INCOMES POLICY

HC Deb 04 July 1962 vol 662 cc590-652

7.0 p.m.

Dame Irene Ward (Tynemouth)

I beg to move, That this House congratulates Her Majesty's Government on initiating a policy designed to control inflation and to stabilise prices but calls on the Government to expound the policy with greater clarity; regrets that its application has not been uniform throughout the public and private sectors, and that private industry has not always been stimulated sufficiently to co-operate; recognises that any policy applicable only to the public sector would be unfair to public servants and could not be indefinitely maintained; and calls on the Government to announce its future policy for an overall fair plan with a positive outline as to its future intentions.

Mr. Speaker

It may be for the convenience of the House if I say that I propose to call the Amendment standing in the names of the hon. Member for Grimsby (Mr. Crosland) and other hon. Members, should it be desired to move it.

Mr. Ellis Smith (Stoke-on-Trent, South)

I want to make it clear that I realise that it would be out of order to challenge in any way your decision on which Amendment should be called, Mr. Speaker, but if I understand correctly the Standing Orders and the Parliamentary procedures as laid down in Erskine May, it is permissible to ask Mr. Speaker to be good enough to explain the basis on which he has selected a certain Amendment.

Mr. Speaker

I do not think that I am under any obligation to do so, but as a matter of courtesy to the hon. Member I can tell him that neither Amendment materially narrows the scope of debate, so that the hon. Member and all other hon. Members concerned can express their views in the debate. Of the two Amendments tabled, I preferred the latter.

Dame Irene Ward

I understand that Burke made a statement to the effect that all that was necessary far evil to triumph was for good men to do nothing. If he had been here today he might have been moved to add that, in the doing, action should be taken which is bath fair and based on common sense. The House may recall that those words were used by my right hon. Friend the Prime Minister the weekend before last, when he was speaking in the country, and it occurred to me that, having made that announcement, he then put on his Nelson hat, picked up a couple of telescopes, applied them to both eyes and closed his eyes tightly—although he is no doubt anxious that this incomes policy should be operated with fairness and common sense, and that is the basis on which I have moved the Motion.

When my right hon. and learned Friend the Chancellor of the Exchequer announced his policy last July I believe it commended itself to the country as a whole, not only to the private sector but also to people of good will who recognise that one of the great threats to our economic stability and our ability to meet our world commitments is inflation. Many people welcomed the idea behind my right hon. and learned Friend's statement. Without its being known to the participants, I have listened to a conversation between railwaymen, Who are not notoriously well paid, in which they have expressed the view that if only the Government could bring prices down it would be much more welcome than an increase in wages. I believe that to be profoundly true.

There was a large measure of support for the Chancellor's policy among thinking trade unionists, who recognised the strength of the argument which my right hon. and learned Friend put forward last July. It is regrettable that, that policy having been initiated, we seem to have come to a dead end, and that the pay pause, which was started in the public sector, and the subsequent incomes policy, which has no limit in respect of policy announcements, have caused great anxiety and grievance among many people, who feel that the new policy, which was a very sound one, has not materialised.

I hope that the Financial Secretary will give us a clear explanation exactly how successful the pay pause, and then the initial stages of the incomes policy, have been. I notice that my right hon. and learned Friend continually states that the pay pause has been a great success, but only within the last few days the information given out from the financial sphere has been considerably disquieting. There has been a rise in the cost of living; the deficit in our national affairs has increased; we have increased our expenditure, and the increase in wages which has occurred has not met the rise in the cost of living, in spite of the pay pause and the incomes policy. As a result, not only is the standard of living less good today but the position of those on retirement pensions and small fixed incomes has deteriorated. I hope that my hon. Friend will carefully analyse the reasons which enable my right hon. and learned Friend continually to state that the pay pause has been a success—from which I gather that he means that it has helped considerably in strengthening the economy.

I recognise with gratitude and appreciation that what my right hon. and learned Friend did last July was very valuable in strengthening sterling and improving our competitive position, but I suspect that it was not the pay pause, followed by the dehydrated incomes policy Which was mainly responsible for this effect; I believe that this was due to other measures taken by my right hon. and learned Friend, and also to difficulties which many of our competitors got into last year.

When my right hon. and learned Friend talks about the rise in the cost of living I hope that he will not make the mistake of equating the price of potatoes with the price of a ton of coal. I place no reliance on the cost-of-living index. I try to represent ordinary men and women.

There are four inescapable items of expenditure in the budget of the people where there have been increases which I should like to emphasise. There is the rise in rents, the rise in rates, the rise in heating of all kinds and the rise in transport costs. When arguing about the rise in the cost of living it is not effective, nor is it fair, to try to say that although there may be a seasonal rise in the price of vegetables, when potatoes are so excessively costly, as they are at present, that that will disappear and then the cost of living will be back to a steady figure.

If I understand correctly, my right hon. and learned Friend has already given a guarantee that if we pursue this incomes policy in the right way, we can look forward to a further stable price level in the future. That does not in the least affect the very serious position of practically the whole of the community caused by the acute rise in rents, the acute rise in rates, the acute rise in heating costs and the acute rise in transport charges. I very much regret that when he made his statement last year my right hon. and learned Friend did not deal with this matter very clearly.

You, Mr. Speaker, have said that you propose to call the second Amendment on the Order Paper, and I should like to congratulate the Opposition on having staged quite a good operation. I always enjoy a well-staged operation in a political fight, even if it is against me or my Government. But I do not wish my hon. Friend the Financial Secretary to the Treasury to be moved from answering the questions on my Motion. The Amendment is, of course, designed to destroy the Government, whereas my Motion is designed to improve the Government. I think that most people in the country will agree with me when I say that destruction is much easier to achieve than improvement. So I say to my hon. Friend, "Please do not take the easy way out and spend all your time answering the Amendment, because it is much more important to the country that we should get the answers to the questions embodied in my Motion". I am very pleased to see that there are so many Ministers sitting on the Government Front Bench.

When my right hon. Friend introduced his new policy last year I very much regretted two things. If it had been decided to impose a discriminatory policy—because that is what it was—on any section of the community, particularly if it affected those for whom the Government have a responsibility, I think that it would have been far better to have announced that we proposed to impose a special unpleasant obligation on them. I am sure that the Treasury Ministers and the Government as a whole will support me when I assert that in this country we have first-class public employees.

No country in the world has better public employees, and I deplore the somewhat laconic statement made by my right hon. and learned Friend. He did not say that we were imposing this obligation. He did not pay any tribute to those who would have to bear the first heat and burden. If he wanted to lead the country, as I am sure he did, it would have been much better if he had grasped that nettle. I think that the people in the public sector realise and are grateful for the fact that at least they have security so long as this country is financially sound and able to meet its obligations.

I regret that my right hon. and learned Friend made this very laconic statement. I am sorry that he did not say that we were asking the public sector to face a very unpleasant few months until we saw whether the private sector was proposing to respond to his policy. Far be it from me to make any observations about how I conduct my political campaigns. But when fighting a battle, if I have anything which stands against me—perhaps not through my own fault, perhaps because of the actions of the Government—I always bring it out at a very early stage. By the end of the day I know that I shall have been able to get my case across. It would have been much wiser and fairer if my right hon. and learned Friend had said that we were going to behave badly to the public sector but that we were asking them to give a lead. If my right hon. and learned Friend reads tile reports of what happened in 1931 he will note the magnificent response of the public sector to the impositions put upon them at that time. I have always been grateful for that. But my right hon. and learned Friend did not take the opportunity afforded to him, and that is one reason why I am moving this Motion.

I wish to discuss what Government spokesmen have been saying in this matter. I feel anxious, because it has become perfectly obvious that when my right hon. and learned Friend embarked on this policy it had not been thought out in any great detail. That I consider regrettable and deplorable. I have mentioned my right hon. Friend the Prime Minister and said that he expected that this policy would be based on facts, figures and common sense. I am bound to say that I have not found many examples of that.

I wish to mention now what was written on 25th June—it is very up to date—by the Chancellor of the Exchequer. I think it right to emphasise that it is nearly a year since we embarked on this policy and Ministers of the Crown have made some utterances—anyone can make utterances—but there is no meat behind the utterances. I wish to draw attention to a letter written to an organisation called "Coppso"—that is the Conference of Public and Professional Servants. Quite naturally—I do not blame them—the public servants have linked themselves together to look after the interests of the public sector, as I am afraid that they do not feel that they have been very correctly or properly served by the Government or by my right hon. and learned Friend.

The general secretary of this organisation is Sir Ronald Gould. My right hon. and learned Friend wrote that he had said: We have no intention of seeking to keep a fixed, immovable, petrified relationship between the rewards for various sections of the community.… My right hon. and learned Friend also said in the letter: I went on to accept the need for the re-examination of pay and salary structures in certain cases such as that of the nurses. In that letter there is no mention even of the "guiding light". We have not yet heard exactly what is meant by that. In any event, I do not think that the organisation concerned will be very satisfied with that letter. But I always find my right hon. and learned Friend the Chancellor of the Exchequer tries to be helpful and I like him very much better as a man than I do as a Chancellor. The Chief Secretary to the Treasury has been a little more guarded. He has made one or two statements about trying to meet the difficulties of some of the people who are employed in the public sector but he has not committed himself to paper in that way.

Last weekend, however, the Leader of the House made a speech. He said that to find an answer to whether the policy should proceed by words or exhortations alone, or whether the overriding importance of this issue demands a more fundamental and a different approach was the main challenge to the Government on the home front. I could not agree with my right hon. Friend more. It was also the main challenge to our right to the confidence of the country, and he said, We shall not fail. The Leader of the House puts it in a much more picturesque way because he is a politician. I do not really put the Chancellor in that category. [HON. MEMBERS: "Oh."] I think I could probably deal more easily with the Chancellor than with the Leader of the House because I am not very susceptible to flowing words. It is very easy to make speeches. It is not the making of speeches that is the difficulty, it is the redeeming of pledges, and I am anxious to have the pledges redeemed.

In any event, that is what the Leader of the House said only last Saturday, and he went on to say, and it filled me with alarm, that the Government were now starting a series of studies, presumably on how we shall deal with the public and private sectors. I think it is fair to say, because I really believe in my Government, that they are now going to try to see that the private sector is brought to play its part more fully in relation to the public sector. I assume that that is what my right hon. Friend meant, but he went on to say that this series of studies would probably last into the autumn. I presume that in the autumn, with any luck, we shall hear exactly what the Government's attitude is towards the future of the incomes policy.

I know very well that as a back bencher I am only entitled to a speech today from my hon. Friend the Financial Secretary to the Treasury. I have had hard things to say about him, but I recognise that he has a very brilliant brain and that he is a man of integrity. I am glad that he is to reply to my Motion but I want him to interpret what the Leader of the House has already said in the country. I have been getting about a good deal since I drew up the Motion and I want to know whether when the Chancellor of the Exchequer embarked upon this policy he had not made up his mind what would happen if the private sector did not co-operate fully with the public sector. If so, it was very bad planning indeed.

We are not entitled to ask the public sector to bear burdens, a great many of which are most unfair, unless we have a complete plan of the direction in which we are going. Since the Chancellor is to have this series of studies undertaken, I do not suppose that the Financial Secretary will be able to tell me much about this, but it is only right, in the interests of the country as a whole and particularly of the public sector, that we should know to what these studies will he directed. I should be very disappointed if my hon. Friend fails to deal with this problem, which must be faced.

I say again that I do not think that any Government are entitled to embark on perhaps one of the most important policies of the century, that is to say, the restraining of expenditure in advance of production, without having thought out in what direction they are going. The Financial Secretary, of course, will make a very clever speech. He always does. Sometimes he has to make such clever speeches that I am sure his heart must disagree with them even if his head supports them. I hope that we shall have some knowledge of what the Leader of the House meant on Saturday. I recommend to my right hon. Friend that it would be wiser if he did not make speeches in future unless we know what the policy is.

I want to go into detail on some of the problems of the public sector, because they have not been put adequately to the House or to the country. Firstly I should like to deal with the probation service, which is very important. I want to say to the Financial Secretary, and I know that the Chancellor will take note of it, that nobody seems to have recognised that the medical laboratory technicians, who are the responsibility of the Minister of Health, put in a claim long after the appropriate day in July and their claim was met.

I am not disagreeing with that, since I do not know anything about medical laboratory technicians, but when the question was raised the answer was given, I expect by the Minister of Health, that these technicians were engaged on a job comparison and that was why their application was not put in at the right date. This was counted in their favour and they were given their increase out of date, so to speak.

I would say to the Financial Secretary that the nurses and the professions supplementary to medicine have been making tremendous efforts towards having a job comparison, which is exactly what they want, but they have not been allowed to have it. One realises that the Prime Minister, the Chancellor of the Exchequer and the Foreign Secretary have such burdens to bear that one would not expect them to read every detail of every paper or even every one of the letters I send to them, which are very numerous, but I cannot understand, in the general policy, how one small group, however worthy, should be able to have their claim settled when others have failed.

The probation service had its position looked at by a Committee which was set up in 1959. The present Government do not set up committees lightly. Whenever I ask for a committee to be set up—and I have asked for a few—I am always told that the objection to doing so is that it involves more expenditure and therefore the Government do not set up committees if possible. I know that Governments change their minds, as the wind changes unexpectedly, but I am assuming that when the Government set up the Morison Committee to examine the probation service they recognised that the position of this service required examination.

Summarising the conclusions of that Committee, it said that this great social service is desirable on social and economic grounds…Current salaries have not enabled the service to be maintained in size or quality at the necessary level of efficiency and substantial salary increases must be made. That Committee was appointed on 27th May, 1959. If the medical laboratory technicians can get their case put forward because of necessity, I cannot see why the probation service has to be caught by the guiding light when a committee has been examining that service all these years and has come to a definite conclusion.

Mr. Richard Marsh (Greenwich)

Would the hon. Lady not agree that the position is made even more farcical by the fact that the medical laboratory technicians' increase, which was granted despite the guiding light, totalled in some parts of the scale 47½ per cent.?

Dame Irene Ward

Yes. I did not want to rub it in too much. I regard this debate as "all in" for the nation, so I say "Thank you very much" to the hon. Member for that observation.

If we tell the medical laboratory technicians that the job comparison put them in a special category, it can surely be argued that the probation service, after an examination for all those years because their case was so urgent, should also have had the Committee's recommendations accepted without getting involved in this guiding light.

I can only think that my right hon. Friend the Home Secretary has not fought hard enough in the Cabinet. I should like very much to get inside that Cabinet. We know from the service which my right hon. Friend has rendered and from his tradition, that he is tremendously interested in these matters. The case could not have been put to the Cabinet. At any rate, I think the probation service has been given a very raw deal, and I am not in the least impressed with the guiding light policy in that case.

I now want to say something about the hospital almoners. I have had a lot of correspondence with my right hon. and learned Friend on this subject. Occasionally when we disagree—and he usually disagrees with what I write—I wonder whether I have been wrong, because I often am wrong. But I always take the trouble to get all the evidence and all the papers that concern the case. I embarked upon the case of the hospital almoners and psychiatric social workers and the award that was made to them by the Industrial Court. These people are regarded as a very important part of the community. My right hon. and learned Friend sent the Treasury economic adviser to state the case for the national interest before the Industrial Court. In spite of that, the Industrial Court awarded between 14 per cent. and 15 per cent. to the hospital almoners and psychiatric social workers.

It is ridiculous that psychiatric social workers inside the National Health Service, who have had more training than psychiatric social workers in local authority service, should be paid less than those in Government service. No one, not even the Treasury Bench, could agree that that was right. But, of course, this group of people are so dedicated and they have such a feeling of vocation that they do not fight for themselves. What makes me so angry is that the Treasury Bench do not fight for them. I have never believed that one should have to fight to get a just reward. That is not the way to run a civilised country. I do not think that if we suddenly find that we are short of police or Army doctors, and so forth, we should immediately make the conditions of pay and service so attractive that everybody will rush in, because a lot of undesirable people would then apply.

Surely the right thing to do is to look at the qualifications. I say to the Chief Secretary to the Treasury that it is quite ridiculous to bump up education in this country and improve people's qualifications if, when they have improved qualifications, they get less pay than if they had no qualifications. It is like living in Alice in Wonderland, and I should not like to live in Alice in Wonderland. Nor do I think hospital almoners want to do so.

Anyway, that was the position. These people got an award from the Industrial Court. It is frightful that these people, who have been serving the community for so long, have been underpaid. Then along comes the guiding light. Thank God for the President of the Industrial Court. Unfortunately, I have never met him, but he is one of the few men in public office recently who have spoken in human terms that can be understood, who have spoken in terms of common sense and fairness, to which my right hon. Friend the Prime Minister referred before he closed his eyes while gazing through those telescopes of his.

I thought it was absolutely essential to get the minutes of evidence given before the Industrial Court on the hospital almoners and psychiatric social workers. It was suggested to me today, by someone who shall be nameless, that it was really rather odd that I should manage to get hold of these minutes of evidence because I was not supposed to have seen them. They are not marked "confidential". In my view, there is in public life today far too much marking of things as confidential, a practice which, I believe, covers up many inequalities and injustices which never see the light of day. Moreover, neither the country nor the House of Commons would ever tolerate secret courts. I am very glad that I have got hold of the minutes of evidence which was given to the Industrial Court and, in reading them, I have been delighted by the approach of the President of the Industrial Court to to these problems.

I have brought the minutes of evidence here. They cover 84 pages. I do not propose to read them, although I have noted several extracts which are very interesting. I shall quote certain extracts but go no further than that. However, I say to my hon. Friend the Financial Secretary that I hope that he will publish as a White Paper the evidence which was given on behalf of the hospital almoners and the psychiatric social workers to the Industrial Court. If we are to embark upon a policy of income restraint, however it may develop, and if we are interested in the working of the Whitley machinery and the working of arbitration and of industrial courts of one kind and another, it is very important that Members of Parliament should see the evidence which was given on that occasion. I think that they will get a shock when they do.

The first passage to which I draw attention is on page 60 of the minutes of evidence. I shall give the numbers of the pages on which there are matters of particular interest so that, when the document is made available, as I am sure it will be, hon. Members will have the references. On page 60 are recorded these words by the President addressed to the spokesman of the management side: Is it in the national interest to go right against the ordinary interests of fair play? That just suits me down to the ground. I do not think that it is in the national interest, and I am very surprised that Treasury Ministers should have instructed the spokesman of the management side as they did. I shall not give his answer because it is my purpose to attack Ministers.

On page 62 a very interesting little episode is referred to. On the instructions of the Minister of Health, an adjournment of the sitting of the Whitley Council was sought on 16th January. The adjournment had to take place because the Minister had not instructed the management side. Subsequently, of course, it transpired that the Cabinet was discussing its incomes policy and, after the sitting had been put off for that day, the next day the Cabinet had decided about its incomes policy and so the hospital almoners and the psychiatric workers were caught in the incomes policy net, the guiding light. I call that jiggery-pokery, and I do not like it at all.

Also, there was an extraordinary message which the permanent secretary of the Ministry of Health had given, on the Minister's instructions, in which he said that the Cabinet had not been able to agree the proposals for hospital almoners which had been put up by the Minister of Health. No one knows what the proposals were, but, so far as I can judge from the general evidence which was given, they were better than the guiding light policy any way. I do not think that that was a very good thing to do.

The hospital almoners had been asking for months for a hearing at the Whitley Council and they had always been put off by the management side saying that it was not ready, that it had not received instructions from the Minister. Of course, this game can be played ad infinitum, but it is not the sort of game I like to play. It would be just as well to have these minutes of evidence published in a White Paper so that everyone can see what was put before the Industrial Court.

There are various other pages of note. On page 66, there is recorded a discussion of the salary increases given to the medical laboratory technicians. I have already dealt with that matter. Those increases come into effect on 1st April, but they are not subject to the guiding light.

On page 67, the President of the Court is recorded as saying to the leader of the management side: It rather looks as though, at the time that pay pause was introduced, the Treasury did not know what the next stage was going to be. That is exactly what I feel and what a lot of people feel. As I say, the President of the Industrial Court is used to all this sort of matter, a very informed and enlightened person, and that is the opinion which he held. I am sure that he was right. The other pages to which, I suggest, people should turn are pages 69, 70, 79, 82 and 83.

On page 83 it is recorded that the economic adviser to the Treasury was unable to explain why the pay of doctors in the Forces had jumped the queue. I do not say that the increases were not absolutely essential. I am sure that what was done was right, but, again, the Minister of Defence is, I believe, very powerful in the Cabinet, and I am glad that he is because I have a very great admiration for the Minister of Defence. However, when the Leader of the staff side asked the economic adviser to the Treasury whether precedents could be quoted where the pay pause had been breached or the guiding light ignored, he said that he had no knowledge. When he was asked what information he had to give about the breach in regard to doctors in the Forces, he could give no information there either. I do not want to break the tradition. I know that the economic adviser to the Treasury was acting on behalf of the Chancellor of the Exchequer. But, surely, if the staff side addresses a question of that kind to a distinguished Treasury official, he ought to have the information. It is quite ridiculous that he had not. I thought that it was a nice piece of irony that the leader of the staff side should say that he thought that the economic adviser to the Treasury, had answered to the best of his ability, but, on that basis, his ability was not very great. If I had been there, I could have added something to that.

The trouble is that all these people engaged in negotiations have to watch their step. One thing I took great exception to was this. When the nurses decided to go to arbitration, the Minister of Health said that if they had gone earlier they would have spared embarrassment to those who had the welfare of nurses at heart. That was not a very good thing to say. The nurses reacted, and I am not surprised that they did.

In all this machinery, there is very little opportunity for the staff side people to tell either the Chancellor or the advisers to the Treasury what they think. This is a great pity, and it is one of the reason why I regard it as imperative that the House should have an opportunity of seeing the way the management side put the case for the Government Department concerned. I did not think that, in the case of the Industrial Court evidence, the management side of the Government came out very well. That, of course, means that the Government did not come out very well, which is what I think.

Mr. A. G. Bottomley (Middlesbrough, East)

We appreciate what the hon. Lady has been saying about the need to treat public servants decently, but is not she aware that in her last few remarks she has been doing just the opposite in respect of a tried and trusted public servant? She should be attacking the Government on whose instructions he was operating.

Dame Irene Ward

That is exactly what I am saying. I said I knew that the management side was acting on behalf of the Government and that it was putting forward the Government's case. But I think that it would be in the public and national interest if the case presented by the management side at the Whitley Council was re-examined because I do not think that hon. Members, from reading the evidence, would be satisfied that the instructions given by the Government to the management side were right. That is my opinion, and I think it right that I should express it. I take full responsibility for expressing it. Of course, the management side must do what the Government tells it to do, but I think it very extraordinary that the Treasury Ministers did not brief their economic adviser on why the pay pause had been breached in respect of the Army doctors.

The Financial Secretary to the Treasury (Sir Edward Boyle)

Since the right hon. Member for Middlesbrough, East (Mr. Bottomley) has raised the point, perhaps I can deal with it now. The deputy head of the economic side was acting as an expert witness on the Government's incomes policy generally. With respect, I do not think there is any reason why he should have been an expert on the particular circumstances of the increases given to medical officers in the Armed Forces. I think that what my hon. Friend said was unfair.

Dame Irene Ward

I thank my hon. Friend very much for that, but I disagree with him because there cannot have been a breach without the Cabinet knowing about it nor without the Chancellor of the Exchequer agreeing to it. If that is so, then I think that the economic adviser should have been briefed before he went to the meeting so that he could deal with the Government's case.

The Chancellor of the Exchequer made it perfectly plain by a statement in the House that he was going to ask the Industrial Court to ensure that the national interest was considered, and I do not think that anyone would disagree that the national interest, so far as the Treasury saw it, was considered. I do not think that the President of the Industrial Court always agreed with what was said, but it is fair to say, I think, that he said that the economic adviser had put the case very clearly. But I do not think it right that the nurses and those in professions supplementary to medicine, having been told that nothing could be done about them, should get up one morning and read in the newspapers that the Army doctors had been given a large increase because we must have doctors in the Army.

My right hon. Friend the Financial Secretary should put himself in the place of ordinary people, not in the place of Ministers in the Treasury. That is what I feel, and if I had thought that the Treasury official was not going to be in a position to answer certain questions then I, for one, would not have been agreeable to his going before the Industrial Court to argue in the national interest. I might have thought that it was in the national interest that the Army doctors' case should be breached. It is these divisions of opinion which drive one dotty.

May I give one final picture and then wind up because I am looking forward to hearing what other hon. Members have to say. Many hon. Members, no doubt, have done jigsaw puzzles. As I see it, here is a jigsaw puzzle with a beautiful ship, the ship of State, such as one which might have been built on the Tyne, forging a way through rough economic seas. Of course, the captain is the Chancellor of the Exchequer and, as it is the flagship, the admiral is, of course, the Prime Minister. First, the jigsaw puzzle is opened and all the pieces fall out in a jumble on the table in the captain's dining room. The first thing which the captain, the Chancellor of the Exchequer, does is to fit in the easiest bits. Anyone who has done jigsaw puzzles knows that, first, one picks out the edges, which are the easiest pieces of the whole puzzle. The Chancellor of the Exchequer picked out all the edges and carefully put them round the out- side of the puzzle so that they formed a frame. Then he thought that he would go off and do something else, and he left other people to get on with fitting the pieces in the middle.

Then my right hon. Friend the Minister of Defence, who, as I have said, is a powerful character—I have a great admiration for him because he is both tough and sympathetic, and I like men like that—picks out some pieces and, as he is very quick in action, fills in his little corner and gets his way. Then along comes the Home Secretary, who is not quite as clever. I suppose that his mind was on African problems and not on home problems, and since the ship of State had nothing to do with African problems with which his mind was filled, he let the puzzle go by default and did not fit in any pieces.

Then comes the Minister of Health. He was colour-blind. He fitted the pieces in quickly enough, but he put them in upside down, so that when the jigsaw puzzle was completed the beautiful ship was spoiled because there were all these brown pieces fitted in. This spoiled the whole pattern.

Here I should like to refer to what The Times said on 13th June. I know that my Government do not particularly like references to The Times, but sometimes it carries a very good leader. On 13th June it said exactly what I believe is true and what I have embodied in the Motion. It is a great pity that Her Majesty's Government, having clearly seen how essential it was that this country should cease to spend more than its productive capacity could carry, did not use the time between the announcement of the pay pause and the introduction of the incomes policy to fill in all the details. That is my complaint against the Government.

May I once again say what I have said on several occasions. I get cold feet when I think about "Neddy". There is discussion between industrialists and trade unionists on that Council without a single professional white-collar worker being represented on it. In addition, there is no one on it who understands about shopping. Men do not understand about shopping. If a question were asked about the price of potatoes, nobody on the Council would be able to say, "One can economise and do without potatoes but one cannot do without heating, paying the rent or paying the rates". My complaint against the Minister of Health is that he is so obstinate that, although the whole experienced world puts its point of view to him, it does not make the slightest difference. That, I think, is most regrettable.

I hope that I have not given my hon. Friend the Financial Secretary too much to answer, but if we are to have this incomes policy right—and it is essential in the national interest that it should get right—we want some forward thinking and a definite declaration of policy by Her Majesty's Government that will be fair to the country, both to the public sector and to the private sector. This operation should be undertaken as a great national effort under real leadership and not in this piecemeal way which has caused so much trouble and distress.

8.1 p.m.

Mr. Leslie Hale (Oldham, West)

I am grateful to you, Mr. Deputy-Speaker, for reading the Motion in the name of the hon. Lady the Member for Tyne-mouth (Dame Irene Ward), because it is time that we got some information about what the discussion is about. We have listened to a remarkable speech. The hon. Lady must be suffering from the loneliness of the long-distance plodder. We have heard her talking with subdued passion for 61 minutes about fair shares, and the only thing which emerges with clarity is that the hon. Lady is no believer in fair shares for participants in the debate.

Dame Irene Ward

It is my debate.

Mr. Hale

I will not permit any interruption. If the hon. Lady shouts, I will simply shout louder.

I add this too, and clearly. The hon. Lady has not told us what her views are about equal pay in relation to the pay pause. She has not said a word about profits in relation to inflation. She has not made a single observation about the economic plan that she desires or given us any information of what it is about. I am tempted to recall another legal story of the county court judge who rebuked a young counsel for repetitive- ness. "Mr. Jones, you have said that before", he remarked. Mr. Jones replied, "I am very sorry, my Lord. I do not remember it." "I am not surprised", said the judge, "it was a very, very long time ago."

A story is told of His late Royal Highness the Duke of Sussex, son of George III and brother of George IV, known to history by the delightful title of the "People's Duke", that in his later years he acquired an unfortunate habit of talking aloud and making comments on proceedings whilst they were in progress. Such things happen, of course, in the House of Commons. The reported occasion occurred in church while the preacher elaborated in detail the importance of the Ten Commandments. The recorded observations are that when the preacher said, "Thou shalt not kill", the Duke observed, "Yes, yes, quite right, but by brother Ernest did". When the preacher came later to the point, "Thou shalt not commit adultery", the Duke said, "Yes, yes, quite right, very proper but damned difficult".

Sir E. Boyle

The hon. Member will, I think, find that it was the Duke of Cambridge, the younger son of George III.

Mr. Hale

I will give the hon. Gentleman my reference. He will find the story related by the Hon. W. G. E. Russell, a direct descendant of Lord John Russell, who spoke with authority about contemporary affairs. The story might, of course, have been related to somebody else.

Sir E. Boyle

My reference is Roger Fulford's book, Royal Dukes.

Mr. Hale

The Financial Secretary is trying to divert the story of some long dead notable instead of applying it, as I wish to do, to the Prime Minister's method of approaching policy. Everything is "Yes, yes, quite right. We must do something, but damned difficult". Constantly, we visualise the Prime Minister on the seashore looking at the waves and feeling that "Something attempted, something done, must earn a night's repose". He stretches out a stately and elegant foot tentatively towards the water, withdrawing it from time to time, pushing it out again and saying, "Some time I must take the plunge". Finally, one of his back benchers comes from behind, shoves him in the sea and three months later we are treated to photographs of the Prime Minister receiving the award for being the most daring swimmer of the year. That is what has been going on.

The hon. Lady the Member for Tyne-mouth referred to the probation officers. The Government, under pressure, decided to appoint a Royal Commission on the Police, of which I was a member. Then, under alleged pressure, they suddenly bunged on us the question of pay, although we were completely incompetent to deal with pay. None of us was an economist in that sense. We were appointed to deal with questions of liberty, most of which were later taken out of our terms of reference. We tried to consider the position of the police forces. There was discussion on how these things would be done. Were they to be done in relation to other people's wages, and how does one evaluate them in relation to social value? There was no form of work with which a fair comparison could be made. We described them finally as sui generis and had to consider the position largely in vacuo, perhaps having some reference to the sort of priority which the police had possessed in the past in relation to workers' wages as one of the tests to apply; but there were not many tests to apply.

The curious thing is that probation officers were the nearest one could get to people who were performing that kind of work of quasi-judicial responsibility in a legal atmosphere. We made a recommendation which was accepted, and we made a recommendation a month or two before the pay pause slipped out by chance from some injudicious observation by the Chancellor of the Exchequer. Since the right hon. and learned Gentleman has been Chancellor of the Exchequer, I have begun to think that he was probably a better Foreign Secretary than I thought.

We made recommendations which involved something like a 33⅓ per cent. increase for the man on the beat. They were accepted. Then we came to this principle in relation to probation officers, who surely are among the worst-paid people we know, that a length of time should be imposed upon them. The Government have not even had the strength to govern. The real answer about the pay pause and what has happened is that people who work for a vocation and are not prepared to take industrial action have been grossly and wickedly victimised, while people who have made threats have been placated.

In the middle of it all, the Government announced increases of pay for the Armed Forces, who at one time were the worst-paid people in the world.

Mr. Jack Jones (Rotherham)

They have waited long enough.

Mr. Hale

No; they have had many increases since. I recall that my pay was 14s. a week when I enlisted in 1939. Seven shillings was knocked off for the missus plus a bob in case I got in debt, and I paid 4s. for my eldest daughter and 3s. for my son. There have been increases since, and I do not begrudge them.

The hon. Lady the Member for Tyne-mouth initiated what was to be an economic debate. The hon. Lady wants an economic plan. Is she in favour of restriction of profits? She did not tell us. She had 60 minutes in which to do so. Does she mean that she would restrict the workers' wages alone? Is she in favour of equal pay?

We had a debate a few days ago on the textile industry. The textile worker has always been worst paid of all skilled workers. The margin between the male worker and the woman worker is wider than in almost any other industry. The women are terribly badly off. We had a debate in which the Government said in terms of economic policy that the textile workers must not have any increase because a pay pause was in progress. The textile worker must, so they say, be persuaded to agree to three shifts a day because they have to compete with people on the Continent.

I picked up a memorandum from the French cotton industry, which has very distinct views about it. It says that the Lancashire industry is a subsidised industry. Of course, it was subsidised on the basis of capital, and there was to be some compensation for the workers, but they had been swindled out of most of it. The French cotton industry publication, Industrie Cotonnière Française, for February, 1962, says: It will be necessary for the U.K. to follow the rules of the Treaty of Rome concerning harmonisation in the realm of wages and working conditions. At present the English social security system weighs less heavily on production costs than the French system and equal wages for men and women do not apply in England. This is particularly important in the textile industry. What has the hon. Lady to say about that? Are we going to establish equal pay by reducing the wages of men? Is that the proposition? Or how do we increase our competitiveness in textiles under the Treaty of Rome by at once increasing women's wages to an equality basis, as they say we must? None of these are problems on which the Government have anything to say.

The hon. Lady's Motion does not use the word "planning" at all. We know that it is a naughty word on the Conservative side of the House and that it used to rank with "Co-op" and things like that. They have to consider whether they want any planning at all. We have got a fantastic situation over the last few years, and there is not a single proposition which has been made by this Government in any sphere or field which they have not contradicted twice over. In relation to Tynemouth, two years ago we were debating a controversial Bill. The programme then was to build big ships in English ports to provide wages and employment and re-create the shipbuilding industry, and they now propose to build little ships in foreign ports and to pay subsidies on them.

I never profess to understand finance. I claim that I am rather in advance of most hon. Members of this House in that I understand that I do not understand finance. We have a system now under which only last week shares in "Smith's Crisps" wilted because of something which President Kennedy said two months ago to the ghost of the late Andrew Carnegie. My own shares in Lloyds Bank, and I have only a few which I got from my father, went down seven or eight bob because of something which President Kennedy said to American steel merchants. This is the sort of competitive, wild and incredible system they produce. They talk about the redistri- bution of industry and planning, the wage pause and creating employment, while the eggheads on the Egg Board establish themselves in the middle of the City of London in an area which has never seen coccidiosis or baccillary white diarrhoea, and where if a White Wyandotte stopped there for a fortnight it might be mistaken for a Buff Orpington.

We have got planning on the Potato Board. It is fair to say that potatoes have increased in price, while Consols have gone down. A major planning item for the next Session may be the establishment of a White Fish Industry Board and Potato Board Liaison Board to ensure at long last that, to paraphrase the words of my late right hon. Friend, in an island planted almost exclusively with potatoes and surrounded almost entirely by fish, people in Oldham shall be sure of getting their fish and chips simultaneously. This is Conservative planning.

We were told in relation to textiles that the Government were so passionately attached to the Empire that it was necessary to regard our leasehold property in Hong Kong as an established part of the Empire, and that everyone who goes in must be regarded as being entitled to compete on a low wages economy, and because this is necessary, Lancashire must sacrifice itself in order to subsidise them. On the question of war on want, an issue going outside our terms of reference, I can at least claim an honourable record. I initiated this. This is not "war on want". This is the same sort of economics as those of the people who used to pay the dockers sixpence an hour and match girls a bob a day, because they said it kept the men out of mischief and the women off the streets. We cannot run an economy like that. I think we are entitled to ask the Government and the workers are entitled to know what the Government means by all this.

One of the principal exports of Hong Kong is floating restaurants, manufactured on a large scale with American capital, which is now pouring into Hong Kong. They are building luxury hotels in Hong Kong, but no one ever builds a luxury hotel in Lancashire.

Mr. Ellis Smith

And we say that they are our friends.

Mr. Hale

Even the British have built few luxury hotels in Lancashire. I received the other day from Hong Kong, or rather from The Statist on Hong Kong, a most elaborate brochure showing that this is one of the most developed places on the face of the earth. Mark you, of course, this is planning. The Americans are putting a bar on imports from Hong Kong, buying factories in Hong Kong, producing with cheap labour cheap textiles in Hong Kong, and exporting them to Manchester to compete with Lancashire. If this is private enterprise or "Tory freedom working, then this is the nearest thing to economic lunacy that has ever happened. The figures are here to show that the United States is investing increasingly in the Hong Kong textile industry.

I say that if we get full employment in Lancashire, if we build up our textile industry, as I hope to goodness a future Labour Government may do, we can afford to make the necessary provisions for a "war on want" campaign in Hong Kong, but we cannot afford it now. The Financial Secretary dare not tell us that as productive capacity is gradually increasing, as the industrial capacity of the poorer nations all over the world increases, and when they are producing, as China now produces textile machines which she exports to Indonesia, so they will produce motor cars instead of floating restaurants, and will the Financial Secretary then say that they can come in as free imports to put people out of work in Coventry?

The plain fact about what has happened in Lancashire and the trouble in Lancashire is that the Prime Minister, in one of those extraordinary asides that he makes in a state of ecstatic political diplopia—[Interruption.] Yes he sees double. We said that we were going to build one "Queen", but he was going to build two when he was in Glasgow. We decided to spend £30 million on capital assistance to textiles, but when he was in Oldham he talked about £40 million which was to do some good to somebody, without specifying who it was going to be. I am trying not to use the word which would come more rapidly to my lips, because tit would not be Parliamentary language, but that is what we were told and that is what happened. This was going to save a dozen seats in Lan- cashire, but it did not. The Tory Members for Lancashire with small majorities, or the Tory candidates with only small majorities to overcome, were the people to whom the expenditure of this public money might have been expected to do some good. But it did not. They paid for votes but the goods were never delivered as they have little further interest.

I am not prepared to support the continued subsidisation of millionaire employers of cheap labour at the expense of my constituents.

I want to warn the House, whatever its wages policy, if the people are driven out of this industry again they will not come back. If we drive them out again that industry of ours is gone, and the uncertainty, the incredibility, of Government policy virtually compel a lack of certainty. That is what we have. I say that if we are imposing a pay pause the workers are entitled to know how long it is likely to last.

The right hon. Gentleman has had a magnificent demonstration of co-operation today from the engineers, as reported in the evening paper, which is my source for saying that. I understand that they have agreed to accept a 3 per cent. increase. It is a generous gesture of co-operation.

I would suggest to the right hon. Gentleman that before he turns up all the massive notes the hon. Lady supplied him with he turns up some of the things said by his hon. Friends about my late right hon. and learned Friend, the late Sir Stafford Cripps, when he imposed a similar measure in more difficult and more serious circumstances. Because, of course, the noble lord, the present Lord Sandwich, or whatever he is, said only recently that the Government's crises are conveniently electorally timed: we always get a period of expansion just before an election we always get a period of difficulty immediately afterwards.

The only other thing which one wants to say about this is that when the dead hand of this Government touches any one industry, it withers. Always, whatever they have tried to help, they have injured. Even Cunard's shares went down immediately they began to take a benevolent interest in the work of that company. I cannot complain, and I do not complain, and I certainly do not want to hold up the House any longer, but I think that it is fair of me to say, and it is probably generous to say of that party which is committed in its history either to standing still or to retreat, that it is ungenerous for us to complain too bitterly if it stands still.

I took the House for a moment to the seashore in opening, and finally I will take it back to the seashore. I have had some contemplative moments on the seashore in Galway Bay and reading of Professor Hewatt's most fascinating researches in California into the habits of limpets. It threw a good deal of light on the habits of other members of the Conservative Party. It has always been difficult to distinguish one limpet from another. I have had the difficulty of recalling their constituencies. The problem was to ascertain first, granted that there is normally a limpet in the same place, whether it is the same limpet. Dr. Hewatt noted that between tides the limpets moved during a period of two hours or so, normally forwards towards the shore, and then they moved back. By use of numbers on shells he was able to demonstrate that always the same limpet returned to precisely the same position. They moved with the receding tide and they came back and they all also took their roots and became immovable and solid and prepared to defy the tide when it returned. The professor cut a little niche in a rock to see what would happen and to see if they would get over it. It was a sort of common mark. We might call it a common market. They looked hesitantly into the niche, they hovered on the brink, and then, realising the danger, they withdrew for a time, and finally one by one they went round the mark on to the other side, immediately resuming with absolute precision their original positions. We have had eleven years of observing this, and some of us are a little tired of it.

While I personally have no quarrel with an intelligent policy designed to prevent inflation, I must insist that inflation has gone on in this country to an extent wholly unwarranted in view of the depression of import prices and the favourable terms of trade the Government have had. While there may be a good deal to be said, in co-operation with "Neddy" and planning with the T.U.C., and by agreement with the organised workers, for trying to pursue a policy of this kind, they cannot do it in isolation. By investing in poverty they have established an economy in which I.T.V., strip-tease and chemin-defer are the most prosperous of all industries. They have produced a London which looks very different from the London we used to know, but not very much improved.

I do ask them to say, I ask the right hon. Gentleman to say—because he is one of the few people who, I think, may say it—that the Government, if they do decide to go on with this, are really going to be frank with the House, the nation and the people and are going to be fair to the organised workers and generous to those with a sense of devotion, the nurses and the probation officers, who have served us for too long at such miserable wages.

8.24 p.m.

Mr. John Page (Harrow, West)

In having to follow such a well-known orator as the hon. Member for Oldham, West (Mr. Hale), I wish I were one of those limpets he described at the end of his speech. [HON. MEMBERS: "You are."] I am not, unfortunately: I have taken the plunge. Therefore, I think that it would be better if I went to church, where he started his speech, in talking of the services he described.

I think that perhaps my hon. Friend the Member for Tynemouth (Dame Irene Ward) may really have been saying, in the words of the hymn, "Lead kindly light", but the hon. Member for Oldham, West merely provided the encircling gloom. I should like to come to the end of the verse and say, One step enough for me. I turn, for a change in this debate, to the subject of incomes policy, and if I may, as I wish my one step to be very short, I shall disregard investment income and the income of self-employed people. I feel that it would also be wise to avoid the incomes of elected people. What I should like to dwell on for these few moments is the differentials in wages and salaries which are earned by people who work for different kinds of organisations.

In a speech a few weeks ago my noble Friend the Minister for Science gave the first statement authoritatively from a member of the Cabinet on the reassessment of certain professions within a national incomes policy. His words were: Some professions, in particular those which demand long periods of training and a high degree of personal devotion and self-sacrifice have been persistently under-valued in the past and must be better valued in the future. We never intended and never said that 2½ per cent. was to be absolutely rigid, still less that it was to be permanent. We must get ourselves off this hook as soon as possible. I do not think the Government are really on the hook, but I think that they are caught in their own net, and the warp of this net is full employment and the weft is collective bargaining.

To get out of this net we have got to consider the problems facing the country in dealing fairly with those who work for different kinds of organisations, first, the prospering industries, secondly, the depressed industries, and, thirdly, the non-productive industries in the public service.

The hon. Member for Dunbartonshire, East (Mr. Bence), who was here a moment ago, once said that wage rates are not to be dependent on the ability of the employing organisations to pay. That is something that we must take into consideration. Nevertheless, in a productive and prospering industry, with productivity per man greatly increased, it is difficult to explain that the whole of this increase in productivity and the benefit from it should not be shared by those in the industry. It must be shared by those who support the people in those productive industries by their non-productive work.

Also, I believe that it is quite unfair to ask people to invest their work in the non-prosperous industries and work in those declining industries for a lower rate of pay than can be available to those in the prosperous industries. I believe that the main cause of resentment in connection with wages and salaries is that other people are doing better than they are, though by their own standards they themselves may not be doing badly—the fact that others are doing better rather than the fact that they themselves may be underpaid or that their work is undervalued. The philosophy behind a great many people in respect of their incomes is "keeping up with the Joneses", not "doing a lot better than poor old Jones."

This question of differentials was also mentioned by the Prime Minister in a recent speech, and I should like to quote an extract from it. The Prime Minister said that: Any incomes policy must allow for special cases where what is demanded is not a normal increase but rather a re-assessment so that the value of the services of a particular class may be better recognised. This is specially important in those cases where the value of an occupation cannot be measured by productivity. That was the burden of my hon. Friend's speech, but I do not feel that she gave many clues to my hon. Friend the Financial Secretary, who will be replying about how this would be arranged.

I suggest that there is a way in which this reassessment can take place. I suggest that in looking at a problem it is often worth while trying to visualise the ideal solution, and, having found it, see whether one can make one's way towards it. I wonder whether the House would agree that a perfect incomes policy would be one where each employed person would receive a wage that he believed to give a fair and adequate return for his work, the total sum being within the ability of the community to pay. There were no great cries of dissent at that remark, and so I feel that perhaps an incomes policy which produced this result might receive quite a lot of support.

Mr. H. Hynd (Accrington)

In case the hon. Member is misinterpreting the lack of voices of dissent, would he explain what he means by "an income which the community could afford to pay"?

Mr. Page

I mean an income which the country could afford to pay. I was saying that if every man could receive what he believed was right and fair for the work he did and was happy about it, and if the country were able to afford the total sum of those wages, we should be in an ideal situation.

To the surprise of many, I believe that such a policy exists. I believe that it has been tried out experimentally. I believe that pilot schemes on this line have been tried out in about five or six different industries and types of employment. They have been tried out on full scale in two organisations. I believe that perhaps the findings of this work could form a pattern which could be followed not only by the present Government, but by other Governments in this and other countries during the latter part of the present century.

I am referring to work which many hon. Gentleman on both sides of the House will recognise, what is known as the Glacier Project, carried out by a group of research workers inside the Glacier Metal Company. This project was started by the Labour Government in 1948 under the auspices of Sir Stafford Cripps, who allowed £30,000 to be set aside for this major work of research into industrial relations and management—the biggest research work of this kind ever carried out in this country.

The findings of the project team have been published and copies were, I believe, sent, in brief form, to all hon. Members, many of whom showed interest. But I have been making quite a study of it and I believe that there is a great deal in what has been discovered. The main findings, based on work in different companies over the last five to ten years, are, first, that the best measurement for a graduation of pay should be in the amount of responsible work and responsibility carried out by the individual in his employment—a kind of working out of the cubic capacity of the can which the individual worker carries. This has been worked out on the basis of an assessment of the amount of supervision that each of these individuals requires in his work.

The second major finding is the acceptance by the individual workpeople of wage levels which they feel to be instinctive and natural to themselves as fair recompense for the work they do. I quote this finding from the Report: Employed persons whose work is shown by measurement to be at the same level of responsibility, privately state the same wage or salary to be fair for the work they are doing; These are individuals carrying the same amount of responsibility for different work in different industries and different types of organisation. The Report adds: this finding holds regardless of a person's actual earnings, of occupation, of current market values or of income tax levels. It is noteworthy that individuals paid in accord with the scale for their level of work state that they feel fairly paid. If paid above the scale, they describe themselves as being 'very favourably' paid, and feel uneasy. That, I feel, may cause a certain amount of surprise. And if paid below the scale they describe their jobs as underpaid and push for more. The greater the deviation between actual and equitable payment, the stronger the feeling of disequilibrium. Many hon. Members may consider these findings to be absurd at first sight, but they are the findings of serious men on a long-term research project on which they have worked for the last fifteen years. They are not the findings of a few theoretical economists, or of a lot of cranks. They are the findings of responsible men, which have been published, critically analysed and accepted by a number of other responsible people. Up to the present, the Government have not taken the slightest serious interest in the findings of this project through the Ministry of Labour, or the office of the Minister for Science, or the Treasury, or any other Department. Will my hon. Friend the Financial Secretary get two men from the Treasury just to study the the findings reached at the end of this project? It would take two men probably three or four days to study the findings and report to him at the Treasury whether they thought that there was any substance in the suggestion. If he cannot arrange that, I wonder whether he would suggest that someone from the N.E.D.C. might see whether there is anything in the suggestion; failing that, if not someone from the office of the Minister for Science, then someone from the Ministry of Labour.

If there is substance in this suggestion, if there is a wage level which employees find equitable and fair and which employers find themselves capable of paying, surely that 1s something in the whole circle of an incomes policy which should be given very serious thought.

8.41 p.m.

Mr. Anthony Crosland (Grimsby)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: regrets the total failure of Her Majesty's Government to propose measures that will halt rising prices, increase productivity, improve public services and ensure a rising standard of living for all sections of the population. The hon. Member for Harrow, West (Mr. John Page) has heavily brought down the average length of speech so far, and I shall try very hard to follow his example. The first two speeches took up just under half the time available for the total debate, and I shall try hard nut to exceed my time. The hon. Member also set a precedent by discussing the incomes policy in some detail for the first time, and I will follow that example.

I was glad that he mentioned the investigations at Glacier Metals. He was quite right to say that they had the very strong support of Sir Stafford Cripps, I think even before he was Chancellor of the Exchequer, and they were carried out under the auspices of an industrialist who is a very well known member of the Labour Party. I am not quite certain whether we can build on this. I sympathise with the hon. Member when he asks that the Government should look into it, but I feel a little sceptical, because I am sceptical about the tone of a lot of the writing of Dr. Jaques and others. The hon. Member quite rightly said that this was not written by theoretician economists but to some extent by theoretician psycho-analysts, and I would not necessarily think that an improvement.

It may well be that these two principles—the principle of the amount of responsibility and the principle of self-judgment, as it were, of what is a reasonable reward—could be an aid to wage fixing within a particular factory or plant. But I have considerable doubts about how far they may help us when we are discussing, as we are this evening, incomes policy as a whole, and that is what I want to talk about.

If there is such a thing as a coherent national incomes policy, about which I am a little sceptical, it must be based on a mixture of the two principles. One principle is in some broad sense a general sense of social justice and what a particular occupation is worth, whether it is falling badly behind other and similar occupations, a general sense of what people consider to be the proper reward in an occupation. The other principle is obviously the economic principle, that if there is a shortage of people in that occupation, it may be such a shortage that a large increase in wages or salaries is required.

Our main complaint about the Government's income policy is that it is not based on either of those two principles, nor even on a mixture of them. It bears no relation to anyone's sense of social justice, nor to the economic needs of particular occupations. The awards made in the last month or two—nurses, 2½ per cent.; doctors, 9 per cent.; engineers, 2½ per cent.; probation workers, 2½ per cent.; almoners and psychiatric social workers, 14 per cent.—there is no kind of pattern. The various increases do not bear any relation to what most people would consider the worth of those occupations, nor do they bear the slightest relation to the economic necessities of those occupations.

It is our objection that there is not an incomes policy in any sense of the term. There is simply an incomes muddle. The Government are trying to hold down wages and incomes as a Whole and the outcome is related not to social or economic considerations but partly to pure chance—what some industrial court happens to recommend—and partly to the strength of the bargaining groups, the weakest coming out worst and the strongest best. It is not a policy which achieves any objective which we share in the slightest. For example, consider the two categories which have been mentioned, nurses and probation workers. Obviously, the 2½ per cent. offer to nurses was related not to what most people deserve in some general sense of the importance of their work, nor to whether we need more nurses, but purely to the figure which the Chancellor gave as the guiding light. Similarly with regard to probation workers.

Surely, after the Morison Committee's Report, everybody was agreed that we had to pay probation workers more? The normal work of a probation worker is heavy, but the case load work is much too high. Everybody now agrees that there is a serious wastage out of the probation service, and they also agree that the differential is too low to provide a sufficient incentive to people to move from one place to another to seek promotion. If we had more probation workers, we should, on balance, save money and not spend it. After all, if every probation worker kept two people a year out of an institution, the result would be to save public money. The offer of 2½ per cent. to probation workers and nurses, compared with 14 per cent. to almoners, does not make sense either on social or economic grounds, and our complaint is that the Government's income policy is neither rational nor coherent.

The case of the nurses and probation workers occupied a large part of the speech of the hon. Lady the Member for Tynemouth (Dame Irene Ward). The Government's incomes policy tends to be biased against the public sector. This is due to a number of reasons, but partly because of the Tory Party's attitude to Government expenditure. The hon. Lady appears to be terribly critical of the Government's policy, but nevertheless votes for it month after month. She is constantly trying to get the best of both worlds. She is often a courageous critic of the Government, and yet she votes for their policy.

Dame Irene Ward

Perhaps the hon. Gentleman will look at my Division record before making statements of that kind. When I feel that I want to vote against the Government, I do so. Certainly on these issues the hon. Gentleman will find that what I said works in with the votes that I have recorded.

Mr. Crosland

I have a good idea of the hon. Lady's Division record. She occasionally votes against the Government on specific issues such as nurses' pay, but she would never vote against the Government on a major wage policy from which the specific issues arise. That is why I say that she is constantly trying to get the best of both worlds.

Because of the Government's bias against wages and salaries in the public sector, they, like most other Governments in Western Europe, have no incomes policy for publicly-employed people. As was pointed out in the O.E.E.C. Report on rising prices, issued a year ago, in Britain, as in other countries, the Government are the biggest single employers of labour, and yet they have no incomes policy for their employees, nor even a policy of relating the wages of their employees to incomes outside. The only policy they practise is to react to an economic crisis in two ways. First, they cut investment, and, secondly, they try to keep down wages in the public sector. These are the two typical panic reactions to crises.

It is for those reasons that when there is an imposed pay pause like this there is an unjust bias against public service employees as opposed to employees in manufacturing industries outside the Government's sphere. The only answer to this is that the Government will have to accept two principles for the incomes of their employees. First, in broad terms they will have to accept the principle of comparability. Obviously this has been accepted in particular fields inside the public sector, but the Government still have, in broad terms, to accept that all remunerations in the public sector, whether salaries or wages, must go up steadily.

One reason why we get into difficulties in the public sector is the jerkiness with which this problem is dealt with. Teachers, or nurses, or bus drivers, or whoever it may be, are given a substantial rise. But then, for the next six or seven years no further increases are awarded to them and the Government suddenly wake up to the fact that these groups have fallen far behind everybody else. In private industry we have become accustomed to the idea that in probably most years wages and salaries go up by whatever percentage is necessary to meet rising costs, but we have not achieved the same principle in the public sector.

In addition to the principle of comparability we also have to accept the notion that in the public as well as in the private sector there has to be an annual increase in incomes. If it is an annual increase it need not be as large or as jerky as an increase happening once in every seven years. But I am certain that the principles of comparability and steadiness have to be accepted. It has not been accepted in the Government's incomes policy, and that is one of the reasons why it has been an appalling failure.

The hon. Lady said, quite rightly, that there was indignation in large parts of the public sector today and she made a comparison, which struck me as curious, with 1931–32. I think that the comparison with 1932 is that the Government have succeeded in creating indignation in the public sector which has not been known since then, and this has really been the most frightening result of the Government's so-called incomes policy. It may be that there is a case for a coherent national thought-out policy, including all forms of income—profits, dividends, wages, salaries, and so on. We know that other countries—Holland and Sweden in particular—have tried to operate such a policy. I think that there is some case for this but that there is a tendency enormously to exaggerate it. However, that is not relevant to our discussion today, because that is not the sort of incomes policy that we have had under this Government.

It has been a vague attempt to keep down incomes everywhere, the success or failure of this depending on the strength of particular bargaining groups. What is certain is that the Government have succeeded in keeping incomes down rather lower than they otherwise would have been, not as a result of a sensible incomes policy, but as a result of a measure of deflation over the last year. The Government's only real economic policy is by deflation, plus a certain amount of incomes policy following that, to keep down the rate of wage increases here to about two years below what they think they will be in most other European countries, to improve our relative position. It is the conscious policy of the Government to improve our competitive position at the cost, however, of two years' almost total loss of output and growth.

Hon. Members on this side of the House think that the price is too heavy. We do not think that this is the right way to proceed. The cost in terms of the loss of wealth and output and the cost in terms of injustice in the way this incomes policy works make the price very much too high, particularly as we do not get the advantage which we might get from deflation when we keep prices down. At the same time as this happens, prices keep rising. As the hon. Lady said, the cost of living index rose by seven points last year, and she rightly remarked that the cost of living index does not measure the true cost of living for many of the people that we may be talking about.

The Minister of Pensions and National Insurance gave a false impression the day before yesterday when he announced the new scales of National Assistance. He gave the impression that the cost of living index was a true measure of the cost of living of the people on National Assistance. Most people agree that those living on National Assistance spend relatively much more on two things—food and fuel—so that the cost of living for them is not measured by the index.

For all these reasons, we do not think that the Government are adopting the right policy when they create deflation in order to make our wages and prices more competitive. We on this side would much rather go for the alternative policy of rapid growth. This is the longstanding difference between the two sides of the House during the last ten years.

I want to be brief. I shall say only three things about growth. There are many things that we need for growth, but there are three things in particular, and because the Government are not putting their hand to any of them we are sceptical about their will power and their intentions.

The first necessity is confidence, plus planning. One of the most dangerous things that is happening now in this country—although to a lesser extent than in the United States—is that industrialists, both public and private, are beginning to lose confidence in any sort of prospect of steady and sustained growth. Even after the setting up of the N.E.D.C. we still have these stop-start policies, and we still have the depressing Budget speeches of the Chancellor, talking the whole time about soundness and never about growth. All the emphasis in his last Budget speech was on soundness, and all the rest. There is a serious danger that public and private industrialists will lose confidence in the nation and that we shall not have a steady and rapid growth in the next few years. This confidence can be restored only by positive Government planning through the N.E.D.C., but, so far, although we have had an enormous number of words there has been no definite sign of anything good coming out of it. I only hope that it will.

The second thing required for growth is more investment. We can argue between ourselves as to how much more there should be, and exactly how important investment is—but none of this matters. Everybody agrees that we need more investment in order to get more rapid growth. The real condemnation of the Chancellor's Budget speech was that he said that private manufacturing investment was to be lower next year than this, and did nothing about it. It was the most glaring omission in the Budget. We have had a reduction in investment, but the Government have not taken one step to correct the position.

The third and most serious requirement is for some kind of reform of the international monetary system. We have too few reserves; Americans have too few reserves, and the Canadians have too few reserves. Almost every major country either has too few reserves or thinks that it has. The danger of this position was brought out by a surprisingly progressive leader in the Economist a week ago. It referred to the recent Canadian increase in tariffs and cuts in public expenditure and home investment, and called this an unsavoury whiff from the 1930s, which it is. It does, for the first time since the end of the war, make one think of the thirties with competitive deflation and restriction—with one country starting it, a second having to follow suit, and so on right round the world. In the last few years we have had some co-operation among the central bankers, but this is not enough. If the central bankers ease the position of the Canadian dollar they will lay down conditions, which may lead precisely to this sort of competitive deflation. In the case of Canada it probably will lead to that.

This problem can be solved only by a considerable reform of the whole international reserve and monetary structure, and the serious indictment of the Government is that during the last two years, when, as the Financial Secretary knows, there have been all these discussions about the Triffin plan and the Bernstein plan, and elaborate proposals for major reforms, the British Government have never taken the lead but have always been content with relatively minor, small-scale reforms. It is becoming more and more certain that if that is all we are to get we simply shall not be able to have the rapid growth that we want.

I do not want to go on any longer. When the hon. Lady spoke she said that her intention was to improve the Government whereas ours was to destroy it. We seem to be in a majority in the country, since 61 per cent. of those questioned by the national public opinion poll showed themselves to be anti-Government. The real argument for not trying to improve but to destroy the Government is not that this is what most people want but that it is now too late for any improvement. Destruction is now the only possible course.

9.0 p.m.

Mr. Ellis Smith (Stoke-on-Trent, South)

In the limited time at our disposal it is difficult to do justice to the serious issues that we should be discussing. My hon. Friend the Member for Grimsby (Mr. Crosland) has made the kind of informative and analytical speech which one would have expected in a debate of this kind. Although I differ from him fundamentally in my approach to our problems I wish to make quite clear that I have the greatest respect for his integrity and character and for the conscientious service which he performs for the Labour movement and in this House.

I had hoped that in this debate we should have the kind of reappraisal of the economic position of the country which is so urgently necessary at the present time. I cannot adopt the same approach to our problems as have other speakers. I wish to voice the views of those men and women with whom I belong and whom I have served all my life. My only desire is to retain their confidence and prove worthy of the confidence which so far they have reposed in me.

For generations this country was free from invasion because of our geographical position and the protection afforded by the sea, and because we had a powerful Navy. But because of the changes in the world situation we are now one of the most vulnerable countries in the world. For generations, too, we were almost the only workshop of the world Our exports went all over the world. Just as in time of war we were the most wonderful country in the world so, now from an economic point of view, we could be a wonderful country. Therefore, all hon. Members whose desire it is to safeguard the present position and to utilise it as a basis for working towards something even greater and better should be concerned in the way in which I hope to indicate.

Despite the situation to which I have referred, I think that, once again, we could be the world's greatest workshop. I had the good fortune to be trained and educated from a technical point of view in one of the most efficient industries in the country, with which are connected many well-known names, and I am sure that if we could embark on the necessary research and adopt a progressive industrial outlook the country would be able to maintain the present level of exports and, indeed, increase it, thus enabling us to improve our position in the world. Because that is my belief, I wish to make a contribution to this debate.

The economic position of our country depends upon our manufacturing and productive industries. Particularly does that apply in relation to our export trade. In my view, all our activities should be adjusted to meet that situation. During the last fifteen years no attention has been paid by the House of Commons, in particular, to the constant increase in overhead charges in the productive industries. This has created great difficulties for those engaged in those industries, because in catering for the export trade they must consider production costs. We have now reached a situation in which the burden which manufacturers in productive industry are carrying are far too great.

Steps should be taken to ease them. The present position is that millions of people have had substantial increases in wages and salaries whilst those engaged in manufacturing over 60 per cent. of our exports have not had a penny during the past few years until this week. This has created a situation in the principal export industries about which the Government should be very concerned.

Early in the last war I had many conversations with people like Sir Kingsley Wood and Sir John Anderson, because I had put question after question about the need to avoid inflation. I was interested in the subject because I served in the Army of Occupation in the First World War and, therefore, dreaded inflation ever coming to this country. As a result of the policy of the "Win-the-War" Coalition Government, inflation was avoided to a large extent, to the everlasting credit of the whole country during the war.

It is during the past twelve years, in particular, that we have suffered from inflationary trends. I admit that there is no one reason for this trend, but I shall mention the main contributory factor. It was not increased wages during the past twelve years that produced the inflationary situation about which the Government were recently concerned. It was increased prices that produced it. Wages chased prices. It was not prices that chased wages. In addition, there has been an easing of all controls on industry, an increase in Stock Exchange gambling and an increase in get-rich-quick take-over bids. All these factors have had a serious cumulative effect on our internal position and have produced an inflationary situation.

If any hon. Member doubts my statement of the fundamental reason for the inflationary situation, I invite him to go to the Vote Office or the Library and study the Government's Blue Book "National Income and Expenditure 1961". It will be found from Table 11 on page 7 of that document that during the last decade our gross national product increased by 90 per cent. Consumers' expenditure increased during the same period by 76 per cent., but Government expenditure increased by 101 per cent., and it is Government expenditure that has created this really serious inflationary situation.

Therefore, at a time when this country wishes to hold its own in the great competitive export drive which is beginning to take place in the world, all those who support the Government's gigantic expenditure are responsible for the inflationary situation. The time has arrived when this House should accept the responsibility of making constructive proposals for dealing with that situation.

There is no time to say all that I would like to have said, but I would just mention that nearly twenty years ago my right hon. Friend the Leader of the Opposition gave me a copy of a memorandum that he had prepared analysing how the wealth in this country was owned in those days. It made a great impression on me. But in the time that has elapsed since then the situation has become even more serious. Had there been time I would have quoted from a recent issue of the Observer which drew attention to the present serious situation. It is the inflationary effect of the ownership of wealth, which gives to the relative rich incomes that they ought not to be drawing, even in a capitalist system, bearing in mind the serious economic situation of the country and the terrible burden that is being carried by manufacturing industry.

Great bitterness is aroused in me when I hear some of the speeches which are made in this House and in the country, and when I consider the circumstances of the people to whom I belong. Even the work done by girls is analysed by time and motion study. Every movement is recorded on films, which are taken into back rooms and studied so that the tempo can be increased and production costs reduced to a minimum.

Tension in industry is such that although the workers recently voted against a strike and adopted a responsible attitude, the Government are playing with fire if they rely on there being no industrial unrest. They should make inquiries about the feeling in industrial areas arising from the unfair administration of the alleged pay pause which was introduced by this Government about two years ago. Manufacturing industry will not be able to stand up to the situation much longer. Had there been time, I would have quoted from letters which have appeared recently in the Financial Times giving evidence in support of my plea, letters from some of the most able accountants in this country dealing with our serious situation.

I do not mind what is thought in this House, but I do mind what is thought outside, and I want to emphasise that owing to the limited time at my disposal I cannot make the realistic case that I should like to have done. I have reached the stage when I am not concerned about what other people think. What matters is what one thinks and does oneself. I remember the saying I used to hear in my young days, that those who care most, whether it be for their homes or their country, dare most.

The time has come when the House of Commons should make quite clear that the only satisfactory way to deal with our present situation is to make an immediate reduction in our military expenditure of at least £300 million. I made a similar suggestion, speaking then of a reduction by £200 million, when the present Prime Minister was Chancellor of the Exchequer. I will not repeat the observations which I know were made about this matter, but the right hon. Gentleman was the most sympathetic, and it was obvious that, when he was Chancellor, he was most concerned about the problem and welcomed constructive suggestions of that kind. This country embarked upon gigantic military expenditure which it should never have undertaken. It has been a terrible burden, and we owe it to industry now to ease it.

We have heard a lot about Dr. Beeching. I shall make no observations about Dr. Beeching or his policy now, but I suggest that an investigation is required into expenditure by certain Government Departments, particularly the War Office, the Air Ministry and the Admiralty. Does any right hon. or hon. Member differ with me about that? At each General Election since 1951, every Conservative candidate has given an undertaking to the electors that, if returned, he would work for the reduction of Government expenditure. Every new Government party elected since then has been responsible for a betrayal of those promises.

The time has come when someone should have the courage to remind hon. Members of what they have said. I am not speaking about people personally, because I have had too much experience to be drawn into personalities. I am speaking of the broad promises which have been made, leading the people up the garden. One undertaking after another has been given by Tory Members that they would make proposals for reducing Government expenditure.

Can anyone remember proposals being made like those being made tonight? In my view, the House itself does not play the game with its own Members. I see the hon. Member for Aylesbury (Sir S. Summers) in his place and I am reminded of the great and conscientious service for which he and other hon. Members are responsible in the sub-committees of the Estimates Committees, which meet for hours and hours, week after week, upstairs. The members of the Committee do a great deal of work. They visit Ministries and outside establishments. They prepare Reports for the consideration of the House. Had I more time, I should quote from the Sixth Report of the Estimates Committee, one of the greatest indictments of Government practice ever published in this country. Not a word has been said in the House about extravagant expenditure in the Service Departments during the past few years.

For the Navy, there has been an increase of £31.6 million, for the Army an increase of £34.9 million and for the Air Force an increase of £20.6 million, a total increase of £87.1 million superimposed upon previous expenditure. The Estimates Committee says that, judging by the answers given by responsible civil servants who appeared before it, the tendency will be for this expenditure to increase during the next few years. Has not the time arrived when we should speak out in this way? Industry must readjust itself to this situation if this country is to hold its own.

Time is limited and I do not wish to be charged with what other hon. Members have been charged with. I am satisfied to have made a brief contribution to the debate. However, in two weeks' time we shall be asked again to vote large sums of money for defence. We shall have a White Paper of about six pages before us from which we shall learn how the military has been juggling with millions of pounds. What they have no spent here, they have spent there. I compare military expenditure with the industry to which I belong. Responsible administrators have to watch every penny of expenditure. The rate-fixing departments in large concerns collectively employing over 20,000 people have to fix prices down to the last halfpenny. Yet we are responsible for acquiescing in the application of the seventeenth century principle of virement which enables the military to juggle with millions of pounds. We have a gigantic expenditure of £1,700 million.

This country can stand up in the world, look everyone straight in the face and say that in two world wars we have made a great contribution to saving the world for all that is best. For many years expenditure has been much greater than it should have been. The time has come when, irrespective of our political differences, we should say to the rest of the world, "Great Britain can no longer stand this expenditure. We propose taking the initiative in reducing it to ease the burden on our export trade so that our men and women can have a better chance to work for a greater percentage of international trade to enable us to have a better chance of holding our own in world affairs"

9.23 p.m.

Mr. Michael Shaw (Brighouse and Spenborough)

It gives me great pleasure to follow the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith). I cannot go far with him in his argument for an immediate reduction of £300 million in defence expenditure, but I have great sympathy with his suggestion that the welfare of the country is founded on our manufacturing industries, and particularly on their capacity to export. A small flame is kindled in my breast that the hon. Gentleman might join several of my hon. Friends and me in a policy for some preferential tax treatment for exporters in order to achieve an objective which, apparently, the hon. Gentleman and I hold dear.

We have heard a great deal about the pay pause tonight. We have heard rather more about other matters not directly connected with the pay pause. I believe that the pay pause was right. I admit straight away that I do not think that it was perfect, but it was effective. Had the Chancellor not had the courage to bring it into effect, there would have been very serious consequences for the country.

The hon. Member stated that for too long, as a result of the policies of the Government, we had had inflation. I believe that what would have caused far greater inflation would have been devaluation of our currency, as there was in 1949. The introduction of the pay pause last July probably resulted in saving the country from having to make a further devaluation. We should remember that the wage pause was brought in against a background of general prosperity, against a background of the fact that over the last ten years wages had risen by one-third in value.

I wish to make only two points. I agree with my hon. Friend the Member for Tynemouth (Dame Irene Ward) that the incomes policy on which the Government are working must be stated in such terms as everyone can understand. The reasons for any alterations that may be required in the methods of negotiation and arbitration and in the methods of settlement of wage claims must be made clear. Furthermore, it must be made abundantly clear that any alterations which are necessary in the system are fair to both sides, otherwise the system, if altered, would not work. Imperfect though they may be, the systems which have been built up have proved of tremendous benefit both to management and to men.

An incomes policy in this or in any other country, but particularly here, cannot be regarded in isolation. No matter how perfect the system which is acquired or developed, if the general economic policy is not right, the incomes policy will not succeed. Any sudden, violent fluctuations in our economy are bound to bring a distortion in the general level of earnings. The obvious distortion is that, clearly, there would be a complete and rapid change of circumstances which would lead to the stronger unions being able to catch up more quickly than those unions which are less strong, thus bringing about an immediate disequilibrium. But I will not develop this at any greater length. We need to have longer-term Government and local government planning. We have realised that the stop-start technique in our capital expenditure throughout the country is tremendously wasteful. It is tremendously expensive in terms of wage rises, because every two or three years there is sudden, tremendous pressure for more labour in building and at the peak pressure points there is a rapid movement upwards in wage levels which remains after the pressure eases off, with the result that instead of getting the gradual and steady increase that we want the rise is sharp and uneven.

That must bring me to the end of what I have to say, except for this final comment. I believe that we have only begun to scratch at the surface of providing the necessary information against which wage claims can be settled. I believe that the leaders of industry, the leaders of management and of men have got there because they are leaders and because they are men of sense, and that if the facts are available, whether provided by the N.E.D.C. or anybody else, and if the general conditions of the economy are kept right by the Government these leaders will see what are the true interests both of industry as a whole and of their own particular sections in detail.

Therefore, I should like to press the point that more information shall be available, both from the national level and also from the industry level, both within our industries and within their rivals overseas, so that they can get a true comparison all round to provide a background to wage negotiations for the future.

9.32 p.m.

Mr. Ray Gunter (Southwark)

I am sure, Mr. Speaker, that you and the hon. Lady the Member for Tynemouth (Dame Irene Ward) will not misunderstand me when I say that the hon. Lady fascinates me. For the hon. Lady to move this Motion tonight congratulating the Government upon a policy which she professes she does not understand anyhow and she asks her Front Bench to explain to her, then to go on to say that the country does not know what it is about and to add that this alleged policy is unfair, and, finally, to congratulate the Government, I find rather strange indeed.

We are dealing with a Motion in which the hon. Lady congratulates the Government on a policy. Having listened very carefully to the hon. Lady tonight, I would in the first place give emphasis to what my hon. Friend the Member for Grimsby (Mr. Crosland) said. To me, there is something a little curious about an hon. Member on the Tory benches coming forward with the observations which the hon. Lady has made today. She has complained of injustice and inequality as between different sections of the community, but she would not be a member of the Tory Party unless she accepted inequality in society. [HON. MEMBERS: "No."] Yes, of course. The blunt truth is, and the hon. Lady knows it, that this crisis and this alleged policy stem from the fact that this nation has been over-paying itself for a number of years. We all know and understand that it is not an immediate crisis. For the last half-dozen years, we have been living beyond our means. That was the position at the time of the last General Election, when the hon. Lady had scratched all over her constituency, knowing that position, the words "Don't Let Labour Ruin It".

I suggest to her that she should go back to first causes. It is the party of hon. Members opposite that is responsible for the position in which we found ourselves in July of last year, when the Chancellor made his statement. They must accept that responsibility for it was they who taught the people—and this has been said in this House before—that perhaps thrift did not matter any longer. I say to those on the Government Front Bench tonight that they cannot have a wages and salaries policy in isolation. So long as they are prepared to face the consequences of a policy embracing not only wage earners and salary earners but those who have the profits and the dividends in this country, there are many sensible people who are prepared to listen to them and to sit down with them to settle that problem, but they cannot have a policy of this character which applies only to wage and salary earners. It must be an all embracing policy.

Because of the attitude of the Government, because they have failed clearly to put the issues before the country, because they have failed to impress the country that we are all in it together, certain consequences have flowed, which the hon. Lady was so worried about, in the machinery of negotiation.

There have been very dangerous blows struck at the system of collective bar- gaining in this country. They are not quite so obvious as people think. I emphasise in the presence of the Chancellor of the Exchequer that I am not one of those who believe that our existing form of collective bargaining is sacred and eternal. I accept the fact that in a developing society such as ours and with the changing pattern of industry, it could well be that the unions and management will have to come to a different understanding on how we arrive at job evaluation and the differentials between individuals. I accept it. But we can only make those changes which are necessary so long as we carry with us the confidence of those engaged in industry, and this Government stand indicted not so much because of their motives as because of their stupidity. They have by this method damaged the confidence of men who have been taught to believe in the forms of collective bargaining which we have had. There has been interference by the Government.

Let met here emphasise again that I would agree with the Chancellor that in the years to come it may well be that the voice of the Treasury ought to be heard at certain levels of wage and salary negotiations. I would not dispute it, but to do it in the hamhanded way in which it has been done in the last six months or so is damaging.

I would say to the hon. Lady—I cannot quite recall the offensive remark she passed about the Chancellor's White Paper—that that White Paper is about the daftest thing I have ever read. [An HON. MEMBER: "A namby-pamby document."] That was it, a namby-pamby document. The White Paper said to those engaged in the processes of collective bargaining that they must whittle down most of the customary arguments which are adduced in wages negotiations. I am not here arguing that they are sacred, but, nevertheless, there has been a pattern on which negotiations have taken place, and, as I say, to some degree or other, the White Paper has whittled it down, saying that the cost of living is not so important as it was, that increased productivity in certain industries is not a great factor, that we cannot talk so much about trends of profits, or shortage of labour, and that comparisons with incomes in other industries should not be made. All these things are written down in the White Paper by some degree or another. I confess that I am completely bewildered as to what we are going to talk about. We shall be singing love songs across the table in negotiations if we cannot discuss these things.

I suggest to the hon. Lady that it is no good her grumbling and moaning now about the injustices to certain sections of the community, because they arise from the Government's policy. I want to allow time to the hon. Gentleman who is to reply to the debate, and Heaven forbid that I should stand between him and his most devoted follower at the back, but I must say a word about the injustices which she emphasised. This is stark cowardice. The dockers beat the Government, did they not? They beat the Government because they were able to defend themselves. But the nurses could not defend themselves—and they roused the martial glory of the Etonians in the Cabinet and they said, "They shall not pass," and so they fought the nurses. What a way to deal with the dedicated sections of our community. That was injustice, and it ought to be put right.

All I say to the House is that the fact is that we have no policy, and we need a policy. Let no one be misguided enough to think that we can go on in the way we are going. We must have a policy—we can call it a national incomes policy or whatever else we like—which will determine the priorities and bring industrial peace, because that is essential.

The arbitration courts at the present time are, I am very glad to say, taking little notice of what the Government say to them. Let me repeat—this is not to say that I have not an open mind about the operation of industrial courts in the future—that the failure of the Government to implement the policy with justice and sense has gravely damaged the industrial machinery that we have built up. Consequently, my concluding words to the hon. Lady are that it is no good coming here and moaning about injustices, because they are the direct result of lack of Government policy and lack of Government understanding of the proper problems of industry.

I am surprised at some back benchers opposite who are men who know industry. There are men on the back benches opposite to whom I talk, for they know the language of industry. The tragedy is that on the Government Front Bench there is not a single member of the Government who can really talk that language, who understands the priorities of industry and who understands the important and the unimportant things in the field of industrial relations. It is about time some hon. Members on the back benches opposite made sure that the real voice of industry, the real voice that could interpret what is required to create good industrial relations, finds a place there so that we may be able to see matters in their proper light.

9.42 p.m.

The Financial Secretary to the Treasury (Sir Edward Boyle)

At the outset of her speech, my hon. Friend the Member for Tynemouth (Dame Irene Ward) asked me whether I would explain how successful the incomes policy has been. Just what my hon. Friend said at the beginning of her speech may not now be within the recollection of the House, but I will start by answering that question.

If my hon. Friend will look at a speech which I made in the House on 31st May, in answer to an Adjournment debate, she will find that I tried to deal with the precise point. As time is short, I will say just a brief word about it now. I said on that occasion—I gave reasons for the calculation—that if one took the six months' period from October, 1961, to April, 1962, wage rates rose by 2.2 per cent. I gave reasons for thinking that without the incomes policy they might have risen as much as 3 per cent.

I deliberately put what I had to say to the House in very broad terms because, obviously, here one is not dealing with something which admits of absolutely precise calculation. I said: On the assumption that future wage increases are damped down as much as the calculations I have given suggest that they were damped down between October, 1961. and April, 1962…it is possible that retail prices will rise 1 per cent. to 1½ per cent. each year less than they otherwise would. This may not seem a dramatic figure. However, if we could achieve over a term of years an average rise of retail prices 1½ per cent. to per cent. less than we have experienced during the 1950's. this would make a substantial difference to our competitive power abroad." [OFFICIAL REPORT, 31st May, 1962; Vol. 660, c. 1729.] I am sure that that is true.

I should like, next, to take up the point in the Motion where my hon. Friend regrets that the application of the incomes policy has not been uniform throughout the private and public sectors. I have no doubt that this is the point more than any other which is uppermost in people's minds when they are discussing the incomes policy today. I would tell my hon. Friend that when one is looking at the history of the period since last July one must distinguish two distinct phases. First, there was the pay pause, which was introduced last July and came to an end on 1st April.

My right hon. and learned Friend the Chancellor of the Exchequer always realised that the pay pause was bound to have a very sharp impact—indeed, I would be prepared to say a crude impact —on the public sector. For that reason, he made it clear that this could only be a temporary phase. Then, we had the interim White Paper on Incomes Policy in February last, which gave general guidance to those responsible for fixing incomes—general guidance in the interest of the economy as a whole, which was to apply both to the public sector and to the private sector.

In answer to the hon. Member for Grimsby (Mr. Crosland), I suggest that if one reads again paragraphs 7 and 8 of the White Paper—while I accept his point that one has to consider carefully whether one is using social or economic arguments—one finds that the bias of those paragraphs was clearly on the economic side.

I do not think that one should underrate the effect that this White Paper has had. It has had effects on the private sector as well as the public sector. It has had effects on a number of industries, including some of very great importance to Britain's competitive power abroad. But no one has ever disputed for a moment that this is an interim White Paper and, as my right hon. Friend the Chancellor of the Duchy of Lancaster made clear in the speech to which my hon. Friend the Member for Tynemouth referred, the Government are still considering very carefully what should be our long-term incomes policy.

I have said in the House many times, and I think that it is well understood on both sides, that this is a major economic decision—one of the most important decisions in the economic field that any Government can make. Of course, the Government realise, as they have always done, that an absolutely flat level of pay increases is not something that can be maintained in the long term. It would not strike public opinion as fair. It would not be sound economics nor conducive to the sort of society we would wish to see.

But, at the same time, when the hon. Member for Oldham, West (Mr. Hale) —whose speech we listened to with great interest and respect—talks of going back to the situation as it was before July last year, I say to him that we have to avoid indiscriminate copying of an increase rightly granted in one sector of the economy by other sectors where there is not the same justification. That is what happened before July last year.

The hon. Member for Grimsby developed a perfectly fair point about the annual rate of increase which seemed rather closely in line with a very thoughtful letter written by Professor Kahn to The Times a little while ago. Professor Kahn was partly responsible for the O.E.C.D. report on prices, which rightly laid great stress on the problem of what was called "wage wage inflation"—the tendency of an increase rightly granted in one sector being copied indiscriminately in others. That is the biggest problem we shall have to face when framing a long-term incomes policy.

Mr. Hale

The Treaty of Rome will not allow us to have a policy of the sort which the Government have been considering for twelve years. If we join the Common Market, the Government will not be able to do this.

Sir E. Boyle

I do not want to avoid that point, but I am not an expert on the Rome Treaty, and, with time so short, I must ask to be excused from developing it. I do not believe, however, that there would be anything in the Treaty that would prevent us from developing an incomes policy.

My hon. Friend the Member for Brighouse and Spenborough (Mr. Shaw) made an excellent speech. I agree with what he said about information. He is quite right about this. The Government, by one means and another—by speeches, by appearances on radio and television and by interviews with national and provincial newspapers—have done a good deal more to publicise this policy than is often realised. Sometimes rather unfair things are said about this. In addition, of course, the Government's policy has been spelled out at considerable length in correspondence with the T.U.C. and representatives of the white collar workers and the Civil Service unions, including the complete and important statement made on behalf of the Government before the Civil Service Arbitration Tribunal.

I should like to take up one point in the speech of my hon. Friend the Member for Harrow, West (Mr. John Page), who spoke about the Glacier project and whether more could be done in the way of job evaluation. I would not wish to cast scorn on this, but it is illusory to think that the application of any one or more of the schemes to which my hon. Friend referred can provide the solution of the problems raised by a national incomes policy.

But there is some rather valuable material on this subject in the evidence which the Treasury presented in its memorandum to the Royal Commission on the Police. One point in the memorandum which struck me as strong was the principle not only that market situations change constantly, but that social judgments as to the value of certain kinds of work and professions change all the time. This is the very great difficulty of trying to achieve too much by the sort of means which my hon. Friend the Member for Harrow, West had in mind.

I should like to say something on the subject of the Amendment of the hon. Member for Grimsby. I absolutely agree with him that the subject of long-term growth is at the heart of our economic problems today. In other words, the important point is not just achieving a rate of increase of produc- tion in one year as a result of an increase in home demand, but of achieving a steady rate of long-term growth over a term of years.

It was just for this very reason that the Government set up the National Economic Development Council. I would not for one moment wish to suggest to the House that the Government can pass on any of their own responsibilities to this Council. On the contrary, the more the Government can be seen following policies which are conducive to growth the greater the value of the work that the N.E.D.C. can do. But the opposite is equally true—that it is surely of value that these considerable problems of how we can speed up technological change and develop competitive management and achieve a more rapid training and mobility of labour are matters on which the Government can gain a great deal from the advice which they will receive from the Council.

It is worth remembering that the N.E.D.C. today is not only considering the implications of a 4 per cent. growth rate, but is also to assess over a wide field of public policy and industrial practice the conditions which are likely to be favourable for a sustained rate of growth.

Growth is a matter of both sufficient demand and a response on the side of supply. Home demand in the United Kingdom throughout the 1950s was usually ample, but the response of industry on the supply side has not always been as elastic as we could wish. There is surely a need to modernise throughout British economic life. I was not able to listen to the hon. Member for Grimsby on the wireless last night, because I was otherwise engaged on the Report stage of the Finance Bill, but I would not quarrel—in fact, I would very much agree—with the emphasis which he laid, and always lays, on the importance of expert ability in all aspects of our national life, and the need to realise where specialist knowledge and expert ability are clearly required.

True economic growth is not simply a matter of statistics of output. It is one of the aspects of a growing economy that more of its members will spend their income not just on acquiring more goods, but on enjoying more services as well. When one is considering differences in living standards, they are marked very often more than anything else by differences in the ability to enjoy certain services, and again, we ought not to overlook the importance of quality and variety of consumer goods.

On both sides of the House there is more realisation than ever of the importance of trying to promote an open economy. I have no doubt that we could achieve high statistics of production by shutting ourselves off from the rest of the world, provided that we were prepared to accept a very low level of consumer choice. But I do not believe that that is the sort of economy which most people wish to see.

The economic outlook today is reasonably good, despite uncertainties in the United States. As we have a more moderate trend in prices during the rest of the year, consumers will have more purchasing power and there will be the increase in consumer demand which my right hon. and learned Friend has forecast. Public expenditure is rising and the trend of exports is favourable. There is still every probability of a satisfactory expansion over the current financial year. We have made the necessary readjustment which had to be made as a result of last summer's balance of payments crisis.

The hon. Member for Grimsby made a number of points. First, he expressed the need for confidence, and, of course, I entirely agree with what he said about the need for industry to feel that we intend to promote a steady rate of growth based on a first-class competitive performance. He spoke about what we have neglected to do with regard to the reform of the international monetary system. I cannot speak with any specialist knowledge of the various plans —the Triffin Plan and the Bernstein Plan, and so on—which he mentioned, but we have taken two separate initiatives recently to increase the resources of the International Monetary Fund. We supported, and, indeed, took considerable initiative in supporting increased quotas and we also have supported an increase in borrowing powers from the Fund. I can assure the hon.

Division No. 238.]	AYES	[10.0 p. m.
Agnew, Sir Peter	Ashton, Sir Hubert	Barter, John
Allason, James	Atkins, Humphrey	Batsford, Brian
Arbuthnot, John	Barlow, Sir John	Baxter, Sir Baverley (Southgate)

Gentleman, without going into details, that neither of these operations was quite so easy to negotiate as some people might have supposed.

On the subject of Government expenditure, I say this to the hon. Gentleman. I know that it is very easy to quote selective figures, but it surely is of significance that if we compare the Estimates of this year with the Estimates of 1951–52 not only has the total social expenditure more than doubled, but as a proportion of the gross national product we are today spending more on social and community services proportionately to the national product, and if we consider it as a proportion of Supply expenditure the change is quite dramatic. In 1951–52, the proportion of Supply expenditure on social and communal services was about 33 per cent. and today the figure is about 43½ per cent.

I link up the Motion and the Amendment by saying this. The greater the good sense shown on the incomes front the more fully it will be practicable to run our economy. Indeed, it is true to say that if we have moderation in claims for higher incomes this will lead to a higher rate of increase in real wages.

After all, what determines the standard of living in the long run must be decisions taken by many millions of people, and increases in productive efficiency and in sales efficiency all along the line. I believe that we have always been right, as a Government, to say that rising living standards must be based on a first-class competitive performance, that exports must lead growth and that our incomes policy is one vital part of the policy which we must follow if we are to achieve these desired results. It is for these reasons—

Mr. G. W. Reynolds (Islington, North) rose in his place and claimed to move. That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 165, Noes 87.

Biffen, John	Henderson, John (Catcart)	Price, H. A. (Lewisham, W.)
Biggs-Davison, John	Hendry, Forbes	Prior, J. M. L.
Birch, Rt. Hon. Nigel	Hiley, Joseph	Profumo, Rt. Hon. John
Bourne-Arton, A.	Hill, Mrs. Eveline (Wythenahawe)	Proudfoot, Wilfred
Box, Donald	Hill, J. E. B. (S. Norfolk)	Pym, Francis
Boyd-Carpenter, Rt. Hon. John	Hobson, Sir John	Quennell, Miss J. M.
Boyle, Sir Edward	Holland, Philip	Ramsden, James
Brooke, Rt. Hon. Henry	Holllngworth, John	Redmayne, Rt. Hon. Martin
Brown, Alan (Tottenham)	Hornby, R. P.	Rees, Hugh
Bryan, Paul	Hornsby-Smith, Rt. Hon. Dame P.	Ridley, Hon. Nicholas
Buck, Antony	Hughes Hallett, Vice-Admiral John	Roberts, Sir Peter (Heeley)
Burden, F. A.	Hughes-Young, Michael	Roots, William
Campbell, Sir David (Belfast, S.)	Iremonger, T. L.	Ropner, Col. Sir Leonard
Campbell, Cordon (Moray & Nairn)	Irvine, Bryant God man (Rye)	Russell, Ronald
Carr, Compton (Barons Court)	Jennings, J. C.	Sharpies, Richard
Chichester-Clark, R.	Joseph, Sir Keith	Shaw, M.
Clark, William (Nottingham, S.)	Kaberry, Sir Donald	Skeet, T. H. H.
Clarke, Brig. Terence (Portsmth, W.)	Kerr, Sir Hamilton	Smith, Dudley (Br'ntf'd & Chiswick)
Cleaver, Leonard	Kirk, Peter	Smithers, Peter
Cooper-Key, Sir Neill	Lewis, Kenneth (Rutland)	Speir, Rupert
Corfield, F. V.	Lilley, F. J. P.	Stoddart-Scott, Col. Sir Malcolm
Costaln, A. P.	Linstead, Sir Hugh	Storey, Sir Samuel
Coulson, Michael	Litchfield, Capt. John	Studholme, Sir Henry
Critchley, Julian	Lloyd, Rt. Hon. Selwyn (Wirral)	Summers, sir Spencer
Cunningham, Knox	Longden, Gilbert	Talbot, John E.
Curran, Charles	Loveys, Walter H.	Taylor, Sir Charles (Eastbourne)
Currie, G. B. H.	Lucas, Sir Jocelyn	Taylor, Frank (M'ch'st'r, Moss Side)
Dance, James	Lucas-Tooth, Sir Hugh	Temple, John M.
Deedes, W. F.	McAdden, Sir Stephen	Thomas, Leslie (Canterbury)
Drayson, G. B.	McLaren, Martin	Thompson, Kenneth (Walton)
Duncan, Sir James	McMaster, Stanley R.	Tiley, Arthur (Bradford, W.)
Elliot, Capt. Walter (Carehalton)	Macmillan, Rt. Hn. Harold (Bromley)	Tilney, John (Wavertree)
Emmet, Hon. Mrs. Evelyn	Maddan, Martin	Touche, Rt. Hon. Sir Gordon
Errington, Sir Erio	Matthews, Gordon (Meriden)	Turner, Colin
Farr, John	Mawby, Ray	Turton, Rt. Hon. R. H.
Finlay, Graeme	Mills, Stratton	Tweedsmuir, Lady
Fisher, Nigel	Miscampbell, Norman	van Straubenzee, W. R.
Fraser, Ian (Plymouth, Sutton)	More, Jasper (Ludlow)	Vaughan-Morgan, Rt. Hon. Sir John
Freeth, Denzil	Mott-Radclyffe, Sir Charles	Wakefield, Sir Wavell
Gammans, Lady	Neave, Airey	Walder, David
Gibson-Watt, David	Noble, Michael	Wall, Patrick
Gilmour, Sir John	Nugent, Rt. Hon. Sir Richard	Webster, David
Glyn, Dr. Alan (Clapham)	Osborn, John (Hallam)	Wells, John (Maidstone)
Goodhew, Victor	Osborne, Sir Cyril (Louth)	Whitelaw, William
Gower, Raymond	Page, Graham (Crosby)	Wilson, Geoffrey (Truro)
Green, Alan	Page, John (Harrow, West)	Wise, A. R.
Gresham Cooke, R.	Pannell, Norman (Kirkdale)	Woodnutt, Mark
Grosvenor, Lt.-Col. R. G.	Pearson, Frank (Clitheroe)	Woollam, John
Hall, John (Wycombe)	Peel, John	Worsley, Marcus
Hamilton, Michael (Wellingnorough)	Percival, Ian	Yates, William (The Wrekln)
Harris, Reader (Heston)	Pitman, Sir James
Harrison, Col. Sir Harwood (Eye)	Pitt, Miss Edith	TELLERS FOR THE AYES:
Hastings, Stephen	Price, David (Eastleigh)	Dame Irene Ward and
		Sir Godfrey Nicholson.

NOES
Abse, Leo	Galpern, Sir Myer	Milne, Edward
Ainsley, William	Gourlay, Harry	Mitchison, G. R.
Allaun, Frank (Salford, E.)	Grey, Charles	Morris, John
Awbery, Stan	Criffiths, David (Rother Valley)	Neal, Harold
Bacon, Miss Alice	Grimond, Rt. Hon. J.	Noel-Baker, Rt. Hn. Philip (Derby, S.)
Bennett, J. (Glasgow, Bridgeton)	Gunter, Ray	Oram, A. E.
Blackburn, F.	Hale, Leslie (Oldham, w.)	Parker, John
Blyton, William	Hall, Rt. Hn. Glenvil (Colne Valley)	Pentland, Norman
Bottomley, Rt. Hon. A. C.	Hamilton, William (West Fife)	Prentice, R. E.
Bowden, Rt. Hn. H. W. (Leics. S.W.)	Hannan, William	Price, J. T. (Westhoughton)
Boyden, James	Harper, Joseph	Randall, Harry
Braddock, Mrs. E. M.	Herbison, Miss Margaret	Rhodes, H.
Brown, Thomas (Ince)	Howell, Charles A. (Perry Barr)	Ross, William
Castle, Mrs. Barbara	Howell, Denis (Small Heath)	Short, Edward
Crosland, Anthony	Hoy, James H.	Skeffington, Arthur
Cullen, Mrs. Alice	Hynd, H. (Accrington)	Slater, Joseph (Sedgefield)
Dalyell, Tarn	Jay, Rt. Hon. Douglas	Small, William
Davies, Ifor (Gower)	Jones, Dan (Burnley)	Smith, Ellis (Stoke, S.)
Diamond, John	Jones, Jack (Rotherham)	Soskice, Rt. Hon. Sir Frank
Dodds, Norman	King, Dr. Horace	Spriggs, Leslie
Donnelly, Desmond	Lawson, George	Steele, Thomas
Edwards, Walter (Stepney)	Lee, Frederick (Newton)	Stewart, Michael (Fulham)
Fernyhough, E.	Lubbock, Eric	Stones, William
Fitch, Alan	Mabon, Dr. J. Dickson	Taverne, D.
Forman, J. C.	Mclnnes, James	Thornton, Ernest
Fraser, Thomas (Hamilton)	McKay, John (Wallsend)	Thorpe, Jeremy
Gaitskell, Rt. Hon. Hugh	Millan, Bruce	Wade, Donald

White, Mrs. Eirene	Willis, E. G. (Edinburugh, E.)
Wilkins, W. A.	Woodburn, Rt. Hon. A.	TELLERS FOR THE NOES;
Williams, LI. (Abertillery)	Woof, Robert	Mr. Reynolds and Mr. Marsh.

Main Question put:—

Division No. 239.]	AYES	[10.10 p.m.
Agnew, Sir Peter	Grosvenor, Lt.-Col. R. G.	Pitt, Miss Edith
Allason, James	Hall, John (Wycombe)	Price, David (Eastleigh)
Arbuthnot, John	Hamilton, Michael (Wellingborough)	Price, H. A. (Lewisham, W.)
Ashton, Sir Hubert	Harris, Reader (Heston)	Prior, J. M. L.
Atkins, Humphrey	Hastings, Stephen	Profumo, Rt. Hon. John
Barlow, Sir John	Henderson, John (Cathcart)	Proudfoot, Wilfred
Barter, John	Hendry, Forbes	Pym, Francis
Batsford, Brian	Hiley, Joseph	Quennell, Miss J. M.
Biffen, John	Hill, Mrs. Eveline (wythenshawe)	Ramaden, James
Biggs-Davison, John	Hill, J. E. B. (S. Norfolk)	Redmayne, Rt. Hon. Martin
Birch, Rt, Hon. Nigel	Hobson, Sir John	Rees, Hugh
Bourne-Arton, A.	Holland, Philip	Ridley, Hon. Nicholas
Box, Donald	Hornby, R. P.	Roberts, Sir peter (Heeley)
Boyd-Carpenter, Rt. Hon. John	Hornsby-Smith, Rt. Hon. Dame P.	Roots, William
Boyle, Sir Edward	Hughes Hallett, Vice-Admiral John	Ropner, Col. Sir Leonard
Brooke, Rt. Hon. Henry	Hughes-Young, Michael	Russell, Ronald
Brown, Alan (Tottenham)	Iremonger, T. L.	Sharpies, Richard
Bryan, Paul	Irvine, Bryant Godman (Rye)	Shaw, M.
Buck, Antony	Jennings, J. C.	Skeet, T. H. H.
Burden, F. A.	Joseph, Sir Keith	Smith, Dudley (Br'ntf'd & Chiswick)
Campbell, Gordon (Moray & Nairn)	Kerr, Sir Hamilton	Smithers, Peter
Carr, Compton (Barons Court)	Kirk, Peter	Speir, Rupert
Chichester-Clark, R.	Lewis, Kenneth (Rutland)	Stoddart-Scott, Col. Sir Malcolm
Clark, William (Nottingham, S.)	Lilley, F. J. P.	Storey, Sir Samuel
Clarke, Brig. Terence (Portsmth, W.)	Linstead, Sir Hugh	Studholme, Sir Henry
Cleaver, Leonard	Litchfield, Capt. John	Summers, Sir Spencer
Cooper-Key, Sir Neill	Lloyd, Rt. Hon. Selwyn (Wirral)	Talbot, John E.
Corfield, P. V.	Longden, Gilbert	Taylor, Sir Charles (Eastbourne)
Costaint, A. P.	Loveys, Walter H.	Taylor, Frank (M'ch'st'r, Moss Side)
Coulson, Michael	Lucas, Sir Jocelyn	Temple, John M.
Cunningham, Knox	Lucas-Tooth, Sir Hugh	Thomas, Leslie (Canterbury)
Curran, Charles	McLaren, Martin	Thompson, Kenneth (Walton)
Currie, G. B. H.	McMaster, Stanley R.	Tiley, Arthur (Bradford, W.)
Dance, James	Macmillan, Rt. Hn. Harold (Bromley)	Tilney, John (Wavertree)
Deedes, W. F.	Maddan, Martin	Touche, Rt. Hon. Sir Gordon
Drayson, G. B.	Matthews, Gordon (Meriden)	Turner, Colin
Duncan, Sir James	Mawby, Ray	Turton, Rt. Hon. R. H.
Elliot, Capt. Walter (Carahalton)	Mills, Stratton	Tweedsmuir, Lady
Emmet, Hon. Mrs. Evelyn	Miscampbell, Norman	Wakefield, Sir Waved
Errington, Sir Eric	More, Jasper (Ludlow)	Walder, David
Farr, John	Neave, Airey	Wall, Patrick
Finlay, Graeme	Noble, Michael	Webster, David
Fraser, Ian (Plymouth, Sutton)	Nugent, Rt. Hon. Sir Richard	Whitelaw, William
Freeth, Denzil	Osborn, John (Hallam)	Wilson, Geoffrey (Truro)
Gammans, Lady	Osborne, Sir Cyril (Louth)	Wise, A. R.
Gibson-Watt, David	Page, Graham (Crosby)	Woodnutt, Mark
Gilmour, Sir John	Page, John (Harrow, West)	Woollam, John
Glyn, Dr. Alan (Clapham)	Pannell, Norman (Kirkdale)	Worsley, Marcus
Goodhew, Victor	Pearson, Frank (Clitheroe)	Yates, William (The Wrekin)
Cower, Raymond	Peel, John
Green, Alan	Percival, Ian	TELLERS FOR THE AYES:
Gresham Cooke, R.	Pitman, Sir James	Dame Irene Ward and
		Sir Godfrey Nicholson.

NOES
Abse, Leo	Donnelly, Desmond	Herbison, Miss Margaret
Allaun, Frank (Salford, E.)	Edwards, Walter (Stepney)	Howell, Charles A. (Perry Barr)
Awbery, Stan	Fernyhough, E.	Howell, Denis (Small Heath)
Bacon, Miss Alice	Fitch, Alan	Hoy, James H.
Bennett, J. (Glasgow, Bridgeton)	Forman, J. C.	Jay, Rt. Hon. Douglas
Blackburn, F.	Fraser, Thomas (Hamilton)	Jones, Dan (Burnley)
Blyton, William	Gaitskell, Rt. Hon. Hugh	Jones, Jack (Rotherham)
Bowden, Rt. Hn. H. W. (Leics, S.W.)	Galpern, Sir Myer	King, Dr. Horace
Boyden, James	Gourlay, Harry	Lawson, George
Braddock, Mrs. E. M.	Grey, Charles	Lee, Frederick (Newton)
Brown, Thomas (Ince)	Griffiths, David (Rother Valley)	Lubbock, Eric
Castle, Mrs. Barbara	Grimond, Rt. Hon. J.	Mabon, Dr. J. Dickson
Crosland, Anthony	Gunter, Ray	Mclnnes, James
Cullen, Mrs, Alice	Hale, Leslie (Oldham, W.)	McKay, John (Wallsend)
Dalyell, T.	Hall, Rt. Hn. Glenvil (Colne Valley)	Millan, Bruce
Davies, Ifor (Gower)	Hamilton, William (West Fife)	Milne, Edward
Diamond, John	Hannan, William	Mitchlson, G. R.
Dodds, Norman	Harper, Joseph	Morris, John

The House divided: Ayes 153, Noes 84.

Neal, Harold	Skeffington, Arthur	Thorpe, Jeremy
Noel-Baker, Rt. Hn. Philip (Derby, S.)	Slater, Joseph (Sedgefield)	Wade, Donald
Oram, A. E.	Small, William	White, Mrs. Eirene
Parker, John	Smith, Ellis (Stoke, S.)	Wigg, George
Pentland, Norman	Soskice, Rt. Hon. Sir Frank	Wilkins, W. A.
Prentice, R. E.	Spriggs, Leslie	Williams, LI. (Abertillery)
Price, J. T. (Westhoughton)	Steele, Thomas	Willis, E. G. (Edinburgh, E.)
Randall, Harry	Stewart, Michael (Fulham)	Woodburn, Rt. Hon. A.
Rhodes, H.	Stones, William
Ross, William	Taverne, D.	TELLERS FOR THE NOES:
Short, Edward	Thornton, Ernest	Mr. Reynolds and Mr. Marsh.

Resolved, That this House congratulates Her Majesty's Government on initiating a policy designed to control inflation and to stabilise prices but calls on the Government to expound the policy with greater clarity; regrets that its application has not been uniform throughout the public and private sectors, and that private industry has not always been stimulated sufficiently to co-operate; recognises that any policy applicable only to the public sector would be unfair to public servants and could not be indefinitely maintained; and calls on the Government to announce its future policy for an overall fair plan with a positive Outline as to its future intentions.