HC Deb 07 July 1966 vol 731 cc640-4
2. Mr. Biffen

asked the First Secretary of State and Secretary of State for Economic Affairs what proposals he has to align the incomes norm with the current and expected increases in national output.

27. Mr. St. John-Stevas

asked the First Secretary of State and Secretary of State for Economic Affairs what further steps he now proposes to take to create an effective incomes policy, in view of recent decisions which run counter to it.

30. Mr. David Howell

asked the First Secretary of State and Secretary of State for Economic Affairs, in view of the numerous wage settlements which continue to be made in excess of the guiding light, what steps he proposes to take to re-design that policy.

37. Mr. Stratton Mills

asked the First Secretary of State and Secretary of State for Economic Affairs if he will seek to call a meeting of representatives of trade unions and employers to discuss the incomes policy.

Mr. George Brown

It is a matter of urgency for the nation to strengthen the effectiveness of the policy. We are taking every opportunity to urge this on all sections of the nation and to develop the policy in consultation with trade unions and employers.

Mr. Biffen

Is the right hon. Gentleman aware that that in no sense answers Question No. 2? Can he say whether the recorded progress of the gross domestic product and its expected course over the next 12 months justifies a norm of 3 to 3½ per cent., and if not, what is he doing about it?

Mr. Brown

I have answered that earlier, but on this one I think that my Answer was probably better than the Question.

Mr. Howell

Surely the right hon. Gentleman must realise that it is a natural and normal thing for the trade unions to press for higher wages? Does not the right hon. Gentleman think that it would be better to concentrate our energies on reforming the wage structure rather than trying to freeze wages and hit the trade unions on the head?

Mr. Brown

If it were as simple as that, it would have been settled under previous Governments. But it is not as simple as that, nor are we trying to freeze wages. What we are trying to ensure—and I would have thought that right hon. and hon. Gentlemen would have seen the point of this—is that personal incomes rise at a rate no greater than the rise in our national productivity.

Mr. Mills

With regard to Question No. 37, as it is obvious that the Declaration of Intent has been somewhat superseded, will the right hon. Gentleman consider calling another meeting of trade unionists and employers to consider the former declaration and see whether it can be brought up to date?

Mr. Brown

I thought that the hon. Gentleman's was the best Question of the four. That is why I said that we were developing the policy in consultation with trade unions and employers.

Mr. Haseldine

Would not the right hon. Gentleman agree that instead of trying to fix artificial levels for wages and salaries, which is bound to lead to the continuing stagnation of the economy, he would be better advised to try introducing incentives to the economy which will lead to increases in personal earnings and, therefore, faster growth in the economy?

Mr. Brown

Nobody is trying to establish an artificial level. The hon. Gentleman must surely at some stage get the point that if we take out by way of personal incomes more than we are together putting in by way of effort inflation is the answer. This is what I am trying to establish. As for the last part, I think that the hon. Gentleman was nearer the mark.

Mr. Mawby

Is the right hon. Gentleman aware that we all agree with him on his last thesis? But would it not be better for him to concentrate more upon increasing national output rather than trying to restrict the amount of money which people should take out at the present low rise in national output?

Mr. Brown

These things cannot be divorced in that way. We are, in a variety of ways and through the whole gamut of our economic policies, trying to stimulate industry—which means management as well as workers—to increase output and productivity. While we are getting that we cannot dodge the fact that we must try to keep outgoings in accord with input.

16. Mr. Hordern

asked the First Secretary of State and Secretary of State for Economic Affairs whether he is satisfied that the present figure of 3 to 3½ per cent. as the norm is still appropriate; and if he will make a statement.

33. Mr. Goodhart

asked the First Secretary of State and Secretary of State for Economic Affairs how long he will continue to recommend 3½ per cent. as the median figure for wage and salary increase in the public and private sectors; and when a new guiding light figure will be announced.

Mr. George Brown

Yes, Sir. But the norm will continue to be kept under review in the light of the general behaviour of national productivity.

Mr. Hordern

Surely the right hon. Gentleman must have some idea of the state of the economy now? Does he not think that the norm should be either increased to reflect the rapid rise in earnings or decreased to reflect the depressing record of productivity?

Mr. Brown

When one is dealing with questions of this kind I do not think that that kind of black and white approach is necessarily very good.

Mr. Goodhart

In view of the large number of failures to maintain the norm in recent wage negotiations, does the right hon. Gentleman intend to have formal consultations with any trade union leaders before a new norm is announced?

Mr. Brown

When I also consider, as the hon. Gentleman apparently does not, the number of great successes which we have had I get a balanced picture.

Mr. Higgins

What would the norm be on the basis of the National Institute for Economics and Social Research forecast?

Mr. Brown

Perhaps happily, the National Institute is not responsible for the nation's economy.

Mr. Whitaker

Would my right hon. Friend tell us what plans he has for bringing professional and salaried earnings within the same norm?

Mr. Brown

All incomes of all kinds are, of course, within the norm. This is something which we apply or try to get applied to the rise in the totality of incomes. We have provided, in paragraph 15 of the White Paper, with which my hon. Friend is very familiar, for the exceptional cases. To the extent to which people do not observe that, they are increasing the problems facing the nation and increasing the inflationary pressures on themselves. The principle applies to every possible personal income.