Mr. Anthony Wedgwood Berm:
I beg to move to leave out from "House" to the end of the Question and to add instead thereof:
has no confidence in the policies described in the consultative document on the Price and Pay Code (Command Paper No. 5247) and believes that the problems of inflation now require the adoption of socialist policies demo-critically controlled by Parliament along the lines indicated in the Joint Statement issued by the Labour Party and the Trades Union Congress on 28th February.
I begin by congratulating the right hon. and learned Gentleman on the good-natured and good-humoured way in
which he presented the Green Paper. The debates on the Counter-Inflation Bill, both in the House and in Committee, were of a high order, and today's debate is a continuation of that process.
The nub of the Minister's argument, and he came to it at the end of his speech, is that the gravity of the crisis confronting the country is such that the nation as a whole should rally round the Government's policy as being the only policy capable of solving the problems. No one on this side of the House will dissent from what the right hon. and learned Gentleman said about the gravity of the crisis. The rate of inflation is very rapid indeed, even during the freeze, and certainly in respect of fresh food prices. The balance of payments position is worsening, and there is widespread industrial unrest which can no longer be dismissed as being the view of a minority of so-called militants.
There is low investment. Despite two and a half years of rule by a Government who put investment high upon their election objectives, there was a drop of 10 per cent. in real terms between 1971 and 1972. There is an international monetary crisis, about which we shall no doubt hear more when the Chancellor presents his Budget tomorrow. There is a collapse of confidence that is widespread throughout the country. We therefore do not dissent from the Minister's view that there is a serious crisis, but we do not for one moment accept that there is only one answer to it or that the Government have provided that answer.
The Opposition case in this debate can be briefly stated. It is that, less than three years after coming to power on a programme of unrestrained competition within a market economy, the Government have completely abandoned that policy, they have plumped for a managed economy on corporate lines, they have undermined first industrial and then parliamentary democratic control over major economic policies, and they have brought about a major confrontation with large sections of the community, with important implications for the future. The Opposition believe that the time has come to seek a new national partnership on the basis of Socialist policies democratically controlled by Parliament that meet the needs, and therefore command the support, of the nation.
Today's debate is in a sense much more important to this country's future than tomorrow's Budget speech. The reason is that the Chancellor has the power to impose his Budget unilaterally upon the nation, whereas the code which we are discussing will not work without the support of the whole nation.
This code, if it comes into effect under this legislation, will mark the end of free enterprise as we know it and will usher in an era, not of Socialism—I entirely acquit the Government of any intent in that direction—but at least of State capitalism or something like it which is totally contrary to the principles upon which they presented themselves to the electorate in 1970.
This code is, of course, only one of a number of measures that the Government have introduced in the last two-and-a-half years. The Government Front Bench are still unaware, or appear to be unaware, of the magnitude of the changes that they have carried through in the system of the economy in which they profess to believe. I want to remind the House, briefly, of the powers that this Government have taken in the last two-and-a-half years, so as to set a background against which we can debate the code.
First, in the Industrial Relations Act the Government defined for the first time a wholly new concept in law—an "unfair industrial practice". I believe that I am right in saying that such a concept was utterly foreign to our law before. If there is to be an unfair industrial practice in respect of disputes, there are many people who are arguing that there are other things which are unfair industrial practices, including, for example, asset stripping, insider dealing or land speculation, and the Government have at any rate provided a future Labour Government with a precedent for dealing with such practices under an umbrella phrase like "unfair industrial practice".
Next, the Government are seeking to take power to control a privately-owned company in the interest of its customers. Clause 20 of the Insurance Companies Bill, now before Parliament, gives the Secretary of State the power to give any directions he wishes to an insurance company in order to protect its policy holders. Under the same Bill, the Government have also asked Parliament to give them the power to ask any insurance company to produce the books, all the books, and people to explain them to any duly authorised officer appointed by the Secretary of State. Under Clause 2 of that Bill they have asked for the power to approve the names of directors of insurance companies and they are seeking to give the Secretary of State the power to remove directors whom he regards as unfit.
Take another case. They have also taken the power—in this case under the Housing Finance Act, but it makes no odds—to put in a commissioner if a Minister's directive is not obeyed. If one can have a housing commissioner, there is no reason why one should not have a "production commissioner" as part of the same tradition: sending in an appointed officer if a company does not obey a ministerial directive.
Under paragraph 6 of the White Paper "A Programme for Controlling Inflation", they have defined in clear language "the commanding heights of the economy" as Category 1 firms. Indeed, the Minister for Trade and Consumer Affairs gave us a definition today of how many such firms he regarded as constituting the commanding heights of the economy. I have some figures, which he broadly confirmed, to show that the top 100 firms in this country in 1950 accounted for 20 per cent. of our gross national output. In 1972, the top 100 firms controlled 50 per cent. of our output, and the forecast of the NIESR is that, in 1980, the top 100 firms will produce 66 per cent. of our national output.
The Government are seeking powers to force these companies to submit detailed reports to them before any major decision can be taken on prices, investment or anything else. Under paragraph 28 of this code, as the Minister confirmed today, they have taken the power to supervise the internal operations of multinational companies. I asked the Secretary of State for Trade and Industry about this, and the Minister later confirmed it.
Ford, General Motors, Chrysler, IBM and the oil companies can, under this provision, be required to reveal sufficient information for the Government to judge whether or not they are engaged in arm's-length trading.
Under Clause 12 of the Counter-Inflation Bill 1973 they are taking power to require periodical returns of information. In Committee I asked the Secretary of State for Employment whether that information could be used for criminal prosecutions, and received from him a provisional reply which he later found it necessary to modify in a letter. In that letter, after reminding me of what I had said in Committee, the right hon. Gentleman wrote:
This brings me to the point about offences. If an organisation of workers commits an offence under Clause 14(2) of the Bill the fact will normally be obvious since the offence consists in bringing pressure on an employer in the ways described in Clause 14(3). Thus, I do not think that it would normally be necessary to use the powers in Clause 12 to obtain information about such an offence, although I cannot altogether exclude the possibility. By contrast, the fact that a business enterprise which was the subject of an order or notice applying the Code was not complying with it might never become evident at all if they were not required to provide relevant information under Clause 12. It is mainly for this reason,"—
for the purpose of potential prosecution—
incidentally, that this power needs to operate in respect of any period when Part II powers are in operation.
Formidable powers indeed, and their motive is to police Government policy.
The Government also wish to take power under paragraph 38 of the code to control profit margins and, under paragraph 49, to monitor investment plans. They want to take power to amend existing legislation or future legislation by order under Clause 8 of the Counter-Inflation Bill, following a similar provision in the Counter-Inflation (Temporary Provisions) Act, under which steel prices in this country are today held below the level required by our membership of the Common Market.
To take the House back to earlier legislation, now perhaps half-forgotten, the Government also have the power, of course, if they choose, to provide money for investment themselves without allowing prices to rise. It is quite clear that under Section 8 of the Industry
Act 1972 the Secretary of State may, with the consent of the Treasury,
provide financial assistance where, in his opinion—
Of course, the powers that the Secretary of State has are powers of acquisition of loan or share capital, acquisition of any undertaking, or any assets and so on.
Finally, under the famous Rolls-Royce (Purchase) Act, the Government have already set a precedent for a one-clause Bill to take over a firm which they believe they should take over.
I have rehearsed the achievements of two and a half years of Conservative Government, not to imply that the Government have become Socialist—for they have not—but to show that they have made a very good job of burying the capitalism to which they have hitherto been so deeply committed. Given this, given that they are now not only picking up lame ducks but, as some would say in the CBI, are going for the goose that lays the golden eggs, there is not just one option open to Parliament and the nation as to how to proceed. There are at least three options.
The first is that one could go back to the market economy and forget the enforcement of these powers. But that does not find favour with the Cabinet, which has tried it and believes that it has failed. The second is to evolve the present policy further along the road to a corporate State, managed by agencies and boards and enforced by the courts, all of them beyond the control of Parliament. But this, almost by definition, because the democratic element is abstracted, involves a decision to manage the country specifically without the consent either of industry or of organised bodies of workers. The third course open to the country is the one advocated in the amendment—that we should go on to greater public ownership and greater equality and democracy, with Socialist measures, since there is no longer any argument about interventionism between the two sides of the House.
If the argument is not one of interventionism versus the market economy, and if we are to have intervention anyway, let us ask the real question: in whose interest is the economy to be managed? Is it worth preserving a system which has been mummified, like Tutankhamun himself, by the Government in their major alteration to the market system, to which they were committed?
Of course, if we are to come to this question, all sorts of new areas of policy and possibilities open up. The argument about inflation and about prices and incomes is no longer a peripheral argument in our society. It is now the central question.
All previous prices and incomes policies have concentrated on the role of wages as the principal cause of inflation. But in the present prices and incomes policy it is manifestly not true that wages are the dominant cause of inflation. It is manifestly true that the Government are taking sterner measures, or so they claim, against prices than have ever been contemplated before.
All previous prices and incomes policies have commanded the support of the centre in British politics, however unpopular they may have been. The relatively few critics, from Right or Left, could safely be dismissed as militants or extremists who did not accept the policy. But that is manifestly not true now that the civil servants, the health service workers, the nurses, the TUC, the Labour Party and large sections of the Conservative Party do not accept that this is a good policy.
It could be argued that all prices and incomes policies in the past were designed in some way to leave the mixed economy to work as normally as possible. But this code is now so severe that the working of that system is itself in effect suspended, like the money markets this week until the international monetary crisis is resolved.
All previous prices and incomes policies were seen as being secondary to or supporting other policies which had already been prescribed by the Government. This time the prices and incomes policy is presented as central, and is seen as being central, as being an argument about the whole nature of our society—who gets what and why. The introduction of such a policy is a complete break with all past policies.
I do not mock the Conservative Party for its change of policy since 1970, although it would be easy to do so. I do not mock it because I believe that what is really important about the Government's change of policy is that the Government genuinely and sincerely believed in free enterprise in 1970 but have been reluctantly driven by experience to abandon their own policy and to introduce policies which even now in their hearts they do not like but know they cannot escape. I want to analyse this experience so that the House can understand how it came about that men who would rather not have done it were driven to the course of action which they have taken.