§ Q2. Mr. Ridleyasked the Prime Minister if he will appoint a Minister to coordinate the work of the Department of Economic Affairs and the Ministry of 1138 Labour with regard to the pay norm for incomes policy.
§ The Prime MinisterNo, Sir.
§ Mr. RidleyHad we not better stick to the Chancellor's maxim that we must earn our bonuses before we pay them? On what grounds does the Prime Minister think we shall be able to afford a 3½ per cent. increase in wages this year?
§ The Prime MinisterThis was explained during the debate following the Government's economy cuts. My right hon. Friend was right in what he said. He gave the reasons why he thought we could afford an increase of 3½per cent. in wages this year, provided this is the ceiling and not the minimum.
§ Mr. BarnettWould my right hon. Friend agree that any effective legislation on wages would cause serious industrial upheaval and have a harmful effect on increasing productivity? Will he therefore resist any pressure for legislation in this regard and persist with the voluntary system?
§ The Prime MinisterMy hon. Friend knows that it is the Government's view that we cannot have a successful incomes policy without the fullest voluntary cooperation of all concerned. The question of how far that needs to be supplemented by reserve statutory powers is a continuing problem which we have been examining, and I have nothing to add to what I said on that subject during the debate on the economy.
§ Mr. MaudlingWill the Prime Minister now make it clear whether the 3½per cent. norm pay increase to which he referred does or does not include all wage drift?
§ The Prime MinisterWe regard it as a maximum in respect of any settlement which should be made, and therefore that takes account of drift. It does not include, as I think the right hon. Gentleman will feel is right, extra earnings from overtime, from increased productivity, through bonus payments, through incentive payments, and things of that kind, in the new situation where there may be further earnings.
§ Mr. John LeeMy right hon. Friend referred to the possible need to supplement voluntary agreements in relation to 1139 the incomes policy. Is he not aware that many of us on this side would strongly resist any attempt to supplement this by legislation so long as the present mal-distribution of wealth in this country continues?
§ The Prime MinisterI am well aware of my hon. Friend's views on this question, which may not necessarily be decisive. I believe that, unlike the previous Government, we have the right to ask for this degree of co-operation in wage matters, because we have also taken powers over prices, in which context the right hon. Gentleman who interrupted me in a recent debate was quite wrong in his account of the powers which he thought he had given to the National Incomes Commission.