HC Deb 03 August 1961 vol 645 cc1632-3
20. Mr. Ridley

asked the Chancellor of the Exchequer what estimate he has made of the percentage increase in salaries, dividends and wages which the country can afford this year.

Mr. Barber

As my right hon. Friend said in his statement on 25th July, his view as regards increases in wages and salaries is that there must be a pause until productivity has caught up and as regards dividends that a further general increase this year would not be justified.

Mr. Ridley

Does not my hon. Friend agree that this goes to the very crux of our economic problems? Will he give the maximum publicity to this statement at this time? Does he agree that this is the best way in which he can help the holders of War Loan in future?

Mr. Barber

I agree entirely with my hon. Friend in saying that this goes to the crux of the problem. I think that hon. Members on both sides will agree that what my right hon. and learned Friend has said about this matter has already received considerable publicity, but I know that he would be grateful not only if it could be made more widely known but also if it could be explained in more detail.

Sir G. Nicholson

Is not my hon. Friend aware that these exhortations have been made in the past but have quickly worn off and had no effect? Will he consider suggesting to his right hon. and learned Friend that he writes to the chairmen of boards of public companies stressing and underlining the need, both economically and psychologically, for restricting increases in dividends?

Mr. Barber

I will certainly draw that suggestion to the notice of my right hon. and learned Friend.

Mr. Lee

Has the Economic Secretary any idea how long the pause will last, because the Government's economic policies look like making it a permanency before production rises?

Mr. Barber

No. The length of the pause will obviously depend on how we get on. I am bound to say that I am surprised that what my right hon. and learned Friend has said does not have the support of the hon. Gentleman. After all, to consider last year alone—between the first quarter of 1960 and the first quarter of 1961—wages and salaries per head rose by 7 per cent. In the same period productivity rose by less than 1 per cent. What my right hon. and learned Friend has said, as regards both wages and salaries, and dividends, is reasonable and I believe that it will have the support of the majority of people in this country.