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 Joel Barnett Mr Joel Barnett , Heywood and Royton 12:00 am, 8th April 1970

Here we are starting something, a whole investigation. We are asking the Commission to investigate and report, without the House having decided that that should be done. We all recognise that there could be cases in which there should be an investigation, but the registrar may not want it.

Equally, there could be cases in which the House may not want an investigation. I have in mind the present I.C.I.-Viyella situation. It may be that a lengthy inquiry is not necessary, but merely a quick one, without a report from the Monopolies Commission. The registrar, on the other hand, might decide to go through the whole lengthy business of an investigation and a Monopolies Commission report. There are serious objections to leaving this power in the hands of somebody outside.

I come to the question of how the power should be exercised. Obviously, it must be exercised effectively by an adequate sized commission. Schedule 1 of the Bill gives the Minister power to vary the size of the Commission. I referred to this on a previous occasion, and I am happy to see this provision in the Bill.

The question then arises of how frequently one should expect the Commission to carry out investigations, and how many investigations there should be. When my right hon. Friend the Member for Battersea, North (Mr. Jay), the former President of the Board of Trade, introduced his Bill in 1965 he said that perhaps companies having more than half of a market should always be investigated. I therefore tabled a Question to find out how many such companies there were, and how many had been investigated. I was told that there were about 156 companies.

Following the receipt of that information, I was told by an hon. Member that he thought that one company had been missed out. He seemed a little upset about it. But even if there were only 156 companies, we know that only 10 were investigated. I understand and accept that because I cannot state that because those 156 companies have control of more than half a market they should be investigated. Clearly, one must look at each case on its merits. That is why this is a clear case in which pragmatism, and not dogmatism, should be the order of the day. As I say, one must look at each case on its merits.

We need to look at more companies, not in the narrow sense, but in the sense to which I have referred before; namely, in the wider economic sense that so many of them are failing the nation. The danger is not that we are investigating too many companies, but that the deterrent effect of the Bill could work against the wider public interest by causing stagnation in the board room. That is why, when the right hon. Member for Mitcham referred to the effect of the market on the board rooms of the country, and told us how, without what the Government were doing they would go ahead and not be enervated, I though that many board rooms would not recognise themselves from the right hon. Gentleman's description. Certainly, they would have have done prior to 1964, when one saw what had happened after 13 years of freedom from a Labour Government.

There is still the possibility of stagnation in the board rooms if we rely too much on a Monopolies Commission and the work that it can do. This is the real argument for the I.R.C. and its work in the opposite direction. This is why we need an I.R.C. We must have the stimulus of this kind of organisation which will do the work of encouraging the right sort of merger. I should like to see the corporation given further stimulus, because the work of any monopolies and mergers commission can have only a marginal effect on efficiency.

If a monopolies and mergers commission can have only a marginal effect, the prices and incomes part of the Bill will have a non-existent effect on efficiency. The tragedy of the prices and incomes part of the Bill is not just that we are back to square one. It is that we are back to pre-square one.

I do not speak as someone who wants legislation on prices and incomes. I did not vote for it. I speak as one who wants a prices and incomes policy, but not for a short-term manipulation to deal with the so-called wage explosion. There is as much nonsense talked about that as there was by the right hon. Gentleman about many other things this afternoon. The talk ignores, for example, what is happening to our international competitors who have similar problems. In Europe, for example, we find this so-called wage explosion. Not only do they have the same problem, but they have failed to deal with it, in precisely the same way as we have.

I do not pretend that the level of wage increases is not serious. Of course it is, but one could have a more serious situation. One could have no inflation at all, as there was in the 'twenties and 'thirties and we know what happened to the economy in those days. I do not see inflation as being quite so bad as some hon. Gentlemen opposite do, because for me, inflation, the balance of payments, the £, or the parity of it, are not at the head of my list of economic priorities, certainly not at the expense of economic growth and full employment.

But when all the facts have been stated about a wage explosion, and when all the demands for action have been made by all the Press commentators, we see that at the end of these learned articles no new way is suggested of dealing with the problem, for the simple reason that there is no new way of dealing with it.

When we realise that there is no new miracle method by which to deal with the prices and incomes part of our economy, we realise, also, that the trouble with the prices and incomes part of the Bill is that it has lost sight of the objective. It is perhaps worth reminding the House, if only briefly, of what my right hon. Friend the Member for Belper (Mr. George Brown) did way back in 1964. He came to the House with a statement of intent, signed by the leaders of both sides of industry. It is worth recalling at least part of that statement. Paragraph 10 stated: We therefore undertake, on behalf of our members: to encourage and lead a sustained attack on the obstacles to efficiency, whether on the part of management or of workers, and to strive for the adoption of more rigorous standards of performance at all levels; to co-operate with the Government in endeavouring, in the face of practical problems, to give effective shape to the machinery that the Government intend to establish for the following purposes: It went on to deal with prices and incomes, and so forth.

I am sure that the gentleman from both sides of industry who signed that declaration are honourable men and meant what they said. But they found that, while in theory it sounded fine, in practice it did not work out quite so easily. The trouble was that we tried to force them to use that policy for short term economic ends. The question now is how we are to achieve the objective set out in that document.

We shall not do so by the Bill. The one thing wrong with it on prices and incomes is that it ignores the traumatic effect of the last 5½ years. That is why we are back to worse than square one. We cannot start in the middle as if nothing had happened. We have to start all over again. A prices and incomes policy, we have always said, is impossible to impose. Willing co-operation is needed. But if the leaders of industry who signed that document in 1964 really meant it, that co-operation must be sought all over again. We shall not help to get it by what is in this Bill. The sooner we make a start on seeking that co-operation, the sooner we will arrive at some form of solution.