Orders of the Day — Commission for Industry and Manpower Bill

Part of the debate – in the House of Commons at 12:00 am on 8th April 1970.

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Photo of Mr Robert Carr Mr Robert Carr , Mitcham 12:00 am, 8th April 1970

I am glad that my hon. Friend the Member for Peterborough (Sir Harmar Nicholls) is pleased. I am sure that the country will be pleased with him.

Moreover, I suggest that there is another possible danger in this policy, for which, strangely, the right hon. Lady was taking some credit in one part of her speech. I fear, and I suspect that my fears may well be shared by at least a number of hon. Gentlemen opposite, that this may add even more fuel to the fires of industrial conflict. If companies really were to try to use either the facts or the threat of Government price control as a reason for refusing wage claims, I believe that the anger and bitterness of workers and trade unions and the unfairness of it all might be even greater than under the provocation of the old statutory incomes policy. I do not believe that many companies will be able to do what the right hon. Lady suggested they could do in the circumstances of a modern economy; but if they were to use the fact that the Government were stopping them increasing their prices I think that the right hon. Lady would find that she has thrown another fire lighter on to the fire of industrial strife.

There is no doubt, of course, that the C.I.M. will be presented to the public in the coming months as the new, wonderful instrument of power which will at last control the cruel rate of price increases and inflation which is now well established as the hallmark of Labour Government. It will not. As far as controlling prices is concerned, it is nothing but a spoof, a great big spoof.

Look at the record. We have had these powers of early warning and statutory control of price increases for most of the five and half years of this Government's life and look what has happened. If all this bureaucratic and Ministerial intervention has not worked hitherto, what scrap of evidence is there to suggest that suddenly it will begin working now? During the six years prior to 1964 under a Conservative Government, with no early warning system, with no statutory price control, except in a proven case of abuse of market power under monopolies legislation, prices rose only about half as fast as they have been doing during the five and half years of Labour government.

Moreover, the Labour Government's record is just as bad relatively since they have introduced all this paraphernalia of prices policy, as it was during the first one and half years of their period of office. Food prices have been the subject of particularly close scrutiny under the early warning system, yet they have risen even faster than prices generally—a 6·3 per cent. increase in food prices during the 12 months ended in February; and since devaluation we have been told that there have been 15,000 price increases in grocery items alone. That is only part of the story under Labour Government. Coal up 29 per cent., electricity up to 28 per cent., gas up 15 per cent., house prices up 40 per cent., mortgage repayments on an average priced new home up £3 10s. a week: this is what has happened under these wonderful, bureaucratic, early warning powers, with high-powered experts in ivory towers looking into matters. Now we are asked the believe that prices will be kept under control by the continuation of this crackpot system.

Let us consider what has been happening in the last three months since that notable day just before Christmas, 17th December, when the right hon. Lady the First Secretary and the Chancellor of the Exchequer pleaded with the House to extend the powers of Part II of the Prices and Incomes Act, 1966. That, we were told, was a vital bridging operation until we could get the C.I.M. Bill passed and working. Few of us on either side of the House, whichever way we may have voted in the Lobby, could see why it was vital; but Ministers told us that it was and that we should be sunk without it. They said that this bridge was essential and that we must have it to reach the promised land of the C.I.M. which has been disclosed to us today.

But where have we got to on that bridge since 17th December? What use has been made of the powers which were said to be so essential before Christmas? What influence has their existence had as a deterrent in the background? The answer is, none at all—certainly none for the good.

In pleading for an extension of the powers on 17th December, the right hon. Lady said: if output per worker increases by 3 per cent., most pay settlements need to fall within a range of 2½ per cent. to 4½ per cent. if the aim of greater price stability is to be achieved.—[OFFICIAL REPORT, 17th December, 1969; Vol. 793, c. 1379.] What has happened to pay settlements? There have been settlements of 10 per cent., 12 per cent—[An HON. MEMBER: "20 per cent."] Some have been higher. I am talking about the average. What does the right hon. Lady say about "greater price stability" now, and what can the Bill do about it?

Consider what the Chancellor of the Exchequer said in winding up the debate on prices and incomes on 17th December: We should now be able to look forward to a greatly reduced rate of price increase. We could break the price-inflation psychology but not if we have a wage or price explosion."—[OFFICIAL REPORT, 1969; Vol. 793, c. 1476.] What a forecast from the Chancellor of the Exchequer. I only hope that he will be more accurate next week. But, far more important, what an irresponsible lapse in the standard of judgment and advice which the House should expect from a Chancellor of the Exchequer. Did not the right hon. Gentleman know, or even have the slightest inkling of, what was boiling up in industry? If he did not know, he and his colleagues are indeed living in a padded cell at the top of an ivory tower.

Everyone in touch with the real world knew before Christmas what was happening. Everyone knew that what the right hon. Lady and the Chancellor were saying was utter nonsense. They knew that these powers which the Ministers were saying were essential, were useless and would never be used. Yet we went through that charade.

Since that date, we have had a wage and price explosion of the sort which the Chancellor said he thought he could move away from. There have been wage increases in the 10 to 15 per cent. range, with no attempt to attach any productivity strings at all. So far this year prices have been rising at an annual rate of almost 8 per cent., with many more price increases to come. An increase in the price of bread was announced yesterday. Increases in the price of meat, milk and goodness knows how many other foods are soon to follow. There are to be increases in Post Office charges. London bus fares are to rise as a result of the 16 per cent. wage increase announced in the newspapers today.

The situation is appalling. We are in the throes of a roaring inflation. The Government have stood by in the last three months doing nothing. They have refrained from making the slightest use of the powers which only just before Christmas they told the House and the country were essential to prevent what has happened. Cannot the Prime Minister, the Chancellor of the Exchequer and the right hon. Lady see the damage being done by this farce—by the gap between words and reality, between promise and performance? It is a farce; but it is also a tragedy. Cannot Ministers see that this sort of, not just double talk, but absolute gobbledegook destroys the credibility and authority of government as an institution?

Is it any wonder that respect for Government and Parliament and politicians generally is plummeting to its lowest depths? Is it any wonder that people take the law into their own hands on almost every occasion? [Interruption.] Strangely enough, law and order, not only or even mainly in the sense of catching and punishing criminals, but, above all, in the sense of supporting freedom and responsibility, happens to be what democratic government is about. When democratic government has reduced itself to no credibility and no authority, very serious damage has been done. That is what right hon. Gentlemen and the right hon. Lady opposite have done.