HC Deb 20 October 1966 vol 734 cc371-3
2. Mr. Boyd-Carpenter

asked the First Secretary of State and Secretary of State for Economic Affairs whether he is satisfied with the degree today of voluntary observance of the pay freeze; and whether he will make a statement.

Mr. M. Stewart

Yes, Sir. The bringing into force of Part IV of the Prices and Incomes Act is no reflection on the great majority of employers and employees who are voluntarily observing the standstill.

Mr. Boyd-Carpenter

Is the right hon. Gentleman's satisfaction with this not marred at all by the fact that a great many people have been induced or cajoled into going back on bargains which they have freely made? What is he going to do to build up again faith in agreements freely negotiated?

Mr. Stewart

The reasons for this step were explained and discussed in the House in July. I believe that the nation as a whole accepts its necessity, and that the problem of building up confidence which the right hon. Gentleman creates in his mind does not therefore exist.

Mr. Crawshaw

Is my right hon. Friend aware that what many people on fixed incomes—especially pensioners—are more concerned about is whether prices are voluntarily being held down? Can he assure the House that he will apply the same vigour in keeping down prices—which I believe that he has rightly applied—in respect of incomes?

Mr. Stewart

Yes, Sir. It is the Government's intention to see that the principles of the White Paper on the standstill are observed as much in respect of prices as of incomes. My hon. Friend will realise that people with lower incomes or with small fixed incomes would be among the worst sufferers if there were a free-for-all.

Mr. Iain Macleod

Does the First Secretary appreciate that the main factor in the increases in prices is the Selective Employment Tax and the burden of taxation that has been imposed by this Government? Does his answer, therefore, mean that he is going into reverse in this matter?

Mr. Stewart

No, Sir. As explained in July, there were bound to be some increases in prices, for the reasons which the right hon. Gentleman has mentioned. It is true that since then those reasons have been the main reasons—indeed, almost the only reasons—why prices have risen. That follows necessarily. But I should have said that we shall carry out the principles enunciated in the White Paper.

Mr. Molloy

Will my right hon. Friend acknowledge the fact that while there might be some justification in some places for an increase because of S.E.T., what is really happening is that people are using S.E.T. as an excuse to cheat the public? Will he consider introducing legislation to stop this form of downright cheating?

Mr. Stewart

This fact has been brought to my attention and that of my colleagues in a number of letters and reports. These cases are being vigorously investigated. If it were necessary the powers under the Act would be used.