HC Deb 21 December 1961 vol 651 cc1558-60
36. Mr. Millan

asked the Chancellor of the Exchequer if he will postpone the operation of the ruling, announced in Command Paper No. 1337 on the financial and economic obligations of the nationalised industries, that nationalised industries shall in future be obliged to finance a larger proportion of their capital expenditure from internal resources, so far as this involves the nationalised industries in raising their prices to the public.

Mr. Brooke

No, Sir.

Mr. Millan

Whatever the rights and wrongs of this policy, is it not obvious that a major change of policy of this sort can be carried out only if some, or perhaps all, of the nationalised industries raise their prices to the public? Is not this a most inappropriate time for that to happen in view of the Government's policy generally? Why cannot this policy at least be deferred until the pause policy has been stopped?

Mr. Brooke

It is the view of the Government and I think of most people that the nationalised industries should, as far as possible, be conducted according to normal commercial criteria.

Mr. Millan

This means bluntly that the nationalised industries at the moment are being forced to put up their prices. How can the right hon. Gentleman possibly justify that in existing economic circumstances when he is calling upon workers, trade unions, and so on, to exercise restraint? Surely this is the most inappropriate time to do that. Is that not what is happening at the moment, that the nationalised industries are being forced to put up their prices? May we have a clear answer to that question?

Mr. Brooke

The hon. Gentleman is implying all the time that the nationalised industries would serve the country better if they were freed from the normal commercial obligations on every private company to do at any rate a substantial part of their capital financing out of their surpluses. Surely that must be right.

Mr. Wingfield Digby

Will my right hon. Friend bear in mind that it is very hard for individuals to save at a time or inflation, that the Government seem to find it difficult to do the same and that an undue amount of national saving is being put on the private sector of industry? If more were put on it through the nationalised industries being excused, it would be a quite unreasonable burden for it.

Mr. Brooke

I entirely agree with my hon. Friend that the nationalised industries should play their part.

Mr. Callaghan

While I think that there is no dissent from the proposition that all industry should endeavour to finance its capital, at any rate to some extent, from its own savings, that is not the question that the Chief Secretary is being asked. He is being asked whether at this moment, when the Government say that their purpose is to maintain the value of wages and that they wish the pay pause to continue, this change should be made in the financial structure of the nationalised industries which will result in their putting up prices to the public.

Mr. Brooke

The White Paper on the nationalised industries was published in April this year, so that hon. Members have had plenty of time to give attention to it. At present, we are seeking to agree with the nationalised industries what the targets of their financial performance should be. That must be the right way to proceed.

Mr. Callaghan

May I ask the Chief Secretary this one further question: are increases in prices to be made by the nationalised industries during the period of the pay pause arising from this change in their financial arrangements about savings?

Mr. Brooke

The prices and charges made by the nationalised industries are matters for the boards of those industries. [HON. MEMBERS: "No."]