Budget Resolutions and Economic Situation

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

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Photo of Mr Tony Benn Mr Tony Benn , Bristol South East 12:00 am, 12th March 1973

The matter was not put for decision at the Shadow Cabinet and if the hon. Member believes everything he reads in The Times that also explains his difficulty.

The real issue facing both sides of the House is that even a statutory policy requires consent. Therefore, the Budget has to be judged by the extent to which it contributes towards making that consent possible. When the Government last autumn at Chequers claimed to try to get a voluntary policy, they drew from the trade union movement the offer of a voluntary policy if the Government were ready to provide statutory price control. The Government chose last October to reject the offer of a voluntary policy on wages in return for statutory price control.

The basic fact is that the Government claim even now that phase 3 will be operated on a voluntary basis, but phase 3 cannot be voluntary unless there is the combination of a statutory price control and also a much greater measure of social justice. That is the way the public see the prices and incomes problem and one day the House of Commons will have to learn to see it that way, too.

May I put it even more crudely and vulgarly to the House. This is a problem about the prices and incomes policy: how can those earning over £5,000 a year—and that includes Ministers in both Governments because of the scale of ministerial salaries—earn the right to say to those earning far less than £5,000 a year, who have now acquired a bargaining power to improve their conditions, "Wait, because if you push your bargaining power you may create serious inflation"?

That is the problem. It has never been put in that way in the House, but that is the way in which it is seen by the public as a whole. Those earning over £5,000 a year are the managing directors and the chairmen of the boards of companies who are responsible for industrial negotiations. They are the civil servants who devise the incomes policies; the Ministers of both parties who have to advocate those policies; the broadcasters who comment on incomes policies; and the editors who write the leading articles about them.

I return to the The Times, which had a leading article on Saturday—[Interruption.] I am talking about a leading article. That leading article, presumably written by the editor, called for "heroic" measures in incomes policy. The writer rebuked my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) for not being heroic enough. I rang up The Times today to find out whether the editor's salary was published. Of course, it is not. It is not even made known for others to comment on. The salary of the Director-General of the BBC is not made known.

The British public will no longer, or not for much longer, be prepared to accept lectures from well-paid people with high tax reliefs granted by the present Government, people whose salaries are individually negotiated, who enjoy a large number of personal perquisites, who have the advantage of secrecy, so that people do not even know what their salaries are, telling the large body of workers, including many lower-paid workers, that they must accept restraint.

That is the change between the present Budget debate and many of those in the past. The relatively small number earning over £5,000 a year—about 250,000 of them—are talking to a body of people who do not enjoy anything like the same living standards. They are talking to 4·6 million people living on supplementary benefits; to the working poor, 50,000 men who are at work, and still earn less than supplementary benefit levels; to 140,000 on family income supplement; to engineering workers whose basic rates are such that a skilled engineering worker will reach only £25 a week next August, although actual earnings in the industry are much higher. They are talking to large bodies of workers who do not enjoy the same advantages, and who will not accept what the Government say as the only solution to the problem.

I even take the claim that is sometimes argued to be unpopular, the Ford workers' claim for an extra £10 a week. But if productivity merits a £10 increase for the Ford workers, is it so very obvious that it is more socially just that all the benefit of that productivity should be left to Henry Ford to invest his money in Spain, where the trade unions are illegal and he will obtain a better return on his investment? And how does it so ob- viously help the lower-paid worker if the Ford worker is restrained by an Act of Parliament and Mr. Henry Ford can move his capital abroad?

Those are the issues that have been skilfully concealed by technical complexity, by the way in which Ministers explain the technical aspects of budgetary problems. The eyes of the Chancellor light up as he discovers a new detail of an adjustment to an inheritance tax that he can make for the benefit of his own supporters that he has been able to conceal in the past. [Interruption.] That is what it is about. Let us have a little truth in the House. Why do hon. Members imagine that £2 million, £3 million or £4 million was put into the Government's election campaign by business people, if they did not expect a return on it in successive Budgets?

The plain truth is that the time when it was possible to cover up and conceal what the Government—any Government—has done is over. We are at the end of cosmetic politics, when it was possible to keep things separate and hope that the public did not understand what was happening. The hon. Member for Bosworth is the last of the cosmetic politicians. He rose with a little pancake make-up to try to persuade my hospital workers in Bristol that it was the rich who were being taxed by the Chancellor and that they were very well off. They know it is not true. That is the change that has occurred this year.

The argument that my right hon. Friends and I have advanced for social justice over many years acquires a new importance, because without social justice it is not possible to buy consent for the Government's counter-inflationary policy. The only way in which the Chancellor can realise what he claims to want—that there should be support for a genuine counter-inflationary policy—is to take some notice of the joint statement of the policies advocated by the Labour Party and the TUC.

If the Chancellor does not like extra-Parliamentary action, if he does not like industrial disputes, let him listen to the demands of working people reflected in that joint statement calling for permanent statutory price controls; food subsidies on essentials; a rent freeze covering the Housing Finance Act; a special tax on gains from land speculation; a larger council house building programme; a redistribution of income in favour of the less well-off at the expense of those fortunate enough to pay 90 per cent. on a part of their income; a phasing out of social charges; a higher rate of pensions towards the £10 and £16 basic for single people and married couples; a reduction of all defence expenditure in the direction at any rate of the proportion of GNP devoted to it by other Common Market countries; control of capital movements, to deal with the Ford point to which I referred; good regional policies, including the maintenance of regional employment premium; and a greater degree of accountability of industrial power. The only way in which the Government can realise their objectives is by meeting the demands of people whom they are now trying to keep down by the use of the law.

We face a genuine crisis in our mixed economy. I realise, and I think the House realises, that the policies I have advocated, the policies that have emerged from the trade union movement and the Labour Party together, would involve even more fundamental change. But I must thank the Government Front Bench for making it easier. When some years ago we advocated such policies, the arguments thrown against us were that to carry them out would involve controls. Well, we have controls. It was argued that it would involve inspectors. We have inspectors. It was argued that it would involve direction of the economy and the end of the market economy. The market economy has at any rate been put on ice during phase 2. It was argued that it would affect profits. Profit margins are in any case now to be controlled. It was argued that it would affect investment. Even in two-and-a-half years of government in which they have pursued absolutely freely the policy they wanted, the Conservatives have totally failed to bring about the investment that they know to be necessary, even though they encouraged high profits wherever they had the opportunity to do so.

I do not say that the Chancellor has stolen our clothes, but he has obligingly taken off his own. When the debate against democratic Socialism takes place, he will, in Aneurin Bevan's phrase, go naked into the conference chamber, because the managed economy has already been conceded. It is a managed economy in the interests of the working people that is now the main item on the agenda.

In the absence of a readiness to adopt those policies, the Government have only one line open to them. It is to intensify the campaign against the trade unions and to try to develop the concept of militancy as spreading so widely throughout our society as to endanger the fabric of society. That is untrue. The civil servants, the agricultural workers, the gas workers, the hospital workers, all people now engaged in seeking to defend their standard of living, are people who are demanding justice and no more.

This Budget will be remembered for a change in public attitudes towards the rôle of equality in society. I put it to the House on behalf of my hon. and right hon. Friends that we need a clear commitment to a just society and we need to resolve to use our powers to get it. We must have an end to confrontation, to concealment, to the deliberate attempt to confuse people into thinking that they are better off than they are.

There is no guarantee that new policies will solve problems as difficult as those confronting us. There is no one in the House, in Government or in Opposition or among the Liberal Party, who can say with any measure of absolute certainty that if the policies they advocate were put into effect the problem of inflation would be easy to overcome. I and my right hon. Friends believe that the best chance of success is to talk plainly and honestly to the people about the nature of the problem, to listen to what they are saying to us and to respond to them.

I do not believe that the present policy can succeed, for one reason. It is that the Government have absolutely failed to give to the people any vision of any sort or kind of a society that will have anything offered to it but a measure of growth to be bought at the expense of authoritarianism and a diminution in democratic rights. The vision of their manifesto of 1970 is dead. The vision of Europe, offered as a panacea to all of our problems, has been shown not to be panacea but to present new problems. What the Government must offer to the people is something better than deepening inequality of a kind which the Chief Secretary has contributed to achieving this year. Until some Government call forth the best in the British people that Government will not gain the response, which we must have, if we are to solve this or any other problem.