Orders of the Day — Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 7th November 1972.

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Photo of Mr John Grant Mr John Grant , Islington East 12:00 am, 7th November 1972

We have heard quite a few fond remembrances about incomes policies in the past, and that has all been relevant. I thought that my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) made a particularly interesting contribution to the debate, but I do not want to go back as far as he did. I propose, instead, to say something about the things that led to the Downing Street talks.

One should say straightaway that any Conservative Government dealing with organised labour starts with a considerable handicap, because most of the trade unions regard a Conservative Government at best as some kind of employers' nark and at worst as their outright enemy. When, on top of that, the Government come into office and bluster, swagger and take the dictatorial attitude of saying "We know what is good for you", then that natural handicap becomes virtually impossible to overcome. This Government did not merely throw down the gauntlet to the trade unions. When they came to office they threw their entire attire at them. They stood there quite naked in an anti-union posture.

In fact, it was not just a question of their being anti-union. The Government have shown an overall prejudice against ordinary working people to an extraordinary extent. If we consider the record, the action on rents, on school milk and meals, on schooling generally, their attitude to students and towards employment and industrial policy and their obsession with competition—that is a word which hon. Members opposite seem to have dropped from their vocabularry these days—we can understand the situation at Downing Street.

As my right hon. Friend the Member for Leeds, East (Mr. Healey) said, what we have seen is a redistribution of wealth in favour of the better-off in society—the surtax payers and the stock option holders—which has been little short of an incitement to trade union leaders. Then, of course, having "socked it to them" in this way, the Government decided to change course. They realised that they were getting themselves into an increasing mess, and they changed their slogan, saying "If you can't beat them, woo them." Superficially at any rate, the words lately have been much more soothing, even if mouthed by the same protagonists.

Whether they really wanted a deal at Downing Street is a matter for conjecture. I share the view of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer)—on balance, it was something of a cynical public relations exercise. That is why the Government refused to budge on the £2 figure at the end of the talks, a figure which up till then everybody had expected to be negotiable.

The message from those Downing Street talks was that it was too little and too late. It is no good pretending that the last two years just have not happened or that, after some of the things which transpired over that period, the climate could now be altered sufficiently.

We now come to the splendidly titled Counter-Inflation (Temporary Provisions) Bill, with its freeze and its fines and its court proceedings, the whole lot comprising the policy which the Prime Minister so blithely opposed in 1966 and thereafter. It is, however, fair to say—there is a real distinction here—that the situation then was not set against the background of the handouts to the rich that I have mentioned.

It is time that the Prime Minister or the Chancellor or the Leader of the House, if he is to wind up, considered standing up to say that their attitude in 1966 was wrong. They could not have been right then and right now. That just is not possible.

Many of us on this side—I would say the majority—certainly including myself, believe that a prices and incomes policy is necessary, and we will certainly work for one under a Labour Government. We have a party conference decision to the effect that that is the way we should be going. It is also worth mentioning that several countries now have statutory control of prices to a considerable extent without similar control on wages.

But such a policy cannot hope to succeed if it is rushed in in a crisis as a short-term expedient. In that case, it is bound to be an exercise in futility. Nor can it be seen as the central plank in any Government's economic platform. It cannot take that kind of strain. That was probably the major mistake of the last Labour Government, and it is one which this Government are repeating. They simply have not learned any of the lessons of that period. It certainly cannot work unless the social and economic background is right—and that lets this Government right out.

There will obviously be some long and fierce debates before that Bill is through the House, and I do not intend to try to anticipate them, except to say that it seems quite clear that, on the basis of the Bill as published, there is to be a control of wages far more rigorous than anything which is envisaged for the prices. We have heard a fair example from the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor) of the difficulties in any kind of price control. Certainly, as envisaged by this White Paper, even on the basis of one day's evidence, the Bill is a nonsense in this respect. There is also the question of dividends. A dividend frozen today can be paid out tomorrow. Wage earners cannot catch up in that way.

It is against this whole background of Government social and economic policies that we on this side are united in saying that this package is totally unacceptable. The legislation will serve only to embitter still more the feelings in industry. It will certainly do nothing to contribute to the long-term development in economic management which the White Paper rather touchingly describes as "agreed objectives".

Finally, I emphasise that it is pointless for the Prime Minister once again to try to shift the blame for this situation to the trade unions and to talk so glibly about "acting in the national interest". This is a crisis of the Government's own making. There may be international implications, but the real crisis of confidence is that of ordinary people in the Government. They are bewildered by the incredible twists and turns of this Government which led even The Times political correspondent to describe the Prime Minister as a "pliant pragmatist". That was a correct description but it did not go far enough. The Prime Minister is now revealed as both pliant and dishonoured: he may be described as the "Dodger of Downing Street".

This House and, even more, the electors who returned the right hon. Gentleman to office are entitled to a straight answer to the question that he constantly avoids—he avoided it again at Question Time today—why he pledged the utter rejection of statutory wage control in his election manifesto. On this, as on so many other matters, this self-styled "man of honour" has betrayed his mandate. I share the view of my right hon. Friend the Member for Leeds, East that it is high time he gave the country the chance to show what it thinks of him.