HC Deb 09 August 1966 vol 733 cc1547-86
Mr. Ian Mikardo (Poplar)

I beg to move Amendment No. 69, in page 16, line 36, to leave out Clause 16.

The Chairman

I think it will be for the convenience of the Committee if there are discussed with this Amendment Amendments No. 19, in page 16, line 36, leave out subsection (1).

No. 20, in line 40, leave out from beginning to "unlawful" and insert "It shall not be".

No. 21, in page 17, line 1, leave out subsection (3).

No. 22, in line 8, leave out subsection (4), and No. 23, in line 38, leave out" (4)".

There can be a separate division on Amendment No. 22 if desired.

Mr. Mikardo

Yes, Sir Eric. The rubric to Clause 16 describes it as being about terms and conditions of employment, and enforcement, and it is clear from the short description that the Clause raises two questions which, although linked in some measure, are nevertheless in some degree separate. It raises the question of the incomes policy which the Government are seeking to impose on the country and the merits of it, and the question of the methods to be used under the Bill to enforce that policy.

The two things are linked in the sense that those who believe that the policy is right and support it with whatever degree of enthusiasm they can muster would possibly be prepared to swallow some doubts and reservations about the enforcement methods which are being proposed. They may think that although the means are dubious the end is worth while. But if one believes, as I do, that the policy which the Government seek to enforce is wrong, and in any event impracticable—and if, in addition, methods are proposed for enforcing it which are repugnant—the two things taken together surely make an overwhelming case for seeking to have the Clause deleted and for asking the Government to accept the Amendment which deletes the Clause. I wish to say something about each of these two topics—the policy and the method of enforcement.

It is more than 20 years since I publicly advocated a national wages policy, when the idea of planning wages was not even a gleam in the eye of some of my right hon. Friends who have now adopted the idea so enthusiastically. Of course, if one is a Socialist, as I am, one believes in a planned economy, and if one is logical one realises that one cannot have a planned economy with an unplanned wages sector. Those who, on the one hand, demand planning of the economy and, on the other hand, demand a free-for-all in wages get and deserve the sort of criticisms which some of my right hon. Friends have been pushing at them.

However, if it is true that one cannot seriously conceive a planned economy with an unplanned wages sector, the other side of the coin is equally true, which is that we cannot have a planned wages sector in an economy which, in all other respects, or virtually all other respects, is totally, or nearly totally, unplanned. That is the situation which the Government are trying to create. In an economy such as ours is today in which economic decision making is spread over a large number of separate entities, each seeking its own separate welfare, with little or no co-ordination between them, there is no means of ensuring by this Bill or any other Bill that a policy of wage restraint serves the purpose which the Government intend, such as the purpose of warding off inflation.

In the sort of conditions which we have today, me only effect of holding back earned incomes may be to create an almost automatic rise in unearned incomes, or to accelerate the natural rise in unearned incomes.

There is one red-letter day which sticks in my memory—8th January this year, the day on which my right hon. Friend the Minister of Labour delivered a tremendous, thundering homily as only he can about wage claims and had the ill fortune that 35 minutes later a number of the joint stock banks simultaneously announced 50 per cent. increases in profits and dividends.

Even within the earned income sector, in an unplanned economy—I repeat, in an economy in which economic decisions are taken by a large number of separate entities each seeking its own welfare—the only effect of holding back low wages may be, notwithstanding this Bill, to accelerate the rise in higher earnings which can sometimes come about without any rise nominally in wage rates.

The fact that the norm—3½ per cent. as it was, nil as it now is—still applies, with only marginal exceptions, to all incomes points to a feature of the Government's policy which I find quite unacceptable and which, I should think, any Socialist and any occupant of these benches would find unacceptable, because it is based, even if for only a short period, on the assumption that the present distribution of income, highly egalitarian as it is, is something which we should accept as a feature of our society, something which is broadly right, and something which should continue.

I said that I find that proposition unacceptable, but I go further. I find it offensive when we are reliably informed that about a seventh of our population is living below the income levels laid down by the National Assistance Board as the minimum for decent living, when we are told on the authority of the Government themselves that because of wage stop and other factors about half a million British children are not getting enough to keep themselves in decent health, while at the other end of the scale there is an increasing degree—increasing almost every day—of ostentatious, luxurious spending, a lot of it out of capital accretion which goes scotfree under the Bill and virtually scotfree under any other of the Government's measures.

In that situation, I do not see how anybody can accept, even for a limited period, the proposition that the present balance of purchasing power within the community as between any one sector and another should be frozen in a totally unequal, unjust and repellent mould. The failure of the Government to take that factor into account is only one facet of their failure, as my right hon. Friend the Member for Nuneaton (Mr. Cousins) has pointed out more than once, to realise that the key to competitiveness in export markets, which, I understand, it is one of the prime objectives of the Bill, and an objective we all support, is not so much wages as productivity.

I cannot accept, on the published figures that it is the wage element in our economy which threatens inflation. In 1965 there were only four countries in which the percentage of the national product represented by wages plus salaries was lower than it had been in the previous year. Those four countries were the Republic of Ireland, the Republic of Hungary, the Republic of South Korea and the United Kingdom of Great Britain and Northern Ireland. That is a company in which I am not thrilled to find myself.

The fact is that when we talk about competitiveness in export markets we are talking about America, France, Western Germany, Sweden, Switzerland and so on. In every one of those countries the percentage of the national income which goes into wages plus salaries went up in 1965, compared with 1964, and they were competitive. Our percentage, with the percentages of the other three countries I have mentioned, went down in 1965 compared with 1964, and we were not competitive. In the face of that, how on earth can anybody bringing an unprejudiced mind to the question possibly maintain that it was wage rises which threatened the competitiveness of British exports?

Another important factor is that if investment policy is not planned with, and is not related to, wages policy, the only effect of holding back wages may be to delay modernisation because low wages create a disincentive to investment in modern, labour-saving appliances.

11.15 p.m.

If I may say so without immodesty, I think that the analysis which I have made, if anyone accepts it, gives some indication of the preconditions which would make broadly acceptable and, therefore, practicable the sort of wages policy which the Government have been trying to sell to the House and the country. There are five such preconditions. First, there must be effective central control of the economy, and there are some who think that that would involve some extension of the public sector. Second, there must be a continuous move towards a more egalitarian distribution of both incomes and wealth. Third, there must be effective control over essential prices. Fourth, there must be controls on unearned incomes at least as strong as those on earned incomes. Fifth, there must be some other measures of social justice, which have been screaming out for implementation for a long time, such as the application of the principle of the rate for the job.

My objection to the Government's incomes and prices policy is that the elements of it are not being kept in step. It seems to me that to carry out such a policy we need to phase together three pairs of factors, as it were, driving together three pairs of horses, each pair being teamed together. First, we must move along together at the same time, and with the same assiduity, investment planning and incomes and prices planning. Second, within incomes and prices planning we must keep phased together prices planning and incomes planning. Third, within incomes planning we must keep phased together the planning of earned and the planning of unearned incomes. If we do not do all those three, then, whatever Bills are passed and whatever speeches are made, we shall not achieve as universal a measure of public acceptance of a wages policy, as would make it possible to implement it.

Those three pairs of factors are not being kept in phase at present. The planning of investment is not being kept in step with the planning of incomes and prices but is lagging a long way behind. There has been a great deal of pushfulness and hard work put into the operations of the Prices and Incomes Board on the wages policy generally, but it is still broadly true that, outside a bit of special attention for certain regions, the only instruments being used for investment planning and control are the ones which were used by the previous Conservative Government, whom my right hon. Friends criticised for relying upon them exclusively, the instruments of cajolery and bribery—the weekend speech and the subsidy.

In fact, there is no selectivity in the work the Government are doing in encouraging, directing or phasing investment. Quite rightly, the whole of our criticism of the economic policies of the previous Conservative Government was that the instruments they used were blunt and unselective. Nobody more than my right hon. Friend the Prime Minister drew attention so forcefully and so convincingly—he certainly convinced me— to the need to ensure discriminatory planning of investment so as to advantage the essential as against the inessential, the exporting as against the non-exporting, the import-saving as against the import-consuming. We have got nothing of that. We have a broad discrimination in the Selective Employment Tax as between services and manufacturing, so that inessential manufacturing is advantaged at the expense of essential services. That is not selectivity as it was advocated over the years before 1964. That is not selectivity as it was advocated——

Mr. George Brown

On a point of order. I shall need to know, Mr. Deputy Speaker, how wide I may be allowed to go when I come to reply. Clause 16 deals with terms and conditions of employment and the enforcement thereof. My hon. Friend the Member for Poplar (Mr. Mikardo) has for sometime now been engaged upon a very interesting discussion of economic policy. I would like to know whether I shall be allowed to go as wide when I reply?

Mr. Deputy Speaker

I have been thinking that the hon. Member was travelling very wide of the permissible debate on this Clause. I hope that he will endeavour to confine his remarks to the proposition that the Clause should be left out. I hope that subsequent speakers will also try to confine their remarks, as far as possible, to the ambit of the Clause.

Mr. Mikardo

With the utmost respect, Mr. Deputy Speaker, I had hoped that you were going to reply to my right hon. Friend that of course it would be open to him—and I for one would welcome it—to reply to the observations which I am making. I put it to you that I have not said a single word that is irrelevant to or wide of the Amendment I am moving. The Clause lays down the way that a certain policy is to be imposed. Is it seriously being argued by my right hon. Friend that the question of whether the policy is one which one approves of or not is not germane to the question of whether one should or should not support the means of enforcement? Are we really saying that we are not going to discuss the way a man should use a brick, whether to build a house or smash a window. Is that the proposition before us?

Mr. Brown

With great respect, we must know where we are. If it is your ruling, Mr. Deputy Speaker, that on the Clause which deals with terms and conditions of employment and the enforcement thereof we are entitled to have a wide ranging economic debate, then of course I am very willing to take part in it. But I find it surprising, if that is your ruling, to see how it can possibly be within the terms of this Clause to do that. I am therefore asking you if you are so ruling.

Mr. Deputy Speaker

I am ruling that this Clause admits a fairly wide discussion but it obviously does not admit a general economic debate. I hope that the hon. Member who is moving this Amendment will try to confine his subsequent remarks to the content of the Clause.

Mr. Mikardo

I was intending to go on for only two or three more minutes discussing the first of the things in the rubric. I put it to you, Mr. Deputy Speaker, that the rubric reads: "Terms and conditions of employment: enforcement" and that therefore one is surely entitled to discuss that. I intended to go on for only two or three minutes more in the hope that I might manage to convince those who up to that point I had not managed to convince of the general validity of my argument. I think that my job has been done for me by the intervention of my right hon. Friend.

I will leave the point altogether and turn to the second part of the rubric, which is the matter of enforcement. The key word in this Clause is contained in Subsection 4, and it is the word "strike", which has been made in the discussions which have gone on about incomes and prices a dirty word. What is a strike, whether it is a strike of one man or of 1,000 men, whether it is organised officially by a trade union, organised unofficially by a group, or not organised at all? It is the refusal of a worker or workers to sell their labour because they think hat the price being offered for it is not the right price and not the price they are able to get.

I am not one of those who believe in the commodity theory of labour. I wish to see an economic situation and an order of society in which any such theory is unthinkable. But since, for all practical purposes, we have a free-for-all economy, this is the simple question I ask: If I walk into a tobacconist's shop and point to a packet of cigarettes marked 5s. 5d. and say to the tobacconist, "I will buy those from you for 5s. 3d.", he will no doubt reply, "Get the hell out of here. I am not willing to sell those cigarettes for less than 5s. 5d." Is he or is he not conducting a strike? He is refusing to sell me his assets, his stock in trade, at a price below what he thinks they are worth. What is the difference between that and the refusal of a worker to sell his assets, which are only his brain and his hands, at a price below what he thinks they are worth and what they will fetch?

It must be remembered that under the Clause, even if an employer says, "I know you are worth ten bob more Bill and I want to pay you that extra ten bob "—indicating that there is agreement that the commodity is being under valued; that there is an attempt to buy it for below its proper value—then, even though there is agreement, they both become criminals under the terms of the Bill. How on earth can one logically sustain an argument on that basis? [Interruption.] My right hon. Friend the First Secretary really must consider this matter, particularly since There is more joy in Heaven over one sinner that repenteth". What sort of trade union movement do we want? Do we want the movement to become one of the arms of the State? For the time that the Clause is in operation, long or short, the trade unions will be an arm of the State, and we are treading the path first blazed by that engaging character, Benito Mussolini. Or do we want trade unions which are a free element in a free society?

What will happen as the ultimate sanction for the penalties under the Clause are imposed and people refuse to pay the fines? I gather that there was some talk about there being some arrangements by which the fines would be deducted from wages but that we have moved on from there—for a reason I will not go into tonight—and that now we are getting a different penalty. I am not a lawyer, and I hope that I shall be corrected if I am wrong in believing that when the Measure becomes law, if workers refuse to pay the fines, they will be liable to be imprisoned. How many of them will be imprisoned? How many spare beds are there in Her Majesty's prisons? Will two or three of the so-called ringleaders be picked out while the rest will get away with it? There is too great a sense of solidarity among railway workers, miners and dockers for that to be possible.

11.30 p.m.

What will be the ultimate sanction? My right hon. Friend understands better than most the more sophisticated problems of labour relations, and I would give him this example. One industry about which I know a good deal, because there my constituency is full of it, is the docks. I invite him to consider what has been happening in the last two or three months and what will happen as soon as the Bill becomes law, if it ever does. The power of the unofficial group based on the Royal Group and one or two places in Liverpool has waned immensely because of stronger work by the officials of the union, including its lay officials and partly because of the promise of public ownership in the next few years. Whatever the reason, the influence of Mr. Dash and people like him, who are anti-everything, whether it is good, bad or indifferent, has waned considerably. The implementation of the Clause in any dock in Great Britain will make Jack Dash "king of dockland" all over again. Is that what the Government want? Do they want to put a premium on the unofficial movement to the detriment of the serious, responsible leaders of the trade union movement? If not, they must think out some of the practical implications of the Clause.

This is one of the key points in the Bill. As we have been getting along so well up to now, I hope that I may be forgiven for having spoken for so long.

Mr. Eric S. Heffer (Liverpool, Walton)

The House has listened carefully to the speech of my hon. Friend the Member for Poplar (Mr. Mikardo). I am sure that members of the trade union movement will understand his point.

I am not against a wages policy. I am sure that no hon. Member accepts the concept that if we have a planned economy we can have a free-for-all in wages. Some hon. Members opposite are against planning in any case, and they especially do not want planning of incomes. But that is not our position. I believe that a planned incomes policy is absolutely vital. The Clause is designed to introduce a new dimension into our legislation. I have been considering past legislation against workers combining in their trade unions or going on strike. What do I find? I find that we had the anti-combination Acts a long time ago. Ultimately, after great agitation, those Acts were repealed, I understand by the Tories at that time but as a result of our pressure in the Labour movement, and this meant that the right to strike was there for all time.

Then we had two other periods, both during wartime, and even then the trade union movement accepted these restrictions reluctantly and insisted on their removal at the earliest possible moment. We had the great agitation after the Second World War. We had martyrs after the Second World War. We had martyrs in the docks in London, Liverpool and Hull, and elsewhere, such as Salford, where lads were prepared to go to prison in order to destroy Order 1305. We shall have martyrs again if this Clause is put into operation.

Mrs. Lena Jeger (Holborn and St. Pancras, South)

Tolpuddle martyrs.

Mr. Heffer

If I were on the shop floor and not on the Floor of this House, if J wanted to make myself a local leader in the trade union movement and to get a big name nationally, I would make certain that I burked this Measure and organised the lads against the Clause, and if there were an Order put into operation affecting my factory or my industry I would get myself imprisoned. My right hon. Friend the Member for Easington (Mr. Shinwell) is not in the Chamber at the moment, but he knows about going to prison and making one's name in the trade union movement. So do many other hon. Members of this House who have experienced this sort of thing.

If we want to bring the trade union movement to a position of chaos, industrial conflict and unofficial action, I suggest that we carry this Clause into operation. But if we want to make certain that we continue with the right sort of intelligent approach to our industrial problems that we have had during the years, we should reject the Clause. We should have nothing to do with this type of legislation. This adds a new dimension in our movement.

I am told that there is no need to worry because action cannot be taken without the decision of the Attorney-General. I know that the Attorney-General is a benevolent as well as a learned right hon. Member of this House. Everybody likes the Attorney-General. But even in the present Government he may not be the Attorney-General for ever. [HON. MEMBERS: "Oh."] I am not the Prime Minister, so I cannot say. The point is that Attorney-Generals come and go. But are they all benevolent? I can think of a few past Attorney-Generals who were not so benevolent. Thus, we might leave it to the Attorney-General but find that we were filling our prisons with people going to gaol on the basis of this Clause.

I ask the House to reject the Clause. I seriously put it to my right hon. Friends on the Government Front Bench that they should withdraw it. If we want a wages policy to be successful, we should do it through the trade union movement. I do not deny for a moment that there is a great task to be donene in the trade union movement, but I believe that it can be done on the basis of the voluntary principle and by strengthening the powers of the General Council of the Trades Union Congress. I believe that the trade union movement will have to reorganise itself on the basis of industrial unions. That is a long way off, it is true, but we have to do this. The trade unions must do it. None of us can do it for them, and legislation does not affect them in the slightest. I appeal to the Government to withdraw the Clause, let the voluntary principle continue and let the T.U.C. itself get to grips with the question of strengthening the powers of its General Council.

With regard to claims, I accept the argument—it is a legitimate one—that the small group at the point of production can get a great deal more out of it than someone who is not in that strategic position. That is a logical and reasonable argument, and I accept it. I accept that the nurse or the firefighter is not in the same position as the worker in a car factory at a strategic point of production. That is a logical and acceptable argument to me.

I want to see this system work on the basis of the voluntary principle, accepted by the trade unions through their own organisation, and not on the basis of introducing legislation of this kind that will put up the backs of the entire trade union movement against the Government and the whole principle of a wages policy. That is my plea on this Clause.

I could say a great deal more on this question. I suppose we all could. I conclude by making one more point. I have been in the trade union movement since I was 16 years of age. I have been involved in many industrial disputes; I have led quite a few. My experience teaches me the following. We have never been able to gain any advance for the chap in the factory unless he has been organised and prepared to fight and press for what he wants. Hon. Members opposite may not like this, but I have yet to meet an employer who has said, "We shall ask you, as shop steward, to come round the table next week. We are offering you 10s. an hour more." What I have experienced is continual discussion and argument and then an agreement reached after that lengthy process. This is the way our movement operates. That is our experience of industrial life.

Agreements are not reached overnight. It takes months of serious negotiation to reach an agreement. No employer says to his workpeople, "From next week you can have an extra 6d. an hour". Local productivity agreements within a factory, based upon incentive schemes, also take weeks to finalise. It can take us four or five months of negotiations to reach an agreement, with possibly a strike situation boiling up, but ultimately we reach agreement with the employer. At that stage we are told, "No, you cannot let this happen. There must be a period of standstill for 12 months".

I can see what can happen in a factory. At this stage the situation can boil up. There can be an industrial dispute or a strike. At that stage people can go to gaol. This is well understood by the men in the factories. That is why I say that this ought to be, from the point of view of a Labour Government, a non-starter. I ask the Front Bench to make it so by withdrawing the Clause.

11.45 p.m.

Mr. Cousins

Those of us who were members of Standing Committee B will have listened with interest to the speeches of my hon. Friends the Members for Poplar (Mr. Mikardo) and Liverpool, Walton (Mr. Heffer). My hon. Friends covered much of the ground we dealt with in great detail in Committee. At least one part of the House will have been pleased to hear an endorsement of many of the arguments which were put forward in Committee. I do not want to rehearse those, because it would be improper to repeat them here or to repeat what was said in Committee. I understand why my right hon. Friend the First Secretary felt that there was an intention to broaden this discussion over a whole field of economic affairs, because this was the kind of argument which came up in Committee. There was repeated inquiry as to whether we were going over the whole broad field of every subject and every Clause.

There is a fairly simple reason why this is so. The Bill is badly drawn up, because it is drawn up on the basis of expediency, addition and alteration from time to time to try to overcome a particular aspect of the problem which has been brought to the attention of the Government or the draftsmen. The Bill has been supplemented at the end by an over-riding Clause which makes it almost impossible to deal with the substance of a Clause without recognising the nature of the reliance of the Clause on everything else in the Bill. I can understand my right hon. Friend the First Secretary recognising that he has to talk in a much broader sense in replying to a Clause than he might more properly have done had the Bill been drafted differently.

I do not think that the discussion needs to centre around the question of the right to strike. I should like to keep for a few moments to the Clause. It is relevant that at some stage of the night we shall no doubt have a discussion about economic aspects. I want to stay with subsection (4) for a few moments. I think that the Bill is quite offensive, but I feel that this provision is probably the most offensive of all, because it suggests that an offence is being committed by a trade union or other person who 'takes, or threatens to take, any action … by way of … persuading others to take part in a strike". In the course of a detailed examination of the Bill, in Committee and elsewhere, I have tried to work out what is meant by this.

The Clause should be struck out because it is illogical and unenforceable and we might, with service to ourselves, spend a little time trying to interpret what it really means. Am I taking action at this moment which may encourage others to strike? I hope I am if the things that I believe they are entitled to receive are not paid to them. I know that it is difficult to interpret what is a strike, when and where it is a legal strike at times, or whether some actions taken are legal. But the Clause refers to "influencing" any employer.

I suggest that almost every paid official of every trade union, irrespective of his views about the Bill, will in the next six months, as he did in the last six months, try to do exactly that. He will try to influence employers in order to get done the things that he believes should be done. Let us consider what we are authorising. On an earlier Clause members of the legal profession in this House tried to get down to a glorious assessment of what it meant. Indeed, the interpretation of the words … takes … any action … to … influence any employer … will be of great value to the legal profession.

I do not know whether even the speeches I hope to make and which many of us will have a chance to make at the Labour Party conference and at the T.U.C. will be regarded by that time as bringing us within the provisions of the penalty arrangements of the Clause. I know that if my right hon. Friend wants to defeat this kind of argument his simple comment will be that it will not occur unless a settlement of a claim is forbidden. Again there is an illogicality. If it is a settlement, then it should be paid. It should not be forbidden. If we get to the stage that I can be made to have committed a legal offence by someone forbidding a settlement I have just negotiated, then again some lawyers will have a field day in an argument about what is voluntary, what is compulsory, what is influencing people and so on.

However much we try to disguise it, the Bill destroys the whole basis of our industrial relations. Whether we are ready to accept that or not, it is taking away from us the ordinary processes of the activities of the trade unions towards the employers and of the employers towards the trade unions, because they occasionally ask the unions to take steps they think will be of benefit to them in their industry. The great tragedy is that the Bill puts nothing in its place. It simply leaves us with a hiatus of some six months or twelve months whilst we settle down to examine what really ought to be done.

I ask those on both sides of the House who give their allegiance to the idea that, in a free society, trade unions and employers' associations or individual employers are entitled to negotiate and settle their problems—and that does not mean the running away of the economy—to ask themselves whether they can endorse the theory that we are committing an offence by doing the thing we accept is the right and proper thing to do.

How can we accept that unions whose rules prescribe that they shall take certain action in the interests of their members are committing an offence by following those rules, which have been endorsed by the Registrar and have stood the test of time? How can we then slip straight out of them because a Minister decides, because that is what we are being asked to endorse, that a Minister—I am not talking of my right hon. Friend the First Secretary; I am talking of a Minister—has the right to determine that at some stage in the ordinary processes in which, in the capacity of an official of a trade union, I would normally be conducting negotiations freely and properly by the laws of the country, I can be told that I am committing an offence?

I suggest that the Bill was ill conceived. It has subsequently been pushed through to do a job for which it was never designed. It is not getting the support that it will need if it is ever to be made effective, because if there is one thing that we in our country have learned it is that relationships about wages and conditions of employment and understandings between employers and trade unions, if they are ever to work, have to be worked on a voluntary basis. When there was legislation to control, we fought against it.

I have heard it said that the T.U.C. leaned over backwards to endorse and support the Clause. I do not know whether that is a phrase that members of the T.U.C. would use. I understand that quite a number of them have said that they reluctantly endorse it, and they support it more reluctantly each time they get nearer to the compulsory stage. One thing that I can say, however, is that I have heard the present General Secretary of the T.U.C. say over and over again, "We were created outside the law. Do not drive us further outside the law than is necessary." That is the very action that will come.

I hope that at a later stage we will discuss a further Clause in the Bill. I hope at that time to try to illustrate a point about which I am very much grieved and disturbed. If we pass the Clause as it is—and pass it we seem determined to do—thousands and thousands of decent, straightforward, honest people will not know what offence they are committing, why they are committing an offence or whether they are committing an offence.

I have tried repeatedly, in discussions directly with my colleagues, in Standing Committee, once in the House, in the open discussion and now again tonight, to suggest that it is still not too late to take away the Clause and remove all the consequences of taking it away and do the job that was the original intention of those who made the Declaration of Intent, because I also believe in a planned economy and a planned growth of wages. I therefore again add my voice to that of my hon. Friends in saying that there is still time for the Government to take the view that the Clause is not necessary, is not helpful and ought to be discarded.

Mr. Albert Booth (Barrow-in-Furness)

Clause 16, which the Amendment proposes to delete from the Bill, contains subsection (4), which has been the hinge-pin of the debate. Subsection (4), however, applies not only to Part II of the Bill but also to Part IV. Therefore subsection (4), which was intended originally to prescribe a penalty for taking certain action during a period when the Prices and Incomes Board was examining a claim to determine whether it was in the public interest, is now, in the present terms of the Bill, to be applied when it has already been prejudged that the claim is not in the public interest. It is to be applied in a period when wages are to be frozen, for a great many workers, for 12 months. This is a very different sort of application of this subsection.

12 m.

This subsection is already becoming infamously known as the penal clause. It will take from the trade unionists the right to strike or to threaten to strike to induce an employer to implement an award or settlement. This is a fundamental right of a free trade union, and a right which was won by industrial and political action which welded the Labour Party and the trade union movement together. It is indeed a tragic indictment of the course which the Labour Government are following that they are seeking to establish legislation which trade unionists feared would come from hon. Members on the Opposition benches.

It will be argued, of course, that this loss of right will apply only for a short time. To me, as a convinced trade unionist, this is a very strange argument. If a magistrate or a judge on sentencing a man to three months or a year in gaol said: "It is only a very short time", one would not then say to the man, "The fact that you are being deprived of your liberty is not very important". It is a principle which I believe, and which many other trade unionists believe, is at stake in this, and we are not prepared to concede that this is merely a matter of judgment, depending on economic circumstances as they exist now, whether or not trade unionists should have the right to exercise what we believe is their rightful function.

It was put to us as trade unionists only a short while ago that four months would be the maximum period during which the Clause would be operative. Tonight, we know it can be 12, if this Bill goes through without this Amendment. This Clause, as I said, was originally intended for a purpose fundamentally different from that for which it is now being used. Therefore, this House should very carefully consider against whom it is the Clause can apply, and to whom it is likely to apply.

I would suggest that among those who would be most likely to offend against the provisions of the Bill would be the very low-paid workers. In social justice, they have the greatest right to kick. When one freezes wages, one freezes; the injustices which are inherent in the present wages set-up, and we are doing this at a time when there are 10 national joint councils' wages rates for male adult workers below £9 a week. What hon. Member of this House would be happy to apply against a man who is earning less than £9 a week a fine of the order written into the Bill, on summary conviction … not exceeding one hundred pounds "? Or what sort of funds has his trade union got to pay on indictment … a fine which, if the offender is not a body corporate, shall not exceed five hundred pounds"? Even if it could come to his assistance, it is not feasible in the order of things that these lower-paid workers can happily accept that they were intended to be included within the provisions of such a Bill. If the Bill sought to exclude them, to set a limit below which its provisions would not apply, I would not be standing to defend it, but at least I could not use this argument, which I believe to be important.

I suggest that the provisions of the Bill may also apply against people who have agreements which they believe to be legitimate agreements, which they believe to be agreements in the national interest, which they believe to be agreements in their own interests, and which they believe their employers have accepted as being in the employers' interests.

I have such an agreement here—the National Joint Industrial Council 1966–69 Industrial Agreement. I want to read from it two clauses, especially for the benefit of the First Secretary. One provides for measuring output to ensure increased productivity, and for making corresponding benefits to employees, and another provides for regulating and controlling overtime and for eliminating all unorganised stoppages at work. Surely this is the sort of progress that we want to make. In a period of voluntary restraint such an agreement has come about. I have talked to individual employers in my constituency who want this agreement to go through, and to trade unionists who want it to go through, yet I predict that it cannot and will not go through if the wages provisions of the agreement cannot work.

The workers and their families—45 million of them in all—who rely upon the trade union movement for their wages and conditions, own only 20 per cent. of the national wealth, the other 80 per cent. being in the hands of a small minority. When the Government intervene to redress that balance we shall take a very different view of the wages policy. I do not believe that a rapid growth of productivity and the technological revolution that our country requires will be brought about by men who are deprived of their trade union rights, and men who have their wages frozen. For this reason I ask the House to delete the Clause from the Bill.

Sir K. Joseph

In the select series of notable Parliamentary occasions when men have pleaded with passion for what they believed to be right, this debate will find its place. I know that hon. Members below the Gangway opposite will not want any commendation from me, but I hope that they will accept that we regard their speeches as sincere, although we must establish that we regard the speech made by the hon. Member for Poplar (Mr. Mikardo) as sincere, yes, but singularly wrong-headed. We believe it is wrong-headed because what he wants would not achieve social justice or be compatible with either a prosperous or a free society.

But there is some common ground between those who have spoken and hon. Members on this side of the House. We agree that it is wrong to freeze earnings; we agree that the target should be unit costs and not wages; we agree that the way in which the Government propose to proceed will make the trade unions an adjunct of Government and we agree that Part IV will manufacture militants and, possibly, martyrs in a way that no sensible Government could possibly desire. It may be—I say this cautiously, because we have not heard the reply of the Government—that we will end up in the same Lobby as some of the hon. Members who have spoken.

But we wish to record, however briefly, our own views on Clause 16 which in a series of Amendments we, too, are trying to eliminate from the Bill. We think it intolerable to punish an employer for carrying out his moral or legal contract. We think it intolerable to impose upon employers and employees strains and dilemmas, implicit in Part IV, to which they should not, as individuals, be subjected by their Government. We think it intolerable even to conceive of subsection (4). We have made our views on Part IV, and on the Bill as a whole, except for Part I—and our opposition to all but Part I—crystal plain to the Government time and again. I can summarise our objections to the Clause as an indefensible by-product of an indefensible Part IV which has been embarked upon only as a result of an indefensible economic mismanagement by the Government. That is why, for some though not all of the same reasons, we shall welcome an opportunity, unless the First Secretary tells us something more surprising than we can expect, to vote against this iniquitous Clause.

Mr. Stanley Orme (Salford, West)

First, I want to deal with this issue as it has been dealt with inside the labour movement and the Parliamentary Labour Party during the last 18 months. It is time to speak openly and frankly, because many of us have been involved in quite genuine and sincere discussions with the First Secretary. I pay credit to him here: while we have not reached agreement, at least we have discussed and argued. We have made the point to him from the beginning that the stumbling block in the Bill for some of us, both in the House and in the trade union movement and Labour Party as a whole, is the punitive Clauses.

We feel strongly about this matter, because it is a reversal of the trend of history of free negotiation and free association. We ask the right hon. Gentleman what his attitude would have been if the Conservative Party had introduced such a Bill and such a Clause. We know what the answer is: he and his right hon. Friends, and the whole of the Labour Party, would have opposed them. We have to analyse the reasons why the Clause has been introduced.

The Clause is an admission of failure. It is an admission by the First Secretary that he cannot make a voluntary wages policy work. When he, along with the Prime Minister, went to the trade union movement and the Labour Party before the 1964 General Election for a wages policy, they seized on a statement of my right hon. Friend the Member for Nuneaton (Mr. Cousins) at the Labour Party conference that he was in favour of a planned growth of incomes. On the basis of the acceptance of a planned growth of incomes, the Labour Party, by an overwhelming vote—about 6 million to a few hundred thousand votes—accepted a prices and incomes policy.

We have gone a long way from the planned growth of incomes. We will not go into Part IV; we have not got there yet. We are dealing with Part II of the original Bill. We have moved completely away from the basis on which the labour movement and the party accepted a prices and incomes policy. I should like to see the movement—we shall probably do so shortly—asked to pass judgment on the Government's latest actions on this policy.

When the First Secretary went to the T.U.C. and had those hurried consultations and then obtained its acceptance in 1964 to the voluntary basis, he said, "If you accept the voluntary basis, I think that we can make it work". Only a short while after that he said that it was necessary to take further powers, and the punitive Clauses were then discussed all round.

12.15 a.m.

When the Bill was being formulated, all types of people were consulted unofficially—such as the C.B.I. and the T.U.C.—but never this House, and the members of my party were not consulted until it had been finally decided that such Clauses would be put in. I raise very strong objection to this as a member of the House.

When my right hon. Friend finally decided that the Bill would go forward on this basis, we were told, "Well, you know, Clause 16 is really quite mild. It will not affect a great number of workers. The number of people committing a crime in between the making of a settlement and pressing for its implementation will not be great, and in effect it will not be a serious Clause".

Well, then, why do we want the Clause at all? What concerns me and many of my hon. Friends is that having taken the first step into legislation one then starts taking further steps if that legislation is not satisfactory. I say very seriously to the right hon. Member for Leeds, North-East (Sir K. Joseph) and his party, "You are opposing this Clause and many others in the Bill which have punitive provisions, and yet you as a party advocate far worse measures against the trade union movement to try to bring it into line". We do not like those proposals either, and we shall oppose them.

But at the moment we are dealing with this particular Clause, introduced by the Labour Government. The position would be different if, when all has been said and done, we could have even the hope that this might be successful and achieve the objectives that the First Secretary seeks. I think that there is no division on this side of the House on those final objectives; it is the short-term measures that are creating the crisis amongst ourselves at present.

In trying to achieve those objectives, we shall reach a new economic situation, and even these proposals will be superseded. Hon. Members on this side of the House are concerned about the whole question of how one obtains a prices and incomes policy, and many of my hon. Friends and I feel that one will not achieve the policy that the Government are outlining by these sort of measures. One will not coerce and intimidate the working people of this country. One will achieve the policy only by their cooperation. The concern among hon. Members on this side of the House is not only among those of us who are vocal but among my hon. Friends who have supported the Government in the Division Lobby on this with hearts as heavy as mine and some of my hon. Friends.

Nobody is going round advocating this type of policy. The First Secretary who, with his zest, zeal and vigour, is fighting to try to implement it will not, at the end of the day, convince the trade union movement that it is right. We shall finish up with a Bill that is worthless, with no policy, and with none of the other basic measures that should have been taken in the meantime to implement such a policy. This is what concerns us. Many of the economic aspects of this problem have been dealt with by other hon. Members, and we shall be able to discuss them further when we come to the broader provisions of Part IV.

If the Government would turn away from inward-looking self-critical examination and turn outwards towards trying to achieve their policy, they could still achieve it on a voluntary basis. If it is accepted, on the other hand, that it cannot be achieved, if we say, in effect, that we live in a mixed economy and that that economy cannot be run with full employment without a Bill which has punitive provisions directed against the trade union movement, then we must look again at the basic tenets on which we are trying to make progress in this country.

I suggest to my right hon. Friend that, in the interests of all he is trying to achieve, he should withdraw this Clause and allow the voluntary system at least to work itself out. It has not had a chance to work. It has not even been properly tried, and many people are prepared to try it. Retain this Clause, and the policy is deemed to failure.

Mr. George H. Perry (Nottingham, South)

Like my right hon. Friend the Member for Nuneaton (Mr. Cousins), my collaborator upstairs last week, I have no wish to repeat what I said in Committee, but I wish to put again, in the course of a few brief but sincere remarks, a question which I put to the First Secretary of State but which was then ruled out of order so that I had no answer.

I come from the Midlands town of Derby, which has been designated by many as the most non-militant industrial town in Britain. But Derby has a wonderful heritage from the earliest days of organised labour because it was in Derby in 1834 that the first withdrawal of labour took place in this country. It is known as the Derby turn-out, when hundreds of workers from the Derby silk mill starved for three, four, five or six months, and some even died. To use a Goldwynism, if those silk mill workers were alive today, they would turn in their graves. It is no wonder I am against the Bill.

In the Queen's Speech given on 21st April, 1966, there appear these words: My Government will continue to develop, in consultation with management and unions, the agreed policy for productivity, prices and incomes. Proposals for legislation to reinforce this policy, while preserving the voluntary principle on which it is based, will be laid before you". What kind of a voluntary principle is it when there is a £500 fine if someone does not agree? It reminds me of the sergeant-major who told his squad that he wanted three volunteers—" You, you and you". This is what sickens me about the Bill.

I agree with my hon. Friend the Member for Salford, West (Mr. Orme) that we all want an incomes policy and a planned economy. But I want to see us turning towards a planned economy, and in what is taking place now under the policies of the present Government following the policies of the previous Tory Government in their 13 years, there is no sign of our turning towards a planned economy. We cannot have an incomes policy unless we plan the economy at the same time.

What about our strike record in this country? This is what I asked my right hon. Friend about last week, when he gave it as his opinion that there were people in this country who sought to hold the nation up to ransom through the industrial power they had to break the economy. Who are they? The strongest group of workers are those in the electricity generating industry and the water supply industry. If the workers in the electricity generating industry were to withdraw their labour, they would cripple the country within 24 hours. If the workers in the water supply industry were to withdraw their labour, they would cripple the country within a few days.

For many years I was on the employers side of the National Joint Industrial Council for the Water Supply industry which employs 35,000 workers. If the wages of sin are death, then the wages in this industry are slow starvation. Throughout the years the wages in this industry have been the lowest in the public utilities. The water supply industry is the lifeblood of the country and the workers could cut off the supply to industry and domestic dwellings. The same is true of the electricity generating industry, whose workers could stop industry.

What is the record of other European countries and America in comparison with ours? The fact is the British trade unions have the best record in the world in settling disputes. The International Labour Office records the figures of days lost by strikes per thousand workers. In 1964, 170 days per thousand workers were lost here compared with Italy, where the figure was 1,270, the United States, where the figure was 850, France, where it was 280, Belgium, where it was 260, and Japan, where it was 190. Every unofficial strike in Britain is headlined but good industrial peace is not reported. Trade unionists do not make excessive wage demands. On the contrary——

Mr. Deputy Speaker

I must ask the hon. Member to relate his remarks to Clause 16.

Mr. Perry

The indications in Clause 16(4) are that the trade unions are crippling the economy with excessive wage demands. On the contrary, countries with which we compete for exports have had bigger increases in wages. The hourly wage rates in manufacturing industry in 1965 in this country were 6.1 per cent. higher than in 1964 and 36 per cent. higher than in 1958. The comparable figures in Germany are 9.7 per cent. and 81 per cent., and for the Netherlands 8.9 per cent. and 73 per cent. This is the answer to those who point the finger of accusation at the trade unions movement. As one who has dedicated most of his life to the interests of the trade union movement, I rise in protest against subsection (4), which is a diabolical, vicious, fiendish attack on the trade unions of this country, and I ask my hon. Friends to support, the Amendment and throw out the subsection.

Mr. Arthur Blenkinsop (South Shields)

I think that another view should be expressed. I have listened respectfully to others who support this Amendment, and I hope that they will regard my views as being sincere if I do not fully accept the point which they are making.

I thought that the hon. Member for Poplar (Mr. Mikardo) made the case for the Government, because he was not objecting in principle to a wages policy. He made that clear on a number of occasions, and, indeed, rather implied that he would accept it if certain preconditions were accepted and clearly proved to be in operation. The Government are trying to achieve the very preconditions which my hon. Friend laid down and which are essential for the proper development of our economy. That is why many hon. Gentlemen opposite have been attacking the policy of the Government during the last 18 months.

12.30 a.m.

My hon. Friend the Member for Poplar spoke of the need for a wider measure of central control. We have been urging this and have been gradually developing a more effective system of positive intervention in industry which will be valuable for the economy. My hon. Friend also pointed out that we need more effective control of prices, but that is already agreed and that is the precise matter we are discussing in the Bill. He went on to argue for more control over unearned income, but he glossed over the measures, which have been vigorously attacked by hon. Gentlemen opposite, in regard to Capital Gains Tax and Surtax. One cannot delete from one's mind the whole range of measures introduced by the Government in the last 18 months. That being so, the Government are entitled to at least ask for some effective control over the way in which wages are rising.

The Government are entitled to say to our trade union colleagues that they have proved, by their measures since taking office, that the pre-conditions mentioned by my hon. Friend the Member for Poplar are in the course of being carried out. We do not pretend that they have been achieved. But sufficient action has been taken by the Government to prove their sincerity in this matter.

It was curious that my hon. Friend the Member for Poplar found it necessary to refer to the need to get rid of some inequalities in our society, since this has been the main purpose of the whole range of Government actions in the last 18 months. I naturally share the deep anxieties felt by some of my hon. Friends about certain of the detailed measures proposed in the Bill. However, I have not yet heard any arguments suggesting alternative courses. While I respect the sincerity of the views of my hon. Friends in this matter, particularly those expressed by my right hon. Friend the Member for Nuneaton (Mr. Cousins) concerning subsection (4), I suggest that the Government are entitled to take into account the other major measures they have introduced since taking office.

Mr. Emrys Hughes

I represent a constituency which has long historical connections with the political and trade union movement of this country. From the town in which I come—indeed, from the house in which I live—Keir Hardie came to Parliament to hoist the standard of independent labour and to form a new political party. The Labour movement has grown over the years until we now have a Labour Government. Old miners in my constituency still remember the political and industrial struggles led by Keir Hardie. When they ask me to explain why a Labour Government put in these provisions which may result in £100 fines or imprisonment for miners, I cannot.

The Scottish miners are strongly opposed to the Clause. How will it work? We have heard that the Attorney General is benevolent and will apply this provision gently in England but we have not heard about Scotland. There was one Scottish hon. Member in the Standing Committee of 25—[An HON. MEMBER: "He never spoke."] He was the Parliamentary Private Secretary to the Minister, and he said nothing in the debate. Who will prosecute the miners? Will it be the Lord Advocate? Will the Secretary of State defend the prosecution of trade unionists if the penal Clause is applied?

I do not know how to explain to the mining areas or the militant trade union movement on the Clyde how this will work, or why the Government are bringing in this Clause instead of relying on the co-operation and loyalty of the movement. The miners are intensely loyal to the Labour Government and want it to succeed. If the prosecutions will not come and are not likely to come, and the Lord Advocate and the Solicitor General will not go into action, why are these provisions in the Bill?

The Scottish miners want to increase output and are doing so. But if an industrial dispute affects lower-paid workers in the collieries, industrial trouble is possible. There may be strikes. What will happen if the Lord Advocate or the Solicitor-General gets a conviction which results in some of the miners' leaders going to prison? The pits will close down and strikes will spread. There will be no more productivity and less coal. We need more coal and more miners at present——

Mr. John Horner (Oldbury and Halesowen)

Does my hon. Friend recall that a strike of this kind took place in Beteshanger in 1942, under the Compulsory Arbitration Order? It was resolved only when the then Minister of Mines, with the general secretary of the National Federation of Mineworkers, went to Canterbury Jail and negotiated with the prisoners the return to works terms. That was at the behest of the War Cabinet.

Mr. Hughes

This is something which might happen again—[Laughter.] I have negotiated in jail before, and I am prepared to do it again. What I am saying is that we shall get the danger of a coal shortage in this country. In order to get the mines going in another five years time, or less, we shall need more miners, and we shall need to give them more pay. So we cannot have a wage freeze policy.

There are in my constituency other workers in whom we are interested. There are the bus workers. They now face the possibility of a wage dispute. What will happen to them? If there is a strike or a threatened strike in that area and one section of the buses stop or the leader of a strike movement is put into gaol or threatened with prosecution, the whole lot will stop.

How will the agricultural workers be affected? The farmers already want to produce more food, and they will have to face the demand for increased wages by the agricultural workers. I cannot explain to the agricultural workers in my constituency the necessity for or the economics of a wage freeze policy, if we want to increase productivity.

Why are these penal provisions in this Bill? We have been told that they are tough because it was necessary to give a good impression to the financiers of the United States of America, that it was necessary to appease foreign financiers. I think it was the Attorney-General who talked about patriotism. The time will come when we shall have to take a stand in this country to protect the standard of life of the British workers against the financiers of the United States of America.

For all these reasons, although I am a strong supporter of a Labour Government, I want the present Government to think twice before embarking upon a course which they will find impracticable and for which they will have to find a different alternative.

Mrs. Lena Jeger

I rise to ask for some light in my darkness. I have read this Clause very carefully and there is one question to which I hope the Government spokesman will reply, because there may be others who share my state of confusion, for which I am quite prepared to apologise.

I want to know what happens if those responsible for achieving a wage increase in defiance of this Clause then pay their fines. What happens to the wage increase? Does that persist, or is it withdrawn. If it is withdrawn, where is the authority in this Bill for its withdrawal? I can foresee a situation in which the payment of a fine of £100 or £500 may be peanuts in relation to increased wages negotiated for thousands of workers all over the country.

There may be circumstances in which those fines are paid. What happens to the wage increases? There may be circumstances in which the fines are not paid, and in which those responsible under this Clause are sent to prison. While they sit unloved in gaol, do the workers on whose behalf they are suffering imprisonment enjoy the benefit of the wage increase in respect of which the negotiators have been sent to prison?

I assure my right hon. Friends that I do not put these questions mischievously. I put them seriously. They are questions that I am being asked. They are the sort of questions that all of us will have to answer in our constituencies, at our trade union branch meetings and at our local political meetings. They are perfectly fair questions, and I hope they will be treated as such, and I very much hope that the answers will be helpful to all of us.

12.45 a.m.

Mr. J. J. Mendelson (Penistone)

I want to make a very brief reference to the speech of my hon. Friend the Member for South Shields (Mr. Blenkinsop) and then put a couple of points to the Government.

My hon. Friend said that he agreed with our hon. Friend the Member for Poplar (Mr. Mikardo) in laying down a number of pre-conditions which are absolutely essential if a wages policy is to be accepted and made workable. Then my hon. Friend proceeded to say that we must all admit that, while the Government have done a good deal of work in moving towards the implementation of these pre-conditions, they have got nowhere near implementing them.

This is the whole point. It is the decision on timing that is the real difficulty. What I would argue in reply to my hon. Friend is precisely that unless and until more progress has been made by the Government in bringing about the implementation of some of the preconditions, the difficulties that my right hon. Friend the First Secretary has experienced will remain with us.

I very much regret that my right hon. Friend the Chancellor of the Exchequer is not on the Front Bench tonight to share the responsibility for the policy with the First Secretary. I have never been one of those who have held—I think that events have proved me right—that there is any peculiar personal responsibility on the shoulders of the First Secretary for the Government's policy in this field. It is true that it was the First Secretary who went to see the General Council of the T.U.C. before the last annual congress and engaged in the long negotiations in which the possibilities of future legislation were discussed in detail, but I understand that, naturally, he went to Brighton for those discussions on the instructions of the Cabinet. Equally, there is a good deal of evidence that in the course of those discussions the policy of the Chancellor and the commitments that he had entered into in various negotiations abroad played a very large and important part.

The policy involved in Clause 16 is one that changes the whole aspect of the Government's policy, and it is precisely on that point that I want first to ask the Government how they would like to defend the change of attitude that has occurred. A point not yet made in the debate concerns one of the aspects of the Government's policy which I am sure the First Secretary will advance when he replies, that we are dealing here, not as in Part IV, with delaying actions, and that all that the Government are advancing in that part of the Bill is the enforcement of delay before negotiations can advance.

When this matter was discussed with the General Council of the T.U.C. that is how the position was. Then the First Secretary had those very long discussions with it. It was not prepared to put before the congress a policy of statutory enforcement of such delaying action. Instead, it asked the General Secretary, Mr. George Woodcock, to work out an alternative policy, and it was as a result of that alternative policy that the resolution from the General Council, embodied in a supplementary economic report, was first carried. It substituted for the Cabinet's desire at the time to have some provision which was lodged with the National Board for Prices and Incomes and die Government a committee of the General Council of the Trades Union Congress which would then invite affiliated organisations to submit their wage claims so that the General Council could look at them.

Now we have a complete reversal of policy and the replacement of that substantially by what is embodied in Clause 16. If the conditions were not ripe during the intervening 12 months for the voluntary acceptance of this policy, partly through the agency of the Trades Union Congress, partly through the National Board, what hope is there that the introduction of this compulsion will change the minds of any group of workmen or of any trade union when there is no willingness to accept it on a voluntary basis, because of the absence of the right conditions, as my hon. Friend the Member for Poplar has said.

Does not my right hon. Friend the First Secretary recall that it has always been the argument of Mr. George Woodcock, the General Secretary of the T.U.C., who knows at least as much about these matters as anybody in the House or anybody in industry, that industrial relations are essentially like a marriage contract; they have to be based upon voluntary co-operation? Once recourse must be had to law, the marriage has already foundered. Is it not quite clear that, if the big guns of the Clause are brought to bear upon a delicate industrial situation which requires co-operation as the basis for success, the reverse of what it is desired to achieve will be achieved?

I conclude by asking my right hon. Friend whether in all these circumstances he will not consider it wise, particularly as some of the original assumptions under which his proposals to the T.U.C. were debated have now been out-paced by other events, to reconsider the policy for this more limited purpose embodied in the Clause? Would not it be better to make a new approach?

It is because I, together with some of my hon. Friends, am anxious that this should be properly considered that I regard this as a very useful debate and, as the result of this debate, I hope that many people in the trade union movement will know that there is more than one point of view on this. I invite my right hon. Friend to answer this debate in the spirit of considering the possibility of a changed course on the Clause, even at this late hour.

Mr. George Brown

As the right hon. Member for Leeds, North-East (Sir K. Joseph) said a long time ago, this has been a moving and sometimes for some of us a sad debate. It is a debate that goes to the heart of things which many of us hold very dear. I imagine that nobody who has spoken critically will challenge my own right to speak as a trade unionist with a lot of experience behind me and a lot of deep feeling.

I have never taken the view, and I do not now take the view, that some of my right hon. Friends seem to be claiming, that our business in the trade union movement is simply to fight for our people's wages and not to be part of the process by which society is governed. I have heard the phrase used many times—I heard it used in Committee; I have heard it used tonight—scornfully about the trade union movement becoming an unjunct of government.

I heard the late Ernest Bevin a long time ago, when I was a very young man, say that if all we were concerned with was earning fodder for our people there were others not nearly as good as we who could do that. The trade union movement grew up from more than earning fodder for our people. It grew up so that people could play their part in developing a new society, to help them manage that new society and to help to plan it. As we have come to responsibility and power in this House, so duties have come to rest upon us.

This is where I part company with so many right hon. and hon. Members who have spoken tonight, because I recognise that we are now in a managed economy. My hon. Friend the Member for Poplar (Mr. Mikardo), in opening the debate, made a speech which I well understood, although I did not agree with much of it. He seemed to rest his case on the fact that we were not in a planned society. I do not think that anybody but he really could persist in that view, and I doubt whether he does.

We are planning a society; indeed, we were doing it before this Government came to power. As my hon. Friend the Member for South Shields (Mr. Blenkin-sop) said, we have certainly been doing it for the 20 months or so we have been in office. We have been interfering, intervening, planning, controlling—and I know that right hon. and hon. Members opposite do not like it; of course they do not. But tonight we have heard the corollary of their view on this side of the House.

Right hon. and hon. Members opposite do not like the fact that we are interfering and intervening with profits, prices and the free run of the market as they think it should happen where their interests are concerned. I must say to my right hon. and hon Friends that they are taking the view that they do not like the fact that we are interfering with the free run of the market where our own vested interests are concerned. I do not see any case that we can develop to our own people or to the nation as a whole on those lines.

Obviously, I think of our own people, for I myself am a trade unionist and have been a trade union official. But I also happen to be here because the nation as a whole put us in office. I do not, therefore, see how we can develop a case, either to our own people or to the nation as a whole, in saying, "It is all right for prices, it is all right for profits and it is all right for dividends, and we do not mind the Government having compulsory fall-back powers for them, but we are not going to have anything which looks like a fall-back position for wages". We could not defend such a case to our own people, and I am certain that we could not defend it to the nation.

We are now dealing with Part II of the Bill, dealing with the prices and incomes policy which, as far as I know, everybody accepts as an absolutely sine qua non of expansion and growth. If this nation is to expand, to produce more, to be more competitive and to grow, a prices and incomes policy is inescapable. We can argue about how we get it, but a prices and incomes policy we have to have.

When I went to the T.U.C. General Council a year ago, I said, as I say to the House tonight, that we have had a fair period now of trying to do this thing voluntarily, and it is not working well enough.

1.0 a.m.

Wages and earnings are going up by far more than we can possibly support, even if we were having the productivity which we set out to get. We are not even getting the productivity. I said that this must end. If it goes on, the possibility of getting the growth and the expansion that we need means that this degree of inflation cannot possibly be tolerated or supported. For a variety of reasons, the Bill which I discussed with them a little later has not come before the House until now. Therefore, we now have all that much more experience and all that way back to look.

I do not believe that the trade unionists are so blind. They can see what has happened. The inflation has gone on and on, and the voluntary system has worked less and less well.

The Government still want the voluntary system to work. We still depend upon it. In my view, it is in the end the only way. That does not mean, however, that one should not say to people that if it goes on like this, there is only one alternative: that is, that the Government must govern and that we must try to halt the inflation, because no free society can stand what is happening.

Therefore, this is what we are doing in the Bill. We are saying let us go on with the voluntary system and try to make it work. We have got to have it. At same stage it must happen. The T.U.C., the C.B.I and all the other organisations in the country, as well as this House, must at some stage come together and make a productivity, prices and incomes policy work. When we do, we can go ahead with growth and expansion. Until they do, this nation, especially limited as we are by our international obligations and especially vulnerable as we are for reasons many of which have nothing to do with us, will be cribbed, cabined and confined, as we have seen recently.

Therefore, all that I am asked really to do is to defend to my right hon. and hon. Friends why I say in the Bill that we will take fall-back powers on prices and on incomes if the voluntary system does not work. My right hon. and hon. Friends are quite right: if one says to an employer or manufacturer, "You must not put up your prices", it involves saying to a trade unionist, "And you must not use your power to force that employer or manufacturer to do what we are telling him he must not do."

There are trade unionists, trade union leaders and trade unions who, in a free society—and a free society here means operating in a free market—are big enough and powerful enough not only to look after themselves, but to win for themselves and their members a great deal. There are others who cannot. And there are others who are in those big unions who cannot. And the pensioners, and the people on fixed incomes, cannot.

I am prepared to say to any trade union in this country, including my own: "O.K. You think you are so big. You think you can win in a free for all. Think, for heaven's sake, of the people who are bound to lose in a free for all—for whom we are also responsible." This is what this is all about.

Of course we must accept, in the society we are now managing, some limitations upon ourselves. Of course it is the duty upon the Government to operate it with fairness, justice and understanding. Of course the duty upon us is to consult, and move in closest contact, with both sides of industry. Of course the ultimate is to get it done by agreement; and there must be no use of compulsory powers unless we cannot get it done by agreement.

I heard my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), for whom I have a great affection, talk about how Keir Hardie came here and the standards he came here to raise. I came here in the same tradition. We having raised that standard, my business is not to do what Keir Hardie came to do. My business is to do what Keir Hardie would do if he were here now this night. My business now, I submit to the House, and especially to my right hon. and hon. Friends—and hon. and

right hon. Gentlemen opposite will not mind if I specially address myself to my hon. and right hon. Friends, because this has been, in a way, an internal debate, and I agree with the right hon. Gentleman that to take part in this is one of the great, moving occasions in our life—I say to my hon and right hon. Friends, we have gone far, far beyond what Keir Hardie or any of our predecessors thought we would have gone, and our business now is to carry that advance forward. To carry it forward means getting the unlimited though controlled and sustained growth and expansion we need.

For the moment, we can be torpedoed by groups, by individuals, who, in all parts of our society, will put their vested interests above those of the community as a whole. I feel, therefore, that we are entitled to take these powers, whether against the price fixers, whether against the employers, whether against those trade unionists, who do not observe the common weal. I trust we shall never have to use them. I think we shall consult all our own people's wishes best by accepting the Clause, by accepting this Bill, and saying to unions and to everybody else: Now, let us get down to making it work on a voluntary basis.

Question put, That the words proposed to be left out, to the end of line 7 in page 17, stand part of the Bill:—

The House divided: Ayes 162, Noes 123.

Division No. 168.] AYES [1.9 a.m.
Albu, Austen Cullen, Mrs. Alice Garrett, W. E.
Alldritt, Walter Davies, Harold (Leek) Garrow, Alex
Anderson, Donald de Freitas, Sir Geoffrey Gordon Walker, Rt. Hn. P. C.
Atkins, Ronald (Preston, N.) Dell, Edmund Gourlay, Harry
Barnes, Michael Dewar, Donald Greenwood, Rt. Hn. Anthony
Baxter, William Diamond, Rt. Hn. John Gregory, Arnold
Benn, Rt. Hn. Anthony Wedgwood Dobson, Ray Hamilton, William (Fife, W.)
Bennett, James (G'gow, Bridgeton) Doig, Peter Hannan, William
Bidwell, Sydney Donnelly, Desmond Harrison, Walter (Wakefield)
Binns, John Dunnett, Jack Haseldine, Norman
Blackburn, F. Dunwoody, Mrs. Gwyneth (Exeter) Henig, Stanley
Blenkinsop, Arthur Dunwoody, Dr. John (F'th & C'b'e) Herbison, Rt. Hn. Margaret
Boardman, H. Edelman, Maurice Houghton, Rt. Hn. Douglas
Boston, Terence Edwards, Robert (Bilston) Howarth, Robert (Bolton, E.)
Bowden, Rt. Hn. Herbert Edwards, William (Merioneth) Hughes, Roy (Newport)
Boyden, James Ellis, John Hunter, Adam
Bray, Dr. Jeremy English, Michael Hynd, John
Brown, Rt. Hn. George (Belper) Ennals, David Janner, Sir Barnett
Brown, Bob (N'c'tle-upon-Tyne, W.) Ensor, David Johnson, Carol (Lewisham, S.)
Buchan, Norman Evans, loan L. (Birm'h'm, Yardley) Johnson, James (K'ston-on-Hull, W.)
Butler Mrs. Joyce (Wood Green) Fletcher, Raymond (Ilkeston) Jones. Rt. Hn. Sir Elwyn (W. Ham, S.)
Cant, R. B. Floud, Bernard Jones, J. Idwal (Wrexham)
Carter-Jones, Lewis Ford, Ben Kelley, Richard
Conlan, Bernard Fraser, John (Norwood) Lawson, George
Crawshaw, Richard Fraser, Rt. Hn. Tom (Hamilton) Leadbitter, Ted
Crosland, Rt. Hn. Anthony Freeson, Reginald Ledger, Ron
Crossman, Rt. Hn. Richard Gardner, Tony Lee, Rt. Hn. Jennie (Cannock)
Lever, L. M. (Ardwick) Norwood, Christopher Skeffington, Arthur
Lewis, Ron (Carlisle) Oakes, Gordon Slater, Joseph
Lomas, Kenneth Ogden, Eric Small, William
Loughlin, Charles O'Malley, Brian Snow, Julian
Luard, Evan Oswald, Thomas Steele, Thomas (Dunbartonshire, W.)
Lyon, Alexander W. (York) Page, Derek (King's Lynn) Stonehouse, John
Lyons, Edward (Bradford, E.) Pavitt, Laurence Summerskill, Hn. Dr. Shirley
Mabon, Dr. J. Dickson Peart, Rt. Hn. Fred Taverne, Dick
McBride, Neil Pentland, Norman Thomas, George (Cardiff, W.)
McCann, John Prentice, Rt. Hn. R. E. Tinn, James
MacColl, James Price, Christopher (Perry Barr) Varley, Eric G.
Macdonald, A. H. Price, Thomas (Westhoughton) Walker, Harold (Doncaster)
McKay, Mrs. Margaret Probert, Arthur Watkins, David (Consett)
Mackie, John Randall, Harry Weitzman, David
Mackintosh, John P. Redhead, Edward Wellbeloved, James
Maclennan, Robert Rees, Merlyn Whitaker, Ben
McMillan, Tom (Glasgow, C.) Rhodes, Geoffrey Willey, Rt. Hn. Frederick
Mallalieu J. P. W.(Huddersfield, E.) Richard, Ivor Williams, Clifford (Abertillery)
Manuel, Archie Roberts, Gwilym (Bedfordshire, S.) Williams, Mrs. Shirley (Hitchin)
Marquand, David Rodgers, William (Stockton) Willis, George (Edinburgh, E.)
Mayhew, Christopher Ross, Rt. Hn. William Wilson, William (Coventry, S.)
Millan, Bruce Rowland, Christopher (Meriden) Woodburn, Rt. Hn. A.
Molloy, William Rowlands, E. (Cardiff, N.) Woof, Robert
Morgan Elystan (Cardiganshire) Ryan, John Wyatt, Woodrow
Morris, Alfred (Wythenshawe) Sheldon, Robert Yates, Victor
Morris, Join (Aberavon) Shore, Peter (Stepney) TELLERS FOR THE AYES:
Moyle, Roland Silkin, Rt. Hn. John (Deptford) Mr. Alan Fitch and
Mulley, Rt. Hn. Frederick Silkin, S. C. (Dulwich) Mr. Edward Bishop.
Alison, Michael (Barkston Ash) Gower, Raymond Noble, Rt. Hn. Michael
Allason, James (Hemel Hempstead) Gresham Cooke, R. Nott, John
Batsford, Brian Griffiths, Eldon (Bury St. Edmunds) Onslow, Cranley
Berry, Hn. Anthony Grimond, Rt. Hn. J. Orr-Ewing, Sir Ian
Biffen, John Gurden, Harold Page, Graham (Crosby)
Birch, Rt. Hn. Nigel Hall, John (Wycombe) Peel, John
Blaker, Peter Harrison, Col. Sir Harwood (Eye) Percival, Ian
Body, Richard Hawkins, Paul Pike, Miss Mervyn
Boyle, Rt. Hn. Sir Edward Heath, Rt. Hn. Edward Pink, R. Bonner
Brewis, John Heseltine, Michael Price, David (Eastleigh)
Brinton, Sir Tatton Higgins, Terence L. Pym, Francis
Bromley-Davenport, Lt. Col. Sir Walter Hill, J. E. B. Ramsden, Rt. Hn. James
Brown, Sir Edward (Bath) Hobson, Rt. Hn. Sir John Rawlinson, Rt. Hn. Sir Peter
Brown, Rt. Hn. George (Belper) Hooson, Emlyn Rossi, Hugh (Hornsey)
Bruce-Gardyne, J. Hordern, Peter Royle, Anthony
Bullus, Sir Eric Hornby, Richard Russell, Sir Ronald
Carlisle, Mark Howell, Denis (Small Heath) Sharples, Richard
Carr, Rt. Hn. Robert Hunt, John Shaw, Michael (Sc'b'gh & Whitby)
Clegg, Walter Hutchison, Michael Clark Sinclair, Sir George
Crouch, David Jerrkin, Patrick (Woodford) Smith, John
Crowder, F. P. Johnston, Russell (Inverness) Stodart, Anthony
Dance, James Jones, Arthur (Northants, S.) Summers, Sir Spencer
Davidson, James (Aberdeenshire, W.) Jopling, Michael Tapsell, Peter
d'Avigdor-Goldsmid, Sir Henry Joseph, Rt. Hn. Sir Keith Thorpe, Jeremy
Dean, Paul (Somerset, N.) Kaberry, Sir Donald Tilney, John
Deedes, Rt. Hn. W. F. (Ashford) King, Evelyn (Dorset, S.) Turton, Rt. Hn. R. H.
Doughty, Charles Kirk, Peter van Straubenzee, W. R.
Eden, Sir John Kitson, Timothy Vickers, Dame Joan
Elliott, R. W.(N'c'tle-upon-Tyne, N.) Knight, Mrs. Jill Wainwright, Richard (Colne Valley)
Eyre, Reginald Loveys, W. H. Walker, Peter (Worcester)
Farr, John Lubbock, Eric Ward, Dame Irene
Fisher, Nigel Mackenzie, Alasdair (Ross&Crom'ty) Webster, David
Fletcher-Cooke, Charles Maclean, Sir Fitzroy Wells, John (Maidstone)
Fortetcue, Tim Macmillan, Maurice (Farnham) Whitelaw, William
Foster, Sir John Maddan, Martin Wilson, Geoffrey (Truro)
Fraser, Rt. Hn. Hugh (St'fford A Stone) Marten, Neil Wood, Rt. Hn. Richard
Gibson-Watt, David Maxwell-Hyslop, R. J. Worsley, Marcus
Giles, Rear-Adm. Morgan Maydon, Lt.-Cmdr, S. L. C. Younger, Hn. George
Gilmour, Sir John (Fife, E.) Miscampbell, Norman
Glover, Sir Douglas Mitchell, David (Basingstoke) TELLERS FOR THE NOES:
Glyn, Sir Richard Morgan, W. G. (Denbigh) Mr. Jasper More and
Goodhart, Philip Munro-Lucas-Tooth, Sir Hugh Mr. Anthony Grant.
Goodhew, Victor Neave, Airey