Prices and Incomes Policy

HC Deb 09 February 1967 vol 740 cc1798-804

1. Mr. Marquand

asked the First Secretary of State and Secretary of State for Economic Affairs with what administrative machinery, and according to what social and economic criteria, he intends to administer the Government's prices and incomes policy after July, 1967.

9 and 10. Mr. Channon

asked the First Secretary of State and Secretary of State for Economic Affairs (1) if he will now publish a White Paper dealing with the future of the Government's prices and incomes policy;

(2) if he will now state the Government's policy towards wage increases after July.

12. Mr. Christopher Rowland

asked the First Secretary of State and Secretary of State for Economic Affairs what progress he has made in his discussions with the Trades Union Congress and the Confederation of British Industry on an effective long-term prices and incomes policy.

13. Mr. Biffen

asked the First Secretary of State and Secretary of State for Economic Affairs if he is satisfied that Parts I, II, and III of the Prices and Incomes Act give him sufficient legislative sanctions to influence the movement of prices and incomes after 31st July; and if he will make a statement.

38. . Mr. Ridley

asked the First Secretary of State and Secretary of State for Economic Affairs when he will now make a statement on the Government's incomes policy to follow the end of the period of severe restraint.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. Michael Stewart)

My right hon. Friend, the Minister of Labour and I have had further meetings with the C.B.I. and T.U.C. this week. The consultations have covered the norm criteria, machinery and possible statutory powers after the end of severe restraint. The two sides are considering the Government's views on these various topics and further consultations will be taking place.

Mr. Marquand

Can my right hon. Friend at least give an assurance that he has no intention of returning to a wholly voluntary incomes policy after July, since experience has shown that a voluntary policy is equivalent to no policy at all? Secondly, what does he intend to do after July about the lower-paid workers and will he specifically look at the proposal for a national minimum wage, at least equivalent to the standards laid down by the Supplementary Benefits Commission?

Mr. Stewart

I will certainly look at the proposal contained in the last part of my hon. Friend's supplementary question, as I am already looking at this and other suggestions. To answer the first part of his supplementary question, that is exactly one of the matters now under discussion.

Mr. Channon

Is it not a disgrace that this House has not yet been told about the Government's plans for the period after July? When will the First Secretary let the House know, as well as the T.U.C. and the C.B.I., what the Government are proposing?

Mr. Stewart

I hope to give that information to the House as soon as possible, but I do not believe that there is anything objectionable—and this is frequently done—in the Government beginning by putting certain ideas and possibilities forward to particular parties before stating those ideas in the form in which they should be presented to this House.

Mr. Rowland

Would my right hon. Friend indicate along which lines his mind and that of the Government are working? Is it that there may be no price change at all—whether it be the price of labour, goods or services—without the prior approval of the Government, or that there may be price changes, subject to delay and to possible Government intervention afterwards? If it is the former, may I say that I would object not so much on doctrinal grounds as on practical grounds?

Mr. Stewart

Without pre-empting the result of discussions, I think that I agree with my hon. Friend about that.

Mr. Biffen

Before endorsing the advice offered to him by his hon. Friend the Member for Ashfield (Mr. Marquand), will the right hon. Gentleman bear in mind the considerable hostility that will be expressed, not only in this House but throughout the country, if the drift to compulsion in this policy is intensified rather than ended?

Mr. Stewart

It would be idle to suppose that any solution to this problem could be reached without there being opposition to it from some quarter or other. It is a difficult problem, in the consideration of which many pros and cons must be weighed. That is why I am now having consultations. As I said, I hope that before long the Government will be in a position to speak to this House about it.

Mr. Ridley

Is the right hon. Gentleman aware that authoritarianism is often more successful than liberty, but that our economic freedom to determine wages and prices is something which we cherish very much indeed? Will he, therefore, hesitate severely before extending compulsion in this matter?

Mr. Stewart

The hon. Gentleman says that authoritarianism is often more successful than liberty. I should have thought that that was true only in the very short term. The argument here is not between authoritarianism and liberty. There are a great many subjects on which we have laws, but they have to be laws which are broadly in line with public opinion. What we have to consider now is exactly what part voluntary action and Government action should play.

Mr. Orme

Is my right hon. Friend aware that a considerable number of hon. Members on this side of the House, including trade union Members, are opposed to any extension of compulsion after July? Would he not consider that the proposals made by the T.U.C. for a temporary scheme are more acceptable to the Government than the previous suggestions?

Mr. Stewart

There is certainly a great deal in the proposals put forward by the T.U.C. with which I would agree and with which I think anyone who has studied this problem will agree, but before any of us take up rigid positions on this we ought to allow the consultations to proceed a bit further.

Mrs. Thatcher

Would the right hon. Gentleman agree that when the powers were introduced he did take up a rigid position on this? The White Paper said that the powers would be purely temporary, that they would lapse automatically, and could not be renewed. Is he saying that the nation can put no faith whatever in that promise?

Mr. Stewart

No. It is perfectly clear that the powers contained in Part IV of the Prices and Incomes Act do lapse, actually, I think, on 11th August this year, but my right hon. Friends, in saying this, pointed out that if it were ever considered desirable to ask for any other powers, they would, of course, require fresh legislation and the consent of this House.

Mr. Raphael Tuck

Will my right hon. Friend at least give an assurance to the House that if controls are to continue—and I hope they are—he will maintain just as strict and rigid control over prices and profits as he does over incomes?

Mr. Stewart

I do not think we ought to use too freely these words "strict" and "rigid". This is not what is in issue. This is a question whether we can get, and what is the best method of getting, sufficient stability in our prices and wages to enable us to sustain rapid growth in the economy, but quite certainly, whatever is decided on that, one has got to make it apply both to prices and to incomes.

Mr. Hugh Fraser

Will the right hon. Gentleman confirm the comparative failure of his policy so far, as 1,100 prices have gone up and 165 have gone down and the cost of living since July has gone up 1.7 per cent.?

Mr. Stewart

When the hon. Member talks like that I think he fails to understand what the purpose of the policy is. If he will study the White Paper, he will find that it was to see that during the periods of standstill and severe restraint neither incomes nor prices went up unless there were certain specified justifications for them. That policy has been carried out.

Mr. Heffer

Will my right hon. Friend give an assurance that he will not follow the advice of lawyers and university teachers on this question but will accept the advice of the Trades Union Congress, which is involved in the day-to-day negotiations for wages in this country?

Mr. Stewart

I have clearly got to pay very great weight indeed to any advice given to me by the Trades Union Congress. I have to bear in mind, however, that this is a matter which affects the rights and standard of living of everybody in this country and I have received advice from a great variety of quarters. Not all trade unionists are agreed on the advice they give me, and not all university teachers are agreed either.

Mrs. Knight

Is not the right hon. Gentleman aware that what matters to the people of this country is not so much the purpose as the result of his policy and that the result has been that many increases have taken place in the nationalised industries? Would he not agree that this is a rather unfortunate result, whatever the purpose started out to be?

Mr. Stewart

I think the hon. Lady is again making a purely selective choice of evidence. If she has a look at what has happened to the Price Index as a whole and the reasons and justifications there have been wherever increases either of prices or of incomes have occurred, she will see that the policy is being carried out.

Mr. Crawshaw

Is my right hon. Friend aware that some hon. Members are concerned at the tremendous pressures which are being brought to bear on both sides of industry without any apparent concern for the general public? Will he bear in mind that we as Members of Parliament represent the general public and not a sectional interest? Will he ensure that this is thought of when the legislation is brought forward?

Mr. Stewart

Yes, indeed. Indeed, it is, of course, the Government's part in this matter—the part of the Government and the House—to represent the general interest. On any question requiring legislation, of course, this House would properly have the last word.

2. Mr. Marquand

asked the First Secretary of State and Secretary of State for Economic Affairs what steps he is taking to ensure that the recommendations contained in the Report of the National Board for Prices and Incomes on productivity and pay during the period of severe restraint, Command Paper No. 3167, will be carried out.

The Chancellor of the Duchy of Lancaster (Mr. Frederick Lee)

The Government have welcomed this valuable guidance to all concerned in the negotiation of productivity agreements, and the Board's recommendations are being taken into account in the examination of proposals for pay increases under paragraph 27 of Cmnd. 3150. The Government themselves are considering the Board's recommendation that it should receive a reference relating to systems of payment by results.

Mr. Marquand

Does my right hon. Friend agree that perhaps the most important of the points made by the Report mentioned in my Question is its insistence that the benefits of the productivity agreement should accrue to the whole community in the form of lower prices? Will he say specifically what he is doing to achieve that?

Mr. Lee

I quite agree with my hon. Friend. This to me also is one of the important factors. It is one of the reasons why one cannot merely talk of a productivity agreement, so-called, and give assent to it without finding whether the national interest is being preserved by it.

Sir C. Osborne

Can the right hon. Gentleman tell the House when he expects that we shall have greater national productivity? In view of the fact that only this morning it was shown that in steel production there has been the greatest fall since 1963, is it not time that the right hon. Gentleman did something about it, or allowed someone else to do something about it?

Mr. Lee

I should have thought that the hon. Member would have noticed from what the Chancellor of the Exchequer had said that the tendencies are all in that direction.

21. Mr. St. John-Stevas

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will now revise Government policy disallowing discretionary wage and salary increases to employees.

Mr. Frederick Lee

No, Sir, as far as the period of severe restraint is concerned.

Mr. St. John-Stevas

Does the Minister not agree that the present system works great injustice by linking wage increases to the purely arbitrary criterion of job classification? Does he realise that that is bitterly resented, not least among employees of the Marconi factory in my constituency at Chelmsford?

Mr. Lee

Where a commitment to review was in existence on 20th July last year, it is covered by paragraph 34 of the White Paper, Prices and Incomes Standstill; Period of Severe Restraint, Cmnd. 3150.

Mr. Ford

Is my right hon. Friend aware that whilst it is comparatively easy for employees working under payment by results schemes to increase their earnings, employees labouring under systems of personal assessment, with earnings related to productivity, are at a severe disadvantage?

Mr. Lee

Yes, Sir, I am. I have recognised that from the days when I used to negotiate for them. This is not brought about by anything in the present restraint period; it is one of the weaknesses of bargaining in the old sense.