Inflation

Part of the debate – in the House of Commons at 12:00 am on 24th January 1973.

Alert me about debates like this

Photo of Mr John Grant Mr John Grant , Islington East 12:00 am, 24th January 1973

I am grateful to my hon. Friend for giving the House that horrific news. We all know of his endearing interest about what is happening in Brussels. I was not aware of what he has just told us.

The danger is that people will be mesmerised by the Government and their public relations machine into believing that what they are getting is what they voted for in 1970. We had weeks of softening up by the Downing Street talks which took place in conditions which guaranteed that there would be a collapse. The public relations exercise was angled in order to persuade people that it was all the fault of the wicked trade unions; they had scuppered the whole policy. Now it seems that open government begins and ends at Lancaster House where we had the studied nonchalance of the Prime Minister in his presidential-style Press conference. There was not a word about the promises he made about the statutory incomes policy and freeze which he had vetoed before 1970. He made it all sound perfectly natural and desirable. These are not supposed to be panic measures, but the Government have been panicked into this situation. It has been forced on them in a crisis. That is the story which is rather skilfully hidden from the people.

I do not want to go into detail about the White Paper because many others have done so and several of my hon. Friends wish to speak, but it clearly fails to deal fairly with the questions of food prices, rents, the current grossly inadequate old-age pension, dividends and profit margins. There is also the sinister attack on the powers of the House over the rights which are to be given to the new boards for prices and pay, which will not be answerable to the House.

The hon. Member for Aylesbury (Mr. Raison) talked about the views of my right hon. Friend the Leader of the Opposition on a national dividend. It has never been suggested that if a national dividend was shared by agreement with the two sides of industry this House would be bypassed in having the last word. That is the essential difference.

I wish to say a few words on the wages question. I accept that any arbitrary freeze—and Governments of all hues have had to introduce a freeze at some stage—is bound to produce injustices and anomalies. But the present freeze is a shocker. I wish to deal with the position of what I regard as probably the worst hit group, namely, low-paid civil servants. As hon. Members know, I act as parliamentary consultant to the Civil and Public Services Association, which is the largest of the Civil Service trade unions and which represents the bulk of the lower-paid civil servants. The more I look at this case—and I have looked at it in some detail—the more I am convinced that these people are being scandalously treated.

The present resentment and bitterness among civil servants is quite unprecedented and it cannot be shrugged off in the way in which the Prime Minister tried to shrug it off today. It has already led to limited protest action. I am bound to warn the Government—I say this advisedly, and there is no secret about it—that there is the real probability of industrial action being taken in the Civil Service. Many Civil Service union leaders—I hope no one will suggest that they are "wild cats"; their record disproves that—reluctantly believe that some form of industrial action is becoming inevitable and will be justified. I do not pretend that that is other than a very grave development in an area with hitherto a totally unblemished record of industrial peace.

I should like at this stage to quote from a letter which I received today. It is typical of many letters which I have received from civil servants about this matter, and civil servants are waiting in the Lobby tonight to lobby hon. Members on it. The letter states: My fellow colleagues and I are fed up with being understaffed, underpaid and of being political toys. Only if the Government restore relativities within the Civil Service as an absolute minimum in their policy of restraint will they avert what seems like a most undesirable set of circumstances. I also resent most strongly the further restrictions of the freedom of the rights of the individual proposed in the aforementioned Bill, so please do inform Lt.-Colonel Heath that if he does not desist he ought to be court martialled and shot by the ordinary, low paid people of this fair land …". I would not concur with the latter remarks—[HON. MEMBERS: "Why not?"]—because I am a kindly soul, but that letter, which was written in anger—it is not a comic letter—is indicative of the feeling in the Civil Service.

Many people in the Civil Service are about 20 per cent. behind people in similar outside employment in their salary rates. They were due to receive catching-up payments on 1st January, but they have been stopped. It appears that they will be very lucky to get half of what is due to them simply to enable them to catch up. That is the price they are being asked to pay for keeping the industrial peace, for serving and for maintaining a system of pay rises by fair comparison which has been a sort of mini-incomes policy.

The Government face a crisis of confidence on their own doorstep. They must allow for exceptional cases of this kind, and doubtless there will be others. The Prime Minister was much too woolly to be convincing in what he said about the Civil Service. Anything could happen between now and phase 3, and it is baldly surprising that civil servants feel unable to trust the Government that far ahead. Why should they? All the while they are falling further behind. There is no suggestion of retrospection in phase 3.

The very rigidity of the policy will be its downfall because there is no adequate safety valve. Unless there is flexibility, industrial conflict is certain. Perhaps it will be not in the Civil Service but among workers we have not thought of. If it happens, it will happen where it is least expected and it will have crippling effects on the national well-being.

When we criticise its policies, the Conservative Party wants to know our alternatives. Today my right hon. Friend the Leader of the Opposition gave a clear picture of the direction in which we would want to go. The national executive of the Labour Party and the Trades Union Congress are producing a joint policy. I am categorically in favour of a prices and incomes policy, but not the Government's policy. Any policy which I support must result primarily from the consent of those principally affected, and that means the ordinary working people, their families and those who are no longer able to work.

The Labour Party and the TUC are on the right road. They have outlined the social and economic package—on growth, jobs, pensions, prices, land, homes and so on—which they regard as essential. But I accept that they must deal in much more detail with the wages situation. It is said that the rôle of wages in the inflationary spiral is exaggerated. I agree. But it is idle to pretend that they do not have any effect. I do not think there is or ever has been any call for the Labour Party to go into complete reverse and suggest that what the party and the unions agreed in 1964 was wrong. I believe that it was right then and that it is right now. But it was never properly tried; it was never given a proper chance.

The Government's package has no lessons for us. My right hon. Friend the Member for Leeds, East (Mr. Healey) has been quoted as referring to it as being in some sense an arsenal for Socialism. I am a Socialist, and the Arsenal is my constituency football team. I wish them both every success. But I cannot agree with my right hon. Friend that the Government's package is an arsenal for Socialism. If it is an arsenal, it is an arsenal of popguns. However, we on this side of the House cannot duck the pay issue.

I accept what my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said about the crisis of capitalism. However Socialist we seek to be, we do not expect the mixed economy to vanish overnight. Our job is to change the mix and to persuade the people that there should be a change. Meanwhile we need an incomes policy. Perhaps the Government are helping us a little in this respect.

I repeat that we can do this only by consent. I believe that the Labour Party can achieve that consent. It is perfectly understandable that the trade unions find it impossible to accept the unfair and unworkable package presented to it by the Government, which have bullied and bashed them ever since they came to office. Equally, it would be surprising if the trade unions refused to co-operate with a Government pledged to carry through so many of the changes which the unions seek and so many of the changes which have been worked out jointly, and I believe that they will cooperate in the best interests both of their own members and of the community as a whole.