Orders of the Day — Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 25th January 1979.

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Photo of Mr John Nott Mr John Nott , St Ives 12:00 am, 25th January 1979

Although the motion refers to a number of vitally important economic issues, I do not think that this is strictly an economic debate. May I say that we welcome a speech from my hon. Friend the Member for Devizes (Mr. Morrison), even in an economic debate, and I was glad that he opened this debate from the Back Benches on this side of the House.

This country is not suffering from a financial crisis—yet. That was the message from the Chancellor of the Exchequer earlier in the debate. However, we are suffering from a crisis of authority, and it is on this theme that I want to close the debate from this side of the House.

The problems which now confront the Government as a result of the events of the past fortnight are, I believe, partly attributable to their economic policies. It is not just that the Government have created an irresistible force by their trade union and labour legislation. It is also because, as one newspaper stated last week, having created that irresistible force, they have sought to turn employers into an immovable object. The Government have sought to do that by their incomes, prices and sanctions policies. Because we have, one the one hand, a near-irresistible force and, on the other, an attempt to create an immovable object, an explosion had to occur. The reservoir was bound to burst.

Perhaps the rigid 5 per cent. policy was chosen for electoral purposes. We do not know, but there has been no election and it has back-fired upon the Government. I think it would have been remarkable, if past experience is anything to go by, if the usual struggle for differentials and relativities had not generated the serious conflict from which this country is now suffering. The Conservatives were right to criticise the Government for the rigidity of their incomes policy. As for the phrase "a return to free collective bargaining", I see from the tomes in front of me that that phrase is used much more frequently by the Leader of the House than it has ever been used by my right hon. and hon. Friends. It was used by him in successive debates not more than a year or two ago.

The causes of our inflation are many and various. I do not atribute all of them to the Labour Government. I believe that they have had great difficulties with the quintupling of oil prices. But the fact is that they fought the last election by encouraging wage expectations. Then, when the situation exploded in their face, they entered into an arrangement with the TUC—in fact, they sub-contracted the running of this country's economy to the TUC—for two whole years. They have now sub-contracted the enforcement of law and order to the Transport and General Workers' Union.

Of course, not all the problems that we face today are created by the Government. But, just as they have faced these problems, it is also worth reminding the House that they have also had unique advantages. Just as we have suffered from the greatest inflation in British history, so also have we experienced possibly the single sharpest addition to our national wealth that has ever occurred. I ask the House to remember what was being widely forecast and believed in 1974, namely, that whoever won the 1974 election would be likely to govern this country for at least 10 years because of North Sea oil. Many believed that at the time, and many hon. Members of both parties were saying it.

The Chancellor today made one of the most useful speeches that I have ever heard him utter. Apart from the opening and closing, which were full of his hectoring and bombast, it was an excellent speech. Its central core was absolutely right. He clearly spelled out the position facing the country and where we stand today if the current crisis is not settled. If only the Chancellor had adopted that tone, instead of pretending repeatedly that every major defeat was a minor victory and that the future contained miraculous recovery, some of our problems would not be so severe today. While he made his predictions, our industrial base has been shrinking and shrinking.

I do not want to go into the Government's spending plans. But, as my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said, last year the Government said that the increase in real terms would be about 2 per cent. In fact, it turned out to be between 7 per cent. and 8 per cent. I believe that this year the Government's expenditure plans will have to be revised, whatever the settlements. I leave that there. But, since the outset of the present industrial chaos, the Government have come forward with only one new proposal in relation to economic policy. I believe that proposal to be an insult to the intelligence of the House. We debate it on Monday.

The Guardian, which is not a Tory newspaper, has described the proposal to abolish profit safeguards as "a futile gesture". Its leader also said: There are occasions when the irrelevant becomes positively insulting". That was The Guardian's view of the Bill that we debate on Monday. In fact, its impact on prices in the short term will at the most be about one-tenth of one penny in the pound. Again, this is an exercise in electoral and trade union cosmetics and is an affront to those who look to this Government to arrest the nation's decline by firm action and words.

At the heart of our dilemma is the fact that, if we erode the incentive to acquire a skill, to work overtime, or to work at all, if we are prepared to go on accepting the immobilities of restrictive practices and the rigidities of the economy, so many of which have been encouraged by the Government—the Employment Protection Act, rent restriction and the Land Commission—that will ensure that our productive potential, which is what this is all about, will in the end keep us at the bottom of the league.

I could embark upon a whole host of woeful economic prophecies for the future. I shall not do so as the Chancellor's speech has done that effectively. But I would like to assure a sense of balance in the debate by making a short reflection on our history.

As believers in the authority of government and the rule of law, surely the whole House must find it profoundly disquieting to know that in the past few days this nation has been effectively controlled by strike committees. In common language they might well be called workers' soviets, because that is precisely what they are. At present, these soviets have come near to total dominance over the processes of distribution in the country, even if they do not totally control production and exchange. We live in a world of validation certificates. To use the phrase of the hon. Member for Tottenham (Mr. Atkinson), we live in a world in which the permission of the pickets is required to allow essential goods to move in and out of our hospitals, schools and docks.

We have an elected Government in office, or perhaps it would be more accurate to say a Government who are occupying offices. They are not in office as such. The Government are openly choosing to run the country through these soviets, thereby acknowledging their authority and giving them a legitimacy. That is wholly bad. It is not only bad for the authority of the Government but it is bad for constitutional government in the country in future.

If I may say so, the occasional mutterings from the bogs of South Down are always a significant echo of some area of public concern. It is appropriate that the right hon. Member for Down, South (Mr. Powell) should choose this week to enjoin us to form ourselves into an alliance with the Soviet Union.

If I were to seek some comfort from the present situation, it would be this. From the days of the Anglo-Saxon chronicle, there have been constant lamentations about the crises of confidence that have arisen in our affairs, and contemporary historians have continually predicted the imminent collapse of ordered society. The saying in the history books God Almighty have mercy on this wretched place. May Christ establish counsel for his wretched people is almost the repeated authentic voice of contemporary historians since the foundation of our nation.

In one respect I have been singing the Prime Minister's song. As far as we can see, he believes that it is only by divine intervention, rather than by any act of his, that the good sense of the British people will be restored. If I may say so, in this he resembles a bland and rather elderly suffragan bishop who, as he approaches retirement, displays a rather cynical resignation about the frailties of the human condition. The Prime Minister does so of the frailties of the people in this country.

At the heart of the problem is that, whether we think of the law, medicine, Parliament, the Army, the Church or, now, the trade unions, in this country we have traditionally organised our affairs in a clublike way. In varying ways, the clubs, now the trade unions—[HON. MEMBERS: "No!"] The trade unions are clubs. Like many other of our professional bodies, they enjoy some sovereignty over their members. They decide recruitment and expulsion. They possess legal immunities and privileges, and they maintain their own courts.

Of course it is true that the justice dispensed in a diocesan court or by the Jockey Club varies somewhat in style and quality from a kangaroo court in a factory—and that was referred to by my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths). But each and every one of these bodies believes itself to be the best judge in its own cause. It defends its privileges with relentless self-interest, achieving benefits at the expense of people generally, according to strength and ruthlessness.

The question facing the electorate at this election, no less than in 1974, is whether the British people will accept that another turning point has arrived in our history when a strong central Government must reassert their authority over the private franchises. The British people will have to decide whether they seek a new Government that actually will change, to try to bring it about and perhaps fail, or whether they prefer to face another five years of sermons from a suffragan bishop pussyfooting around the problems, while things increasingly run out of control, giving more and power to militants and Marxists and the small number of people who are out to destroy our society.

I wonder what the Prime Minister is really thinking. The Labour Government have presided over record inflation, a doubling of our debts in three years—and it took 300 years for them to reach the figure of £26 billion—near-record unemployment and a falling of real incomes. The Chancellor must be about as enthusiastic to present his next Budget as Labour Members are to go through the picket lines, as recommended by the Prime Minister. The Secretary of State for Employment has been defended by the Prime Minister. The Secretary of State said that he preferred the advice and recommendations of his hon. Friend the Member for Salford, East (Mr. Allaun) to those of his Cabinet colleagues, but the Prime Minister said that his right hon. Friend had misunderstood the question. I want to know what question the Secretary of State misunderstood.

Not many weeks ago it seemed that unemployment, inflation, debts and stagnation could all be borne for the friendship, trust and co-operation of the trade union movement. But I turn to Mr. Peter Jenkins to see his comments in The Guardian about the current sitution. The Prime Minister himself presented Mr. Jenkins with an award the other day and in doing so he said that he looked to Mr. Jenkins for enlightenment. He also said: I also read him to find out what I'm thinking. The previous day Mr. Jenkins wrote in The Guardian:The trades union connection in which so much has been invested, to which so many concessions have been made, on which so much fulsome praise and favour has been lavished, has turned into an inflationary and disorderly travesty. Can anybody doubt that that is the truth?

I come, finally, to the most important part of the debate—the whole subject of picketing and the rule of law. The right hon. Member for Bermondsey (Mr. Mellish) said that it would be dangerous and terrifying if Government intervention made things worse. He is an ex-Chief Whip and is in a position to comment on the competence of the Government should they intervene. But, taking the point seriously, this is an uncertain and difficult area of the law. It is why we have consistently demanded a clear and unequivocal statement from the Government and the Law Officers of the Crown about what the law really is. But we have had to wait until today. Why did we have to put down a private notice question to get a clear and unequivocal statement. When we were faced with troubles of a rather different sort in 1972 our Attorney-General, Sir Peter Rawlinson, made a statement setting out the law.

The Home Secretary, who is interrupting me, says he has no power to instruct chief constables. We know that perfectly well. In 1972, the then Conservative Home Secretary called the chief officers of police into the Home Office and talked about the need to ensure that picketing was peaceful and lawful. The whole world knew that the Government were behind the forces of law enforcement. The chief constables knew it; the public knew it. But, frankly, until the Prime Minister's personal statement on Tuesday, at Question Time, the Government's position was ambiguous, to say the least. Even now, the whole world knows that the Prime Minister does not speak for a united party. Ultimately, he chooses to remain the leader of the Labour movement and not the leader of the nation.

I turn againt to Mr. Peter Jenkins, who in that same article said: Mr. Callaghan's dilemma is a grave one. The plight of the country indicates one course of action. The crisis of his party in an election year remains another. Perhaps the tragedy of the current crisis is that Mr. Callaghan is the one person with the personal authority to take the measure of the trade union problem in Britain and carry the public with him—and yet he is constrained by the politics of his party from doing so. I believe that is true. It is a really damning indictment of the Prime Minister and his position.

We had a statement today from the Attorney-General on the law of picketing. I must confess that I think most hon. Members are even more confused now than before he made his statement. The Attorney-General was asked whether intimidation was lawful or unlawful. His reply—I think I paraphrase it more or less correctly—was that it depends whether the intimidation is lawful or not. That is effectively what he said. It was left to my hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) to tell the House about the recent findings of the Court of Appeal and how the Court of Appeal had defined intimidation. Until today, not even Members of this House had had a clear expression of the law from the Government. It was left to my hon. and learned Friend the Member for South Fylde (Mr. Gardner) to make the simple point that, if the law is uncertain, as I believe it is, it should be changed.

In layman's terms, what we have now is not the rule of law but the rule of lawlessness. It is a shocking thing for the people of this country. There are those who say that it is no use passing laws that cannot be enforced; and that, of course, is true. But who is so sure that a clearer and narrower definition of picketing would not be respected and could not be enforced? If the laws of England really cease to express the will of the British people, as expressed through Parliament and developed by the courts, will not the law be brought into greater disrespect? Where else can a free people and a free nation look but to the impartial workings of our courts?

Throughout the day and throughout the week, my right hon. and hon. Friends have questioned the Government on industrial, legal, economic and commercial questions arising from this crisis. And the Leader of the House is one of the principal architects of this crisis. It is no use being told today that the Government seek to bring forward a voluntary code on picketing. We put forward that proposal during the passage of the Employment Protection Bill. It was the right hon. Gentleman and his right hon. Friend the Secretary of State for Employment who rejected our attempt to bring in a voluntary code for picketing. He turned it down.

It is no use the Government lecturing us now about a voluntary code. We tried to put one on the statute book. When that measure was going through the House, the Leader of the House actually apologised to his own hon. Friends because he could not revise the law on picketing to enable pickets to stop lorries.

The Leader of the House was an echo of the trade union movement then and he and the Prime Minister are echoes of the trade union movement now. What the country wants is not an echo but a voice. The country wants to hear the voice of leadership. That is not what is it getting from the Government.