly the sort of inflationary follow-up to devaluation that we want to check. That is why, a few days ago, we referred retail margins on paint, where the Board found the mark-up could be as high as 80 per cent., to the Board for detailed examination, and why I am today referring distributors' margins in three other significant sectors of consumers' expenditure—household textiles, children's clothing and proprietary medicines. These references relate to margins covering the whole field, not only to those cases where manufacturers themselves recommend retail prices.
I would remind my hon. Friends that, unless we renew Part II of the 1966 Act through this Bill, the power of the Government to hold up price increases pending a full examination by the Board, will come to an end.
And now I turn to rents. These form a crucial part of family budgets—indeed, by far the biggest element in the increase which has taken place in the retail index since the middle of 1966 has been the cost of housing, which has risen by no less than 10 points during this period. We are, therefore, proposing to take powers to insulate tenants against sharp increases that could undermine the balance of the prices and incomes policy. The provisions fall into two parts.
Clause 9 deals with the private sector and gives the Housing Ministers power to make regulations for moderating rent increases in regulated tenancies under the Rent Act, 1965. We do not intend to interfere with the basis on which fair rents are fixed or with the provisions under which fair rents may be reviewed. But the Government consider it right, in the context of the prices and incomes policy, to phase the steep increases which we know can result from the registration of a fair rent. Our intention is that the controls should apply throughout the country and irrespective of the rateable value of the house, within the limits of the 1965 Rent Act.
In the first year following registration there will be a limit of 10s. per week on the amount by which the rent may be increased. If the regulations are still in force at the end of that year, any significant balance remaining to bring the rent up to the fair rent will be spread over two further stages so that the full fair rent will be reached at the end of the second year. Increases due to rises in rates will be exempt from these staging arrangements and, broadly speaking, increases due to rises in the cost of services provided by the landlord will also be exempted. My right hon. Friends intend to make the regulations to bring the scheme into operation immedately the Bll becomes law.
Clauses 10 and 11 deal with local authority rent increases. The Government have consistently urged the need for moderating these increases in present circumstances. Most authorities have cooperated in this, but some have not. The Government therefore referred this question to the Board and we are now taking powers to bring its proposals into effect. Clause 10 is concerned with rent increases after the Bill is passed and its broad effect is that local authorities will not be able to increase rents without Ministerial approval. Clause 11 gives power to require local authorities to reduce rent increases which take effect on or after 1st April, but before the passing of the Bill, and also in the case of those increases which have been referred to the Board.
Local authorities have already been circularised warning them that Ministers will not normally accept proposals for average increases in standard rents of more than 7s. 6d. a week in any one year or increases for any individual house of more than 10s. a week. Already, Walsall Council is re-examining the increase of 15s. a week which it was proposing to bring into effect, while the G.L.C., whose proposed increases the Board criticised, has now submitted revised proposals to the Ministry for the coming year from next September. Under these, the average rent increase of 11s. 7d. a week has been dropped to 7s. 6d. and the highest individual increase from 22s. 6d. to 10s.—a welcome relief to about 225,000 tenants of the G.L.C., which the Minister has readily approved.
Clause 12 deals with a minor point which will, none the less, be welcomed, I am sure, on both sides of the House. It relieves local authorities of their present obligation to serve a notice to quit when notifying a tenant of a rent increase—something which has caused considerable distress and misunderstanding, particularly among elderly people.
Finally, but not least important, I come to dividends, which are dealt with in Part II of the Bill. It would clearly be intolerable if, at a time when everyone in the country is being asked to show restraint, we were not to call for equal restraint in company distributions to shareholders.
That is why the Chancellor announced in his Budget speech that the 3½ per cent. ceiling for increases would apply to dividends as much as to wages and salaries and that we would be taking statutory powers, but asked that firms should immediately start notifying their dividend recommendations for vetting by the Treasury. The response from industry has been very good and the policy has been operating voluntarily since 19th March on the lines of the published guidance already given by the Treasury.
The powers set out in Part II are, therefore, reserve powers, just as they are in the case of prices and pay, not to be used unless voluntary co-operation breaks down. But they are comparable in their effect to those proposed for incomes and prices.
The essential reserve power is in Clause 6, which would enable the Treasury, in the unlikely event of the need arising, to make Orders or directions requiring companies not to distribute higher ordinary dividends than in a past year without obtaining consent. The Clause also spells out the various definitions which would be necessary to make this basic power workable. But I repeat that the wording of Part II of the Bill does not in itself alter the present voluntary scheme of dividend restraint.
Hon. Members may have noticed that there is no mention in the Bill of the ceiling itself—the famous 3½ per cent.— or of the criteria spelt out in the White Paper which set the framework for the whole policy. There is no sinister significance in this—no weakening on any aspect of the policy. In fact, the criteria are already operating. In accordance with normal practice, I have already used my power under Section 4 of the 1966 Act to make a General Considerations Order, as a result of which the latest White Paper —Command 3590—is the document which must now be taken into account by the Prices and Incomes Board in interpreting the policy.
Indeed, the whole case for the Bill and for these powers must be judged in the light of these criteria, for the policy that we are putting forward is as much a social policy as an economic one. Are we right to say that there is a vital interaction between prices, incomes and productivity? If so, is it not better, in a mature society, to plan that relationship in a constructive way instead of falling back on the brutal instruments of deflation or savage cuts in public expenditure which are the pet alternatives of hon. Gentlemen opposite?
And if we choose to plan, are we not right to give priority to those who are weakest in the bargaining market place, the lower paid—as we do in our criteria for pay increases; criteria incidentally which we agreed at the outset with the C.B.I. and the T.U.C.? And are we not right to add to these criteria, as we do in the White Paper, the new and challenging one; the chance to raise our standard of living to the extent that we raise our productive efficiency? The keynote of the policy I am recommending to the House this afternoon is opportunity. The Government do not merely call on our people for endurance: they call for creative new attitudes of mind, and a positive, not a negative, approach to our problems.
An incomes policy is likely to mean little if it is not developed into a constructive and positive instrument of reform. It can be really effective only if it is accepted at the place of work by managers and trade union representatives as a policy which makes sense to them as negotiators. It must be based on consent if it is to be successful. This means that it cannot only be a policy of restraint and of holding back. This may work for a short time, but it will never capture the imagination of people in the long run.
Only a policy of reform will do that— and it is on reform that I intend to place emphasis. I want managers and trade union representatives to feel that this policy can help them to reform their wages structures, to improve their methods of bargaining and consultation, and so release our full potential of productivity. It is this which the White Paper sets out to achieve and it is on these aspects of our policy that my new Department will be concentrating.
I believe that the people are tired of the crises which have plagued us under successive Governments. They are tired of our economic weakness and the loss of our industrial lead. They are tired of our endless indebtedness to overseas creditors. They want this country to regain its economic independence, its freedom to expand, and to decide its own social policies. This is the independence which hon. Members opposite never achieved. This is the independence which we intend to achieve under this Government.
Opportunity knocks, so we are told. The right hon. Lady the Secretary of State may be set on reform, but the British people are set on having a new Government.
We started listening with amazement to what the right hon. Lady had to say. We were taken into the heights of cloud-cuckoo land. Possibly the choicest remark was that devaluation was a conscious choice of policy. Surely the right hon. Lady has learned by now that that is a joke which will no longer wash. Then we had the excuse about all the miseries of the last two years being due to the terrible, uncompetitive, broken-down economy which she and the Prime Minister had inherited. They did not say much about that in the 1966 election campaign. All was high promise then. The highest trade deficit since the last year of the previous Socialist Government occurred last year, 1967.
Then we had the balance of the right hon. Lady's speech. It is no good the right hon. Lady trying to fool her hon. Friends. All of us know that this is an incomes policy Bill. Hon. Members opposite showed by their reaction hardly unanimous and warm support for the small part of her speech which she devoted to incomes, and they showed by their cool silence during the major part of her speech dealing with prices, and so forth, that they do not believe that this policy will help their supporters very much.
Therefore, just as we opposed the Bills of 1966 and 1967, so we shall oppose this Bill. Of course, we agree that one of the most urgent national needs is to achieve a better balance between increases in national production and increases in national earnings. But we reject the method and the whole economic and political philosophy on which the Bill is passed.
We accept that an incomes policy has a part to play in our economic management. No Government in modern conditions can be indifferent to the movement of incomes in relation to production or refuse to try to influence that movement. The last Conservative Government had a policy on incomes. The next Conservative Government will have a policy on incomes.
What we reject is the altogether excessive weight which the Government have placed on incomes policy which they have not been able to bear over the last three years and which they will not be able to bear in future. What we also reject is the use of statutory control, of legal compulsion. We reject legal compulsion on the grounds both of practicability and principle. Two years ago, and again last year, we said that it would not work and it has not worked.
In its report in February of this year, for example, the National Institute of Economic and Social Research—certainly no instrument of Tory policy or propaganda—came to the conclusion that over the whole period from just before the freeze incomes had risen by roughly the amount that had been expected as a result of natural forces, and that, if anything, the rises frequently had been higher during previous roughly comparable periods, periods, be it noted when there were no statutory powers.
There is no reason to suggest that statutory powers will work any more successfully in the future than they have in the past. On the contrary, all the signs point in the other direction, because the pressure for wage increases is growing faster than powers which are being taken to resist them. Moreover, the machinery for implementing this Bill is farcical.
Nothing can be done under the Bill until proposed pay or price increases have been notified and vetted; and as the right hon. Gentleman the Chancellor of the Exchequer told me in answer to a Written Question only on Monday last, the total staff in all Government Departments concerned with vetting tens or probably hundreds of thousands of notifications is only 90. The vast majority of pay and price increases, therefore, are bound to go by unvetted; and even the minority which are properly vetted cannot have any action taken upon them until they have first been sent to the Prices and Incomes Board.
Therefore, the percentage of proposed pay, price or charge increases which takes place in this country every year which can be bitten on by this policy is a fraction of 1 per cent. only, so the machinery is farcical and it will not work. But in so far as in this fraction of cases it does bite, the policy is likely to be arbitrary and unfair in the way it does so.
In particular, the responsible and unscrupulous will always find it easy to drive a coach and horses through these powers and regulations. So, of course, will many people in innocent ignorance as well, so that there will be a tendency for the Bill mainly to penalise those who both take the trouble to understand it and are the more responsible and conscientious members of our society; and that, Mr. Deputy Speaker, is a very dangerous tendency to foster.
Moreover, quite apart from the farcical nature of its machinery, the policy is itself woefully lacking in clarity. The Bill itself is a disgrace in this respect. I wonder how many ordinary people, trade union officials, managers, Members of Parliament or even Ministers for that matter, can read the Bill and understand what it is all about. But this is a Bill which, if it means anything at all, has to be clearly understandable to people on the factory floor. Speaking for myself—and I suspect not only for myself —it is virtually incomprehensible.
It is not only the Bill, it is the whole background of policy. Take the question of the norm. The Chancellor, in his Letter of Intent to the International Monetary Fund, referred categorically to a nil norm, but since the announcement of a 3½ per cent. ceiling Ministers have consistently refused to give a categorical answer to the question whether a nil norm is still the order of the day.
One has only to read, for example, the Observer of last Sunday, for example, or even parts of the reports of the Prices and Incomes Board to realise that there is a lack of clarity even among informed circles about what this policy really means. If that is so at that level imagine the lack of clarity at the factory floor level, which is the only place where it matters. Then, as we found, on 19th March in the speech of the right hon. Gentleman the Secretary of State for Economic Affairs, the Government have no idea about how this policy applies to piece-work systems or local wage drifts. A report just published by the Prices and Incomes Board underlines the extraordinary importance of this and the extraordinary lacuna, this procedure appearing to have been omitted altogether.
The Prices and Incomes Board pointed out, for example—on its estimate on wage drifts—that wage drift alone, in a year when output is rising and employment is high, may well be roughly the same as the average annual increase in productivity; yet there is nothing it can say that really gets to the bottom of wage drift in this policy. Again, the Prices and Incomes Board, in its report, found that payment-by-results earnings often do not arise from claims or settlements in the accepted sense, but from bargains struck in their thousands every day, nearly always by groups of fewer than 100 workers—the very people who are not covered at all by the Bill. It is bound to fail in the future as it has failed in the past.
So we come to the damage the Bill does and, in particular, we come to the damage it does to the real principle of freedom. One of the hallmarks of freedom is surely the right of people to determine their own earnings without State intervention or direction, whether they do so by collective bargaining or by individual negotiation. I hear the right hon. Gentleman the Prime Minister muttering. I used to think, and I believe that most of his supporters in the House and in the country used to think, that the statement I have just made was one of the basic tenets of the Labour Party. Certainly, looking at the converse, one has only to look round the world during the last generation to realise that trade unions and employers' associations which have become agents of central government are a distinguishing feature of the authoritarian State.
Of course, we have not got to that point, and no one is suggesting we have, but perhaps we are moving more towards it than most people realise, let alone intend; because once started on this road of State intervention backed by legal compulsion it is very difficult to turn back.
In 1966, it was promised that statutory control was to last for one year only. The right hon. Lady was claiming great virtue for the continuance of it and all the wonderful things it would do for prices. She did not appear to wake up to it in 1966. It was so unimportant in 1966 that we were promised that without fail it would not last more than one year. In 1967, it was to be for one further year. Now it is to be for another one-and-a-half years, and but for the fierce resistance of many hon. Members opposite, the Government intended that the powers could then be continued year after year by almost automatic annual process. Have the Government really changed their mind, or is this just another trimming to the wind that blows?—because already, after less than two years of compulsory powers, we see the damage that has been done to responsible voluntary action in industry. Ill-will and conflict are arising where good will and peace existed before. The authority and influence of responsible trade union leaders is being undermined and the confidence of less responsible ones increased. This kind of damage is easy and quick to do. It is a much longer and more difficult task to repair it once it has been done.
I have never heard such nonsense in my life. Other countries have had and have legislation comparable with what is proposed in our policy document, and the unions in those other countries flourish on a democratic basis, growing in strength as a result of such policies. And so they will in Britain.
The damage which we are suffering— hon. Members opposite know that the damage is being done—has produced no practical benefit even in the short run. Anyone looking at the Bill dispassionately must accept that it creates a panoply of power and a superstructure of fussy inquisition which are out of all proportion to the very small results likely to be achieved by it. Yet these same features are peculiarly well designed to damage responsible voluntary action by both sides of industry.
The most serious danger in the long run is that compulsion feeds on itself, so that as in each successive year we have a Prices and Incomes Bill, the Government have to take stronger powers than the year before, covering a wider field in order to try to produce the same minimal effect. Last year, the delaying power had to be extended to seven months. This year, it has to go up to 12 months. This year, orders made by wages councils and the Agricultural Wages Board have to be brought within the field of control. This year, also, the Government feel impelled to take new powers to control prices, rents and dividends.
Thus, the powers relentlessly extend themselves until legislation to implement a prices and incomes policy becomes legislation to control the whole economy. Last year, we warned that the policy was unstable and that the Government would this year either have to go to more com- pulsion or return to greater freedom. Predictably, they have chosen more compulsion. And so it will go on until they are turned out.
We cannot help recalling the reasoned Amendment which we moved against the original Prices and Incomes Bill in 1966. It ended by declining to give a Second Reading to a Bill
which introduces a Measure of compulsion that will inevitably lead to State control of prices, wages, dividends, and to direction of labour."—[OFFICIAL REPORT, 14th July, 1966; Vol. 731, c. 1761.]
Within two years, we have the lot except the last, direction of labour.
The right hon. Lady has often made clear that she believes in the planning of incomes not just as a short-term expedient, not just as a necessary evil in time of emergency, but as a long-term good and an essential part of Socialism. She has made clear also, since taking her present office, that she believes in the planning of manpower. Indeed, in the long term how can one plan incomes without planning employment? But if the planning of incomes requires to be backed by statutory control, is it not more than likely that in the end it will be discovered that the planning of manpower also requires some form of legal sanction to make it effective? I ask the House to contemplate that state of affairs seriously. Of course, it is not here yet. Of course, the right hon. Lady and her right hon. Friends do not wish it to happen. But it is a dangerous path on which we are embarked.
This dangerous chain reaction of compulsion feeding on compulsion must be broken. It can be broken. We in the Opposition have frequently spelled out the alternative to the Government's present policy. The last occasion on which we did so was in the Budget debate on 21st March. Following that debate, the Sunday Times, in its editorial of 24th March, complained that what I had put forward was not an alternative incomes policy, but was a complete economic programme. Of course it was. That is the whole point.
The only salvation for this country lies in adopting policies deliberately designed to encourage a high-earnings, high-profitability, high-productivity, low-cost economy. Only in that way shall we have an economy sufficiently enterprising and competitive to allow for stable growth. The policy in the Bill, however, is the enemy of such a development, and that is why we oppose it utterly.
On 5th July, 1966, when reluctantly supporting the Prices and Incomes Bill of that year as a necessary and temporary evil, The Times said:
It should never be forgotten that the Bill is needed simply because of the failure of the Government economic policy. … In the long run these inflationary forces can be controlled by the statutory control of incomes, or regulations in other fields, only at the cost of putting the economy in a strait-jacket which itself is the greatest deterrent to a fast and stable rate of growth.
That still remains true. If there be a need for the present Bill, it arises still because, and only because, of the failure of the Government's economic policy. Change the economic policy, and we could scrap the Bill. We could then bring the economy out of the straitjacket which is the greatest deterrent to fast and stable growth. But the straitjacket will by this Bill remain an even greater deterrent to that growth than when The Times wrote its editorial two years ago. The statutory controls and regulations have become greater and more pervasive, and they are being made more so by the Bill.
The additional powers under the Bill regarding prices, rents and dividends as well as incomes will all increase the deterrents to economic growth. Let us consider the new powers on prices. These display the Government at their glorious best, playing their favourite game of facing two ways at once. The Chancellor of the Exchequer sets out to please the international bankers by saying that he will put prices up. The First Secretary of State tries to please her hon. Friends on the benches behind her and the trade unions outside the House by saying that she will be extremely active and interventionist in bringing unnecessary price increases down. Who is deceiving whom? For the moment, at least, it is only the Chancellor's policies which pack any punch. The First Secretary of State's activities are largely a propaganda exercise—all my eye and Betty Martin—and for "Betty Martin" read "publicity for Barbara Castle".
The one effective way of preventing unnecessary price increases is by competition. Let us have more of it. Attempts to reduce prices by administrative intervention are almost certain to disillusion consumers because of their almost total ineffectiveness, and, in so far as they do succeed, by reducing profits they will reduce investment and they will make it more difficult for the enterprising to get ahead of the field.
My right hon. Friend the Leader of the Opposition, by his action in abolishing resale price maintenance, did more to prevent unnecessary price increases and, at the same time, to increase efficiency than the right hon. Lady will achieve in 20 years of fussy interventionism and high-street snooping.
Let us consider the Government's actions on rents. These are both hypocritical and economically and socially damaging. They appear popular when first uttered, but they are hypocritical, because by far the largest cause of increases in cost and, therefore, the need for higher rents is the direct result of Government action. Any hon. Members with experience of local government will say that at least half the extra charges or higher costs come from high interest rates on the moneys which local authorities have to borrow. On top of that there is the S.E.T. and all the other extra taxation.
The Government's actions on rents can have only one of three effects, or perhaps a mixture of all three together. Either they will force councils to put up rates, or they will force councils to decrease the size of the rent rebates they provide for those tenants in the greatest need, or they will force councils to reduce their building programmes. One or a mixture of all three effects must inevitably flow from the Government's action on rents, and what sense does that make in terms either of social justice or economic policy?
Moreover, by interfering with the independent statutory duties of local authorities the Government are exhibiting another sign of their mania for centralisation. Remember, it was only a week or two ago that all these local authorities sought and obtained an overwhelming vote of confidence from their electorates, and the biggest ever condemnation of central Government policies.
The new proposed powers on dividends are also economically damaging in their effect. We must grow up and talk sense about this and not fool the people as the right hon. Lady is trying to do. If we really want to encourage the growth in Britain of a high earning, low-cost, high productivity economy, we must encourage high profits and dividends, as long as we make sure—and this is the vital proviso—that these are earned in a fiercely competitive market. To do otherwise will be to reduce productive investment and to slow down the growth of new and enterprising businesses. As my right hon. Friend the Leader of the Opposition said two years ago, it will encourage the survival of the fattest, rather than the fittest. Moreover, it will create a situation ripe for the sort of takeover spree which hon. Gentlemen opposite will be the first to condemn.
We come back, inevitably, to the fact that the only, and also absolutely necessary, alternative is a complete economic programme of the kind that we have spelled out over and over again, an economic programme radically different from the policies of this Government. Let me repeat in shorthand form the headings of some of the basic actions which are required.
First, get Government expenditure under control. Secondly, cut back the last three years' overgrowth of bureaucracy. Thirdly, give special new incentives to saving by introducing some form of contractural scheme for "save as you earn". Fourthly, reduce direct taxation on both individuals and companies, Fifthly, sharpen competition by every means available, including, where necessary, the reduction of tariffs. Sixthly, reform the structure and method of government so that the Government set an example in their various rôles as policy maker, administrator, and the country's largest buyer of goods and services. Seventhly, give Britain, for the first time, a comprehensive system of industrial relations law comparable to the systems already existing in every other major industrial country, under which the trade unions flourish and the people benefit.
Within that radically different economic context an incomes policy without statutory powers would have a minor but none the less significant rôle to play. How would it be operated? The Prices and Incomes Board would be given a new start by being reconstituted as a productivity board. Such a board would be used much more sparingly and selectively, and it would operate entirely by a process of inquiry and report; seeking to influence the parties before they reach their settlements, rather than upsetting them afterwards; providing the parties with better information and so helping to lubricate the workings of a market economy; mobilising and educating opinion; above all, as a result of becoming the focus for collecting and transmitting information of successful practice, making itself an increasingly important agency for encouraging the development of productivity bargaining and efficient systems of payment by results.
Above and beyond the rôle of the productivity board, and more important, the Government must set an example in relation to their own employees, not an example of meanness, but an example of efficiency; paying the proper market rate for the sort of staff they require; striving the whole time to pay better, but keeping the total salary bill in check by requiring fewer people; being an innovator in the development of more efficient salary structures and better methods of relating pay to work and responsibility; and using their influence as their banker to make sure that nationalised industries and local authorities do likewise.
To all those who have come to believe in the essential need for a stautory incomes policy as a centre-piece of economic policy we say, look at the facts, because we genuinely do not believe that the facts have ever been properly looked at by the Government.
I should like to give way, but there is a shortage of time and other hon. Members wish to take part in the debate.
Hitherto, the Government have simply asserted as a "given" truth that an incomes policy has a vital and leading rôle to play, rather than a minor and supporting one. Yet before embarking on the frustrating and dangerous path of a statutory incomes policy, which some hon. Gentlemen opposite support, and making it a central plank of economic management, surely at least three basic questions should have been answered. First, has the behaviour of prices and wages in the United Kingdom been the root cause of our economic malaise? Secondly, what are the real benefits which a successful policy of this kind would bring if all went well? Thirdly, what chance is there of a successful policy, compatible with democracy?
Last year —[HON. MEMBERS: "Too long."] So far, I have spoken for 10 minutes less than the Minister did, and my speech will be shorter than hers. [An HON. MEMBER:" It still seems long."] Perhaps because it is more solid. Perhaps, in the end, policies matter more than a public relations exercise.
Last year the United Nations published a report prepared by its Secretariat of the Economic Commission for Europe. It showed that over the last decade Britain came ninth out of 11 major industrial countries in the international league table for increases in wage earnings. Only Switzerland and the United States had lower increases in earnings than Britain. The same report gave comparative prices for domestic expenditure from 1958-1964. It showed that Britain came twelfth out of 14. Only Belgium and the United States had lower price increases over that period.
The strikingly different thing about the British economy in all international comparisons is not that domestic wages and prices have risen faster than in other countries, but that output and productivity have risen less rapidly. There is, therefore, a prim a facie case for believing that rather than to incomes policy we ought to look elsewhere in the structure of our economy for the explanation and the cure of our economic malaise.
Once more, we are driven back to the inescapable conclusion that Britain's over-riding need is for a new and radically different economic policy, because even if we had a complete statutory freeze on incomes and prices—something which nobody wants or believes desirable, and nobody proposes—it can be worked out that that would be the equivalent of about a 5 per cent. further devaluation in its effect on the export-import balance. This, in the first year at least, would only improve the balance of payments by a few tens of millions of pounds. Such a complete freeze would need to go on several years before the effect got at all large.
Let us suppose—to be less unrealistic— that the Government's present policy is successful in holding down rises in prices to 1 per cent. less than they would otherwise have risen. Even that is a highly optimistic supposition. It would take a decade before really substantial benefits accrued to the balance of payments. Incomes policy cannot bring substantial short-term benefits to the balance of payments. In other words, one is driven to the conclusion that, if incomes policy is to play a central rôle as the saviour of our balance of payments, two conditions are essential.
First, it has got to be far more effective than it has been hitherto, which means almost certainly that powers of compulsion would have to be far greater than hitherto or now contemplated. Secondly, the policy has to be permanent and not temporary, which is contrary to all the Government's assertions. Thus, the Government's statutory incomes policy is seen to be a false god at whose feet we shall worship and, alas, sacrifice in vain. That brings me to the whole economic and political philosophy on which the Bill is based.
In advocating the policy desperately to the Parliamentary Labour Party last week, the Prime Minister is reported to have said:
A Government which for any reason is forced to administer policies in which it does not believe … ceases to be a Government.
At another meeting two days later, he said:
Denied its prices and incomes policies, no Government pledged to full employment could govern.
Does the right hon. Gentleman really believe that? If he does, why did he say in Television Election Forum on 10th March, 1966:
I don't think you can ever legislate for wage increases and no party is setting out to do that … Once you have that law of prescribing wages, I think you are on a very slippery slope.
That is what the right hon. Gentleman believed in 1966. Three months later, of course, he forgot those words.
In October, 1967, he returned to the television screen on the B.B.C's programme "Twenty-Four Hours", and specifically said that when the 1966 Act came to an end there would be no continuation of legislative powers. Yet we had the 1967 Act and now we have the 1968 Bill, which apparently the Prime Minister says no Government can govern without and still believe in full employment. How the tune has changed. In one year, the Prime Minister puts his hand on his left-side heart and swears to the Labour Party and the country that he believes one thing; two years later he puts his hand on his right-side heart and swears that he believes the opposite.
So this Bill brings into focus the underlying choice which Britain has to make. All that is wrong in Britain today is that we lack the necessary driving force, without which our economy and society cannot flourish. Basically, we have to choose between two kinds of driving force. The first is the driving force of a market economy propelled by incentives and competition and placing its emphasis on private initiative and responsibility. The alternative is the engine of State direction. Both can be successful in their different ways. We can look to the United States for one and to Russia for the other. But to be successful one must depend predominantly on one or the other.
The basic trouble under a Labour Government is that Britain has neither course, because British Socialist Governments distrust the market economy, initiative and free enterprise and shackle and choke the market economy to the point where it becomes ineffective. On the other hand, to their credit, they try to draw back from the full force of State directions. So we get the worst of both systems in lack of any driving force.
A Labour Government meddle, but they do not really manage. The meddle leads to muddle. The muddle leads to half-hearted compulsion. The halfhearted compulsion leads to more meddling, to more muddle and then to somewhat stronger compulsion. And so the wheel spins—meddle, muddle, com- pulsion—the repetitive cycle of Labour Government with the compulsion getting stronger every time we come round.
If Britain is to prosper we must make a clear and sharper choice. We must either have much more freedom or we must choose much more positive compulsion. We are convinced that the people will never tolerate the degree of compulsion required to make the Socialist planned economy work. For that reason, we base our policies on freedom, incentive and competition, and that is why we reject this Bill. We are sure that we are right and that we shall be upheld by the electorate.
No doubt hon. Members will pick out various parts of the speech of the right hon. Member for Mitcham (Mr. R. Carr) for comment. I have but one comment to make about it. First, he said that we must have a different economic policy. Later he said that if we changed the economic policy we could scrap the Bill. Later still, he defined his changed economic policy as one of high profits and high distributions in the fiercest competitive society. I ask the House, and my right hon. and hon. Friends in particular, to remember who would be the victims of such a society.
I lived and worked for a long time while that doctrine dominated our society. [Interruption.] I hope that we now have that jibe over. It comes well from the mouth of the hon. Gentleman, so let us have it out. I happened to live for a long time in the sort of society described by the right hon. Gentleman. Industry did not become efficient. We did not stand up to international competition. All that happened was that many people were out of work and those who were in work were poorly paid and overworked. If the right hon. Gentleman is seriously putting forward such an economic structure, then he is giving a recipe for going back whence we came—and that is a place which we would prefer to forget.
I have mixed feelings about taking part in the debate. First I have the feeling that this is where I came in.
It feels a little as though I were making a maiden speech. I do not propose to re-run all the old causes or fight again all my old battles. Unlike the right hon. Gentleman, I think that this is an issue of critical importance to the economic survival of this country, no matter what economic policies Ministers of either side think they are running.
I still believe that the Declaration of Intent on Productivity, Prices and Incomes is valid and tremendously important. Let me remind the House that it was signed by everyone who had responsibility in industry, trade and commerce. They include the Chambers of Commerce, the British Employers' Federation, the F.B.I., the National Association of British Manufacturers— as these then were—the T.U.C. and the Government. That declaration set out what they thought it was important to do and what action each of them should take to bring about the aim. It established their view that unless we do these things we shall have a slower rate of growth and a lower level of employment.
We know that the Conservative Party never accepted it, although the right hon. Member for Mitcham, in an ambiguous part of his speech, said, "We accept an incomes policy"—but it remains true that every other area of British industry, commerce and trade has remained with that declaration. I believe that it continues to have validity, and that is why none of them has renounced it.
The increased benefits which we say we want our people to have and the social wage which my hon. Friends want them to have can come only from increased productivity. The real purpose of my remarks today, which I promise to keep brief, is to point out that increased productivity requires this policy as one of its elements. We all know that it will not come only through that, but it does require it as an element of it.
When I hear the right hon. Member for Mitcham and other hon. Gentlemen opposite demanding that one of the ways out of this difficulty is just to cut Government spending—last week-end it was suggested that the Government made too much of a demand on our production— I wonder, since hon. Gentlemen opposite want more aircraft carriers than we are providing, since they would return to east of Suez, from which we are coming out, and since they would pick up so many of our defence commitments which we are dropping, from where the cut in Government spending would come. Naturally it could come only in housing, schools and hospitals. [Interruption.] When hon. Gentlemen opposite were wearing a different hat at the hustings they were saying that they would do more for those sectors than we are doing. Let us at least talk in honest terms to each other.
When we talk about increased earnings coming from increased productivity, let us note that that means the total of all increases in earnings. Many of our people cannot make independent productivity bargains, although they, too, will want a share in the rises. They are not willing to see those who can push their earnings up from £25 to £30 while those who are on £13 stay on £13. They will want a share, too. Thus, productivity bargains, where they can be properly made, must, in effect, be shared at least three ways: one way to those who contribute to them, one way to management, which also contributes by putting in vastly more expensive equipment, and one way which takes care of the consumer—the social wage which we in this country pay for mostly centrally and not by a direct charge on the factories—and which also takes care of those who cannot themselves get a productivity bargain and a rise that way.
We must somehow—and I say this particularly to my right hon. and hon. Friends who may not agree with me about this—get this across to the trade unionists, workers, and not least to those who claim to lead the trade unions. This has not been happening.
I will not give way. [HON. MEMBERS: "Give way."] If the House particularly wants me to give way I will, but since about 40 hon. Members wish to speak I would rather continue, and hon. Members who follow me and who disagree with me can make their views known.
As I was saying, this has not been happening. If I am asked why, I would say that for the most part the reason is because our trade unionists and employers, for all their protestations, in the document to which I referred and elsewhere, simply have not been willing to carry it out when it came to doing the job. But it could happen and I hope that the House will forgive me for sounding perhaps a little arrogant when I say that my reading, as it were, of people as I have gone about the country is that they would be willing for it to happen this way if they got the leadership for it. [HON. MEMBERS: "Ah."] When I say "leadership"—[Interruption.] I hope that hon. Gentlemen opposite will not be silly—I am talking about leadership in the C.B.I. and the unions. From the failure to get it to happen has come much of our economic difficulty in the last few years and much of the reason for our inflation.
Can we get rid of one nonsense—the myth that there has been a wage freeze and a runaway prices rise? It just jolly well is not so and all the figures are the other way round. Whatever success we had in holding incomes down, that was for a very short period indeed. Whatever success we have had in holding prices down, that has been for a very long time indeed, and this has increased the inflationary pressure inside the country.
I wish to address a few remarks mostly to my right hon. Friends on the Government Front Bench and to refer to what I regard as the very dangerous nonsense to which I give the generic name "Powell-ism". I ask my hon. Friends who may have doubts about what to do tonight to recognise that the right hon. Member for Wolverhampton, South-West (Mr. Powell), who is not in his place today—[HON. MEMBERS: "He is."] I beg his pardon. Like me, the right hon. Gentleman sits in a rather unfamiliar seat these days. The right hon. Gentleman follows out to its logical conclusion the argument which so many of my hon. Friends use. [HON. MEMBERS: "NO."] This may be disagreeable to my hon. Friends, but I must point out to them—
Unless my hon. Friends are ready to accept some orderly planning in this area, there will be a free-for-all and the victims of that will be most of our people and the gainers will be most of their people.
This is not a speech with which I am trying to seek popularity. I think it needs to be said, as I thought it needed to be said in 1964 and again in 1966, and it needs to be said to my hon. and right hon. Friends. This view did not begin with the 1964 Labour Government, much less with me. In a debate of which my hon. Friend the Member for Ebbw Vale reminded me just now about two or three o'clock in the morning, when the General Secretary of the Transport and General Workers' Union was still with us, I referred to a book, which is in the Library now, called "The Clydesiders". At least one of them is present with us today. That book includes a memorandum written by John Wheatley very many years ago which could have been the prototype, the draft, from which the present prices and incomes policy was taken.
The inevitable conclusion I draw from all this is that a planned policy is inescapable, is inevitable, despite all the difficulties of getting it through, if we are to avoid chaotic inflation and glaring injustice. Now I come to part of the difficulty. We are all conscious of the chicken and egg argument: where does the cycle begin, with the chicken or the egg? We have that problem here. If a prices and incomes policy is essential for expansion, equally an expansion policy is essential for a prices and incomes policy. Otherwise, the climate for it simply does not exist. Much of our difficulties over the years since 1964 have been due to the successive doses of deflation and the departure from the expansion programme set out in the National Plan of 1965.
In my new-found position of giving the Government the utmost support with the utmost reservation, I warn Ministers seriously that even the most dedicated of us will find it very difficult to get support for this policy if at the same time Ministers talk, as I heard a very senior Minister talk the other day, about our standard of living falling. It may sound courageous, it may sound realistic in our own ears, but it just is not understood outside and it cannot be true of everybody. My standard of living could fall without my feeling any great harm. That of many hon. Members opposite could fall even further without their feeling any harm at all. But there are many people outside, whose support for this policy is essential, whose standard of living simply cannot fall.
It is no use talking in these general terms. The only effect, if we talk to people like this, is to stimulate them to fight for themselves, to try to insulate themselves from this. I believe that sort of talk is also fatal for the drive for increased productivity. I think it was my hon. Friend the Member for Poplar (Mr. Mikardo) who said the other day that nobody in his right mind will work hard if the consequences of working hard, he thinks—never mind whether he is right or wrong—will do him out of a job and put his mate out of a job. If we talk in these terms we not only do not have a climate for a prices and incomes policy which otherwise people might accept, but we do not even have a climate for accepting the new methods which will lead to increased productivity.
Increased productivity, as the Minister said today, is itself an absolutely essential requirement for the expansion we need to pay for all the rest, and the whole wretched circle is completed once again. I believe that the Government—here I speak from experience—and their advisers, all of them, must accept that this is so and must change their attitude. The traditional Treasury views on this and related subjects must be overborne. Otherwise, far from breaking out, we shall remain in the same straitjacket. I failed in my time; I wish the present Minister success in hers. I hope she will succeed. Because I believe, and remain an ardent believer, in the need for the earliest increase in total economic activity and greater productivity, I accept the need for this Bill, but I insist to the Government that all these things must go together. Acceptance of the Bill must be taken to mean on their side acceptance of the other parts of what essentially is a package deal.
On the question, why do we need the Bill, all this business about penal powers and all that, no one could pretend that we were getting results commensurate with our needs up to now under the existing machinery. A fresh drive has to be made. All experience suggests that the voluntary machinery needs legal backing and reinforcement if it is to work even partially effectively. I do not believe that the voluntary machinery will ever work wholly effectively. People talk about it breaking down in Sweden and collapsing in Holland, but the point is that there after 20 years they still regard the situation as better than if they did not have it. [An HON. MEMBER: "Oh, do they?"] A partially successful working of the machinery is held by everybody in Sweden and Holland to be better than no machinery at all.
I have not changed my view that in the end a successful prices and incomes policy will operate, and operate only on an agreed voluntary basis. But as the situation is at the moment—let us face it—the voluntary basis between the C.B.I. and the T.U.C. is not yet strong enough to do the job all by itself. I believe also that—this is something which was attacked by the right hon. Gentleman, it is a difference of view but I declare my view—for this policy to work requires a much greater degree and much greater development of centralisation of authority in the Trades Union Congress and in the C.B.I. This is not yet accepted in either, but I believe that one day it will be. It has to come and until it has come we shall not get the degree of success needed for this voluntary policy.
That leads me to the conclusion that something like this Bill is needed in the meantime. I understand those who are so traditional that they think individual trade unions should never surrender authority to the General Council of the T.U.C. They of course are in a straight line with those who, before there was a T.U.C, would not even agree to setting one up, for the very same reasons. I understand it. I happen to think it is a little neolithic, but I understand it. What I do not understand is that those who believe in this development should go on claiming to see this Bill as an obstacle to it happening. Oddly enough, I think this Bill is one of the ways to encourage it to happen. Much less do I understand those who claim to accept the policy and then oppose this development.
All that I have said up to now is consistent with what I said in 1964 and in the debates on the 1966 Act, which I have re-read—the exciting but rather wearisome debates throughout those days and nights. But I have changed my view in one respect, which leads me greatly to regret the Government's decision to drop the 18 months and the continuation provisions from the Bill. I recognise that this will not endear me to some of those I am trying to persuade. Nevertheless, I should say it.
As a result of experience over these years I have come to the conclusion—and my ex-colleagues in the Government know that this is no new statement; they have heard it before, but this is the first time I have said it in public—that this policy, which I regard as essential, will need those kind of backstop provisions for quite a long time ahead. I also believe that it is damaging and disturbing industrially and economically to have this performance every year or every other year. I also believe that it is destructive of our credibility abroad. Who can seriously believe that we shall go through this again in 1969 or 1970?
Who can believe that the need will be any less in those years than it is now if we are to go on maintaining even the 3 8 per cent. expansion rate set out in the National Plan, let alone the 6 per cent. which other people talk about? Is it too late to ask for reconsideration of this?
I doubt whether the opposition to the Bill has been affected in the slightest one way or the other by this so-called placatory move. But I believe—I may be quite wrong about this—that our economic strategy in the two or three years ahead could well be damaged by it.
Finally, a word to my hon. Friends who opposed the 1966 Act so strongly and are equally opposed to the present Bill. When I re-read the debates on that Act, it seemed to me that there were really three arguments, and I suspect from what I have read of what people have written or spoken that they are the three major arguments now. The first is that the policy has not worked fairly or sufficiently effectively to be worth reinforcing; the second that the reinforcing provisions could never be used anyway; and the third that we could not afford to have them on the Statute Book for fear that we might have another Government who would use them against our people. Those arguments run through all the debates I hear today, just as they did in 1966.
Apart from the contradictory nature of the arguments, may I repeat something of what I said in past days. If it is true that the policy has not worked fairly or sufficiently effectively, it is a condemnation not of the policy but of the failure of those in industry on all sides who endorsed it and committed themselves to it to make it work fairly by themselves. If that is true, we must lead on to an argument for a Bill of this kind.
Second, from the point of view of lower-paid workers and those who, by the very nature of their work, have less industrial strength and less opportunity for productive bargaining, the need for something like the Bill is made much greater by the failure than made less.
Third, and equally important, if we are to end the period of economic stagnation the need for something like the Bill is made much greater and not less by the failure of those outside to give what they committed themselves to giving.
That the so-called penal powers may never be used is the obvious and natural desire. Almost certainly, that will turn out to be so. But their existence can be both an encouragement to better voluntary action and a deterrent to non-co-operation or active sabotage of what others are doing. There is no trade unionist in the House and there is no trade union official in the House who does not know that some are banking on being able to say, "We got through because we were militant. The others did not because they were co-operative." We all know that that is done, and can name the unions who can do it. I speak as a sponsored trade union candidate for the House and as an official of my union. We are all grown up and we all know what happens. There is no point in trying to pretend that it does not.
On the point about other and less trustworthy Governments coming in and taking over the powers—[HON. MEMBERS: "Oh."]—well, the Conservative Party is about the one which one could be sure would be less trustworthy than almost any other. There is too much history there. Hon. Members might even like to read some Winston Churchill on the subject.
The obvious retort to those who say this is that the remedy is to see that they are not elected. I remind my hon. Friends that nowadays trade unionists are numerous enough always to ensure that the Conservatives are not elected if they do not want them. Apart from that, I think the answer is that Britain's national economic, industrial and social requirements will remain over the years ahead and they, rather than this kind of political argument, should be our major concern. I believe that these requirements—I can speak only for myself—demand that the policy should work. I accept that the Bill, or something like it, is now, and in the foreseeable future, required for this purpose.
I do not think that it is an acceptable or adequate answer to say that this group or that group will not have the Bill and therefore we must, in the interests of unity, refuse to carry it. That would be a very spurious unity based on a very cowardly performance. I have known those now urging it on Her Majesty's present Ministers to have rejected it out of hand when they were themselves Ministers carrying forward policies that were unpopular in our movement.
Nor can I accept the argument that trade unionists have never and will never accept the introduction of legal provisions into our collective bargaining. The right hon. Gentleman said that, but it really is not true. Whenever we have been in difficulties, as we have at various times in our collective bargaining history right up to recent times, one of the first things we have done is to get ourselves political power in order to bring legal provisions into our collective bargaining. It is not true; but, if it were, I say to those who use this argument that we simply cannot advocate change all round us and reserve decay for ourselves.
I ask my right hon. and hon. Friends to join in putting this Bill through and to join, even more importantly, in a fresh attempt really to persuade our friends outside of the value of, and the inescapable need for, the whole concept of a productivity, prices and incomes policy as endorsed by all the parties to the original Declaration of Intent. Those in the trade union movement who oppose this, in my view, are not speaking with the voice of twentieth century democratic trade unionism. Theirs, like the right hon. Gentleman's, is the voice of nineteenth century laissez-faire capitalism.
To win a by-election is a wonderful, memorable and satisfying experience, but my elation on winning the Meriden by-election has been very much tempered by the sad circumstances which brought it about, as I did not have the pleasure of meeting the late Christopher Rowland. During the short time that he was in the House I know that he made a significant contribution to its work. He was an extremely popular, conscientious and hard-working constituency Member of Parliament who was liked and respected by all shades of political opinion in Meriden. In the level of service to his constituents he set a very high standard that I will find difficult to live up to. His sudden death at any early age is both a Parliamentary and a personal tragedy.
Meriden is a microcosm of the nation. If one fed into a computer all the national occupations, national incomes and social groupings in order to find a truly representative English constituency, the answer would be Meriden. It has thousands of car workers, miners, commuters, businessmen, housewives, farmers and all the rest; there is the beautiful countryside; there are some of the biggest power plants in the country; and there are massive overspill schemes for Coventry and Birmingham. Indeed, the centre of England is in the Meriden constituency.
Midlanders are a shrewd, hard-headed bunch of people—I am a Midlander— and they are looking with more than usual interest at this Bill. I hope to keep my remarks temperate and non-controversial, although it may be difficult from time to time. If I stray into the realms of controversy, I hope that the House will forgive me.
The first test in legislation seeking to cure or solve a problem seems to be to analyse the problem. My right hon. Friend the Member for Mitcham (Mr. R. Carr) referred to this in his speech. We have had a lot of argument, but very little analysis. Taking the last 10 years, the average annual industrial earnings in this country have risen considerably slower than all our main trading competitors, with the exception of Canada, the United States and Switzerland. We find that our annual rise in prices is broadly the same as our main trading competitors, but our annual increase in industrial production over those 10 years has been rising only half as fast as theirs.
In terms of take-home pay and fringe benefits, the British worker today is pretty low down the European league. This downward trend is accelerating fast. The Bill can only accelerate the acceleration even more. At the same time, industrial production—the other side of the equation —will get little boost from a negative policy of control and restrictions and lower living standards, which is a concomitant of the Bill. On the face of it, it would seem that earnings are not the main problem.
In the short term, no evidence that I have seen suggests that controls of this kind have anything but a marginal effect on our balance of payments. I suppose there could be beneficial psychological effects on our overseas bankers, but these benefits are outweighed, by the inevitable souring of industrial relations and the ossification of industry and management. When one lumps together the go-ahead and the inefficient in legislation of this kind the lowest common factor emerges.
Perhaps I might strike a topical note here. It seems that there is a direct correlation between the renaissance of English football, the World Cup, the European championships and all the rest. This renaissance was begun when the artificial controls on footballers' earnings and bonuses was lifted. They were given incentives, and we found footballers paying surtax. From that date to this England has led the world in football.
In the long run, the strict control of incomes could have a beneficial effect on our balance of payments, as was hinted at by the right hon. Gentleman the Member for Belper (Mr. George Brown). But the long run is nearer five to ten years. I believe that the cost in stifling business, individual enterprise and initiative and the abandonment of democracy, industrial and political as we know it, is too high a price to pay. I do not see any future in this country being the under-developed country of Europe with a low-wage, low-cost, low-investment economy. That, again, would be the result of a five to 10-year policy of strict controls.
If that is so, surely, when we are talking in terms of five to 10 years, it is better to deal with the restructuring and the essential problems in the economy. After all, if an engineer works with a workshop manual which is 60 years out of date, he is probably a very bad engineer and will soon go broke. The legal framework of industrial relations, the structure of our industrial wages system, and all too often the processes by which management decisions are taken, are relics of this bygone age. This means that if restructuring is to work these things must be tackled.
At the same time, there must be a vast increase in management retraining and in industrial retraining. If industrial over-manning is to become a thing of the past, earnings, investments, and the dividends from those investments, must be free to reflect the efficiency and the growth of the industries concerned. If we want a low-cost high-wage economy both industry and Government should have as their aim a five-year write-off in capital equipment as is done in many other countries. If we want greater machine utilisation—and this is an essential part of increasing productivity—this means more three- or four-shift working. Indeed, if one is talking in terms of employment taxes as being desirable— and I have my doubts about this—this seems to be a more promising sphere for action than an arbitrary division between manufacturing and services.
When one is talking about more three or four-shift working, we, as Parliament, should be examining the social implications of such a policy. The opening hours of "pubs", shops, entertainment and transport are things which should be more seriously considered. It is not just a question of money; it is a question of virtually going into purdah when one starts work on a three- or four-shift system.
At the same time, industry needs to get a much better market-oriented approach rather than a production oriented approach. By that I mean make what the market wants rather than make what the factory thinks it desirable to make. Recent industrial mergers lead me to be slightly optimistic that this has at last got through to certain sections of British industry.
If the long-term problems are best solved by that restructuring, as I think they are, what should happen in the short term. First, the Government must act as any housewife acts—that is, to live within their means. I would even go further than perhaps a lot of right hon. and hon. Gentlemen are prepared to go. In present circumstances, for every proposed extra £ of expenditure there should be a proposed £ reduction in existing expenditure.
This would at least be a wonderful discipline for thought, if nothing else. However desirable projects may be, whether loans or grants to industry, private or nationalised, whether buying American aircraft which do not fly, increasing employment, building more roads or anything else, all these desirable things should be debated, but at the end of the day the case should be argued and equal increases in expenditure savings made.
If this were done in present circumstances, then, as economic growth is resumed, social advance can be resumed and this can be soundly based. If such a policy were carried out, the increase in prices caused by increases in direct taxation could be largely mitigated. Let no one doubt that increases in indirect taxation, particularly the recent ones in the Budget, can cause real social misery to many people living just above the social security margin.
A man who must use his car to go to work faces an extra bill of 8s. for his motoring—there are many of them in a rural and overspill constituency like Meriden—and also finds that his wages are frozen and housekeeping is tight; he has to face frustration and despair and possibly even cut his wife's housekeeping so that he can go to work. People who dismiss this and imagine that this increase in indirect taxation will have only marginal effects are underestimating the deep concern of many people, particularly the lower-paid workers.
At the same time, many people consider that our social security system is now giving many benefits to prop people who are shiftless and work-shy, while people who desperately need help are not getting it, and thus the increase in taxation, particularly indirect taxation on the lower-paid workers, is becoming an intolerable burden.
My final objection to the Bill is that it places increasing reliance on the Prices and Incomes Board. I do not wish to make any personal criticism of Mr. Aubrey Jones or his hundreds of colleagues working for the Board, who, in their terms of reference, are doing a good job, but we should query the terms of reference. There is now a pethora of economic planning boards, councils and Standing Committees, discussing this and that, and above them all is the National Board for Prices and Incomes. All these bodies have real and growing powers with influence over the lives of everyone.
While to feed them with information is taking up more and more of the valuable time of industrialists and trade unionists who would be better employed, in the national interest, in running their own affairs, there faceless "supercrats" are answerable to no one. They take on themselves decisions which are properly the function of Parliament, local authorities, management and the trade unions. Even if they have a monopoly of wisdom, which I doubt, this is not democracy— certainly not as I understand it.
I apologise to the House if I have strained the indulgence which is customary on this occasion—
Thank you, I will.
I find the Bill detestable because it does not recognise the problems. It provides no short-term solution and the long-term solution, as in the Bill, is at a price which the nation would regret. In addition, it shelves more and more responsibilities upon outside, non-elected bodies which should not carry them. The Bill's psychology is wrong because it confuses masochism with modernisation. I hope that the House will decline to give it a Second Reading.
Although my hackles have been raised in consequence of having been forced to listen to some previous speeches, I have sufficient respect for the traditions of this honourable Assembly to offer sincere congratulations to the hon. Member for Meriden (Mr. Speed). He made a somewhat contentious and controversial speech, but I take no exception whatever to that. When I entered the House— probably before he was born—I did not ask for the indulgence of hon. Members, and that was only two days after I entered; and I made a very contentious debating speech.
I still have the Press record of that speech. Just as I compliment the hon. Member for Meriden, so I was complimented on my address many years ago. Occasionally, when I feel depressed, or "under the weather ", I look for it and with its discovery comes a complete change of climate. At last I feel that I have something to be proud about. So I hope that the hon. Member—although we on this side violently disagree with many of his contentious observations—will continue to address the House as he thinks fit.
After all, that is the prime consideration. We must never be afraid to say what we feel, whether it pleases our colleagues or not. I would go further. In existing circumstances, one must be forthright, consistent with one's opinions and principles, even though it displease the Goveriment of which one happens to be a supporter.
Last night, I listened to a play on the radio called "Peter Wentworth", an excellent play indeed. [HON. MEMBERS: "Hear, hear."] It was all about a Member of Parliament who, during the 16th century, in the period of the reign of Queen Elizabeth I, had the courage to stand up to his superiors, even to the Government of the day, even to the Chancellor, even to the Queen herself. Of course, he was derided and ridiculed and lambasted, as one would expect, and eventually found himself in the Tower. Fortunately, that is an unlikely contingency on this occasion. If I may mention it, as a digression, the author of the play was Mr. Speaker himself. I take full advantage of Peter Wentworth, created by Mr. Speaker, to draw the moral, "Say what you please as long as you believe honestly and sincerely in the truth of what you say." So much for that.
When I listened to other hon. Members, the right hon. Member for Mitcham (Mr. R. Carr) and my colleagues, reading their speeches this afternoon, I felt that it was wrong. One wonders who their speech writers are. I have never had to avail myself of any advantageous aid of that sort. Perhaps my language is not so refined, not so eloquent. Let me make it clear beyond any possibility of doubt that I do not propose to enter into an argument on the prices and incomes policy with the Opposition—I mean the Opposition on the other side of the House. I understand their motivation. They have no constructive policy.
Take the ambiguous utterances of the right hon. Gentleman. It was a clear indication of a lack of understanding of modern economic requirements. His speech was just a lot of pabulum. I dismiss the Opposition, not with contempt, but with a certain amount of derision, except for this. The right hon. Gentleman spoke as if the Opposition were not in favour of an incomes policy. However, he would like an incomes policy, but when he got down to brass tacks we discovered that it was "high profits, and pay the worker what you think he deserves." If we are to judge from what has happened in the past, the worker would always be worse off.
The Opposition no doubt believes this quite sincerely, but we are against it. I am entitled to say on behalf of every one of my hon. Friends, whatever their opinions may be about certain parts of this Bill, that we are in favour of planning the economic future of our country. One right hon. Gentleman tried to associate a number of my hon. Friends with the right hon. Member for Wolverhampton, South-West (Mr. Powell). I dismiss the suggestion with contempt. It was creating prejudice to suggest it. It is so easy to say that the right hon. Member for Easington, who is myself, is associated in policy and philosophy and economic understanding with the right hon. Member for Wolverhampton, South-West. But no one believes it, not even the right hon. Gentleman who mentioned the matter; it it a form of prejudice.
For some days now there has been considerable excitement and speculation about what would happen tonight in the Division Lobby. The Government need not fear. This is not only because of the prejudice created, and other attempts to create it, but because the Whips have been around, suffering from excessive perspiration, approaching Members who seem to have doubts about the policy. I understand that some of my hon. Friends have succumbed to their blandishments. They did not come to me. No, the Government have nothing to fear tonight. They will get their majority, but they should not suffer any illusion. They will get a majority for this Bill, including the penal Clauses, including the delaying section—perhaps the two most objectionable features of this legislation.
The Government must be under no illusion about this. A far greater number than those of my hon. Friends who may abstain tonight, or who introduced an Amendment, which has not been selected by Mr. Speaker, have grave doubts about this Bill. They will vote for the Government for various reasons. Pressure has been exerted. Some will vote because, well, they wish to display loyalty—they do not want to be counted. Some will vote for the Bill because of the implied suggestion, almost a threat, that if the Government suffer a derisory majority tonight there might be another General Election, and there would be a wholesale massacre of the innocents.
All kinds of pressure have been exerted, and we have therefore to accept the inevitability that tonight the Government will get their majority—30 or 40, I do not mind a bit. It is not passing this Bill that matters, either tonight or on its subsequent stages. It is the reaction among the trade unions. I do not pose as a great authority on trade unionism, although I have my union card in my pocket. I was associated with the movement at the beginning of this century. I was national organiser of a union, as well as branch secretary and the like.
I may not be a great authority on modern trade unionism, but this I do know: the attitude of union leaders is to promise better conditions of labour and higher wages as a bait to potential members. That is traditional and they are unlikely to depart from their attitude, no matter what is contained in this legislation. I do not mean that the traditional process of collective bargaining must continue for ever. There must be some restraint, if the Government are pursuing an economic policy and endeavouring to prevent inflation on wage and price changes.
I notice that the Government have added something which does not matter a great deal—restraint on dividends. That latter is no concession to me at all. I understand exactly what it means. What will happen as a result of this Bill? It has been suggested by the General Secretary of the T.U.C. that it will not work. Ministers have said that it will not work. Many of my hon. Friends have said "Well, anyway it will not work." All that the Government have asked for are reserve powers. They suggest that it might be unnecessary to operate those provisions of the Bill which impose penalties, except in the very rare case of a minority using sabotage. That word was used in another speech.
The Under-Secretary of State for Employment and Productivity, replying to a Question in this House, informed us that these powers would only be used in the case of a minority. What is the effect of that? A minority say that they will not accept the decision that is imposed upon them by the Government. They refuse to accept the delaying factor. They say that an agreement has been reached between the employers and the union which may be consistent with the criteria rn-posed by the Government, or it may exceed the criteria. Instead of 3½ per cent., it may be 6 per cent, or 7 per cent. That is a possibility which the Minister has admitted. They dislike and resent the delay of several months, and they suggest a strike.
I ask the Minister who is to reply to the debate, or anybody following me who objects to the line that some of my hon. Friends and myself are taking, what kind of action is proposed. Obviously, prosecution is proposed, or it may be that the Bill will not work and nothing will be done. If nothing is to be done, why proceed with the penal Clause of the Bill? It has been suggested in a previous speech that this is a very useful deterrent; it keeps the minority in order. To quote Robert Burns,
The fear o'hell's a hangman's whip
To haud the wretch in order.
Is that what we want hanging over the heads of trade unionists? They are not all malcontents, truculent people, inclined to sabotage. They are decent, honourable, law-abiding citizens. Do we want hanging over their heads the threat that they will be prosecuted if they insist on the implementation of an agreement which has been honourably reached between the employers and the representatives of the union of which they are members? Are we to understand that that threat will not be resented? If there is sabotage and a minority are prosecuted, what do the Government expect to happen—that other men will not come out in sympathy? That is the traditional attitude that has been ignored by the Government and by some of those who support the Government.
I am not opposed to economic planning, neither are my hon. Friends. As a member of the Attlee Government I was responsible, as a result of a challenge by some of my colleagues, for producing a memorandum on a national wages policy, the essential feature of which was the declaration, after agreement and investigation, of a minimum wage enforceable by law. It was rejected by the Cabinet. It has been said that this idea has been suggested to many trade union leaders, but that they do not like legislation which imposes a penalty. I am not opposed to a national wages policy. I am opposed to anything in the nature of a threat such as this Bill imposes, or the implementation of that threat in practice by prosecution, fines, penalties and possibly imprisonment. I say to my colleagues on this side of the House, I say to the House and I say to the Government, that if anything of that sort happened, the hope of the economic recovery of this country is doomed for many years to come.
I want economic recovery, and so do we all. We want to get out of the red. We want to be economically independent so far as it is possible to be independent in this world. We want to hold up our heads and to feel that this country is great and based on sound economic foundations.
To proceed in the direction that is now proposed by the Government will produce resentment by a large body of trade unionists, and by many trade unions who will not be prepared to accept it for one reason or another. They will resent it, and at the end of the day the result will be a lack of support for the Labour Party upon which the Government are based.
That is why I object to the policy. I know that it does not go down well with some of my colleagues. I have noticed that in the last week or so Ministers who ordinarily are very amiable and who used to call me by my first name, or at any rate by my diminutive, pass by and look furtively in another direction. I have noticed it particularly among the junior Ministers. According to what has happened recently, it is possible for senior Ministers who retire to get lucrative employment outside, but juniors are in a rather inferior position which they dislike. Anybody who, to use their language, "rocks the boat" or "upsets the apple-cart" is almost regarded as a traitor. I have been a loyal supporter of the Government. I have bent over backwards to support the Government. This is a secret history, but I disclose it. When I was Chairman of the Parliamentary Labour Party I played many tricks and indulged in all kinds of devices to keep the Government in power. There was nothing treasonable about it. I am very glad that I had the opportunity of doing it. But the time comes when one must speak out.
I am very disturbed about another matter which has a bearing on penal legislation. I object strongly to the penal legislation because I dislike the repercussions and the reactions which I envisage. I am also disturbed that the Government no longer appear to take any notice of their supporters. They ride rough-shod over the opinions of their supporters. It has been suggested that occasionally there should be contact. There is contact, but the Government make it as plain as the noonday sun, as the Prime Minister did the other day, when he said that the Government must govern. I have always agreed about that, but the Government must take notice of the views of their supporters. They must give some consideration to their supporters' views.
It may be that the Government are wrong and their supporters are right. After all, the Government have been responsible for errors of judgment. I will not go into that in any detail. I am gravely concerned about this. In case there is a misunderstanding, I am not in the pocket of the Left-wing and they are certainly not in my pocket. I am quite independent. I have come to a certain conclusion of my own volition.
I am not one of those who came into the House recently and who have been professors, students of history, historians and the rest of it. I am just an ordinary member of the party with vast experience of the party and, if I may say so, experience is perhaps more important in a matter of this sort. It leads to judgment, and that is what is wanted in the party.
When I see what is happening, when we are told to go into the Lobby even when we dislike a policy, the time has come to say, "No. It will not do any longer." I will not vote against the Government tonight, and I know that it will be said that I have not the courage to vote against them. I have, of course. But I do not want to vote against them. I do not want to vote at all, but I will not do it ostentatiously by remaining in my seat.
However, before I conclude, if I can remember it, let me quote a piece of Shakespeare:
O judgment! about are fled to brutish beasts, And men have lost their reason.
I say that because many have grave doubts. The Government are trying to enforce something which is unpopular in the party, not only among my hon. Friends, but throughout the party generally, throughout the trade union movement and throughout the country. It is a policy which is resented. I dislike it, and I cannot vote for it.
The right hon. Member for Easington (Mr. Shinwell) has deployed a fairly formidable case for abstaining, and undoubtedly a great deal of the drama will centre on the Vote later this evening. However, I wish to refer to that in my concluding remarks.
Substantially, this is an argument about the law of supply and demand, as opposed to the presumably preferred alternative of some kind of dirigisme.
One person above all others has demonstrated that he does not believe in the law of supply and demand, and that is the Patronage Secretary. With the Finance Bill upstairs and, therefore, with the Floor of the House clear for debates of major consequence, it seems highly ironic that only one day can be spared for a debate of such significance to the House and of such concern to the heart and soul of the party opposite.
My major objection to the Bill is that it adds to the junk which already litters the scrapyard of economic ambiguity. We have had more than enough of that over recent years. This legislation adds considerably to it.
In the interests of brevity and of the many hon. Members who wish to speak, I will refer only to three instances. The first concerns the prices aspect of the policy. The right hon. Lady made great play today with the importance that she attached to the prices aspect of the legislation. I wonder how genuine and successful she will be in her determination to hold down prices, and what may be the consequences of that policy on the demand strategy which was contained in the Chancellor's Budget, because it is at least arguable that the whole demand strategy of the Budget could be put in jeopardy by the "success" of the right hon. Lady in her policy on prices.
In holding that view, I do no more than echo the comments of the hon. Member for Birmingham, All Saints (Mr. Walden). As the Finance Bill is being considered upstairs, the House was denied the pleasure and privilege of hearing his speech, and I would underline my argument by a brief quotation from it, because his words deserve to be heard on the Floor of the House.
Referring to the Budget strategy of his right hon. Friend the Chancellor, he said:
I am less than happy about the activities of my right hon. Friend the First Secretary, who is running around the country assuring people that prices will come down. In the first place, if she has any general success, that will destroy the chances of the strategy succeeding. In the second place, she will have no success anyway, and she is doing what the Government have constantly done—building up ft further source of disillusion. Promises are being made which will not be honoured, and we shall later pay the price for that."— [OFFICIAL REPORT, Standing Committee A, 13th May, 1968; c. 731.]
The second point of economic ambiguity concerns whether or not this is a policy which has social motivation. It has been argued that it is intended politically to determine income relativities to favour the lower paid. It was, to use the words of the right hon. Lady today,
as much a social policy as an economic policy.
Undoubtedly, that was very much in the Prime Minister's mind when he went to the pre-conference meeting of the National Union of Agricultural Workers at Aberystwyth recently and stressed the advantages of the supposed social benefits of the policy for the lower-paid workers.
The National Union of Agricultural Workers did not respond all that well because, within a matter of days, but before publication of the Bill, it passed a resolution rejecting the Government's incomes policy. All hon. Members, particularly those from rural areas, will appreciate the significance of that, because no one would suggest seriously that agricultural workers are other than among the lower paid members of the employed community. Imagine the surprise with which they must have read Clause 5 of the Bill, which contains a provision that the awards of the Agricultural Wages Board can be deferred for a period of up to three months without reference to the National Board for Prices and Incomes.
This cannot be conceived as anything but as a blow at the lower-paid workers, and it cannot but give rise to further disillusion about the intentions and purport of the policy. It has been one of the Government's arguments that their policy has been immensely successful and that, with the amount of statutory backing that they have, the exhortations that have flowed from it have been fulfilled, in the main. Therefore, the suggestion that is sometimes made that they needed powers to deal with wage council awards because the awards would be applied indiscriminately to all and not merely to those on the lowest rates is not a tenable one. Whenever wage council awards have been made recently, the Government have issued an exhortation that the payments be confined to the lower-paid members who were covered by the award. Are we now to understand that this voluntary aspect of the policy was not working? That would seem to be the implication of the Government's inclusion of Clause 5 in the Bill.
I turn now to the third area of economic ambiguity, and, in a sense, this can lead to the most devastating harm of all. It is the proposition that politically motivated incomes settlements, somehow or other, can promote industrial efficiency.
All this is contained in the magic word "productivity". In some sense, I wish that there was a politicians' swear box for the word "productivity" and that, every time it was employed, a coin was extracted from the hon. Member using it.
At least my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) has maintained a stout and welcome scepticism about the whole concept of productivity and productivity bargaining. In the debate which we had on this subject just over a year ago, my right hon. Friend said:
Apparently Mr. Aubrey Jones is to give some guide lines to the Government on the way in which to assess genuine productivity. I quote as an example, Sir Paul Chambers, speaking to the Royal Statistical Society. He said:
' No method of measuring productivity of I.C.I, as a whole, or of a division, has been devised which is meaningful, of practical use and reasonably simple to compile.'
If I.C.I. cannot do it with all its resources it will be interesting to see what sort of job Mr. Aubrey Jones makes of this proposal."— [OFFICIAL REPORT, 13th June, 1967; Vol. 748, c. 426–7.]
Since then, of course, we have heard not less but more about productivity. The nonsense increases, and I should like to quote one example to show that this is not, in fact, some scientific concept capable of measurement, deserving the words of the Prime Minister, "copper-bottomed", or of the right hon. Lady "watertight" but rather a very flexible art indeed.
The quotation I wish to give—not because it is the most dramatic in illustrating my case but merely because it happens to deal with a contemporary dispute—concerns the B.O.A.C. pilots' dispute. I quote from the Financial Times of 16th May, which said:
… the Board of Trade has asked the parties again to evaluate the productivity benefits … it is at this stage that the dispute between the pilots and the Corporation begins.
The pilots say that the net value of the productivity items included in the agreement would result in an increase of over 126 per cent, in productivity. But the Corporation assesses those same items as only resulting in about 1·5 per cent, increase in productivity …
It is precisely when confronted with that situation that one realises that one has passed from the world of economic reality into the world of economic nonsense; that we are creating for ourselves a kind of medieval scholastic technique of economics and that Government is being increasingly involved in this. I believe this to be immensely harmful for the good name of this House and of the Government.
I conclude my observations on what I think are the points of substance which I have against this legislation by saying that I have quoted but three, but that they have a considerable compound effect in the atmosphere of disillusion which I believe to be widespread in industry today, and that we pursue these economic ambiguities at our peril.
I want to end on a generalised note of opposition. The whole philosophy of this Bill and the policy that it purports to sustain seeks to promote the concentration of decision-taking. If I understood the arguments of the right hon. Gentleman the Member for Belper (Mr. George Brown) aright, his main concern was that these concentrated decision-takers ought to be the C.B.I, and the T.U.C. and that they had not been fulfilling in a successful way the concentrated decision-taking which he wished to see come about. I know that it is a quiet, respectable and seemingly modish pursuit to tell us all that we ought to be modernists, that there ought to be larger units in industry today, that decisions of a superior calibre can be taken by qualified people operating in a larger context. I beg leave to have very serious doubts indeed about this, not least for the reasons referred to by my hon. Friend the Member for Meriden (Mr. Speed) in his excellent maiden speech, when he touched upon the dangers of non-elective bodies.
I would say this to my hon. Friends. We in the Tory Party spend a great deal of time talking about taxation, and rightly, but I believe that this trend towards a policy of prices and incomes which concentrates decision-taking either in government or in those authorities that government would like to sub-contract policy to will snuff out liberty and stifle initiative even more effectively than will high taxation.
We shall have a vote tonight, and I agree with the right hon. Gentleman the Member for Easington that the Government will win—but it will be more than just a ritual vote; it will be a quite symbolic vote, because although the dirigistes on the Treasury Bench will get their way, the votes and the abstentions that will be recorded this evening will show that there are many in this House who echo the majority in the country who anxiously perceive the absurdities and the dangers of an incomes policy, and liberty never had more need of champions than now.
I wish to address myself to the Amendment which is on the Order Paper in the name of my hon. Friends and myself. This is an historic debate for this Government and the trade union and Labour movements, and I hope that the hon. Member for Oswestry (Mr. Biffen) will forgive me if I do not follow him in his very erudite arguments. I know his great interest in this subject, which he follows meticulously in this House. I have noted the points made by the Opposition Front Bench, because this is an argument which we on this side of the House have got to get sorted out and to get straight as soon as possible.
I would say to my right hon. Friend the Member for Belper (Mr. George Brown), for whom I have great personal respect, that to try to link some of us on this side with the right hon. Member for Wolverhampton, South-West (Mr. Powell) and his economic policy is a travesty of the facts and of justice. He knows as well as anybody else that those of us who are critical of the prices and incomes policy, and particularly the proposed legislation, want an alternative socialist economic policy, which we have spelled out on many occasions and will again, and it has nothing to do with laissez-faire capitalism or anything of that nature.
I come now to the question of this Bill, the effect it will have, whether it will work and how it will operate. I heard my right hon. Friend this afternoon talk at some length in expounding the details of the Bill. In particular she mentioned one part which has disturbed many of my hon. Friends on this side of the House: paragraph 3 of the Explanatory and Financial Memorandum, where it says:
to delay making orders implementing proposals by Wages Councils.
This is an extension of the previous order.
How can the Government say in one voice that they are in favour of the lower-paid workers and then put themselves in a position to refer agricultural workers' wages to the wages boards in particular, which many of us on this side now believe are a complete and utter failure? This is true in many fields where, unfortunately, trade unionism has failed to operate and where that much derided factor, collective bargaining, has not been able to play its normal part. There are those who deride collective bargaining and talk about higher-paid and selected workers getting an advantage; but they do this by forms of collective bargaining through a trade union organisation and wages councils which were set up to look after the lower-paid and badly organised workers, but which have not brought the desired results. This is one effort at legislation which has not brought results. Consequently, it is absolutely reprehensible for the Minister to take these powers.
We are told that wage claims are dangerous if they are above the norm. The engineers are asking for a £2 increase. We are told that this is in excess of the norm. There is no "copper-bottomed" productivity to go with the claim and, in consequence, it is said that its acceptance would lead to wage inflation. I am willing to bet that the engineering employers who are most opposed to paying the £2 a week increase are the inefficient employers who do not go in for productivity or investment. Low wages have held back the productive industries. May I give a classic example? We have in the machine tool industry some of the most skilled craftsmen in Britain. Only in recent years, when one or two firms have broken through the net and moved on to investment, productivity and higher earnings, has there been a real change in that industry. It is therefore wrong to say that higher wages bring about inflation.
We are consistently told that wages are outstripping production and are in advance of prices. The Minister of Labour's own figures from 1960 to 1967 are extremely interesting. Taking 100 as the base, in 1961 the gross domestic product per head of the labour force increased from 101·6 per cent, to 117·8 per cent, in 1967. That covers a period of Conservative and Labour Governments. Real average weekly earnings, as opposed to basic rates, increased from 102·5 per cent, in 1961 to 1166 per cent, in 1967. Production slightly exceeded earnings over those seven years. The two things virtually went hand in hand. Surely that is the answer to those people who talk about wages outstripping production.
When we have a wage freeze and a restriction such as that which the Prices and Incomes Bill and previous legislation have put upon earnings, and when we have a deflationary policy, certain sections still find ways of getting round the wage freeze and obtaining increased earnings, but there is no productivity to go with them. This is the serious situation which we face.
I am all in favour of productivity, but, my word, some nonsense is being talked about it. I have negotiated on productivity as an engineering shop steward in industry for 15 years. We did it every day in negotiations about payment by results, and so on. The vast part of the engineering industry is involved in this type of daily negotiation. What cannot be done is what the Minister is trying to do. One cannot run around in a great flurry and expect productivity agreements to be popping out of the letter boxes day after day. Such agreements take a lot of detailed negotiation. Many of my friends have been involved in them as employers and as trade union leaders. One must iron out the problems. One must discover the management's problems. New equipment might be needed to carry through the agreement. Investment might be needed, and changes accepted by the workers might be necessary.
To hear some of my right hon. Friends talk, anyone would think that productivity had just been invented. What sort of world do they think we have been living in? Some of us have been living in the real world and consequently we understand the situation. A Prices and Incomes Bill will not deal with the problem. It will have an adverse effect. People will become restrictionist. We hear a lot of talk about getting rid of practices which have lasted for generations. We shall get rid of them only in a period of stability, growth, full employment and rising wages. We shall not get rid of them in the type of madcap economy which we have at the moment.
I wish my right hon. Friend the Secreary of State success, but I notice that the Economic Committee of the T.U.C. told her very quickly yesterday that it did not want legislation for setting up productivity committees within industry. Some of my right hon. Friends have legislation on the brain.
I move now to the prices issue. We are asked, "Are you in favour of a prices and incomes policy?" We live in a mixed economy. My right hon. Friend the Secretary of State said at a meeting which was fully reported—and she repeated it today—that the scandalous increase of 114 per cent, in the price of hearing aid batteries was to be referred to the Prices and Incomes Board. She said that she and the Minister of Technology would meet the firm and hammer out the matter. We are to have two Cabinet Ministers chasing a price increase of Is. 6d. on an article bought by a small minority, but an important minority, in this country. How can we expect thousands of prices to be dealt with?
There is a conflict between what the Chancellor of the Exchequer says and what the right hon. Member the Secretary of State for Employment and Productivity says. The Chancellor made it abundantly clear in the Budget that prices would go up, that he would take purchasing power out of the economy and that he needed £923 million. From where will he get it if he does not take it out of the purchasing power of the people we represent?
That brings me to one of my central points. We are told consistently by the Prime Minister that he has changed his mind about legislation since devaluation. If there were any possible chance of having a price and incomes policy before devaluation, there is none now.
I am sorry that my right hon. Friend disagrees. The effect of devaluation is that real wages will go down. People in our type of society will not accept that.
Let us consider what happened at the municipal elections a week last Thursday. The Government get the worst of all worlds. We have made a prices and incomes policy the central theme of our economic policy. If wages go up, we get blamed. If incomes do not go up, it is, apparently, the Government's responsibility. We cannot win. It is people on the other side who are gaining by carrying out this policy. We are playing into their hands.
I ask the Government to consider what has happened elsewhere. Look at what has happened in Sweden. The whole conception has been destroyed by wage drift. Look at what has happened in Holland. Not only has the policy gone but it has taken half the trade union movement with it as well—a disastrous policy. Look at what is happening in France at the moment. Some of their problems are basically economic. They are in trouble in France at the moment. Mon General had many fanciful ideas about types of legislation. It just will not work, and people in a free society and a free economy as it exists at the moment will not accept it.
I want to come now to the norm. It is mysterious how it appeared in the Bill
at 3½ per cent., and in the White Paper, and now disappears. The strongest critic, wanting to get rid of it, was the C.B.I. The C.B.I, wanted a nil norm right from the beginning. That is in the document issued by the C.B.I, on April 5th, 1968. Paragraph 8 says:
The Government have decided to impose a ceiling of 3½ per cent, to be applied as an annual rate on all wages and salary settlements reached on or after 20th March, 1968. We warned the Government that there was a real danger that this would be widely interpreted as the norm ".
The document continues along those lines.
When we start talking about norms, nil norms, rates and so forth, we know—and my hon. Friends on this side of the House know it is true—that in the main this legislation is going to affect trade unionists, people in the public industries where control can be exercised and in the large companies which may play along with the Government for a short while. But we know that millions of people are going to get by it. What an injustice!
My right hon. Friend the Member for Belper talked about "getting it across". I would tell him that it is not our propaganda, nor our lines of communication, that are wrong; it is the policy that is wrong. That is why people have rejected it. They have rejected the policy, and yet he comes along today, reading very nicely from the Letter of Intent. My word, that is all ready to go into the British Museum.
I will tell my right hon. Friend what is wrong with it. He set off on this long road to Brighton, to the T.U.C., on a voluntary principle. He himself now says that it must be backed by statutory legislation. He even goes further. Perhaps he will allow me to say something further on that, because I believe his speech today, while I disagree with many points in it, was fundamental on some of the points which my right hon. Friend put so well to the House.
But turning to the position in Europe, not only have wages councils and the whole concept of machinery broken down but anybody would think wages were at the centre of all our economic problems. Anybody would think that tremendously high earnings in Britain were responsible for all the purchasing of the imports which are creating the problem of our balance of payments. But when we look at the "league table" we see we are down at the bottom. I do not intend to read out the figures of what other countries earn. I have here the Financial Times and other appendices. In fact, we are extremely competitive. Many of our problems arise not from high wages but from low wages. What we should be aiming for are low unit costs and higher wages. That is the way to productivity, not the way we are going at the present time.
I want to speak particularly in relation to the T.U.C. about which a lot has been said this afternoon. I have here the T.U.C. Economic Review, 1968. In paragraph 221 it is stated:
There are welcome signs that the Government realises that it has in the past laid too great a burden on incomes policy, notably as a means of correcting particularly Britain's balance of payments problems, and also that it has accepted that attempts to impose incomes policy by legislation are at best self-defeating. The General Council particularly welcome the Government's decision to rely on the voluntary incomes policy to meet the needs of devaluation ".
That is the answer to my right hon. Friend who speaks about rogue elephants or rogue mice. That is the General Council of the T.U.C. talking. He would get very short shrift if he went down there with his policy at the present time, because although he persuaded them once, they will not bite again because it is not in their interests and it will not work. What is wanted in this economy is growth, and that cannot be achieved by repressive legislation, by hostility to the trade unions and unemployment. I am sick of saying in this House that British workers can be persuaded but they cannot be coerced; and it is time we learned the basic facts with which we have to deal.
I want to come to the trade unions about which some extremely interesting things have been said. The Guardian repeats this morning what the Chancellor of the Exchequer told us at one of our previous meetings, that whenever he sallies forth with the prices and incomes policy nailed to the mast he is asked, everywhere he goes, "How is it going? What is happening? How is your legislation?" These are probably the friendly gnomes mentioned by my right hon. Friend the Member for Belper. We are stuck with the policy. What an admission! We are partly to blame because in the first place we nailed that damned flag to the mast and now we are stuck with it, and in consequence we are having to pay for the fact. People overseas, our creditors, international investors and particularly people with "hot" money are in a position of not only of telling this country what policy we should operate but also wanting to see how it is operated.
I see that Mr. Richard Goode and his friend from the International Monetary Fund are here today. I hope we can get some short message through to them. My right hon. Friend raised a serious point; he really put his finger on it, because there is a great difference of opinion in this party and in the Government on whether or not there should be permanent legislation. My right hon. Friend the Member for Belper, with his method of going to the centre of things, said he believes the policy is now feasible only if it is permanent. He asked what will happen if we go through this all over again in 18 months' time. I need hardly remind my hon. Friends that in 18 months' time we will be on the eve of a general election and it would not be a very good thing to be going through all this nonsense. If we are going to drop it, why not drop it now? Why carry on at the present time?
There is a general feeling—and the right hon. Member for Belper emphasised this—that the trade unions should move into more central control and that the T.U.C. should have greater power. While he is saying all that, the effect of the Government's policy is driving trade unions the other way. They will not co-operate on that sort of basis. They will not co-operate when they are told that there will be no more legislation and then it comes, when they are told that it will not be operated and then it is operated. We had 14 wages Orders before the House and only one on prices. They remember these things. They go to the very heart of the situation.
It should not escape our notice that it was in the heavy industrial areas of Britain that this party received its greatest setback a week last Thursday. In the heavy industrial concentrations, it is the industrial worker and his family who have withdrawn their support because they no longer have confidence in what the Labour Government are doing. They do not necessarily put up a detailed and articulate case, but they are dissatisfied. They are worried by the uncertainty which exists, by the dismal statements constantly coming from the Government, and by the lack of any sign of light at the end of the tunnel or any real chance of a true alternative road for development. A worker at the giant A.E.I, factory in Manchester said to me after the poll, "You thought you could take us for granted, but you cannot". This is what our own people are saying.
When we talk about these things in the House of Commons, we are talking about the trade union movement. Yet conference after conference has turned against the Government's policy, not just by the odd vote or the president's casting vote. Huge conferences, one after another—not only the A.E.U.—have rejected the punitive Clauses in the legislation and have rejected the voluntary system as well. They say that the whole thing stinks, they do not want it, and they will not have it.
That is our present situation. I cannot support the Government's proposal, however much it is embroidered with references to the corporate State and all that that entails. It will not work in this country. I am in favour of Socialist policy. My hon. Friends have spelt it out. In view of the time, and in fairness to other hon. Members, I shall not spell it out again. We are faced with a very difficult decision tonight. My hon. Friends and I have never doubted the sincerity of our other right hon. and hon. Friends in what they are doing, and I am sure that they do not doubt mine. But on this issue we must stand up to be counted. We have tried to persuade the Government to come some way towards us, to drop the punitive Clauses, to talk to us and to try to find a way round the difficulty. But when we look at the legislation, it gets worse in some respects, not better.
I am a Socialist and a trade unionist. I feel my position extremely keenly, but I shall not vote for the Government tonight. It need not be said that neither I nor my hon. Friends will be found in the Opposition Lobby. I do not need to explain to the Opposition—I think they understand—that their alternative policy is not ours. We have other policies. Those of us who will not support the Government tonight take our stand on the conviction that their policy is mistaken, that it is wrong, that it might well be going past the last chance which this Government have of recovering from the serious economic situation and the loss of confidence in Britain today.
My hon. Friends and I have asked for only one change, a change of policy. We shall continue to fight for that because we believe that ours is the alternative policy to the one put forward by my right hon. Friends and to the one put forward by the Opposition. Our policy has not been tried, but it is there and we shall continue to fight for it.
The eloquent sincerity of the hon. Member for Salford, West (Mr. Orme) confirms my fear that within the wretched and unnecessary confines of a one-day debate there is a real danger that the right hon. Member for Mitcham (Mr. R. Carr) and the Conservative Front Bench will be let off the hook, owing to the frank and open ventilation of domestic differences within the Labour Party. It would be most unfortunate if the Conservative Front Bench were let off the hook on this issue.
The right hon. Member for Belper (Mr. George Brown), in his trenchant criticism of a free-for-all in wages, characterised that free-for-all in terms of "Powellism". He swung the searchlight of his gaze round the Chamber until eventually it lit upon the right hon. Member for Wolverhampton, South-West (Mr. Powell) sitting on the back benches. This added great dramatic force to the right hon. Gentleman's argument, but I believe that it seriously missed the point of the debate, namely, that Powellism is now enthroned on the Conservative Front Bench.
It is entirely irresponsible for the Opposition, who claim to be poised to take over office as the Government, but who are quite unwilling to take up the weapons which the hon. Members for Lewisham, West (Mr. Dickens) and for Tottenham (Mr. Atkinson) and others advocate, should nevertheless proclaim no doubt partly in the interests of the Sheffield, Brightside, by-election, the total sanctity of free collective bargaining.
I wish to make clear that it will be on no such grounds that Liberal Members, with a feeling of some disappointment, will feel bound to vote against the Bill. We shall do so not in any sense asserting in this day and age the total sanctity of free collective bargaining. Liberals believe that the ordered growth of real wages requires a measure of State intervention in the bargaining process, for at least three fairly obvious reasons.
We take that view, first, because we are a country pledged to maintain relatively full employment, in spite of being so vastly dependent on exports and having a chronic balance of payments problem which will be with us for some time. Second, for perfectly honourable reasons, honourable because they derive largely from our pioneering rôle in industrialisation, we still have an old-fashioned wage structure in many sectors of industry which is not being modernised rapidly enough by being allowed to jog along with free bargaining methods. Third, we take that view because ours is a society in which, on the whole, by no means only Liberals believe that elements of potential monopoly power, wherever they be and from whatever sector of society they derive strength, must be watched and, if necessary, curbed.
For those three reasons, we were quite right, as we have made plain for some time now, to support a measure of State intervention on the incomes front. In that spirit, my right hon. and hon. Friends and I voted for the first Prices and Incomes Bill which set up the early warning system. We voted against the succeeding Prices and Incomes Bills not because they were interventionist but because they were so negative in the freeze which they were designed to apply.
We hoped that certain valuable lessons would have been learned from what were at times frankly described by the Government as the experiments of the Prices and Incomes Acts of 1966 and 1967, and we hoped that the fruit of those lessons would be embodied in the Bill this year.
The first lesson was that any sort of appeasing; reference to dividends in a Measure of this kind no longer cuts any ice with the great mass of working people unless it be accompanied by some encouragement for workers to get access to, and a fair share of, the company reserves which automatically benefit from dividend restraint. Clearly, that lesson has not been leaned in the Measure now before us.
Second, we hoped that the new legislation would show that the Government accepted a useful but limited rôle— certainly not a bombastic or highly impressive rôle—for the Prices and Incomes Board in restraining some price increases against the essential background of real frankness about the Government's general policy on prices, namely, that prices must rise in present circumstances.
We hoped that the Government would have learned that any attempt to befuddle the British people by suggesting that the legislation contained a magic weapon to keep down prices over a broad front, would not work at all.
On incomes, what we were looking for was intervention to assist the rapid reform of large parts of the pay-bargaining structure so that engineers and others would get from the legislation a clear message that for their perfectly legitimate expectations of more pay they must no longer look to nation-wide, or industry-wide negotiations, but that they must look to the plant level, or at any rate the local level, or in some few cases the company level, for future benefits. I think that a great service would have been done to engineers at various levels, and especially the younger members of the union, if the Government had spelled out that message quite clearly, because that is the message for the future anyway.
We hoped, too, that there would be some indication of where the Government were going to put their emphasis in using their interventionist power. Instead, we have the most extraordinary muddle which is embodied in paragraph 32 of the White Paper, namely, the spelling out of the fact that increases can take place, and can be negotiated, at four different levels of negotiation, the national, the local, the company, and the plant, and yet in some wholly magic way the Government suppose, and the Bill presupposes, that pay improvements at those four different levels can all be contained beneath one ceiling. There is nothing in the Bill, or in the speeches which have been made commending it to the House, to indicate how on earth that can possibly be done.
We believe that the Government would have deserved support if they had said frankly that within a ceiling of 3½ per cent. there could be no room for pay improvements at national level, and that people would have to look to plant and company bargaining for any improvements. But that has not been spelled out.
The three criteria which are held to justify pay increases under the Government's policy are in essence matters of local application. The first is more exacting work or a major change in working practices. That is something which can be decided only at the individual plant, or perhaps occasionally by reference to company policy. It is not a matter on which there can be a national verdict. The whole nation and all the members of the engineering unions do not at one moment take on more exacting work or make major changes in their working practices, and it would be highly undesirable if they were to do so.
The second criterion is when it seems essential to secure a change in the distribution of manpower. If we are to be realistic, we must recognise that that is a district matter. I believe that the time has gone when hon. Members, even on these back benches, dreamed of mass migration from, say, the Midlands to the rural parts of this country in the interests of a mobility of labour policy. It does not happen that way. Migration happens in an overwhelming degree within the district where people have their roots, and can get back to their homes at night to enable them to keep in touch with their families, and so on. Pay changes in the interests of a better distribution of manpower are a matter for district negotiation.
The third criterion is that existing wage and salary levels are too low to maintain a reasonable standard. My party has great sympathy with the idea of an enforceable minimum wage, but all the discussions that we have had—and we do not pretend to be the most experienced body of opinion in the House on that matter—have shown that there is no hope within the foreseeable future of an enforceable minimum wage of nation-wide application, because standards of living, costs of living, and material expectations vary enormously from one corner of these islands to another.
Here again we say that the admirable and essential effort to enforce reasonable minimum earnings is a matter which lends itself to local or district negotiation. That is the emphasis which we would have liked to have seen in the Bill. Because there is a total lack of it, and because there was no indication in the Minister's speech that she intends even to administer the legislation in that way, it is with a feeling of disappointment and regret that we shall go into the Lobby tonight against the Bill.
The hon. Member for Colne Valley (Mr. Richard Wainwright) dealt with a great deal of detail which I do not think affects the main principles of the Bill. If I might come as near to his constituency as possible, I turn my attention to the West Riding, where people adopt the policy of living within their income. That is what we are talking about today, and I find that the electors of Yorkshire apply the same standards to their politicians and how they run their affairs as they do at home. I therefore do not want to touch on what was said by the hon. Gentleman.
I am much more interested in what was said by my hon. Friend the Member for Salford, West (Mr. Orme), because his experience is very similar to mine. I thought that he made the best speech that I have ever heard him make in the House. It was delivered with great sincerity, but it reminded me of the occasion on which a Harvard academic went to see President Roosevelt. He talked to the great man about deflation, about deficit financing, and about monetising silver. F. D. R. said, "Professor, that is fine, but one thing you have not told me. What do I do next on Monday morning?". That is the problem with which we have to deal. I believe that if we do not pledge ourselves behind the Government tonight pretty severe things will happen by Monday morning.
It is all very well to argue around the legislation as though we had all the time in the world. Over the weekend Sir Roy Harrod did not dissent from the Government that they tried for three years to avoid devaluation. So did 1, within my limits. I did not greet devaluation with the euphoria with which it was greeted by people on the Left of my party. I regarded it as a kind of defeat. It was sad, but we now have to climb out of that state of affairs.
We have now had devaluation for six months, and this debate, whatever the Chief Whip may proclaim it, is a vote of confidence in the Government. I do not know why it has not been called that, because it is a test of the Government's credibility. That is how it will be understood abroad. The test is whether the Government can rally a Parliamentary majority behind them. That is the only thing that will count. The test is whether the Government are seen to be in charge of the situation. If the majority tonight is derisory, then the Government will be devalued throughout the world. So will the Labour Party be devalued because I do not happen to believe that one can separate this party from the Government it created. Devaluation of the £ could well follow, especially in view of the things we are hearing from abroad. The whole credit of the Government rests on this vote.
I want to consider the situation in the context of the situation now. It does not matter much what we thought two or three years ago. I do not much blame my right hon. Friend the Prime Minister for changing his mind from time to time. Emerson once said that foolish consistency is the hobgoblin of little minds —which indicates that my right hon. Friend is a rather large-minded man.
However, I am consistent in this, in that my hon. Friends know that I have never believed that a voluntary system was possible from the trade unions. I have always taken the argument that, on the hypothesis that wage regulation is a necessity, the State must take the responsibility because the trade unions' traditional role is to get the most they can for their members. Their job is not necessarily to consider the whole economy. I have taken part, as I am sure my hon. Friend the Member for Salford, West has taken part, in enough demarcation and differential disputes in ensuring that craftsmen get the right incentives, to know full well that we are ready to take part in a bit of infighting to get what we want for those we represent. There is no question about that. It is no part of a union's function to frustrate its own purpose.
I want to return now to the difficulties faced by that band of brothers, the 17 hon. Members who are in the A.E.U. We are a very curious lot. Last year, under Lord Carron, the A.E.U. went on record in favour of an incomes policy. I was in favour and my hon. Friend was against. This year, under another president, by a vote of 3 to 2, a million votes were passed against the incomes policy at Croydon. One who voted for the incomes policy last year changed his mind. Two were sick. The president was out. That was hardly a qualitative vote. When the rank and file, through the National Committee, met, it decided that it was against any incomes policy, voluntary or statutory. It decided that it believed in a free-for-all.
My right hon. Friend the Member for Belper (Mr. George Brown) made one mistake when he was trying to liken the right hon. Member for Wolverhampton, South West (Mr. Powell) with those on this side who believe in a free-for-all. Of course, they believe in a free-for-all. But he believes that trade unions are an excretion on the body politic and that they should not have an existence at all. So, in effect, in this House the 17 members of the A.E.U., of last year's vintage or this—a good thing that we have Parliamentary privilege—are having to make up their own minds where they stand on this issue.
Presumably everyone on this side of the House agrees with price regulation. Indeed, my hon. Friend the Member for Tottenham (Mr. Atkinson), speaking on 13th June last year, said that he was in favour of free wage negotiations with price control. That, if I may say so, is the only logical alternative policy I have heard from those who are opposing the incomes policy tonight. Presumably, everyone on this side also believes in the limitation of company distributions and that we should stop rent increases. But many do not believe in any regulation of wages.
Taking all these suppositions together, the whole thing is a nonsense. It is not on. Let us consider rent increases. I have been chairman of a local finance committee. I know that, unless one balances the housing account, with the system of pooling housing accounts which we have now, one merely lays the burden on the general body of ratepayers, many of whom are more hard up than the beneficiaries. I also know, because I have studied the figures, that 73 per cent. of all local government expenditure goes on salaries and wages fixed by trade union agreement over which the local authority has no control. This element is far too large to brush to one side and to say that wages should have a special place and be immune.
Of course, all this has led to a great deal of double talk—the phoney productivity agreements, the promises which never come off. We have all seen them. Of course, we all agree about increased productivity and efficiency. I have great sympathy with the hon. Member for Oswestry (Mr. Biffen) when he says that there should be a swear box for the use of the word "productivity" because it has become so devalued.
I do not think that the alternatives being put up now are serious in the context of the present situation. It is argued that we should liquidate our overseas portfolio. I do not quite see the object. Is it to make ourselves stronger or is it to use the proceeds to finance consumption, which is what I fear the answer to be? During the war, no less than two-thirds of our overseas balances were liquidated when we were trying to buy time for America to enter the war. One of the good things of post-war financing is the way in which we have built up our balances so well again. If we were to tap those balances before the weekend, that would cause such a crisis of confidence that we would get into deep trouble next Monday morning. Let us not be mistaken about this. It is a question of whether we should eat our seed corn accompanied by a massive loss of international confidence.
It is suggested also that we should go in for import controls again. I was in office when we started a sort of import control in 1964. This was the beginning of our troubles.
My hon. Friend may not know what he is talking about but I know what I am talking about. It is a form of import control to lay a 15 per cent. surcharge. On face value, we can hardly go in for import controls if we are putting all our money on an export boom which we think is going to fructify next year. Trade is a two-way street.
In considering the penal Clauses in the Bill, I have been through the speeches made since 1964 about this aspect and I have read all the gloomy prognostications. None of them have come true. There have not been any prosecutions under the penal Clauses. Nobody has gone to prison and nobody has had heavy fines lobbed on him, although that was the stock in trade of the weekend speeches made at that time. I have always held, as I said at the time, that this whole matter depends on a great deal of voluntary control. I have always regarded the statutory powers as reserve powers for the potential maverick, because there is always a minority making it hard for the majority.
Is my right hon. Friend aware that while he is making the point that the penal Clauses were never used, he is speaking of a time when wages went up substantially under the 1967 Act? Why does he assume that the Government will be able to hold them under the 1968 Measure?
We are not expecting to hold all of them. Nobody has ever suggested that everything will be held at that level. I have no doubt, however, that this is written into the Bill because it gives a reassurance to the majority who want to get along with the Government and have a sensible policy.
I believe that we are in a position to ask for some control in this sphere because we have attempted to do something for the social wage. If one considers what the Government have achieved since the Labour Party came to office and what the position was in, say, 1963, one sees that supplementary benefits went up by about 35 per cent. between October, 1964, and October, 1967. I appreciate that many hon. Members wish to speak, so I will not give all the relevant figures. This increase of 35 per cent. mirrors increases in the whole range of social benefits. No hon. Member who will abstain tonight would not argue the case in the country that we have justified ourselves on the social advances made by the Government, although that has not been reflected in the polls because the country is mainly concerned about the credability of the Government; about whether the Government appear to be paying their way.
That is, basically, the difficulty we face. Somehow we must reinforce the Government at this time because the prospect would be grim tomorrow from our point of view. We must keep our nerve because I believe that we may be poised between deep trouble if we rat and a boom, with a better change in the political climate next year, if we keep our nerve now.
I do not imagine that I have made an eloquent speech. Time is short and I want to allow as many other hon. Members as possible to take part in the debate. However, I make this speech with the conviction that a healthy vote for the Government is necessary tonight in the interests of the Government, of the party and, more important, of the country.
Having listened to most of the debate, and particularly to the speeches of hon. Gentlemen opposite, I am wondering why at this time my hon. Friends and I are thinking of intervening and are not instead just leaving hon. Gentlemen opposite to their own problems.
It is surprising to look back to 1964 when the Labour Party came to power. In 1966 they were elected with a higher proportion of support in the country and we wondered what policies the new Government would introduce. The first Measure to come off the stocks was the Prices and Incomes Act, 1966. We were assured by the right hon. Gentleman who was then in charge of that Measure that it would be the first and only Act of its type. Most of my hon. Friends forecast, when the Measure was in Committee, that we would see a repeat of it. Sure enough, in 1967 we got another Prices and Incomes Act and now we have an even worse one which will go through, whatever we say and presumably however many hon. Gentlemen opposite abstain.
Like other hon. Members, I have received a great many letters on this subject. Many people in Bath have written to me asking if I can do something in representations to the Ministry about their wage and pay problems. I sent correspondence to the right hon. Lady about insurance clerks in my constituency but I received a rough reply from her stating that she intends to implement the policy, although she realises that an injustice is being committed. In other words, it is just too bad that some people happen to fall on the wrong side of the curtain.
The same can be said about the nurses. I have recently been asked by the tutors of nurses to make representations to the right hon. Lady. I shall be doing that but, in view of this debate, I have no doubt that I shall receive a negative answer. The experience that I have had in these matters is, I know, the experience of all hon. Members. We will make no change in the Bill because the executive —and we now have executive government and not Parliamentary government—have decided the policy and are simply allowing us to have a natter about it. The Government will get their way because the courage of hon. Gentlemen opposite will not allow them to go further than abstaining. They are not prepared to defeat the Government.
I will not give way. I wish to be brief.
Upstairs under discussion is the Transport Bill, the Race Relations Bill and the Finance Bill. On the Floor of the House we have this Measure which, in due course, will go into Committee. I wish to make it clear to you that you are at the end of your tether. The public have already reacted and have made it clear that the Government are at the point of no return. Whatever you may do, when the next election comes, despite some of the excellent speeches that have been made today, the public will show you—
I warn hon. Gentlemen opposite that, whatever the result of tonight's vote, they have lost the confidence of the people and the trade union movement. The vote tonight will make no difference. They will not recover the confidence of the nation by trying to scrap something here and add something there. The right hon. Member for Belper (Mr. George Brown) came clean when he said that he wanted to see this as a permanent Measure. It was the first time that he had come clean on this issue. We have seen the opposition of some hon. Gentlemen opposite who will abstain. If the Labour Party are still in power in 18 months' time, I am sure that they will introduce yet another Prices and Incomes Bill, which will be an even worse one.
The right hon. Member for Easington (Mr. Shinwell) summed up the debate for me when he gave notice to the Govern-that they had lost the respect of their supporters in the House. They have never had the respect of my hon. Friends, and we look forward in the next few months to seeing this Measure bring them down, even if it is only in another place.
The hon. Member for Bath (Sir E. Brown) made a typical Conservative speech, full of hot air and containing nothing of substance. Neither did it— this goes for all the speeches made by hon. Members opposite—put forward any credible alternative. Speeches by hon. Members opposite have shown only one theme—that the social services would be the first to suffer if they were ever returned as the Government.
I support this Bill. My hon. Friends will probably recall the 1966 debates, which took place in the middle of the night. I have not changed my opinion since. The Bill is an essential short-term necessity in the long-term strategy of a Labour Government. We need it because above all else it is of supreme importance that the economy of the country shall be put right. It is of crucial importance that the economy should be rock-like, because only when it is sound can we build for the future. That is what this party was sent here for, so that we can build a future. This is the reason for the Labour Party's existence— to try to change society into something better, but until the foundation is laid we cannot move towards that society.
We as a party and Government believe in planning. Planning does not just mean control of industry or location of industry or regional development; it means having a policy and having a plan, and having an attitude to dividends and profits, to rents—and to prices and incomes. I do not see how one can divorce those two things, especially when we as a nation are dependent upon importing a tremendous amount of raw materials which we need and over which we have no control in terms of world prices. We cannot divide prices from incomes. They are inter-related and interwoven.
I believe in this Bill because I reject the system which seems to have been advocated at times from both sides of this House. I reject the free-for-all society. Like my hon. Friends, I have been in this movement long enough to have made and heard speeches similar to those made by hon. Members on this side against that kind of society but which tonight Members opposite and some of my hon. Friends are seeking to preserve. I object to the free-for-all society because it is always the militant, always the strong, who win and the lower-paid worker, the pensioner and others on fixed incomes who inevitably go to the wall.
I reject the Conservative philosophy of the law of supply and demand. I reject it because it is a jungle law and I hope that we are getting out of the jungle now. I reject the concept held by some hon. Members opposite, and some on these benches, that a trade union has the responsibility of simply looking after the interests of its own members without having any regard to the rest of the community. That is wrong. The role of the trade union movement is changing. I was very glad to hear my right hon. Friend the Member for Belper (Mr. George Brown) speaking earlier, because he said some very truthful things.
I quote from a speech he made in the early hours of 10th August, 1966, which sums up my feelings. He said:
I have never taken the view, and I do not take the view, … that our business in the trade union movement is simply to fight for our people's wages and not to be part of the process by which society is governed.
He went on to say:
I heard the late Ernest Bevin a long time ago … say that if all we were concerned with was earning fodder for our people there were others not nearly as good as we who could do that. The trade union movement grew up from more than earning fodder for our people. It grew up so that people could play their part in developing a new society, to help them manage that new society and to help to plan it."—[OFFICIAL REPORT, 9th August, 1966; Vol. 733, c. 1580.]
This is why I feel that now we have a Government in power which is a product of the trade union movement there should be a far greater degree of co-operation between the two than we have at the moment.
I accept, of course, that the trade unions are neither the servants nor the slaves of the Government, but equally they are not their masters. The Government are responsible for the government of the country as a whole with all the tremendous problems which that entails. I support the Bill because I believe the policy we have been and are pursuing is the means to an end—the creation of the better kind of society I want. We delude ourselves if we think we can have change —and this is what we stand for—without any upheaval or hardship. We must minimise the hardships. This is what again we have been trying to do in our legislation since 1964.
In this transitional stage we are moving from a capitalist society, through a mixed economy, into a society which will not be a Socialist society—because the promised land is a long way away—but to a society where we can begin to build a Socialist society. Do not for a moment think that the promised land is round the corner; there are many more hurdles to get over before we reach it. There can be no question that some hon. Members on this side of the House, including my hon. Friend the Member for Salford, West (Mr. Orme) who made an eloquent speech, did the Government a disservice by implying that everything the Government have been doing was against the interests of Socialism or the philosophy behind it.
We have only to look at the legislation that this Government have brought in to prove that the Conservatives do not like us precisely because we are going about the job of laying the foundation for a better society. Certainly Corporation Tax, Capital Gains Tax, expense accounts and redundancy payments were not Conservative measures. Wage-related benefits, increased pensions, supplementary allowances, travel concessions, rate rebates, rate support grant, leasehold reform, comprehensive schooling, and the Transport Bill are hardly Conservative measures. The public ownership of steel and cuts in defence have been strongly objected to by hon. Members opposite every time they were debated —hardly Tory measures. How can some of my hon. Friends argue in the light of this that we are not trying to bring about a better kind of society and trying to start the beginnings of something better?
All this is closely tied in with this Bill, because this Bill is a means towards creating the foundations on which we can build. Since 1964 wages have risen far more than prices have risen. They are all in the book. If we do not believe the book—the Ministry of Labour Gazette— hon. Members may prefer to read the speeches in HANSARD for 11th March and 1st May this year.
If we want to make progress, and we say that we do, we must reduce our cost factor, become more competitive and increase our productivity. Devaluation last November has given us one last chance. I say this not in political terms—it has given Britain as a nation one last chance. We have to win this battle. I believe that we can do it and we shall.
If my party believes in planning it must be automatically accepted that planning means control. This follows as night the day.
Of course one must accept that we cannot have a planned economy without planning wages, but does not my hon. Friend realise that there is another side to that, which is that we cannot have a planned wages sector in the sort of totally unplanned economy we have today?
If my hon. Friend will allow me to continue my speech and to develop what I wish to say, I shall deal with that point. When we have a situation such as we are faced with at the moment we need to use control, not only over the heights of the economy, but in the field of prices and incomes and also in stimulating industry by all kinds of assistance, using all the modern tech- niques of the Ministry of Technology and the rest, to try to persuade them to provide the new and better machinery to do the job.
If we want this Bill we have to ensure that the lower-paid worker is protected. This, I think, the Bill does. It underlines the simple basic concept that incomes should not rise faster than the rate of growth of national output. That is what the Bill is about—a recognition of a truth. We say that the legislation to which some of my hon. Friends object is necessary to protect the lower-paid workers. The hon. Member for Colne Valley (Mr. Richard Wainwright) talked about plant bargaining, but has not he heard of the millions of people in local government, the health service and other public services? One does not go plant bargaining with hospital management committees and local authorities. Wage rates there are nationally negotiated, which is very proper. But it is the old story. The Liberals always have one eye shut. They can never see the obvious
That is not what the Bill says. It says in effect that the claim of the lower-paid worker will be allowed to go through. That is the whole purpose of the Bill. If we do not have those Clauses how can we control the mavericks and the rogue elephants in our midst, be they in the C.B.I, or in the trade union movement? I have not yet heard any trade union speaker or anyone else tell me how the trade unions will keep their house in order if someone goes astray. Of course, we want the voluntary system, but we must protect the interests of the lower-paid—and I am thinking in terms of 7 million or 8 million pensioners as well as lower-paid workers. It is therefore right and proper that we should have the Bill to protect the many against the few.
I know that prices will rise because of devaluation, but we have tried, by raising the level of the rent rebate, for example, by the increased family allowances, and other measures, to protect those who are in need and at the bottom end of the wage scale. We certainly intend to keep the closest watch on any potential price increases, wherever they may be. The criteria for those increases are laid down in paragraph 16 of the White Paper on which the Bill is based, and the power to take action is in Clause 3.
My right hon. Friend made it abundantly clear that where she can see the case for a price reduction under the criteria laid down in paragraph 18 of the White Paper she will take action. That is right, and the Government are doing the right thing in doing something about dividends and rents. They should have done this a long time ago, but at least they have recognised the need, again in the interests of the people at the bottom end of the scale.
There is no wage freeze. Paragraph 34 of the White Paper sums the position up very clearly. It says that increases can be had
(i) where the employees concerned, for example by accepting more exacting work or a major change in working practices, make a direct contribution towards increasing productivity …"—
that is the productivity provision—
(ii) where it is essential in the national interest to secure a change in the distribution of manpower …"—
this is to encourage people to move from one industry to another to the industries where we need them most.
(iii) where there is general recognition that existing wage and salary levels are too low to maintain a reasonable standard of living;"—
this is the protection for the lower-paid worker, and:
(iv) where there is widespread recognition that the pay of a certain group of workers has fallen behind.
That again is for the protection of the lower-paid worker.
Moreover, it is spelt out in the White Paper, in page 9, that there may be above-ceiling increases for low-paid workers under a settlement which, though covering a wider group of workers, is within the ceiling. This seems to me a fair, just and honest policy. For the life of me, I cannot see why there should be such distrust of, and opposition to, the Bill in its present form. It will protect millions of people who always came off worst in the past.
My own union, the National Union of Public Employees, has benefited from two Reports of the Prices and Incomes Board. The nurses and midwives benefited from Report No. 60 and local authority workers and Health Service ancillaries from Report No. 29, which was implemented by the Government in the interests of the lower-paid workers in the period of severe restraint in 1967. Therefore the Prices and Incomes Board and the prices and incomes policy are working in the interests of those who need to benefit.
I feel that if the trade unions will only face up to their responsibilities, recognise the gravity of the situation and appreciate that the Government seek to create the base on which we can build for future generations, we can go along together. But let us face reality. Let us take the world as it is. I say to some of my hon. Friends, "Come down from those ivory towers. By all means, keep your eyes fixed on the stars, but keep your feet on the ground, because we must deal with immediate problems. "We cannot have policies that we know are correct if the situation is not right for implementing them.
I hope that some of my hon. Friends will be a little more quick in future to praise, because they are very quick to condemn. It is time they recognised that the present Government is their Government. We have been told many times that politics is an argument about power. Of course it is. That is why we are here. But is it not recognised that there are the responsibilities of Government and the limitations of power that must be faced.
If those of my hon. Friends who are thinking of abstaining tonight are not prepared to take a realistic view of the situation and are still living in a kind of cloud cuckoo land, they do not deserve to be members of a party that has to provide a Government. They deserve instead to be in permanent opposition, whiter than white, pure in word, thought and deed, but impotent and powerless, because that is exactly what they and this party are heading for with the kind of speeches being made throughout the country [HON. MEMBERS: "Oh."] While they are tut-tutting they should remember, if they are democrats in the truest sense of the words, that last Wednesday morning our party meeting adopted the White Paper and the Bill by a ratio of five votes to one.
Several hon. Members opposite have mentioned that my right hon. Friend the Prime Minister promised that each of the two preceeding Prices and Incomes Act was to be the last. No doubt we are being told that this Bill is also to be the last. If we ever have another, will my hon. Friend undertake to abstain along with us?
That has nothing to do with what I am saying. I reminded my hon. Friends that we had an argument in our own party and reached a decision by a ratio of five votes to one in favour of the Bill and the White Paper.
As I see it, the choice before us is simple. Either we decide to cling to an outdated system, which I think is rotten and bad, with free bargaining and all the rest, or we try to replan it. Either we decide to go along, and be grateful for the crumbs dropping from the top table and hoping for the best, or we decide to make a better kind of society. But we must make sure that the base is firm first.
Let us recognise that no Government can change society overnight. We cannot in 10, 15, 20 or 25 years wipe out 200 years of capitalism or get rid of the remnants of an imperial past. But it should be recognised, certainly on this side of the House, that we are moving in the right direction. I believe that the Bill takes us a step nearer the day when we can really get down to building the kind of Socialist society we want. I believe that by supporting the Bill we shall earn the gratitude and thanks of future generations who will thank God that there was a Government in 1968 with the will, determination and guts to do something for Britain and its people and for future generations.
It is a particular pleasure to follow the hon. Member for Huddersfield, West (Mr. Lomas) because he and I on occasions get each other's letters. Our names are similar. It does not appear that any circulars he has had from Conservative Central Office have had any effect upon him. I assure him that any circulars I have inadvertently seen from Transport House have had no effect upon me.
As I listened to the speeches of right hon. and hon. Gentlemen opposite, I became more and more concerned about my view on prices and incomes. I have always believed and said that if one is seeking a growth policy, whichever party is in office, there will be a time, assuming that the growth is going well, when one may have to call a halt and say to the country, "Wages have increased over a period of four years or so, and we must have a stop to make sure that the economy does not overheat and to avoid getting into balance of payments difficulties".
This is justified as a temporary measure and as an expedient. It does not mean —and to me it is not acceptable—that it should be a permanent part of our economic planning. At the conclusion of her speech the right hon. Lady made it clear that she envisaged not a voluntary incomes policy, but a fairly permanent statutory incomes policy. I was even more depressed when I heard the right hon. Member for Belper (Mr. George Brown) say the same thing. Going back to 1966, he and I have been involved in this matter on all night sittings upstairs. He was the originator of the prices and incomes policy. At the beginning he always said he wished to secure the policy on a voluntary basis. In fairness to him, he tried very hard to get it on a voluntary basis and he reluctantly brought in the statutory impositions. But today he seemed to make it clear that he was now convinced that it was necessary to include the statutory Measures permanently. The Government also appear to have got into a position where they accept this statutory policy as being continuous. I had always hoped that if we had a statutory policy for a limited time, eventually we would get a voluntary policy; that the trade unions would see sense and accept there was a need for a certain amount of restraint.
The hon. Member for Salford, West (Mr. Orme) made, according to his lights, a very good speech, although I did not agree with it. He indicated that the line he took on the Bill was not because he agreed with our policy in any way. I am sure that my right hon. and hon. Friends would immediately assent to that in reverse. The hon. Gentleman not only wants wages to continue rising without any control; he wants Government expenditure to go on rising alongside it. He wants increases in the social services to go on without let or hindrance. These two matters taken together—the rises in wages and the rises in Government expendituree—have been the very things which have got the Government into their present trouble. To a considerable extent this has been the cause of the overheating of the economy by previous Governments, and this is the reason why the country is now in a position where it is living on borrowed money—we do not know how much—and is faced with the prospect of a second devaluation.
The Chancellor of the Exchequer in a speech upstairs—I was not there so I cannot prove his words or otherwise, but these words were obviously leaked to the Press—let the cat out of the bag when he said that the country faced a choice between an incomes policy or more swingeing taxes and deflation. He did not say anything about cutting Government expenditure. He apparently said, "If this policy does not work, we add to the £920 million imposed in taxation at the last Budget and we deflate". He assumed that we might have to increase the unemployment pool from the present 500 to 600,000 up to 1 million or 1½ million. This is what the Chancellor said to the Labour Party upstairs.
Foreigners will not back a horse if the jockey is overweight and if the horse is overfed. This is the position with economy. The basic trouble with the Government and their incomes policy is that it has gone on too long and started too late.
Some of my hon. Friends say that the incomes policy has not worked. In 1964 wages went up about 10 per cent. Nevertheless, since we have had an incomes policy they have not gone up so much. I imagine that had we no form of incomes policy at the present time we would find that the increase which took place up to March this year of 1½ per cent, in wages would have gone considerably beyond that. That 7½ per cent, included, according to a report which has just been published by the Prices and Incomes Board, a wage drift content of about 4 per cent. The trouble that all Governments are in when looking at this problem is how to deal with wage drift.
Some rude words have been uttered this afternoon about productivity. Certainly it has become an incantation with Ministers, and it is very much in the mind of the right hon. Lady, for she seeks to publicise it as something which will solve all our problems.
Productivity deals are often spurious. Often a firm that has a realistic productivity deal arising from good management pulls in the best workers. The weak managements round about, because they are losing their workers, push up their wages under a spurious deal to pull back the workers they have lost to the company that is well managed. With some limited activity on the part of the Government, and with considerably improved management, we may in the long run be able to improve productivity unit costs and at the same time get a rising wage scale.
But what has not come from the Government Front Bench sufficiently is that we are not dealing with the long run but with the short run. The right hon. Lady's plans are long-term ones and in the short term this country is in a serious economic situation because of Government policies. Because of this and in so far as the foreigner, from whom we borrow so much money, believes that we must hold the line in wage rises in the short run, I am certain we must do so. Therefore, I would support a good deal, although not all, of the Bill. It seems to me vital, in the country's interest, if we are not to fail—both parties are concerned here—and have a situation similar to that of 1931 that we make every effort to hold the line on incomes.
I am disappointed that the trade unions have failed to impress this on their members and get them to accept it. I have never understood why, when people have received wage and salary rises year after year, they cannot, at least for a limited period, accept a standstill. Even with a measure of rising prices, it would not be too great a hardship, certainly not in a country which, under both Governments, has spent a good deal on social services which have cushioned people against many of the personal economic difficulties which they had to suffer before the war.
Therefore, on balance, I think this incomes policy is necessary at this time, but there is a great danger in right hon. Members opposite looking upon it as a permanent feature. I shall not vote for the Bill because it is not right to support a Government who want it to be permanent. Anyway, I do not see why I should assist a Government when many of their own supporters are going to assist them. In the long run, the Government will be judged by their broad economic policies, and on these they are basically wrong. It is because of this that they are now, unhappily, for the third successive time, introducing a Bill of this sort.
Before coming to the Bill, I want to make one observation—probably my only one— which, I think, will carry the support of back-benchers on both sides, even including those whose views on the Bill differ radically from my own. That is, it must be a subject of regret to backbenchers that the only alternative open to them tonight when they vote is blindly to support one Front Bench or the other. Of course we all appreciate that it is right and essential that the Chair should have an unfettered discretion about whether to call any given Amendments, but it is a matter for regret, by backbenchers on both sides, if we are to drift into permanent acceptance of a situation in which no Amendment on Second Reading of a major Bill, other than the official Opposition Amendment, is ever called.
It is because my hon. Friends and I who have subscribed to the Amendment in my name cannot record a vote for it that it is possible for the sort of misconception to arise which was put forward by my right hon. Friend the Member for Belper (Mr. George Brown), which enabled him to say, without a shred of justification, that those who support me in this Amendment are taking the same views about the substance, causes and background of the Bill as the right hon. Member for Wolver-hampton, South-West (Mr. Powell). It is because one is allowed by the procedure which has grown up to dissent only in one way and never in another that the mischievous sort of thing which my right hon. Friend said can possibly be said.
I agree completely with my right hon. Friend the Secretary of State for Employment and Productivity that, whoever may have the right to criticise her policy and this Bill, it is not right hon. and hon. Gentlemen opposite. If there is anything which, in the classic phrase, is enough to make a cat laugh, it is the sight and sound of right hon. and hon. Gentlemen opposite posing as the friends and champions of the workers and the unions. That really is a bit too funny to tolerate. When we were being told from the Opposition benches that the worker and his unions must look there for their support in future, I wished that the argument could be reinforced by the sudden entry of the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) with a nurse on either side of him, so as to remind us what he did about nurses' pay and what was the wages policy which he and successive Conservative Ministers carried out.
I turn now to the argument of my right hon. Friend—and of my hon. Friend the Member for Huddersfield, West (Mr. Lomas)—that devaluation—I took her words down exactly—" has enabled us to turn our backs on deflationary policies "I do not know how my right hon. Friend thinks that she can get away with kidding the House that what we have in devaluation is an alternative to deflation. How she can expect to kid us that we have not got deflation as well as devaluation, I do not know. What are our familiar unemployed except the first evidence— incidentally, the first cause—of a deflationary situation?
As we have heard, the Chancellor has taken £900 million of purchasing power from the community in the Budget. Is that anything but deflationary? He told us that we were to have a cut in our standard of consumer spending power. As my right hon. Friend the Member for Belper said, that, of course, is deflationary as well. I would remind the House that some of the meanest actions of the Government in recent months have been justified by them not on the grounds that they contained merit —they have been admitted by the Government to be regrettable—but on the grounds that, regrettable, unpopular, unpleasant and unfair though they were, they were essential to give a deflationary impetus.
They said that about the increased contribution for the weekly stamp, about prescription charges, unpleasant, but needed for inflationary purposes. They said it about the withdrawal of school milk, and additional charges on school meals—necessary, unpopular, unpleasant, but we need it for deflationary purposes. That is at least a coherent principle. In the name of heaven, how, after all that, can my right hon. Friend come here and tell us that we have used devaluation as a substitute for deflation?
She went on to justify this on quite different grounds, against the background of the Government having achieved— and again I took down her words—" a major industrial transformation". I notice that in the last few days she has had an excess of modesty. In an article she wrote last week, published at the weekend, following very much the lines of her speech today, she talked about a major industrial reconstruction, which is much stronger, forceful, widespread, comprehensive and meaningful than "transformation". She has back-tracked a bit in the last few days.
Have we had, are we having, a major industrial transformation? The Government have done some useful things, on narrow fronts, by way of rationalisation and integration. I give them full credit for it. Within their limits they are very valuable. This is not a transformation of the whole of our industrial scene, much less a reconstruction. This amounts to no more than putting patches on the largest and most obvious, and the most easily repairable leaks. Are we to look upon what happened in the G.E.C.-A.E.I. merger as a piece of industrial transformation? Are we to stand up and cheer about it? Are we supposed to cheer about the shut-down, without warning, of that large factory in Woolwich, with thousands of skilled workers turned out, into either unskilled work or no work at all, with useful machinery sent to the scrap heap, with many middle-aged tech- nicians who will never find work again, turned out?
A whole community has been dislocated leaving the taxpayer to bear the social cost of that dislocation, while the shareholders in General Electric get the extra profits of the merger. Is this what my right hon. Friend is asking me to stand up and cheer about? Is this the sort of Socialist planning that my hon. Friend the Member for Huddersfield, West was asking us to accept as a justification for this Bill? Am I supposed to stand up and cheer about the industrial transformation which will come about as a result of the Government providing hundreds of millions of pounds of taxpayers' money in bribes to induce entrepreneurs to provide employment in the development areas, as a result of which there are dozens of advance factories there still standing empty?
When my hon. Friend says that we must plan wages and have a planned economy, is this the sort of planning that I am supposed to accept? Is that the price which I have to consider as being worth while for the penalties imposed by this Bill? No, that is not enough to buy my vote anyway.
One question which has been referred to many hon. Members is the contribution which this Bill can or cannot make towards an increase in productivity. With the exception of a lonely voice from Oswestry, all those in the House who have referred to this have agreed, and I agree too, that it is desirable, indeed essential, that productivity in British industry should be improved.
With the exception of the hon. Member for Oswestry (Mr. Biffen), I would think that all of us would approve of productivity bargains—perhaps he does too—when they are genuine productivity bargains. I have organised and negotiated some, the earlier ones more than 30 years ago, before my right hon. Friend had ever thought about productivity, maybe before she had ever heard of it. I agree with my hon. Friend the Member for Salford, West (Mr. Orme) who, coming from the factory floor as he does, giggled like fury, and was entitled to giggle, at all these theoreticians who have suddenly discovered productivity, suddenly found this magic wand lying in their Ministerial knapsacks. Blokes who work in the factory have known this for years. Of course, we want it, but I agree very much with my light hon. Friend the Member for Belper when he said that, whether we want it or not, we cannot get it unless we create the right industrial climate for it.
We have not got that climate and will not get it unless we have full employment. The greatest barrier to increased productivity and the removal of restrictive practices is the dole queue. Nothing so reduces the desire of workers to cooperate in increased productivity measures as a level of avoidable unemployment. We will not get real team effort on productivity unless there is much more democracy in industry. So long as productivity deals work out in a way in which benefits deriving from them are allocated by the unilateral decision of management, we will not get workers playing a game in which the rules are rigged against them.
It is as simple as that. I want to tell my right hon. Friend that all her exhortations, and those of her right hon. Friends —and they have been many good and strong, directed at management, to take workers more into their confidence—have had, and are having precious little effect. Even the publicly-owned British Steel Corporation is still carrying on the traditions of the former steel-masters in refusing to recognise staff unions, and in paying funds into an anti-trade union body. That is how much effect there is in all the exhortations to these bodies to get some movement towards industrial democracy.
There is far too much resentment in the factories at the present time to provide a fair wind for an excursion on a big national scale into productivity. There is resentment about the regressive poll tax and the increasing cost of the weekly stamp. There is resentment about rising prices—prices have risen and the workers' wives tell them that prices have risen. They ask for more housekeeping money and the husband says, "You cannot have more housekeeping money, I have no more wages, my wages have kept down, and anyway, you should not need it; the Government say that prices are not going up". The old woman says, "You go out and do the shopping, or maybe get one of your Ministers to go and do the shopping for you ".
There is resentment in the factory about prescription charges. There is resentment in the factory about the Stock Exchange boom. There was fury in the factories about the idiotic decision, now happily reversed, on the three waiting days. There is great resentment in the factories among women workers, and among their male workmates, at the fact that they, unlike my hon. Friend the First Secretary, do not get the rate for the job, and do not appear to be making any progress towards getting the rate for the job.
I share the phophecy made by hon. Members on both sides that the Government tonight will get their Bill, but a combination of two factors, the speeches which have been made today and the fact that their majority in the Lobby will be less than half their nominal majority, will ensure that, although they will get their Bill, they will not have the authority to implement its penal provisions. If they are using their power to carry through a Bill knowing that they will not be able to implement it, I am afraid the only possible conclusion is that one must sadly accept the views of those who today have said that this is largely a public relations exercise, and not much more. On these grounds the Government will be lacking my support in the Lobby tonight.
The 21st May will be remembered for a long time in political history as the day of the start of the disintegration of the Labour Party; the day when a Labour Government first declared all-out war on the trade unions; the day when the right hon. Member for Belper (Mr. George Brown) showed that he had lost faith in the free working of a mixed economy, and came to the conclusion that all the principles for which he had in the past been working had to be changed, and that compulsion was the only way to get the movement in the country that is needed.
It is capitulation by the Government to the ideals that they set themselves, the ideals of free bargaining and the ideals of Labour Government effective control of a mixed economy. For many people in the country—and I speak objectively here—it will be quite a tragic occasion.
For historic reasons the Labour Party has been considered for years to be the mouthpiece of the trade unions, and for this reason the unions have devoted huge sums which they have collected to the support of the Labour Party, Labour constituency associations and Labour Members of Parliament. In the last General Election 134 hon. and right hon. Gentlemen were sponsored candidates of the trade unions, and in three out of the last four years over £1 million has been expended for party political purposes by the trade unions. It is a staggering figure; a quarter of a million pounds in affiliation fees, compared with approximately £40,000 which was collected from constituency parties.
No, I will not—we find the position which was clearly explained by the hon. Member for Ebbw Vale (Mr. Michael Foot) in his speech about the institution of this new Ministry. I will not quote his words, but he said among other things, that this new Bill will put any trade union secretary into an impossible position. So it must.
Why, then, has this Bill been presented to the House? The first reason is that it is a public relations Measure to placate the gnomes and redeem the pledge given by the present Home Secretary at the time of devaluation. The second reason is that the present Chancellor thinks that, from an intellectually superior position, in due course friendly noises can be made again to the trade unions and they will accept that it was necessary at the time but will not last for ever. I think that the third reason stood out clearly in the speech of the right hon. Lady today. She considers the Bill to be an exciting, important and altogether admirable step forward across the threshold of a totally socialist economy for the country.
This is long-term centralised planning from the traditionally neutral headquarters in St. James's Square. From there, she will be able to control wages, salaries, prices, dividends and, through taking power to have prices reduced, the profits made by all our commercial concerns. That is the totality of socialist control of our business life. As for the trade unions, though she likes to present herself in the guise of Joan of ARC, she is really Lucretia Borgia dressed as Joan of Arc.
The tragi-comedy of the debate was outlined by the hon. Member for Salford, West (Mr. Orme). Speaking with considerable experience of negotiations and wage agreements, he said that the Bill has not a chance of working.
When the first Prices and Incomes Bill was produced, it was accepted with remarkable tranquility and co-operation. But that sort of legislation will not be accepted in that way any more. There are only six million out of a total of 24 million employed workpeople in the country who are covered by the "early warning" categories. Those are the 1961 figures, and the Ministry cannot improve on them. What is to happen to the other 18 million people who are not covered by any kind of "early warning" agreement? Clearly there will be agreements and hard negotiations between employers and employees to produce the best bargains which can be mutually reached, and those are the figures which will be paid. They will be dressed up with bonuses and so on to give an image of respectability, but since we have been told that every wage payment which does not conform to the White Paper criteria should be referred to the Minister, it makes an absurdity of the whole Bill. Everyone in the major part of. business, commerce and industry is a criteria-buster now.
There is no doubt that the whole of this Bill is anti-workman, anti-trade union, anti-industrialist, anti-free-enterprise. It is a take-over bid to put in, instead of our present Parliamentary democracy, the rule of Socialist bureaucracy. I believe that it is doomed to failure and can only result in further measures of repression when the present measures come to an end. In 18 months, or whatever it is, a new Bill will be presented because, if this Bill has not been satisfactory in providing the means or reaching the end which the Government want, it will have to be extended. If it is successful, surely the result will be: let us reinforce success, let us have another Bill and continue on the same lines as we have been working on.
I do not believe—and many hon. Gentleman opposite have said this—that this Bill is acceptable to the ordinary man who works in business or industry in this country. As an example, I should like to read two extracts from a letter from a friend of mine who works in a factory which was closed down during the engineering strike last week.
He went to see what was going on at the factories that were closed, and he wrote:
At the first factory, I came across about a dozen pickets and they were unanimous in their opinion that the strike was against the ' Prices And Incomes Policy' rather than their employer.
Then, later on:
I spoke to no less than 43 people. 39 of these said that it was a protest against the Government, two said it was against the Masters Federation and two did not know.
It is not surprising that people do not know because this Bill, the White Paper and the present position are not understood by 99 per cent, of employers, trade union officials and employees in the industry as a whole.
Any hon. Gentleman opposite who believes in democracy and in trade unionism should oppose this Bill as suggested in the sincere and most eloquent speech of the right hon. Gentleman the Member for Easington (Mr. Shinwell) this afternoon, which many hon. Gentlemen opposite may have listened to. I will conclude by quoting from his speech last week as reported in the Sun:
If I had to choose between supporting the unions and the Government, I would refuse to vote for the Government. Frankly, I am more concerned about saving the party than saving the Government. Governments come and gov-
ernments go, but the party must go on. It is doubtful if it could survive without the unions, and we would then see the end of democracy in this country.
This debate so far has brought out what I consider to be the elements of a basic major change in the British constitution. I am only sorry, along with other hon. Gentlemen, that the Leader of the House thought fit to devote only one day to it. It is worthy of much more time than that. It is serious, in the sense that during the past 21 years we have had seven major crises in the British economy. No one can tell at this stage whether further crises will occur. There is every probability that they will.
What are the factors to prevent these crises from occurring? Why do we need a Bill of this character at this time? Why has the credibility of politicians and the Government fallen so low in the eyes of the public? The Prime Minister can be responsible for his own credibility and his own credulity; I am responsible for mine. I do not always believe what he says. When he said on 10th March, 1966, that he would not be a member of any Government which prescribed legislation for the control of wages, I did not believe him. But when he said upstairs to the trade union group a week ago that he could not say whether at the end of 18 months a new Bill would be necessary, I did believe him. What is implied here —and I had better face this—is permanent legislation.
What are the factors mitigating against Britain's economy and its recovery? We have listened today to several spurious speeches from the benches opposite in defence of trade unions and workers' democracy. One would not have thought that, during their period of office stretching over 13 years, they had not managed the economy in the way that they had which left the nation virtually bankrupt when we came to power. During this same period—and this is the vital thing which is wrong with the economy and industry—the unions and industry are not geared for the type of economic recovery necessary in the time wanted for this country to take its prior place among the productive nations. The conditions are not physically there in the time necessary.
What must we do to get out of this situation? The electors, in the main, have the advantage of looking at "the goggle box" night by night. Some of the comments of political commentators —some well informed, some ill informed —are getting through. People are beginning to understand more and more what this matter is about. This is no longer the province of politicians, who differ in education, intellect and credibility. People are seeking solutions, and none is forthcoming.
If we are to believe a paper recently published in America, by the end of this century there will be only a few hundred large firms in Europe. This kind of thing poses a special problem for the economy of this country. But the immediate problem is the control of prices, incomes and wages. I agree with the hon. Member for Oswestry (Mr. Biffen) and my hon. Friend the Member for Birmingham, All Saints (Mr. Walden) that it is no good the Government trying to imply that prices will come down. If they do, the policy of devaluation will have failed. This is what it is designed to do—to take so much out of the economy and to make growth possible in other sectors in the hope that the accounts will balance in a reasonable time.
This is why, with the utmost difficulty, I shall have to make a decision tonight which will be personal to me. No one has been able to doubt my loyalty to the party on any issue. Tonight, I shall have to make a decision. I believe fundamentally that the voluntary policy of the T.U.C. has not been given an adequate opportunity to prove whether it can work. More time is wanted, and if we can find that time and it works, well and good. But if it does not, then the fundamental change envisaged in the Bill should be held over and the electors should be given the opportunity to decide whether they want this policy. It may be necessary to have it; I am not saying it is not. But at least on such a major constitutional change they should be consulted.
I take it that my hon. Friend is very much in favour of the prices and incomes policy and that what he is obviously opposed to is the penal Clauses. Is he in favour of a free-for-all?
No, I am not in favour of a free-for-all. A free-for-all always means that the weakest go to the wall. I am against the penal Clauses. Let that be understood. I am against the extension of that policy and for the T.U.C. being given an effective chance of working, which it has not. If it fails then the nation has to face its future on this question, because it is a tremendous question which cannot be shelved, for what is involved in all this is the economic future of the country. Economists come and go. They have come under this Government in droves—and thank goodness some have gone, too. They have left behind them a catalogue of misjudgements and failures. Nobody has got it right, and until we make a cirtical analysis and diagnosis of what is really wrong with the situation we shall never get anywhere.
We seem to have been staggering about, with Government after Government, year after year, with policies which are not forward-looking, which do not match up to the situation and which in themselves will not provide any solution. If we take the policy of mergers, computerisation and industrialisation and the association of business which is bound to occur if the country is to live in the export markets with a resultant having in labour, and redundancies, and take into consideration the concept of normal trends in this country, one is driven to the conclusion that by the end of the century this country will be over-populated in terms of its resources to the extent of 15 million people. These are the problems at which we should be looking. We cannot avoid that and that is why this policy is causing me so much concern at this time.
I have been a union official, in one way or another, for the best part of 15 years and I know what is operating on the shop floor. I know what is activating men's minds. I know, too, how much loyalty this movement can command and that, whatever compromise we may arrive at in the future, some of the strictures we have heard from the benches opposite will have nothing at all to do with it; but we can compromise, given time. One thing which worries me in all this is that, while I can understand the feelings of outside economists who do not have access to the books, I do not know whether the advice of the Treasury advisers on policy is right on that policy or whether the time has arrived for the Treasury advisers to say to the Minister, "This may be your policy. We are asked to give advice. This is contrary to the economic: facts confronting the country and therefore, despite the fact that you as the Government are responsible for policy, we as Treasury advisers consider that you should take another look at the problem and see if you cannot find another way round."
This situation is different from 1966 when the big "freeze" occurred and when there was union recognition of the gravity of the situation at that time. The unions went along with it at that time. At that time, prices were more stable than they are now. I calculate that there will be a price rise in consumer commodities this year of no less than 7 per cent. In this situation, if the policy goes through, there must be deflation and restriction and a fall in real wages.
My right hon. Friend the former Minister at the D.E.A. and Mr. George Woodcock of the T.U.C. conducted a dialogue about wages for two years, but even with their efforts at that time, each playing a responsible part, there was a general wage rise of no less than 7 per cent. My greatest fear is that compulsion of any kind feeds upon itself. If at the end of 18 months no real improvement in our balance of payments is to be registered, there will be a pent-up flood of wage claims waiting which somebody will have to satisfy, unless fresh legislation is immedately framed to put all those wage claims back or meet them only partially. It is at that juncture, 18 months from now, whoever is the Government, that the real crux of the problem will hit this nation. Make no mistake about that.
If it is intended then to mount rigid legal restrictions on the free collective bargaining power of unions and to adopt the system which the Dutch adopted after the war, I would ask the trade unions to look at the Dutch experiment and what happened to it. The Dutch have now abandoned it, but the biggest casualties of that system were the trade unions themselves, when trade unionists tore up their cards en masse. The prime function of trade unions is to enrich their members. That is what the contribution is paid for, and if it is not seen to be doing it, it is failing in its object.
One hon. Gentleman opposite said that there were 8 million workers in industry who were organised and in respect of whom national agreements were negoti- ated and settled. There are about 24 million workers in industry who are unorganised, and there are some professional people organised in their own way and able to settle their salary scales by negotiation. I deplore it when people in workshops do not belong to unions but take advantage of national agreements to better themselves while at the same time refusing to join. But it must be remembered that in this country, in our changing technological society—we have heard those words bandied about a good deal in the past few years—there is a new class appearing, a class of people who can bargain for themselves on the basis of their qualifications. It is these movements and wage drift—there is a tremendous amount of wage drift in this country—which we cannot control.
I know of three teams of draughtsmen in London who do not work for British industry; they work for the Hamburg shipyards, and one of their number flies back and forth from Germany two or three times a week with plans. The whole concept of the white collar trade union is changing.
We have not got the wide sweep of wage drift organised. Bricklayers, plasterers and carpenters are no longer employed on a company or firm basis. They are tendering for so many doors, so many window frames or so many yards of brickwork. All this is producing wage drift in the economy. Hundreds of thousands of British people are now doing moonlight jobs, as they are called in America, doing two jobs, one after working hours. All this is putting a great weight on the economy which no one can really control. The Treasury cannot account for it because it is impossible to do so.
Our problem today is of such magnitude that at this juncture I prefer to lay claim to the good will which exists between the unions and the Government and to give the voluntary policy of the T.U.C. a considerable extension to enable it to work. I cannot understand my right hon. Friend the Member for Grimsby (Mr. Crosland), or my right hon. Friend the Member for Southwark (Mr. Gunter), or my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), who are hard-headed politicians, going along for an all-out fight between the trade unions and the Labour Party. It is too late to ask them to think again, but I hope that permanent damage will not be done either to this party or to our great trade union movement by today's debate and the decisions that we will have to take in future.
On a point of order. Mr. Deputy Speaker, may I seek your support in getting further time for back-benchers to take part in the debate, and in restraining Front Bench speakers? So far there have been nine speeches from this side of the House. Three have been by Privy Councillors and one from the Front Bench. However, attractive their speeches, that seems an extraordinary number, and I should be grateful for your advice.
Anyone who listened to my hon. Friend the Member for Meriden (Mr. Speed) will agree that we had from him a speech which was penetrating in its analysis, which did not burke the serious problems which we face, and which showed an understanding of the difficulties and hardships which face some of our people today. Those in the House —and there are a number of us—who worked with my hon. Friend before he came here know that he will be an asset, not only to the Conservative Party, but to the whole House.
My hon. Friend talked about the effect of the Bill, coupled with the increase in indirect taxation, on the standard of living. Therefore, I think that it needs to be said quite clearly at the outset of these final speeches—and, like the hon. Member for Billericay (Mr. Moonman), I regret that we have not been allowed two days to discuss the Bill—that the overriding purpose of this Measure, brought in by a Socialist Government, can be simply stated. It is to ensure that wages rise less than the increase in prices, and so, as a deliberate act of Socialist policy, to ensure that this year, after three and a half years of Labour Government, the standard of living of the British working man will fall. That is the purpose of the Bill.
If I might express it in the harsh, and perhaps rather unemotional, terms of the professional economist, the Chancellor of the Exchequer and the right hon. Lady —[HON. MEMBERS: "Where is she?"]— are planning that this year average personal disposable incomes shall rise less than the increase in the Retail Price Index. The right hon. Member for Belper (Mr. George Brown) told us that Ministers should not talk about our standard of living falling, but never since 1951, the last year of the last Labour Government, 17 years ago, has a Government actually set out to cut the nation's standard of living, and then right hon. and hon. Gentlemen opposite wonder why the electorate rejects them.
Now that the right hon. Lady has come into the Chamber, let me give one example to show why nobody any more has any confidence in the Government. Less than a year ago the Chancellor of the Exchequer told the nation:
During the next 12 months there will be a gentle but progressive improvement in the standard of life of every family in the country. From now on we can begin to reap the benefits.
That was never denied by the right hon. Lady or by anybody else in the Labour Party in the House of Commons. The truth is that the Bill is a confession of failure. It enshrines a principle which the Prime Minister has called repugnant. As I shall show, it is in practice a nonsense which has been cooked up by political theorists and naive bureaucrats.
The right hon. Lady said that the Conservative Government held down wages. She produced no figures. She did not compare what happened in our 13 years of office with what has been happening under the present Government. Perhaps the Under-Secretary of State will comment on my figures. From 1951 to 1964, the average annual increase in real weekly earnings was 35 per cent. Under this Government the figure has been 1 per cent. In this, the fourth year of the Government's office, they are setting out quite deliberately, for the first time since 1951, to reduce the standard of living of our people.
The right hon. Lady started by referring to what she considered to be the reasons which have led to the Bill. I want to do the same. We are entitled to ask how it comes about that, despite all the roseate promises made at the General Election two years ago, and all that has been said since until quite recently, we are now faced with the prospect of a falling standard of living and with legislation for the third year running to prevent employees receiving what their employers are prepared to pay them as a result of free bargaining.
I believe that the answer is twofold. In the first place, between 1964 and 1967 public expenditure in constant terms rose by 15 per cent. whereas the gross domestic product rose by only 6 per cent. The consequence, which was predictable and was predicted time and again by my right hon. Friend the Leader of the Opposition, is that this enormous and disproportionate growth for mainly nonproductive purposes has stifled the private sector of the economy which is the main source of our prosperity. Even this year, when we are still in real trouble, the Government's spending spree goes on at an even greater pace.
When he took office at the Treasury, the Chancellor of the Exchequer said that at long last there was going to be the most comprehensive review ever undertaken of the whole field of Government expenditure. That is what we were promised. Then in February were were told the outcome. The Vote on Account, which the Government themselves describe as the most important single statement of expenditure proposals made to Parliament, showed that the Chancellor was setting out this year, 1968-69, to increase the estimates of Government expenditure by £1,000 million.
No Chancellor of the Exchequer has ever been in a stronger position than the right hon. Gentleman. The Prime Minister would never have dared to replace him only a few weeks after his appointment. Yet, as many of us feared and others in the country predicted, he has proved as weak as his predecessor. The result is that Government expenditure now equals about one-third of the entire output of the nation. The right hon. Gentleman has adopted the classic remedy for stimulating inflation, because any increase in the Government's share of total national output can only be financed by higher taxation or by in- flation. So we had the mammoth budget in March, increasing taxation by £900 million a year.
I did not quite understand what the right hon. Lady was getting at today when she told an incredulous House that last November the Government devalued instead of deflating. What does she mean? Does she really think that hon. Members opposite are so stupid that they really think that, over the last few months, there has been no deflation? Or is it that she has not got a clue about the way in which the economy is developing? If the right hon. Lady does not understand now that we have suffered over the last few months the most massive deflation this country has known, she is not fitted to hold her present office.
As every economist was predicting, even that increase in taxation was not enough to counter the weight of increased Government expenditure in an economy which had been virtually stagnant for three years. It is worth recalling that the proportion of the G.N.P.—of all we produce in this country—taken by total taxation has risen from 32·3 per cent. in 1964 to 34·4 per cent. in 1965, to 36·3 per cent. in 1966, to 38·1 per cent. in 1967, and that this year it will be about 40 per cent. This is one of the reasons why there is no incentive; why people are not prepared to give of their best—something which is necessary if we are to get the economy thriving.
And so the Government, having taken the very course which was best calculated to breed inflation, faced with a 1967 trading deficit which was the largest since Mr. Gaitskell's in 1951—the right hon. Lady omitted to mention this when speaking about the balance of payments—and having taxed industry and the citizen to the hilt, he resorted to the inevitable solution of a Socialist Government; the holding down of money wages and the reduction of real wages by penal legislation.
Would the right hon. Gentleman concede that the increases are largely due to the fact that we are spending nearly half as much again on housebuilding, hospital building, education and social security? These may be non-productive activities, but there is a backlog in all of these spheres which the Conservative Party left behind.
I hope that the hon. Gentleman will concede that the increase in civil servants since the Labour Party came to office is greater than, for example, the total of all our troops in the Far East and the Persian Gulf, which the Government are intending to bring home. I hope that he will concede that if the Government had changed over to the policy of import levies, we would then be able to save £250 million a year in public expenditure. I hope that he will concede that we would save a very large sum of money if we were to give up the Transport Bill, the Land Commission and the Industrial Expansion Bill. It is absolute nonsense to pretend that one cannot cut Government expenditure without touching the sort of social services to which the hon. Gentleman referred.
But this is what the Chancellor has done. He has taken a decision, with the right hon. Lady and the Prime Minister, to reduce real wages in Britain. It is ironic that this polished and elegant Socialist, the Chancellor of the Exchequer —[HON. MEMBERS: "Where is he?"]— who, as Home Secretary, was generally renowned for his permissive attitude to society, should now be the Minister who bears the main responsibility for denying the working man his historic right to receive what his employer wants to pay him. [HON. MEMBERS: "Cheap."]
The economic aims of any Government, Labour of Conservative, are four: economic growth, price stability, full employment and a satisfactory balance of payments. It is, of course, common ground that these objectives are easier to attain if the rise in incomes does not outstrip the rise in output. That is to state the obvious. This is why any Government must at least form a view as to what is the tolerable rise in incomes compatible with their objectives.
The trend of incomes is one of the primary factors which determine the whole of the Budget strategy. In short, the aim of Government in the pursuit of an acceptable incomes policy should be, by their overall management of the economy, to create conditions under which the rise in incomes is broadly in line with the rise in output. But this is a function of the overall management of the economy—of total economic policy, of taxation policy, of the control of Government expenditure, of policies to stimulate personal saving and of policies to encourage initiative and enterprise so as to lead to the efficient growth of our total resources.
I hope the right hon. Lady will note this, for she was not here to hear all the speeches. The hon. Member for Salford, West (Mr. Orme), with whom I agree on this point, said that the folly of this Government was that it had elevated incomes policy to a position where it is now the central theme of economic policy. It was clear, listening to the right hon. Lady, that, like all fanatics, she is now redoubling her efforts when she has lost sight of her aim. It is highly dangerous to stake everything on the success of the statutory control of incomes because this legislation is no more likely to succeed than the previous two Acts which were pushed through the House of Commons.
One of the primary purposes of this Bill is to hold down wages by law. I think it right that in this context we should consider what I believe to be one of the most discreditable and sordid political episodes of recent years. That is the way in which the nation has been deceived.
I hope the right hon. Lady will not laugh at the quotations I shall now make. Her right hon. Friend the Member for Belper said in his speech that we should talk in honest terms. I noticed this afternoon that when one or two of my hon. Friends referred to what the Prime Minister said in his election speeches there was a certain amount of laughter on the benches opposite as though hon. Members opposite were prepared to dismiss what the right hon. Gentleman had said as of no relevance or importance. Of course, if hon. and right hon. Members opposite mean that it is a waste of time because no one any more anywhere believes a word the Prime Minister says, they are right, but the right hon. Gentleman—[Interruption.] I have plenty of time and I am going to finish.
I shall refer to the right hon. Member for Easington (Mr. Shin-well) in a few minutes. The fact is that the right hon. Member for Huyton (Mr. H. Wilson) is still Prime Minister of this country. [An HON. MEMBER: "Only just."] This is very important because it is something which is of great significance to people outside this House. If hon. Members opposite go on tittering and laughing at broken pledges given at the last election they will suffer an even heavier defeat at the next one. [An HON. MEMBER: "We are laughing at the right hon. Gentleman."]
I gave the Prime Minister notice that I would refer to this. Last week the Prime Minister attended a private meeting of the Parliamentary Labour Party and made a speech which he gave to the Press. He appealed for unity and referred to what he called "the sophisticated enemies" of the Labour movement. He said that these
sophisticated enemies are insisting that we change our nature as a party.
I must say, that takes the cake. He went on:
We are adjured to forget our past, to forget the aims and ideals which have inspired this party.
Let me help the right hon. Gentleman and the Front Bench opposite—indeed, the whole House—not to forget either the past or the aims or ideals which have inspired the Labour Party. It was the same right hon. Gentleman who told the nation at the last election that a law prescribing wages would be "repugnant to all parties". I wonder, was he then mouthing what he now calls
the aims and ideals which have inspired the Labour Party
or was he conning the electorate? We are entitled to know. We have never heard from him why he has changed his mind, why he said what he said at the last General Election, when, because he was Prime Minister, people believed what he said.
If he thinks that he has only to consider what he calls the "sophisticated enemies" of the Labour movement, he is living in cloud cuckoo land. I will tell hon. Members opposite who are the real enemies of the Labour Party. They are in Meriden, Walthamstow, Acton and Cambridge, and there are 28,000 of the enemy in Dudley and Stourbridge. They are the men and women who have already responded to the Prime Minister's plea not to forget the past, and they have done so because they are convinced that they have been tricked and cheated.
If the Prime Minister or anybody else wishes to be doubly assured that his erstwhile supporters do not forget the past and do not forget what he calls the aims and ideals which have inspired the Labour Party, he will get that reassurance in a few weeks' time from the people of Oldham, the trade unionists of Nelson and Colne and the steel workers of Sheffield, Brightside, because they know, as we know, and as the right hon. Gentleman once told the nation, that the statutory control of wages is the beginning of "a very slippery slope".
That is why we on these benches have consistently opposed the statutory control of wages. We voted against the compulsory powers under Part IV of the 1966 Act. We voted against the 1967 Act, and we shall fight this Bill, which is bad in principle and will not work.
The right hon. Lady said in her speech, "We must look forward first and foremost to management to carry out their responsibilities." Two of the main functions of the manager are the negotiation of wages and the determination of prices. These will now be undertaken by the Government, who will have the ultimate responsibility.
My hon. Friends the Member for Bath (Sir E. Brown) and Harrow, West (Mr. John Page) both directed their attention to the effect the Bill will have on the trade union movement. One of the main functions, if not the main function, of the leaders of the trade union movement is the negotiation of wages. But from now on it will be the irresponsible leader, the unofficial leader, who will be stimulated to take the initiative.
But the right hon. Lady really believes in the Bill, because this is what she means when she talks about the "socialisation of the wages sector." Only a Government devoid of business experience would assume that the bureaucrat knows better than the manager and the trade union leader.
That brings me to the second objection to the Bill. To attempt to hold down wages by law is not only wrong in principle but is impracticable and inequitable. First, even when it becomes law, the employer who gives a 5 or 6 per cent. rise to his workers will have committed no offence of any kind. There will undoubtedly be many who will ignore the right hon. Lady's threats and will do just that.
Second, any employee can ask for his cards and go to the factory next door, and he can get more pay for the same job.
Third, at the end of the period, even when the right hon. Lady brings an Order before the House, the employer is wholly within his rights in granting a lump sum payment to cover retrospectively the whole period covered by the order.
Judging the validity of productivity agreements in the way the right hon. Lady has suggested simply cannot work in practice, because she knows that the C.B.I. and many leading trade unionists are now becoming more and more in favour of plant bargaining. If she has her way, every productivity agreement providing for an increase of over 3½ per cent., even though it is limited to a handful of men in one small factory, will in future be liable to be vetted by a minor bureaucrat who has never been in a factory. [An. HON. MEMBER: "It is not true."] It is true. If it is not true, I hope that the Parliamentary Secretary will deal with this point, because this is what employers outside believe.
What about the employer who desperately wants to fulfil an export order on time but is losing his men to better paid employment elsewhere? There is no question here of increased productivity, harder work or longer hours; to keep his men to fulfil his export commitment he needs to give them a 5 per cent. rise. The answer, as the right hon. Lady knows, is that the Bill says he cannot do that, because it would be against the national interest to pay his workers 5 per cent. more to keep them to fulfil his export commitment.
For the Government to take powers over wages and prices is a manifest nonsense. One right hon. Gentleman opposite said that the compulsion involved in the Bill is incompatible with a free society. The simple truth is that, in fixing prices or in settling the multifarious wage claims throughout industry and commerce, the Government have neither the knowledge or the competence, nor the effective responsibility, and it is absurd to pretend otherwise.
The right hon. Lady said that, for her hon. Friends, this Bill represents a great issue of principle. She was right. The Government now have an overall majority in the House of Commons of 70, and 44 Labour Members of Parliament have put their names to an Amendment rejecting the Bill. If those hon. Members lived up to their convictions the Bill would be defeated. But, of course, they will do no such thing. As the right hon. Member for Easington said, "pressure has been exerted". It is now taken for granted that those hon. Members who have declared their opposition to the Bill will not in fact oppose it. I understand their difficulties and their feelings. But if they let the Bill through, as they will tonight, they really must not be surprised if people outside this House are cynical of politics and of politicians.
After all, here is a Measure which 44 Labour Members of Parliament detest and believe to be wrong. It is a Measure which breaks a solemn undertaking given by the Prime Minister during the last election campaign. But still they cling to their seats and still they prop up a Government which is discredited, distrusted and despised.
The right hon. Member for Easington made a remarkable speech in which he said that the Government no longer take any notice of their supporters. Last week, on television, he said to eight million viewers:
… if the Government go ahead with this so-called prices and incomes policy which is so demonstrably unfair—which puts most of the burden on organised working class people and on the organised professional middle class— then we won't make devaluation or anything else work; we will simply wreck this Government and the Labour Movement.
For right hon. Gentlemen opposite it is enough to live for the day; but on the morrow the nation will reject them.
I begin by offering my sincere congratulations to the hon. Member for Meriden (Mr. Speed) on what was a truly excellent maiden speech. I disagreed with every word of it, including his analysis of the fortunes of the English football team, but it was an excellent speech. Perhaps I may be allowed to add to my congratulations the thanks of Christopher Rowland's many friends in the House for the many generous tributes —justified, but nevertheless generous— which the hon. Member paid to him today and in his election campaign. It is some consolation to us to realise that Christopher Rowland has been succeeded in this House by a Member of such high quality.
I now turn to the speech of the right hon. Member for Altrincham and Sale (Mr. Barber), a speech which was clearly intended to appeal to the lowest common denominator on the benches behind him. Anyone who can face reading it in HANSARD tomorrow will find every political cliché in the book in the 27 minutes that he spoke. Even by the time that he got to the Bill, at 9.25, he was still in the same—[Interruption.]
Even by the time that he addressed himself to the Bill, at 9.25, he was still dealing with it in the same superficial and flippant way which characterised the rest of his speech.
However, there have been serious speeches during the afternoon, not least that from the right hon. Member for Mitcham (Mr. R. Carr). He made a number of points which need comment and refutation right at the beginning of my speech. He said, for instance, in exactly these words, "In 1967, it was going to be for only one further year," making the point, a charge which has been repeated in the country and in the House—a charge which, were it true, would be admittedly grave—that, by bringing this Bill forward at all, the Government have somehow broken their promises to the House, to the Labour Party and to the country— [HON. MEMBERS: "Hear, hear."] Hon. Gentlemen who say, "Hear, hear," should read HANSARD for 13th June, 1967, and devote their attentions to col. 429. There they will see that the right hon. Member for Enfield, West (Mr. Iain Macleod), who is not noted for giving gratuitous compliments to his opponents, referring to the then First Secretary, said:
We have been given no undertaking whatever by the First Secretary. He has been absolutely frank with us, and I acknowledge it. It may be that Part II will come back in its original form … ".—[OFFICIAL REPORT, 13th June, 1967; Vol. 748, c. 429.]
Very largely, Part II is back in its original form, and to suggest that this
is somehow a breach of faith, of promises given and undertakings made, a year ago is absolutely and completely wrong.
Having referred to what was the truth about a year ago, let me now turn to what may well be the truth about a year or 18 months hence—
Before the hon. Gentleman leaves the subject of a year ago, would he confirm that, almost two years ago, a very firm promise was given that these powers would last for one year and that, last year, although the promise was less firm, the indication was pretty strong?
The right hon. Member for Enfield, West did not regard the implication as pretty strong, and if the right hon. Member for Mitcham refers to col. 430 as well, he will find that his right hon. Friend went on to say that, in his view, not only the First Secretary but the Prime Minister had made provision for the powers now being re-enacted.
I turn from last year to next year and to the specific question asked of me and my right hon. Friend the Secretary of State by my right hon. Friend the Member for Belper (Mr. George Brown). He asked whether we would consider the reintroduction of the expiring laws procedure and the possibility of the Bill existing in some permanent form. Indeed, the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) went further and prophesied that our answer would be "Yes", and that the Bill would be here to stay in its present and total form.
I have to say this to my right hon. Friend. I regret that the assurance for which he asked cannot be given. I regret that there cannot be reconsideration of the introduction into this Bill of powers which would enable us to reactivate it in that way. I have to say this to the hon. Member for Rutland and Stamford. I can give him and the House no promises that another Bill of this sort will not be placed before them in a year or 18 months' time. If the problem still exists, the Government must apply the remedies which they regard as being necessary.
Certainly, however, if that eventuality does prove necessary, we would submit the Bill to the normal Parliamentary processes. But as to how likely it is that that should come about, I would say to my right hon. Friend that our wish to retain the statutory powers reinforcing the necessary prices and incomes policy is no greater than the needs of the situation. For my part, a statutorily-backed prices and incomes policy is not an article of faith. It is simply an imperative necessity until the time that the voluntary policy is demonstrably working. If the T.U.C. forecasts for the economy are right, if it should turn out that the T.U.C. policy is working effectively, positively, and demonstrably, in a year's time, there is no dogma on this Front Bench which would lead us to suggest to the House that this policy should be implemented.
We ask for that now because we believe it to be an imperative necessity in terms of economic success and survival. That imperative economic necessity includes prices as well as incomes. Prices policy is not—emphatically not—sugar to sweeten the pill. Of course some prices will rise. We have always said that. My right hon. Friend the Chancellor is one of the few Chancellors in British history who has made a prediction about price rises in his Budget.
We have never suggested that the results of devaluation, of his fiscal policies, can do anything other than produce price rises. Our general overall estimate is 5 per cent. That is not an argument for not trying to limit the amount of unnecessary price increases in other areas. It is the strongest argument for doing something about unnecessary price increases; it is the strongest argument for the sort of positive prices policy that this Bill offers; the strongest argument for the powers in the Bill, which my hon. Friends will recall contain for the first time the opportunity for the Government to require price reductions, as well as price stabilisation.
I emphasise that these powers have economic as well as social purposes. For reasons of simple equity there can, during the hard days ahead, be no unnecessary or unwarrantable price increases. As well as the equity argument, there is the hard economic argument, the argument that the most pressing need of the country is import substitution, the argument that perhaps overall, what we need to do most urgently and promptly is to sell goods in Britain made in Britain, instead of selling goods in Britain made abroad. Our prices strategy is not only to ensure that British goods are more competitive on the continent of Europe and America, but also to make certain that they are more competitive at home. And this is the essential task of import substitution.
One of the difficulties of arguing the effects and necessities of price policy is the strange intellectual double standards that the opponents of prices policy operate. Only the most bizarre of them actually claim that the economy should be left to the invisible hand of perfect competition. Many much more reputable and sophisticated figures advance arguments that can be justified only by the acceptance of the belief that enterprise and the hidden hand of competition can somehow see us through.
It would be very convenient and easy if competition could do these jobs, if it worked like that. It would answer all our questions, most of them before we even asked them, but unfortunately it does not work like that. Market forces have not brought down the prices of those hundreds of goods which have been notified to my right hon. Friend according to the early warning, or constant-watch procedure, and have then had their prices limited, postponed or abandoned altogether, because of Government intervention.
The hand of perfect competition has done none of these things. But the Government have done them, and we are entitled to ask hon. Gentlemen opposite who have talked about the distortion of market forces and letting normal forces operate, which alternative would they choose for the nation? If they had to choose between not distorting market forces, or, by intervening, keeping down the price of bread, flour, biscuits, beer, which would they choose? Do they stand by the theory of competition, or the Government's policy of positive intervention which has positively served the Government's policy? Hon. Gentlemen opposite have never even tried to answer that question, but they have in rather more frank moments answered the alternative question, as to whether or not they might themselves in certain circumstances have an incomes policy. The right hon. Member for Mitcham, speaking from the opposite Front Bench on 13th June, said that his. party realised that it is possible and it might be necessary, however unpleasant, for a Government in a moment of crisis to clamp down for a short period a complete standstill on incomes. He did not confess that attitude to us this afternoon. Had he done so I would have reminded him now that we are advocating a much more positive alternative than the one to which he referred last year.
We are advocating a policy which is creative, which offers special benefits and special advantages to the economy and to the working man, and is to the general benefit and well-being of the nation. Let me explain why I believe that to be so.
There are two conceivable aims and objects of the policy. One is the maximum objective, the maximum objective which is achievable and which is being achieved. That is a radical improvement and a radical change in the very basis of wage negotiations. The old method of across-the-board increases, unrelated to the needs of the economy, unrelated to the needs of the industry, often failed even to meet the needs of the workers. In the short run it failed them because it did little for the lowest paid. In the long run it failed them because it created in itself the inflation that nullified their wage increases.
The new kind of productivity bargain offers genuine real money increases, it safeguards the economy and it produces genuine prosperity. I say to my hon. Friend the Member for Poplar (Mr. Mikardo) that it has an important, indeed, in my view, a fundamental subsidiary advantage, and that is that the productivity bargain offers the worker and his trade union not only the opportunity, but indeed the obligation, to comment on the way in which his work is organised. It offers the worker the opportunity to say, "We can do this more efficiently if you take our advice." I suggest to my hon. Friend the Member for Poplar that this is at least the beginning of worker participation.
The potential increases that the worker can obtain under the Bill and under the White Paper associated with the Bill are unlimited. For the worker who chooses to negotiate through a productivity procedure by genuinely established criteria according to Reports nos. 23 and 36 of the National Board for Prices and In- comes, the increases are outside the scope of the 3½ per cent. ceiling. There is no limit to the increase he may achieve.
Before my hon. Friend leaves that point, would he not agree that the negotiators involved in the current A.E.U. wage negotiations would find it very difficult indeed to negotiate nationally a productivity agreement for the engineering industry, which is predominantly a piece-work industry which works to various standards throughout the industry? Will they not, because of the variation in techniques, find it almost impossible to negotiate a productivity agreement of the kind that is now being described by my right hon. Friend? Would he not, therefore, agree that there is every likelihood that the agreement will be in conflict with the criteria?
Of course, I agree with the technicalities of that argument. What my hon. Friend must therefore realise, and what I hope the trade union already realises, is that in order to obtain the maximum benefit for their members they must concentrate more and more on negotiations at local plant level, where genuine productivity bargains can be arranged, and where genuine substantial agreements and substantial increases can be obtained. That is the answer to the problem that many unions are facing, the chance of negotiating not national but local productivity agreements. That is the maximum achievable aim of the policy.
The minimum aim is the minimum aim spelt out by the right hon. Member for Mitcham, who said that according to many authorities—he quoted the National Institute of Economic and Social Research—the basic and only achievement which this policy could bring about would be a postponement in the increase in wages of something like 1 per cent., or perhaps not even that. To postpone wage increases to the tune of 1 per cent. is to reduce effective demand by something approaching £100 million. If that was the only achievement of the policy, it would not be a minor one. If there is to be that sort of saving, certainly my right hon. and hon. Friends would choose it to come in this way rather than through a cut in domestic Government spending such as that advocated from the benches opposite. As I understand it, right hon. and hon. Gentlemen opposite would prefer the saving to come in that way rather than through increases in taxation.
But the hon. Gentleman appears to have forgotten that my point was that the Conservative Government achieved that sort of withholding of spending power which is important in the management of the economy without any of this paraphernalia and panoply of power and bureaucratic intervention.
Let us face the point fairly and squarely, because this is the difference between us. It is not so much a difference of policy as a difference of principle. We could achieve it if we cut our social expenditure by a degree which those of us on this side of the House would find totally unacceptable.
While I am dealing with the problem and with the right hon. Gentleman's analysis of it, let me ask him another question. When he quoted the first and rather gloomy prognosis of the National Institute of Economic Research in its analysis of incomes policy and its success or failure, why did he not quote its conclusion, which was that we should go on with incomes policy and that it was essential to do so? It is doing the House less than justice to quote the analysis but not to complete the quotation.
I return to productivity agreements, and I remind the House of the statutory situation which dominates the productivity agreement element of the Bill. The statutory postponement of any wage increase covered by the Bill must be linked to and associated with a reference to the National Board for Prices and Incomes. An extension of the postponement and an extension of the order that makes the postponement is only possible if the National Board for Prices and Incomes makes an adverse report. The criteria on which that report, adverse or not, must be based are laid down at any time by the Government's prices and incomes objectives, and the objectives laid down at the moment are those in Cmnd. 3590, which specifies an exemption for productivity agreements. That amounts to a statutory assurance that any increase notified to the National Board for Prices and Incomes and associated with the stand- still must, if it is a genuine productivity agreement, not only get a favourable report from the Board, but that favourable report must be translated in Government terms into permission for the increase to go ahead. In other words, not only must the productivity agreement be copper-bottomed but, if it is, the Government's assurance that the increase can go forward is also copper-bottomed and written into the Bill.
I know that many of my right hon. and hon. Friends will be saying that all the laudable objects of improved productivity, plant rather than national bargaining and a fundamental shift in the way that our wages are negotiated are common ground between us. They will be saying that the T.U.C. shares these aims with the Government, and they will ask why the T.U.C. should not be allowed to get on with it. I am afraid that there is a hard and unavoidable answer. The T.U.C. can give the Government and the nation no assurance that it can make its policy stick, and it can give no assurance that its vetting machinery can work. Indeed, it would not claim that that was a possibility, and certainly it would not aspire to claim that it was a certainty.
Anyone examining the report of the Conference of Union Executives in Croydon last year will examine not only the size of the majority in favour of the economic statement but also the nature of the opposition to it. He will see that both the size of the majority and the militancy of the opponents provide little assurance and confidence that the T.U.C.'s policy can be made to work. Until we are sure that it can be made to work, there needs to be statutory backing and, until it can be seen to be working, the Government intend that that statutory backing shall exist.
Some of my hon. and right hon. Friends took exception to the suggestion that they were apparently adopting the same line as more extreme hon. and right hon. Gentlemen opposite in their criticism of this Bill. I say "apparently", because in my view the common ground is more apparent than real. I believe that the similarity may appear to be there, but it is not there. Indeed, I believe that the attitude they take, although profoundly mistaken, is in absolute distinction to the attitude of hon. and right hon. Gentlemen opposite and certainly in absolute distinction to the more extreme elements who sit on those benches. My hon. Friends take their position because they believe they are protecting the interests of the trade unions and organised workers. I reiterate that I believe that their judgment is profoundly mistaken, but I have no doubt that that is the principle on which their judgment is based.
But the more extreme hon. Gentlemen opposite want free bargaining for quite different reasons. They want free bargaining between employers' associations and unions as the first step towards even freer bargaining between individual companies and individual working men. Whilst I acquit my hon. and right hon. Friends of any complicity in that sort of nonsense, I warn them that by taking the stand they take this evening they are, in effect, making the real interests of the trade unions—the power to organise genuine material increases for their members, the power to organise a genuine, practical incomes policy—much more difficult to realise than if their spokesmen and their supporters in this House faced and realised the actual situation with which we are now confronted. [An HON. MEMBER: "Rubbish."] I believe—and I offer my hon. Friend this consolatory point despite his intervention—that only one thing divides me and him. All of us hope that in 18 months' time there will be a fully voluntary incomes policy run by the trade unions and the trade unions alone. My hon. Friend and I differ only in the belief that the achievement of that happy state must be preceded by 18th months of statutory prices and incomes policy. That is the area of our dispute, and that alone. I believe that it has to be statutorily backed for this simple reason. Clearly the incomes policy as it now stands, and as we have discussed it this evening, is basically a voluntary system. It cannot and will not work unless we have the overwhelming, general, voluntary support of the trade union movement. [Interruption.]
No such policy could possibly work were a majority of the people for whom it has a relevance and a purpose to refuse to operate it, and we are dependent upon the general support, the general good will, the general co-operation of the unions whose wages we chose to back.
I believe that most trade union leaders will choose to expand real incomes, will choose the genuinely long-term prosperous society, will choose the stable economy. I believe that the general secretary of the nation's third largest union who told his conference yesterday that were he a Member of the House he would be voting in favour of this Bill is not uncharacteristic of union leadership in general. I believe that the statutory powers are necessary not only because we need the general support and acceptance of the unions but because we would not get it were they to fear that their co-operation and support could result in leap-frogging by small uncooperative, unsympathetic minorities.
I have put a case which will be in the House's recollection, namely, the case of Rockware Glass, which the House debated in January, 1967, about which a Prices and Incomes Order was made. Several thousand workers covered by National Joint Industrial Council agreements for the glass container industry and the building trade had agreed gladly and willingly, and knowing the economic realities, voluntarily to postpone a wage increase until they heard that 20 of their number were not prepared to accept a voluntary standstill. The reaction of the several thousand men who, until that moment, had been prepared to accept voluntary restraint was that if there was to be a recalcitrant 20 then they would all have their wage increase.
On that occasion, we used the statutory powers against the 20 men. The several thousand who had always wanted to apply a voluntary incomes policy were happy to apply it. They were prepared to undergo and face the sacrifice which the realities of the economic situation warranted.
That is why statutory powers are necessary and why we must underwrite the provisions of this Bill. That is why the legislation has worked and will continue to work. But—and I cannot say this too often—it will work only if the trade unions are prepared to work with it and accept it and to face the economic realities as we and they see them. We cannot accept all the economic conclusions which the T.U.C. offers to us in its annual
economic report, because, in our judgment, to operate on its basis of belief and to operate on its calculations and prophecies for economic growth would be to take unwarrantable risks with the economy were we to fall into the old Tory trap of operating on the most favourable and optimistic assumptions and hoping that everything turned out all right in the end.
The Bill seeks to make sure that the favourable assumptions, if they work, work to our advantage and that if things less favourable occur the nation and the economy are still prepared to meet the difficulties, are still capable of facing the stress and still able to build a lasting, prosperous society for Great Britain.
|Division No. 154.]||AYES||[9.59 p.m.|
|Albu, Austen||Crosland, Rt. Hn. Anthony||Griffiths, David (Rother Valley)|
|Alldritt, Walter||Crossman, Rt. Hn. Richard||Griffiths, Rt. Hn. James (Llanelly)|
|Allen, Scholefield||Cullen, Mrs. Alice||Gunter, Rt. Hn. R. J.|
|Anderson, Donald||Dalyell, Tam||Hamilton, James (Bothwell)|
|Archer, Peter||Darling, Rt, Hn. George||Hamilton, William (Fife, W.)|
|Armstrong, Ernest||Davidson, Arthur (Accrington)||Hamling, William|
|Ashley, Jack||Davies, Ednyfed Hudson (Conway)||Hannan, William|
|Bacon, Rt. Hn. Alice||Davies, G. Elfed (Rhondda, E.)||Harper, Joseph|
|Bagier, Gordon A. T.||Davies, Dr. Ernest (Stretford)||Harrison, Walter (Wakefield)|
|Barnes, Michael||Davies, Harold (Leek)||Hart, Rt. Hn. Judith|
|Baxter, William||Davies, Ifor (Cower)||Haseldine, Norman|
|Bence, Cyril||de Freitas, Rt. Hn. Sir Geoffrey||Hattersley, Roy|
|Benn, Rt. Hn. Anthony Wedgwood||Delargy, Hugh||Hazell, Bert|
|Bennett, James (G'gow, Bridgeton)||Dell, Edmund||Healey, Rt. Hn. Denis|
|Binns, John||Dempsey, James||Henig, Stanley|
|Bishop, E. S.||Dewar, Donald||Herbison, Rt. Hn. Margaret|
|Blackburn, F.||Diamond, Rt. Hn. John||Hilton, W. S.|
|Blenkinsop, Arthur||Dobson, Ray||Hobden, Dennis (Brighton, K'town)|
|Boardman, H. (Leigh)||Doig, Peter||Hooley, Frank|
|Bottomley, Rt. Hn. Arthur||Dunnett, Jack||Houghton, Rt. Hn. Douglas|
|Boyden, James||Dunwoody, Mrs. Gwyneth (Exeter)||Howarth, Harry (Wellingborough)|
|Braddock, Mrs. E. M.||Dunwoody, Dr. John (F'th & C'b'e)||Howarth, Robert (Bolton, E)|
|Bradley, Tom||Eadie, Alex||Howell, Denis (Small Heath)|
|Bray, Dr. Jeremy||Edwards, William (Merioneth)||Howie, W.|
|Brooks, Edwin||Ellis, John||Hoy, James|
|Broughton, Dr. A. D. D.||English, Michael||Huckfield, Leslie|
|Brown, Rt. Hn. George (Belper)||Ennals, David||Hughes, Rt. Hn. Cledwyn (Anglesey)|
|Brown, Hugh D. (G'gow, Provan)||Ensor, David||Hughes, Hector (Aberdeen, N.)|
|Brown, Bob(N'c'tle-upon-Tyne, W.)||Evans, Albert (Islington, S.W.)||Hunter, Adam|
|Brown, R. W. (Shoreditch & F'bury)||Faulds, Andrew||Hynd, John|
|Buchan, Norman||Fernyhough, E.||Irvine, Sir Arthur|
|Buchanan, Richard (G'gow, Sp'burn)||Fitch, Alan (Wigan)||Jackson, Colin (B'h'se & Spenb'gh)|
|Butler, Herbert (Hackney, C.)||Foley, Maurice||Janner, Sir Barnett|
|Butler, Mrs. Joyce (Wood Green)||Foot, Rt. Hn. Sir Dingle (Ipswich)||Jay, Rt. Hn. Douglas|
|Callaghan, Rt. Hn. James||Ford, Ben||Jeger, George (Goole)|
|Cant, R. B.||Forrester, John||Jeger, Mrs. Lena (H'b'n&St.P'cras,S.)|
|Carmichael, Neil||Fowler, Gerry||Jenkins, Rt. Hn. Roy (Stechford)|
|Carter-Jones, Lewis||Fraser, John (Norwood)||Johnson, Carol (Lewisham, S.)|
|Castle, Rt. Hn. Barbara||Freeson, Reginald||Johnson, James (K'ston-on-Hull W.)|
|Chapman, Donald||Galpern, Sir Myer||Jones, Dan (Burnley)|
|Coe, Denis||Gardner, Tony||Jones, Rt.Hn.Sir Elwyn (W.Ham,S.)|
|Coleman, Donald||Garrett, W. E.||Jones, J. Idwal (Wrexham)|
|Concannon, J. D.||Ginsburg, David||Jones, T. Alec (Rhondda, West)|
|Conlan, Bernard||Gordon Walker, Rt. Hn. P. C.||Kelley, Richard|
|Corbet, Mrs. Freda||Gourlay, Harry||Kenyon, Clifford|
|Craddock, George (Bradford, S.)||Gray, Dr. Hugh (Yarmouth)||Kerr, Dr. David (W'worth, Central)|
|Crawshaw, Richard||Greenwood, Rt. Hn. Anthony||Lawson, George|
|Cronin, John||Gregory, Arnold||Leadbitter, Ted|
|Ledger, Ron||Moyle, Roland||Short, Rt. Hn. Edward (N'c'tle-u-Tyne)|
|Lee, Rt. Hn. Frederick (Newton)||Mulley, Rt. Hn. Frederick||Silkin, Rt. Hn. John (Deptford)|
|Lee, Rt. Hn. Jennie (Cannock)||Murray, Albert||Silkin, Hn. S. C. (Dulwich)|
|Lestor, Miss Joan||Neal, Harold||Skeffington, Arthur|
|Lever, Harold (Cheetham)||Noel-Baker, Francis (Swindon)||Slater, Joseph|
|Lever, L. M. (Ardwick)||Noel-Baker, Rt. Hn. Philip (Derby, S.)||Small, William|
|Lewis, Ron (Carlisle)||Ogden, Eric||Snow, Julian|
|Lipton, Marcus||O'Malley, Brian||Spriggs, Leslie|
|Lomas, Kenneth||Oram, Albert E.||Steele, Thomas (Dunbartonshire, W.)|
|Loughlin, Charles||Orbach, Maurice||Stewart, Rt. Hn. Michael|
|Luard, Evan||Oswald, Thomas||Stonehouse, John|
|Lyon, Alexander W. (York)||Owen, Dr. David (Plymouth, S'tn)||Strauss, Rt. Hn. G. R.|
|Mabon, Dr. J. Dickson||Owen, Will (Morpeth)||Summerskill, Hn. Dr. Shirley|
|McBride, Neil||Page, Derek (King's Lynn)||Swingler, Stephen|
|McCann, John||Palmer, Arthur||Symonds, J. B.|
|MacColl, James||Pannell, Rt. Hn. Charles||Taverns, Dick|
|MacDermot, Niall||Parker, John (Dagenham)||Thomas, Rt. Hn. George|
|Macdonald, A. H.||Parkin, Ben (Paddington, N.)||Thomson, Rt. Hn. George|
|McGuire, Michael||Parkyn, Brian (Bedford)||Thornton, Ernest|
|McKay, Mrs. Margaret||Pavitt, Laurence||Tinn, James|
|Mackenzie, Gregor (Rutherglen)||Pearson, Arthur (Pontypridd)||Tuck, Raphael|
|Mackle, John||Peart, Rt. Hn. Fred||Urwin, T. W.|
|Mackintosh, John P.||Pentland, Norman||Varley, Eric G.|
|Maclennan, Robert||Perry, Ernest G. (Battersea, S.)||Wainwright, Edwln (Dearne Valley)|
|McMillan Tom (Glasgow, C.)||Prentice, Rt. Hn. R. E.||Walden, Brian (AM Saints)|
|McNamara, J. Kevin||Price, Christopher (Perry Barr)||Walker, Harold (Doncaster)|
|MacPherson, Malcolm||Price, Thomas (Westhoughton)||Wallace, George|
|Mahon, Peter (Preston, S.)||Price, William (Rugby)||Watkins, David (Consett)|
|Mahon, Simon (Bootle)||Probert, Arthur||Watkins, Tudor (Brecon & Radnor)|
|Mallalieu, E. L. (Brigg)||Pursey, Cmdr. Harry||Weitzman, David|
|Mallalieu, J.P.W.(Huddersfield, E.)||Randall, Harry||Wellbeloved, James|
|Manuel, Archie||Rankin, John||Whitaker, Ben|
|Mapp, Charles||Rees, Merlyn||White, Mrs. Eirene|
|Marks, Kenneth||Reynolds, C. W.||Whit lock, William|
|Marquand, David||Rhodes, Geoffrey||Williams, Alan (Swansea, W.)|
|Marsh, Rt. Hn. Richard||Richard, Ivor||Williams, Alan Lee (Hornchurch)|
|Mason, Rt. Hn. Roy||Roberts, Albert (Normanton)||Williams, Clifford (Abertillery)|
|Maxwell, Robert||Roberts, Goronwy (Caernarvon)||Williams, Mrs. Shirley (Hitchin)|
|Mayhew, Christopher||Roberts, Gwilym (Bedfordshire, S.)||Williams, W. T. (Warrington)|
|Mellish, Rt. Hn. Robert||Robertson, John (Paisley)||Willis, Rt. Hn. George|
|Millan, Bruce||Robinson, Rt. Hn. Kenneth (St.P'c'as)||Wilson, Rt. Hn. Harold (Huyton)|
|Miller, Dr. M. S.||Robinson, W. O. J. (Watth'stow, E.)||Wilson, William (Coventry, S.)|
|Milne, Edward (Blyth)||Rodgers, William (Stockton)||Woodburn, Rt. Hn. A.|
|Mitchell, R. C. (S'th'pton, Test)||Roebuck, Roy||Woof, Robert|
|Molloy, William||Rogers, George (Kensington, N.)||Wyatt, Woodrow|
|Moonman, Eric||Rose, Paul||Yates, Victor|
|Morgan, Elystan (Cardiganshire)||Ross, Rt. Hn. William|
|Morris, Alfred (Wythenshawe)||Rowlands, E. (Cardiff, N.)||TELLERS FOR THE AYES:|
|Morris, Charles R. (Openshaw)||Shaw, Arnold (Ilford, S.)||Mr. Charles Grey and|
|Morris, John (Aberavon)||Shore, Rt. Hn. Peter (Stepney)||Mr. Ioan L. Evans.|
|Alison, Michael (Barkston Ash)||Bryan, Paul||Doughty, Charles|
|Allason, James (Hemel Hempstead)||Buchanan-Smith, Alick (Angus, N&M)||Douglas-Home, Rt. Hn. Sir Alec|
|Astor, John||Buck, Antony (Colchester)||Drayson, G. B.|
|Atkins, Humphrey (M't'n & M'd'n)||Bullus, Sir Eric||du Cann, Rt. Hn. Edward|
|Awdry, Daniel||Burden, F. A.||Eden, Sir John|
|Baker, Kenneth (Acton)||Campbell, Gordon||Elliot, Capt. Walter (Carshalton)|
|Baker, W. H. K. (Banff)||Carlisle, Mark||Emery, Peter|
|Balniel, Lord||Carr, Rt. Hn. Robert||Errington, Sir Eric|
|Barber, Rt. Hn. Anthony||Cary, Sir Robert||Evans, Gwynfor (C'marthen)|
|Batsford, Brian||Channon, H. P. G.||Ewing, Mrs. Winifred|
|Beamish, Col. Sir Tufton||Chichester-Clark, R.||Eyre, Reginald|
|Belt, Ronald||Clark, Henry||Farr, John|
|Bennett, Sir Frederic (Torquay)||Clegg, Walter||Fisher, Nigel|
|Bennett, Dr. Reginald (Gos. & Fhm)||Cooke, Robert||Fletcher-Cooke, Charles|
|Berry, Hn. Anthony||Cordle, John||Forrest, George|
|Biffen, John||Corfield, F. V.||Fortescue, Tim|
|Biggs-Davison, John||Costain, A. P.||Foster, Sir John|
|Birch, Rt. Hn. Nigel||Craddock, Sir Beresford (Spelthorne)||Fraser, Rt.Hn.Hugh(St'fford & Stone)|
|Black, Sir Cyril||Crosthwaite-Eyre, Sir Oliver||Galbraith, Hon. T. G.|
|Blaker, Peter||Crouch, David||Gibson-Wart, David|
|Boardman, Tom||Crowder, F. P.||Giles, Rear-Adm. Morgan|
|Body, Richard||Cunningham, Sir Knox||Gilmour, Ian (Norfolk, C.)|
|Bossom, Sir Clive||Currie, G. B. H.||Gilmour, Sir John (Fife, E.)|
|Boyd-Carpenter, Rt. Hn. John||Dalkeith, Earl of||Glyn, Sir Richard|
|Boyle, Rt. Hn. Sir Edward||Dance, James||Godber, Rt. Hn. J. B.|
|Braine, Bernard||Davidson, James (Aberdeenshire,W.)||Goodhew, Victor|
|Brewis, John||d'Avigdor-Goldsmid, Sir Henry||Gower, Raymond|
|Brinton, Sir Tatton||Dean, Paul (Somerset, N.)||Grant, Anthony|
|Bromley-Davenport, Lt.-Col.Sir Walter||Deedes, Rt. Hn. W. F. (Ashford)||Grant-Ferris, R.|
|Brown, Sir Edward (Bath)||Digby, Simon Wingfield||Gresham Cooke, R.|
|Bruce-Gardyne, J.||Donnelly, Desmond||Grieve, Percy|
|Griffiths, Eldon (Bury St. Edmunds)||Mackenzie, Alasdair (Ross & Crom'ty)||Rossi, Hugh (Hornsey)|
|Grimond, Rt. Hn. J.||Macleod, Rt. Hn. lain||Royle, Anthony|
|Gurden, Harold||McMaster, Stanley||Russell, Sir Ronald|
|Hall, John (Wycombe)||Macmillan, Maurice (Farnham)||St. John-Stevas, Norman|
|Hall-Davis, A. G. F.||Maddan, Martin||Sandys, Rt. Hn. D.|
|Hamilton, Lord (Fermanagh)||Maginnis, John E.||Scott, Nicholas|
|Hamilton, Michael (Salisbury)||Marples, Rt. Hn. Ernest||Scott-Hopkins, James|
|Harris. Frederic (Croydon, N.W.)||Marten, Neil||Sharples, Richard|
|Harrison, Brian (Maldon)||Maude, Angus||Shaw, Michael (Sc'b'gh & Whitby)|
|Harrison, Col. Sir Harwood (Eye)||Mawby, Ray||Silvester, Frederick|
|Harvey, Sir Arthur Vere||Maxwell-Hyslop, R. J.||Sinclair, Sir George|
|Harvie Anderson, Miss||Maydon, Lt.-Cmdr. S. L. C.||Smith, Dudley (W'wick & L'mington)|
|Hastings, Stephen||Mills, Peter (Torrington)||Smith, John (London & W'minster)|
|Hawkins, Paul||Mills, Stratton (Belfast, N.)||Speed, Keith|
|Hay, John||Miscampbell, Norman||Stainton, Keith|
|Heald, Rt. Hn. Sir Lionel||Mitchell, David (Basingstoke)||Steel, David (Roxburgh)|
|Heath, Rt. Hn. Edward||Monro, Hector||Stodart, Anthony|
|Heseltine, Michael||Montgomery, Fergus||stoddart-Scott, Col. Sir M. (Ripon)|
|Higgins, Terence L.||Morgan, Geraint (Denbigh)||Tapsell, Peter|
|Hiley, Joseph||Morrison, Charles (Devizes)||Taylor, Sir Charles (Eastbourne)|
|Hill, J. E. B.||Mott-Radclyffe, Sir Charles||Taylor, Edward M.(G'gow,Cathcart)|
|Hirst, Geoffrey||Munro-Lucas-Tooth, Sir Hugh||Taylor, Frank (Moss Side)|
|Hogg, Rt. Hn. Quintin||Murton, Oscar||Teeling, Sir William|
|Holland, Philip||Nabarro, Sir Gerald||Temple, John M.|
|Hordern, Peter||Neave, Airey||Thatcher, Mrs. Margaret|
|Hornby, Richard||Nicholls, Sir Harmar||Thorpe, Rt. Hn. Jeremy|
|Hunt, John||Noble, Rt. Hn. Michael||Tilney, John|
|Hutchison, Michael Clark||Nott, John||Turton, Rt. Hn. R. H.|
|Iremonger, T. L.||Onslow, Cranley||van Straubenzee, W. R.|
|Irvine, Bryant Godman (Rye)||Orr, Capt. L. P. S.||Vaughan-Morgan, Rt. Hn. sir John|
|Jackson, Peter M. (High Peak)||Orr-Ewing, Sir lan||Vickers, Dame Joan|
|Jenkin, Patrick (Woodford)||Page, Graham (Crosby)||Wainwright, Richard (Co[...]ne Valley)|
|Jennings, J. C. (Burton)||Page, John (Harrow, W.)||Walker, Peter (Worcester)|
|Johnson Smith, G. (E. [...]rinstead)||Pardoe, John||Walker-Smith, Rt. Hn. Sir Derek|
|Jones, Arthur (Northants, S.)||Pearson, Sir Frank (Clitheroe)||Wall, Patrick|
|Jopling, Michael||Percival, lan||Waiters, Dennis|
|Kaberry, Sir Donald||Peyton, John||Ward, Dame Irene|
|Kerby, Capt. Henry||Pike, Miss Mervyn||Weatherill, Bernard|
|Kershaw, Anthony||Pink, R. Bonner||Webster, David|
|Kimball, Marcus||Pounder, Rafton||Wells, John (Maidstone)|
|King, Evelyn (Dorset, S.)||Powell, Rt. Hn. J. Enoch||Whitelaw, Rt. Hn. William|
|Kirk, Peter||Price, David (Eastleigh)||Williams, Donald (Dudley)|
|Kitson, Timothy||Prior, J. M. L.||Wills, Sir Gerald (Bridgwater)|
|Lambton, Viscount||Pym, Francis||Wilson, Geoffrey (Truro)|
|Lancaster, Col. C. G.||Quenneli, Miss J. M.||Winstanley, Dr. M. P.|
|Lane, David||Ramsden, Rt. Hn. James||Wolrige-Gordon, Patrick|
|Langford-Holt Sir John||Rawlinson, Rt. Hn. Sir Peter||Wood, Rt. Hn. Richard|
|Legge-Bourke, Sir Harry||Rees-Davies, W. R.||Woodnutt, Mark|
|Lewis, Kenneth (Rutland)||Renton, Rt. Hn. Sir David||Worsley, Marcus|
|Lloyd, lan (P'tsm'th, Langstone)||Rhys Williams, Sir Brandon||Wright, Esmond|
|Lloyd, Rt. Hn. Selwyn (Wirral)||Ridley, Hn. Nicholas||Wylie, N. R.|
|Longden, Gilbert||Ridsdale, Julian||Younger, Hn. George|
|Lubbock, Eric||Rippon, Rt. Hn. Geoffrey|
|McAdden, Sir Stephen||Robson Brown, Sir William||TELLERS FOR THE NOES:|
|MacArthur, lan||Rodgers, Sir John (Sevenoaks)||Mr. R. W. Elliott and|
|Mr. Jasper More.|
|Division No. 155.]||AYES||[10.15 p.m.|
|Alison, Michael (Barkston Ash)||Birch, Rt. Hn. Nigel||Bullus, Sir Eric|
|Allason, James (Hemel Hempstead)||Black, Sir Cyril||Burden, F. A.|
|Astor, John||Blaker, Peter||Campbell, Gordon|
|Atkins, Humphrey (M't'n & M'd'n)||Boardman, Tom||Carlisle, Mark|
|Awdry, Daniel||Body, Richard||Carr, Rt. Hn. Robert|
|Baker, Kenneth (Acton)||Bossom, Sir Clive||Cary, Sir Robert|
|Baker, W. H. K. (Banff)||Boyd-Carpenter, Rt. Hn. John||Channon, H. P. G.|
|Balniel, Lord||Boyle, Rt. Hn. Sir Edward||Chichester-Clark, R.|
|Barber, Rt. Hn. Anthony||Braine, Bernard||Clark, Henry|
|Batsford, Brian||Brewis, John||Clegg, Walter|
|Beamish, Col. Sir Tufton||Brinton, Sir Tatton||Cooke, Robert|
|Bell, Ronald||Bromley-Davenport, Lt. Col. Sir Walter||Cordle, John|
|Bennett, Sir Frederic (Torquay)||Brown, Sir Edward (Bath)||Corfield, F. V.|
|Bennett, Dr. Reginald (Cos. & Fhm)||Bruce-Gardyne, J.||Costain, A. P.|
|Berry, Hn. Anthony||Bryan, Paul||Craddock, Sir Beresford (Spethorne)|
|Biffen, John||Buchanan-Smith, Alick (Angus, N&M)||Crosthwaite-Eyre, Sir Oliver|
|Biggs-Davison, John||Buck, Antony (Colchester)||Crouch, David|
|Crowder, F. P.||Iremonger, T. L.||Pym, Francis|
|Cunningham, Sir Knox||Irvine, Bryant Godman (Rye)||Quennell, Miss J. M.|
|Currie, G. B. H.||Jenkin, Patrick (Woodford)||Ramsden, Rt. Hn. James|
|Dalkeith, Earl of||Jennings, J. C. (Burton)||Rawlinson, Rt. Hn. Sir Peter|
|Dance, James||Johnson Smith, G. (E. Grinstead)||Rees-Davies, W. R.|
|Davidson, James (Aberdeenshire, W.)||Jones, Arthur (Northants, S.)||Renton, Rt. Hn. Sir David|
|d'Avigdor-Goldsmid, Sir Henry||Jopling, Michael||Rhys Williams, Sir Brandon|
|Dean, Paul (Somerset, N.)||Kaberry, Sir Donald||Ridley, Hn. Nicholas|
|Deedes, Rt. Hn. W. F. (Ashford)||Kerby, Capt. Henry||Ridsdale, Julian|
|Digby, Simon Wingfield||Kershaw, Anthony||Rippon, Rt. Hn. Geoffrey|
|Donnelly, Desmond||Kimball, Marcus||Robson Brown, Sir William|
|Doughty, Charles||King, Evelyn (Dorset, S.)||Rodgers, Sir John (Sevenoaks)|
|Douglas-Home, Rt. Hn. Sir Alec||Kirk, Peter||Rossi, Hugh (Hornsey)|
|Drayson, G. B.||Kitson, Timothy||Royle, Anthony|
|du Cann, Rt. Hn. Edward||Lambton, Viscount||Russell, Sir Ronald|
|Eden, Sir John||Lancaster, Col. C. G.||St. John-Stevas, Norman|
|Elliot, Capt. Walter (Carshalton)||Lane, David||Sandys, Rt. Hn. D.|
|Emery, Peter||Langford-Holt Sir John||Scott, Nicholas|
|Errington, Sir Eric||Legge-Bourke, Sir Harry||Scott-Hopkins, James|
|Evans, Gwynfor (C'marthen)||Lewis, Kenneth (Rutland)||Sharpies, Richard|
|Ewing, Mrs. Winifred||Lloyd, Ian (P'tsm'th, Langstone)||Shaw, Michael (Sc'b'gh & Whitby)|
|Eyre, Reginald||Lloyd, Rt. Hn. Selwyn (Wirral)||Silvester, Frederick|
|Farr, John||Longden, Gilbert||Sinclair, Sir George|
|Fisher, Nigel||Lubbock, Eric||Smith, Dudley (W'wick & L'mington)|
|Fletcher-Cooke, Charles||McAdden, Sir Stephen||Smith, John (London & W'minster)|
|Forrest, George||MacArthur, Ian||Speed, Keith|
|Fortescue, Tim||Mackenzie, Alasdair (Ross & Crom'ty)||Stainton, Keith|
|Foster, Sir John||Macleod, Rt. Hn. lain||Steel, David (Roxburgh)|
|Fraser, Rt. Hn. Hugh (St'fford & Stone)||McMaster, Stanley||Stodart, Anthony|
|Galbraith, Hun. T. G.||Macmillan, Maurice (Farnham)||stoddart-Scott, Col. Sir M. (Ripon)|
|Gibson-Watt, David||Maddan, Martin||Tapsell, Peter|
|Giles, Rear-Adm, Morgan||Maginnis, John E.||Taylor, Sir Charles (Eastbourne)|
|Gilmour, Sir John (Fife, E.)||Marples, Rt. Hn. Ernest||Taylor, Edward M.(G'gow, Cathcart)|
|Glyn, Sir Richard||Marten, Neil||Taylor, Frank (Moss Side)|
|Godber, Rt. Hn. J. B.||Maude, Angus||Teeling, Sir William|
|Goodhew, Victor||Mawby, Ray||Temple, John M.|
|Cower, Raymond||Maxwell-Hyslop, R. J.||Thatcher, Mrs. Margaret|
|Grant, Anthony||Maydon, Lt.-Cmdr. s. L. C.||Thorpe, Rt. Hn. Jeremy|
|Grant-Ferris, R.||Mills, Peter (Torrington)||Tilney, John|
|Gresham Cooke, R.||Mills, Stratton (Belfast, N.)||Turton, Rt. Hn. R. H.|
|Grieve, Percy||Miscampbell, Norman||Van Straubenzee, W. R.|
|Griffiths, Eldon (Bury St. Edmunds)||Mitchell, David (Basingstoke)||Vaughan-Morgan, Rt. Hn. Sir John|
|Grimond, Rt. Hn. J.||Monro, Hector||Vickers, Dame Joan|
|Gurden, Harold||Montgomery, Fergus||Wainwright, Richard (Colne Valley)|
|Hall, John (Wycombe)||Morgan, Geraint (Denbigh)||Walker, Peter (Worcester)|
|Hall-Davis, A. G. F.||Morrison, Charles (Devizes)||Walker-Smith, Rt. Hn. Sir Derek|
|Hamilton, Lord (Ferma[...]agh)||Mott-Radclyffe, Sir Charles||Wall, Patrick|
|Hamilton, Michael (Salisbury)||Munro-Lucas-Tooth, Sir Hugh||Walters, Dennis|
|Harris. Frederic (Croydon, N.W.)||Murton, Oscar||Ward, Dame Irene|
|Harrison, Brian (Maldon)||Nabarro, Sir Gerald||Weatherill, Bernard|
|Harrison, Col. sir Harwood (Eye)||Neave, Airey||Webster, David|
|Harvey, sir Arthur Vere||Nicholls, Sir Harmar||wells, John (Maidstone)|
|Harvie Anderson, Miss||Noble, Rt. Hn. Michael||whitelaw, Rt. Hn. william|
|Hastings, Stephen||Nott, John||Williams, Donald (Dudley)|
|Hawkins, Paul||Onslow, Cranley||Wills, Sir Gerald (Bridgwater)|
|Hay, John||Orr, Capt. L. P. S.||Wilson, Geoffrey (Truro)|
|Heald, Rt. Hn. Sir Lionel||Orr-Ewing, Sir Ian||winstanley, Dr. M. P.|
|Heath, Rt. Hn. Edward||Page, Graham (Crosby)||Wolrige-Gordon Patrick|
|Heseltine, Michael||Page, John (Harrow, W.)||Wood, Rt. Hn. Richard|
|Higgins, Terence L.||Pardoe, John||Woodnutt, Mark|
|Hiley, Joseph||Pearson, Sir Frank (Clitheroe)||worsley, Marcus|
|Hill, J. E. B.||Percival, Ian||Wright, Esmond|
|Hirst, Geoffrey||Peyton, John||Wylie, N. R.|
|Hogg, Rt. Hn. Quintin||Pike, Miss Mervyn||younger, Hn. George|
|Holland, Philip||Pink, R. Bonner|
|Hordern, Peter||Pounder, Rafton||TELLERS FOR THE AYES:|
|Hornby, Richard||Powell, Rt. Hn. J. Enoch||Mr. R. W. Elliott and|
|Hunt, John||Price, David (Eastleigh)||Mr. Jasper More.|
|Hutchison, Michael Clark||Prior, J. M. L.|
|Albu, Austen||Barnes, Michael||Boardman, H. (Leigh)|
|Allaun, Frank (Salford, E.)||Barnett, Joel||Booth, Albert|
|Alldritt, Walter||Baxter, William||Bottomley, Rt. Hn. Arthur|
|Allen, Scholefield||Beaney, Alan||Boyden, James|
|Anderson, Donald||Bence, Cyril||Braddock, Mrs. E. M.|
|Archer, Peter||Benn, Rt. Hn. Anthony Wedgwood||Bradley, Tom|
|Armstrong, Ernest||Bennett, James (G'gow, Bridgeton)||Bray, Dr. Jeremy|
|Ashley, Jack||Bidwell, Sydney||Brooks, Edwin|
|Atkins, Ronald (Preston, N.)||Binns, John||Broughton, Dr. A. D. D.|
|Atkinson, Norman (Tottenham)||Bishop, E. S.||Brown, Rt. Hn. George (Belper)|
|Bacon, Rt. Hn. Alice||Blackburn, F.||Brown, Hugh D. (G'gow, Provan)|
|Bagier, Gordon A. T.||Blenkinsop, Arthur||Brown, Bob (N'c'tle-upon-Tyne,W.)|
|Brown, R. W. (Shoreditch & F'bury)||Heffer, Eric S.||Milne, Edward (Blyth)|
|Buchan, Norman||Henig, Stanley||Mitchell, R. C. (S'th'pton, Test)|
|Buchanan, Richard (G'gow, Sp'burn)||Herbison, Rt. Hn. Margaret||Molloy, William|
|Butler, Herbert (Hackney, C.)||Hilton, W. S.||Moonman, Eric|
|Butler, Mrs. Joyce (Wood Green)||Hobden, Dennis (Brighton, K'town)||Morgan, Elystan (Cardiganshire)|
|Callaghan, Rt. Hn. James||Hooley, Frank||Morris, Alfred (Wythenshawe)|
|Cant, R. B.||Houghton, Rt. Hn. Douglas||Morris, Charles R. (Openshaw)|
|Carmichael, Neil||Howarth, Harry (Wellingborough)||Morris, John (Aberavon)|
|Carter-Jones, Lewis||Howarth, Robert (Bolton, E.)||Moyle, Roland|
|Castle, Rt. Hn. Barbara||Howell, Denis (Small Heath)||Mulley, Rt. Hn. Frederick|
|Chapman, Donald||Howie, W.||Murray, Albert|
|Coe, Denis||Hoy, James||Neal, Harold|
|Coleman, Donald||Huckfield, Leslie||Newens, Stan|
|Concannon, j. D.||Hughes, Rt. Hn. Cledwyn (Anglesey)||Noel-Baker, Francis (Swindon)|
|Conlan, Bernard||Hughes, Hector (Aberdeen, N.)||Noel-Baker, Rt.Hn.Philip(Derby,S.)|
|Corbet, Mrs. Freda||Hunter, Adam||Ogden, Eric|
|Craddock, George (Bradford, S.)||Hynd, John||O'Malley, Brian|
|Crawshaw, Richard||Irvine, Sir Arthur||Oram, Albert E.|
|Cronin, John||Jackson, Colin (B'h'se & Spenb'gh)||Orbach, Maurice|
|Crosland, Rt. Hn. Anthony||Jackson, Peter M. (High Peak)||Orme, Stanley|
|Crossman, Rt. Hn. Richard||Janner, Sir Barnett||Oswald, Thomas|
|Cullen, Mrs. Alice||Jay, Rt. Hn. Douglas||Owen, Dr. David (Plymouth, S'tn)|
|Dalyell, Tarn||Jeger, George (Goole)||Owen, Will (Morpeth)|
|Darling, Rt. Hn. George||Jeger, Mrs.Lena (H'b'n &St.P'cras,S.)||Page, Derek (King's Lynn)|
|Davidson, Arthur (Accrington)||Jenkins, Hugh (Putney)||Palmer, Arthur|
|Davies, Ednyfed Hudson (Conway)||Jenkins, Rt. Hn. Roy (Stechford)||Pannell, Rt. Hn. Charles|
|Davies, G. Elfed (Rhondda, E.)||Johnson Carol (Lewisham S)||Park, Trevor|
|Davies, Dr. Ernest (Stretford)||Johnson' Jamea (K'stnn on-Hull w.)||Parker, John (Dagenham)|
|Davies, Harold (Leek)||Jones Dan (Burnley)||Parkin, Ben (Paddington, N.)|
|Davies, Ifor (Gower)||Jones, Rt. Hn. Sir Elwyn (W.Ham, S.)||Parkyn, Brian (Bedford)|
|de Freitas, Rt. Hn. Sir Geoffrey||Jones, J. Idwal (Rhondda, Wrexham)||Pavitt, Laurence|
|Delargy, Hugh||Jones T. Alec (Rhondda West)||Pearson, Arthur (Pontypridd)|
|Dell, Edmund||Kelley, Richard||Peart, Rt. Hn. Fred|
|Dempsey, James||Kenyon Clifford||Pentland, Norman|
|Dewar, Donald||Kerr, Mrs. Anne (R'ter & Chatham)||Perry, Ernest G. (Battersea, S.)|
|Diamond, Rt. Hn. John||Kerr, Dr. David ('Worth, Central)||Prentice, Rt. Hn. R. E.|
|Dickens, James||Kerr, Russell (Feltham)||Price, Chistopher (Perry Barr)|
|Dobson, Ray||Lawson, George||Price, Thomas (Westhoughton)|
|Doig, Peter||Leadbitter, Ted||Price, William (Rugby)|
|Dunnett, Jack||Lee, Rt. Hn. Frederick (Newton)||Probert, Arthur)|
|Dunwoody, Mrs. Gwyneth (Exeter)||Lee, Rt. Hn. Jennie (Cannock)||Pursey, Cmdr, Harry|
|Dunwoody, Dr. John (F'th & C'b'e)||Lee, John (reading)||Randall, Harry|
|Eadie, Alex||Lestor, Miss Joan||Rankin, John|
|Edwards, William (Merioneth)||Rees, Merlyn|
|Ellis, John||Reynolds, G. W.|
|English, Michael||Lever, Harold (Cheetham)||Rhodes, Geoffrey|
|Ennals, David||Lever, L. M, (Ardwick)||Richard, Ivor|
|Ensor, David||Lewis, Arthur (W. Ham, N.)||Roberts, Albert (Normanton)|
|Evans, Albert (Islington, & W.)||Lewis, Ron (Carlisle)||Roberts, Goronwy (Caernarvon)|
|Faulds, Andrew||Lipton, Marcus||Roberts, Gwilym (Bedfordshire, S.)|
|Fernyhough, E.||Lomas, Kenneth||Robertson, John (Paisley)|
|Fitch, Alan (Wigan)||Loughlin, Charles||Robinson,Rt.Hn.Kenneth(St.P'c'as)|
|Fletcher, Raymond (Ilkeston)||Luard, Evan||Robinson, W. O. J. (Walth'stow, E.)|
|Fletcher, Ted (Darlington)||Lyon, Alexander W. (York)||Rodgers, William (Stockton)|
|Foley, Maurice||Mabon, Dr. J. Dickson||Roebuck, Roy|
|Foot, Rt. Hn. Sir Dingle (Ipswich)||McBride, Neil||Rogers, George (Kensington, N.)|
|Foot, Michael (Ebbw Vale)||McCann, John||Rose, Paul|
|Ford, Ben||MacColl, James||Ross, Rt. Hn. William|
|Forrester, John||MacDermot, Niall||Rowlands, E. (Cardiff, N.)|
|Fowler, Gerry||Macdonald, A. H.||Ryan, John|
|Fraser, John (Norwood)||McGuire, Michael||Shaw, Arnold (llford, S.)|
|Freeson, Reginald||McKay, Mrs. Margaret||Sheldon, Robert|
|Galpern, Sir Myer||Mackenzie, Gregor (Rutherglen)||Shore, Rt. Hn. Peter (Stepney)|
|Gardner, Tony||Mackie, John||Short, Rt.Hn. Edward(N'c'tle-u-Tyne)|
|Garrett, W E.||Mackintosh, John P.||Silkin, Rt. Hn. John (Deptford)|
|Ginsburg, David||Maclennan, Robert||Silkin, Hn, S. C. (Dulwich)|
|Gordon Walker, Rt. Hn. P. C.||McNamara, J. Kevin||Silverman, Julius (Aston)|
|Gourlay, Harry||MacPherson, Malcolm||Skeffington, Arthur|
|Gray, Dr. Hugh (Yarmouth)||Mahon, Peter (Preston, S.)||Slater, Joseph|
|Greenwood, Rt. Hn. Anthony||Mahon, Simon (Bootle)||Small, William|
|Gregory, Arnold||Mallalieu, E. L. (Brigg)||Snow, Julian|
|Griffiths, David (Rother Valley)||Mallalieu, J.P.W.(Huddersfield, E.)||Spriggs, Leslie|
|Griffiths, Rt. Hn. James (Llanelly)||Manuel, Archie||Steele, Thomas (Dunbartonshire, W.)|
|Gunter, Rt. Hn. R. J.||Mapp, Charles||Stewart, Rt. Hn. Michael|
|Hamilton, James (Bothwell)||Marks, Kenneth||Storehouse, John|
|Hamilton, William (Fife, W.)||Marquand, David||Strauss, Rt. Hn. G. R.|
|Hamling, William||Marsh, Rt. Hn. Richard||Summerskill, Hn. Dr. Shirley|
|Hannan, William||Mason, Rt. Hn. Boy||Swingler, Stephen|
|Harper, Joseph||Maxwell, Robert||Symonds, J. B.|
|Harrison, Walter (Wakefield)||Mayhew, Christopher||Taverne, Dick|
|Hart, Rt. Hn. Judith||Mellish, Rt. Hn. Robert||Thomas, Rt. Hn. George|
|Haseldine, Norman||Mendelson, J. J.||Thomson, Rt. Hn. George|
|Hattersley, Roy||Mikardo, Ian||Thornton, Ernest|
|Hazell, Bert||Millan, Bruce||Tinn, James|
|Healey, Rt. Hn. Denis||Miller, Dr. M. S.||Tomney, Frank|
|Tuck, Raphael||Wellbeloved, James||Wilson, Rt. Hn. Harold (Huyton)|
|Urwin, T. W.||Whitaker, Ben||Wilson, William (Coventry, S.)|
|Varley, Eric G.||White, Mrs. Eirene||Winnick, David|
|Wainwright, Edwin (Dearne Valley)||Whitlock, William||Woodburn, Rt. Hn. A.|
|Walden, Brian (AH Saints)||Williams, Alan (Swansea, W.)||Woof, Robert|
|Walker, Harold (Doncaster)||Williams, Alan Lee (Hornchurch)||Wyatt, Woodrow|
|Wallace, George||Williams, Clifford (Abertillery)||Yates, Victor|
|Watkins, David (Consett)||Williams, Mrs. Shirley (Hitchin)|
|Watkins, Tudor (Brecon & Radnor)||Williams, W. T. (Warrington)||TELLERS FOR THE NOES:|
|Weitzman, David||Willis, Rt. Hn. George||Mr. Charles Grey and|
|Mr. Ioan L. Evans.|