§ The Chancellor of the Exchequer (Mr. Gaitskell)
His Majesty's Government have been asked by the Staff Side of the National Whitley Council to reconsider the possibility of applying the principle of equal pay in the Civil Service. In particular the Government were asked whether, if the full application of the principle forthwith were still impracticable, they would introduce a scheme under which, in the course of a limited period of time, the differences in pay would be progressively reduced and finally eliminated.
527 Four years ago my right hon. Friend the Minister of Local Government and Planning, who was then Chancellor of the Exchequer, announced that the Government, after considering the Report of the Royal Commission, accepted, as regards their own employees and as a broad affirmation of a general principle, the justice of the claim that there should be no difference in payment to men and women for the same work. He went on, however, to make it plain that in view of the cost involved and the consequences to the national economy, the principle could not be applied at that time.
In the light of this statement and in response to the request made to them by the Staff Side, the Government have undertaken a full review of the problem and of the probable consequences of the introduction of equal pay. It is important that these should be widely understood and I should therefore like to explain them in some detail.
Any decision by the Government on this matter could not, of course, be limited in its effects to the Civil Service, but would inevitably have to be extended to those employed in other public services, including teachers and other local government staffs. The cost of the full introduction of equal pay in all the public services would be £25 million a year.
But there would also be more far-reaching consequences. A change of this kind would be a signal to the rest of the community. There are many occupations in private industry and commerce where women are paid less than men for similar work, the difference in pay often being much greater than in the Civil Service. There can be no doubt that the introduction of equal pay in the public services would be followed swiftly by its introduction in other occupations, and that any increases in pay given to women in employments common to both sexes would give rise to similar increases for women employed on purely women's work. Thus the effect of the Government decision would be to improve the position of women in relation to men throughout employment generally.
This is, of course, not an argument against equal pay for equal work; it is in part its logical application and in part a further consequence which many would regard as equally desirable. It is, how- 528 ever, also true, unfortunately, that this process, even if it had no other consequences, would raise industrial costs substantially and so drive up prices further.
In fact, however, it would have another result, which is perhaps not always fully appreciated. The majority of men employees have families dependent upon them; the majority of women employees have not. The introduction of equal pay would mean that the standard of living of a married man with a wife and children to support would compare unfavourably with that of an unmarried woman with no dependants. This would give rise to demands for much larger family allowances, either by an extension of the national scheme or through special arrangements in particular occupations.
Such increases in family allowances, which are indeed in many respects the logical accompaniment of equal pay for men and women, are no doubt very desirable. But, there can be no question but that the cost to public funds and the burden on industry would be very heavy. Prices would go up further and taxation would have to be increased. As the House well knows, our economy is at present subject to powerful inflationary influences both external and internal. In such circumstances it is the duty of the Government to do everything possible to reduce these pressures. Unfortunately the introduction of equal pay would undoubtedly make matters worse.
The Government have nevertheless examined with care and sympathy, and in great detail, the possibility of making some very gradual change which would bring equal pay into operation in the public services over a period. They have, however, come to the conclusion that any proposal which was neither utterly derisory nor plainly inequitable would be followed, as certainly, if less rapidly, by the same dangerous consequences as the full introduction of equal pay forthwith.
It is true that its gradual introduction in the public services would not impose at first such a heavy burden on public funds. But there seems no doubt that such a decision would be followed by the introduction of much more rapid schemes in other occupations, where a similar gradual extension would probably not be practicable at all. This in turn would 529 make it extremely difficult to avoid speeding up the schemes in the public services themselves.
The Government therefore do not consider that they can proceed to extend the principle until the full consequences for the economy as a whole, including any necessary increase in family allowances, can be accepted within a relatively short period of time. That being so they have come with great regret to the conclusion that they cannot for the present depart from the decision announced in 1947. I am informing the National Staff Side accordingly.
§ Mr. R. A. Butler
Is the right hon. Gentleman aware that we on this side of the House have also made an affirmation of our belief in the general principles concerned, namely, a belief in equal pay for equivalent work? Is he also aware that, in carefully worded statements, we have gone rather further? Will he allay some of the undoubted anxiety which will be aroused by his statement that this reform may be indefinitely postponed? Would he also go a little further? As I understand it, there are already certain inroads into this principle in the Civil Service, particularly in the Health Service. Would it not be possible to carry that inroad further by making an advance in other services within the Government? Further, can he tell us whether, taking into account his last paragraph, this reform in future is to be indelibly linked in the mind of the Government with a further addition to the family allowance scheme? If the right hon. Gentleman would answer those points, I think that it would help the House.
§ Mr. Gaitskell
In reply to the right hon. Gentleman, I would say that the Government affirm the principle of equal pay. They believe that this is a right and just principle, and that in appropriate circumstances it should be possible to apply it in full. As regards the question of extending it to various other sections of the public services, I do not think I can add anything to the statement that I have made. I have indicated that the difficulty there is even in any gradual extension. On the last point, it is the Government's view that any serious attempt at introducing the principle in the way that we have indicated would have to be linked with an extension of family allowances.
§ Miss Burton
While realising to the full the grave economic problems of the Government, it is with very great regret that I heard the Chancellor's statement. I should like to ask him whether it is not entirely out of date and old-fashioned still to compare a married man with the single woman? Surely, the comparison should be between a single man and a single woman, and, on the other hand, persons with dependants, irrespective of sex? May I ask the Chancellor whether he fully realises that, when a man grows old and retires from business or work, his former dependants are in a position to help him financially, whereas the dependants of a single woman remain dependants for the rest of their lives?
§ Mr. Gaitskell
In reply to my hon. Friend, I would point out that I did not say that every woman in employment had no dependants, or that every man had dependants, but, as the Royal Commission on Equal Pay pointed out, and I am quoting from their Report:The main significant effect of the change to equal pay would be to leave the married man with a family, whose case is in any event not notably easy, economically worse off than any other member of the community.It is for that reason that we took the view that any such scheme of that kind would have to be associated with an extension of the dependants' allowances.
§ Miss Irene Ward
Is the right hon. Gentleman aware of what a very great blow his decision will be to very many women throughout the country? Can he say why he chose this particular moment to announce it, before the golden jubilee of the women's Civil Service and the occasion on which the delegates of the United Kingdom Government have gone to Geneva to discuss the question of a Convention on Equal Pay in line with the Charter of Human Rights? Is he also aware that on this occasion, which is perhaps rather unusual, I should prefer to withhold my comments until I have studied the full implications of what he has said, but is he aware further that, since the Royal Commission and since the statement of the former Chancellor of the Exchequer that the country could not afford it, £40 million has been added to the salaries and wages of the Civil Service?
§ Mr. Speaker
We cannot possibly debate the matter now. The hon. Lady should only ask questions. Miss Lee.
§ Miss Ward rose—
§ Mr. Speaker
I have told the hon. Lady that she was debating the matter, and therefore I called someone else.
§ Mr. Speaker
No, I am afraid the hon. Lady is not allowed. It is my business to choose, and, as she was taking up far too much time, in my opinion, I decided that I could not allow her to do so. I am afraid the Speaker's Ruling has to be obeyed.
§ Miss Jennie Lee
Is the Chancellor aware that many of us in this House are vividly concerned that equal pay should be linked with a still further improvement in the family allowances, or some other such step? Is he also aware that it would be easier for us to adopt that point of view if we felt that his statement today was accompanied by an understandable plan of Socialist priorities? How can we accept the argument that equal pay brings inflationary pressure when we have got a great deal of inflationary pressure already from the City and other sources?
§ Mr. Gaitskell
In reply to the hon. Lady the Member for Tynemouth (Miss Ward), I would point out that the timing of my statement was simply the result of the Government reaching a decision a few days ago, and that it had no connection with the various other activities which she mentioned. To my hon. Friend, I would say that the plain fact cannot be disguised that the introduction of this scheme now, with all its implications on family allowances, would have very serious inflationary consequences which, in my view, we could not tolerate.
§ Mr. Grimond
May I ask the Chancellor whether his statement, in which he said that he has for the time being, as I understood it, decided against even the gradual introduction of the principle of equal pay, means that even where new scales are being negotiated, as in the case of the teaching profession, he will riot even in those cases do something to give proper expression to the very wide feeling which I think exists that the case for the 532 equity of equal pay is overwhelming, whatever the economic circumstances?
§ Mr. Gaitskell
Nothing that I have said will interfere with the ordinary procedure of negotiations in industry. There has been a marrying of the differentiation for some time.
§ Mrs. Middleton
While regretting the necessity for the Chancellor's statement, may I ask him whether he is aware that the vast majority of women in this country would regard as his prime responsibility and that of the Government the large number of housewives in the lower income group, who are facing very heavy family responsibilities?
§ Mr. Woodburn
Is the Chancellor aware that, while at first sight it seems that it is a handicap on women not having equal pay in industry, many women feel that equal pay would be a serious disadvantage to them and would drive them out of industry, because of economic handicaps in regard to men? Is he not aware that equal pay can be accomplished by reducing men's standards as well as by raising women's standards, and that that might be the inevitable result?
§ Mr. Harry Wallace
May I ask my right hon. Friend, since his statement referred to the Staff Side of the National Whitley Council, whether it is a Government decision which cannot be discussed or negotiated, and whether the Staff Side will be given an opportunity to express its views and invite the Government to review the decision which they have just announced? May I also ask him whether he is aware that the gradual application or approximation of the two standards for males and females during the last war encouraged women to go into industry? Does he not think that the Government should review this decision about gradual application, and so encourage women to return to industry?
§ Mr. Gaitskell
This is a Government decision. There is no reason why the Staff Side should not discuss it. I hope they will, and perhaps I may add that if they have any points to raise, they might draw my attention to them, but I can hold out no hope of a review of the decision at the moment.
§ Mr. Wilkes
If a thoroughly inflationary situation develops, and there are no correct priorities, is it not a fact that, if 533 there should be any chance in the near future of giving to the public any considerable benefit in the way of increased payments of any kind, the highest priority should be given to the sick and the unemployed, and those who are now waiting with anxiety for the repayment of their post-war credits?
§ Miss Lee
May I ask the Chancellor to reply to the point which I put to him, which was in regard to his statement that equal pay at this moment would have inflationary effects, when still greater inflationary effects are evident because of high profits? Can he not give an indication that he will exercise the same severity towards the City as towards women?
§ Mr. Gaitskell
I would say that both these questions raise very wide issues, but I would draw my hon. Friend's attention to the substantial increase in the Profits Tax introduced in the Budget.
§ Mr. Chetwynd
Has my right hon. Friend completely given up the idea of giving equal increments over a period to meet this position?
§ Mr. Gaitskell
Yes, Sir, for the reasons given in my statement. I think that would also lead to inflationary consequences.
§ Mr. Gibson
May we take it that this decision will not mean that, in those cases where local authorities are prepared to consider, stage by stage and grade by grade, equalising pay for their staff, there will be no pressure put upon them by the Treasury to stop them doing it?
§ Mr. Gaitskell
It would not be for me to put any pressure on local authorities in matters of that kind.