Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 20th April 1970.

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Photo of Mr Stan Orme Mr Stan Orme , Salford West 12:00 am, 20th April 1970

I repeat what I have just said during the speech of the hon. Member for Perth and East Perthshire (Mr. MacArthur)—what about South Ayrshire? That was the latest demonstration that we have had of Scottish feelings about the political scene. I hope that the hon. Gentleman will not be aggrieved if I do not follow him in his argument about the selective employment tax, because it is not the theme I wish to pursue. I want to return to a theme which has recurred throughout the debate—the issue of wages and industrial relations as they affect the economy, the Budget and many of the observations made on it.

First, however, I want to say something about the surtax relief in the Budget and the criticism by some of my hon. Friends of that relief, criticism which I fully support. I want to link what I have to say about it with what my right hon. Friend the Member for Sowerby (Mr. Houghton) said earlier, when he referred to extending the claw-back system for paying higher family allowances and doing it, therefore, in a fair and just way.

I say to the Government that there is a limit to the extent to which claw-back can be used unless the threshold is lifted, for otherwise the burden falls increasingly on the specific wage group of between £20 and £30 a week. These workers are not only affected by claw-back. They have to make many other payments as well. Whilst I am in favour of increasing family allowances, it would be better to pay for those increases not through the central band of income tax payers, but through the surtax band. That is why I object to the surtax concessions at this stage. I believe that the philosophy of it is wrong.

I fully support the reliefs my right hon. Friend has given to the lower-paid workers. I only wish that they had been extended further. But, within the terms of what he has distributed, he has done it fairly and in the interests of those who really need it. Whether or not my right hon. Friend could or should have distributed more takes us to the central argument, and the core of that argument is the issue of wages and industrial relations.

Wages have moved to the centre of political debate. It is quite extraordinary. They are raised now as an ogre, just as, a few years ago, we were told that we must be careful of what we said because we might affect the standing of the £, whose parity must be maintained. That was the ogre of those days. Now the ogre is wage claims and settlements. This is said to be the central issue of our problems and the remaining malaise of the economy. I regret that argument.

I am confounded by the Opposition's attitude, especially having gone through the trauma of the statutory prices and incomes policy. I remember the debates we had in this Chamber night after night. We heard some of his most brilliant speeches from the right hon. Member for Enfield, West (Mr. kin Macleod). He could have been in the most militant A.E.F. branch and no one could have got to the left off him. We went through all the argument. The Opposition completely rejected the statutory prices and incomes policy which many on this side also objected to because it would not work, was unfair and would prove to create problems. Those are the problems which are now arising in the economy.

The Opposition were opposed to that policy, but they did not develop their arguments. However, we were told that they were in favour of free collective bargaining and this is why I interjected earlier today in the speech of the right hon. Member for Altrincham and Sale (Mr. Barber). We were told that the Conservative Party believed in free collective bargaining as the way in which negotiations and agreements should be carried on. Yet we are now to understand that, as soon as those agreements go above the level which the Opposition think satisfactory or fair, they must be opposed.

The contradictions in the Opposition's attitude on wages will not be missed by the electorate in general and by the workers in particular, some of whom were taken in by some of the pious arguments the Opposition used at the time of the prices and incomes legislation. Those people will rue that day. We have further evidence of the Opposition's attitude in the speech of the hon. Member for Worthing (Mr. Higgins) last Wednesday. He said: If we consider the increase of 11 per cent. in railwaymen's pay, explicitly with no change in productivity, we find it very difficult to see any justification for it. On the other hand, an increase may be justified in terms of the recruitment and training of nurses. He has thus learnt something from the Selwyn Lloyd poise. The hon. Member added: It is in the public sector we need to take a firm line."—[OFFICIAL REPORT, 15th April, 1970; Vol. 799, c. 1507.] That was an interesting statement. The hon. Member said that there was no productivity in the railwaymen's agreement. That is nonsense. A revolution has taken place on the railways with the co-operation of the railwaymen. In 1961, the number employed by British Railways was 500,434 in all grades; in February, 1970, the number had been reduced to 253,615. That is a 100 per cent. reduction in the number of railwaymen in 10 years. Is there no productivity element in that? Are the men on the modernised, electrified and improved railways not entitled to good wages? The argument about productivity bargaining can get carried to a nonsensical length.

I am all for productivity in industry, but I am not so keen on so-called productivity agreements in relation to wage agreements. So much of it is myth anyway, and has no relation to production itself. Again, when men make productivity agreements, they often give up basic rights in their industry. For instance, one-man buses have been introduced. That represents a 100 per cent. reduction in the number of staff on the buses. I remember asking my right hon. Friend the Secretary of State for Employment and Productivity what the busmen would be asked to do next. Would they be asked to get rid of the driver? There is a limit to what can he done. The Fawley refinery agreement, so often cited as an example, has not proved to be a case of production lagging behind wages, which were lower there than in many other sectors of industry.

I do not accept the argument that one can just use the yardstick of productivity. We talk often about teachers and nurses. There is no way of measuring their productivity. When the Opposition go back to Selwyn, as it were, we see what their answer is to the problems facing the economy. It is to clobber the employees in the public sector. I hope that those employees, as well as all others, will take careful note. I remind them again of what the hon. Member for Worthing said about the railway workers.

The Opposition want to extend that philosophy throughout the public sector. This is the refinement they have. At last, we know their answer to a statutory prices and incomes policy. It is to force the workers in the public sector to accept reductions. The hon. Member for Worthing (Mr. Higgins) is sensitive. He does not include the nurses, but it does not matter whether it is the teachers, the railwaymen, the miners—they are in the public sector. They say, "Refuse them the right to an increase and thereby set a pattern for the rest of the country". We have gone through that and the workers will never go through it again.