HC Deb 01 July 1968 vol 767 cc1080-6
66. Mr. Frank Allaun

asked the Secretary of State for Employment and Productivity if she will ask the National Board for Prices and Incomes to investigate all cases where directors' remuneration has been raised to above £20,000, plus dividends, or by more than the norm of wages increase.

Mrs. Castle

I would ask my hon. Friend to await the Question I hope to answer at the end of Question Time about the treatment of the highest levels of remuneration under the Government's policy for productivity, prices and incomes.

Mr. Allaun

In view of that reply, I have no supplementary questions.

Mr. Selwyn Lloyd

When the right hon. Lady is making that statement, will she have regard to the difference between net and gross incomes and draw attention to the fact that the Chancellor of the Exchequer is the principal profiteer from this sort of increase?

Mrs. Castle

The right hon. and learned gentleman had better await the statement.

Mr. Bishop

As my hon. Friend the Member for Salford, East (Mr. Frank Allaun) seems to be showing an unusual sympathy for the higher income groups by this Question, will my right hon. Friend look at the remuneration of directors at much lower levels as well as at the higher increases of directors?

Mrs. Castle

I suggest that my hon. Friend awaits my statement.

Mr. R. Carr

On a point of order, Mr. Speaker. Did the right hon. Lady indicate that she does not intend to answer Question No. 67 following this Question?

Mr. Speaker

The right hon. Lady said that she would be making a statement in answer to Question No. 67 at the end of Questions.

Mrs. Castle

May I intervene here, Sir? I am somewhat confused by the fact that we have made such rapid progress. I see that the hon. Gentleman who tabled Question No. 67 is here in his place, so, instead of making a statement at the end of Questions, perhaps I could answer all these points on Question No. 67 at the end of Questions.

Mr. Speaker

Perhaps that would be better.

67. Mr. Arthur Davidson

asked the Secretary of State for Employment and Productivity what steps she will take to ensure that the highest levels of remuneration are kept in line with incomes policy.

Mrs. Castle

Paragraph 50 of Command 3590 makes it clear that the principles of incomes policy should apply to individual salaries and other forms of remuneration, including that of Company Directors and Executives, that are fixed outside the usual process of collective bargaining. The Government have, however, decided that there is a need for further guidance on the application of this general principle. They are therefore asking the N.B.P.I. to examine the application of this general principle to remuneration at the highest levels, both in the private sector and in nationalised industries.

In view of this general reference to the N.B.P.I., I have decided that it would be inappropriate to answer any questions on salaries and other forms of remuneration paid to individuals.

Mr. Speaker

The answer to this Question was postponed pending the arrival of the Minister. We now come back to Question No. 67.

Mr. Davidson

Is my right hon. Friend aware that her Answer will do something, but not very much to convince people that for a prices and incomes policy to be effective it must apply to all sections of the community? Will she, however, say something to reassure Mr. Jocelyn Hambro that he is not sufficiently important to be singled out for special treatment and help him to get rid of his inferiority complex and feeling of persecution?

Mrs. Castle

I cannot accept my hon. Friend's suggestion that this reference will not mean very much, because, of course, we have given the Board very wide terms of reference and there is ample scope for examining the whole field. I am sure that the evidence will be of very great value to the Government.

Mr. Iain Macleod

Is not the truth of the matter that the First Secretary has got herself into a ridiculous position and is now trying to get out of it? Does she not think that at a time like this she and her Department have better things to do than to organise witch hunts?

Mrs. Castle

I am sorry. I cannot accept either of the right hon. Gentleman's assumptions. This is an aspect of prices and incomes policy which the Government have had under consideration for some time. I should have thought it was obvious to the House that we cannot have either a continuing situation in which the needs of the nationalised industries are not given very careful consideration and at the same time the need for convincing the people of this country that the policy can and must apply to all sections of the community.

Mr. Frank Allaun

As wage increases are only a few shillings a week in most cases, why should there be increases of thousands of pounds a year? While my right hon. Friend's Answer gives some satisfaction, is she aware that she has said that only the principle will be investigated whereas, in the case of wage earners, their increase has been investigated and not the principle?

Mrs. Castle

The Government have always recognised the difficulty of controlling individual salaries, not only in industry or in the City. There is a problem here once we go away from groups covered by collective bargaining to individual salaries, but the Government's recognition of the need for restraint in the field of individual salaries, which the C.B.I. has accepted, has always been part of the prices and incomes policy. One of the things which may emerge from the Board's Report is how far the policy has been effective in this area. The Government will obviously have to consider the position in the light of the Board's report.

Mr. Selwyn Lloyd

When I asked a question earlier, the right hon. Lady asked me to await the statement. Will she draw the attention of the Board to the very penetrating supplementary question I asked?

Mrs. Castle

I regret to inform the right hon. and learned Gentleman that I have forgotten what the question was. The terms of reference of the inquiry are very wide indeed and I am sure that the Board will have under consideration all relevant factors.

Mr. Shinwell

In view of the allegation against my right hon. Friend that she is trying to get herself out of a ridiculous situation, will she say which is the worse—to suffer an accusation of that kind or to deal with the merchant bankers, people in the City of London and industrial tycoons who are exploiting shareholders and their own concerns by taking far more out of the profits than they are entitled to?

Mrs. Castle

Far from feeling myself to be in a ridiculous position, I believe that I have announced an important step forward.

Mr. Lubbock

Why does not the right hon. Lady admit that her hon. Friend the Under-Secretary of State dropped a goo-lie in his reference to Mr. Hambro and get on with a consideration of the genuine issues here? For example, will the Prices and Incomes Board be able to consider the relationship between the salaries paid to the heads of nationalised industries and those in private industry, with a view to ensuring that we have the best men in the public service?

Mrs. Castle

I thought that I had made that absolutely clear in my original Answer when I said that we should examine the application of the general principles of remuneration at the highest levels both in the private sector and in nationalised industry. I repeat that this is a problem which the Government have had under consideration for some time, as anyone who is concerned about the future strength of the nationalised sector, as I am.

Mr. Sheldon

Will my right hon. Friend bear in mind that there is little logical relationship between the various wage differentials, and far less between the remuneration paid to company directors—for example, the £91,000 a year paid to one gentleman and the remuneration paid to other directors—and will she accept my congratulations for instituting an inquiry?

Mrs. Castle

I am grateful to my hon. Friend. There is no doubt that the Board will produce a valuable report.

Mr. Fletcher-Cooke

What is the position of Mr. Hambro now? Was he not informed that his individual case would be investigated by the right hon. Lady's Department? Is that still so, or has that individual investigation been dropped, and it is. now a general investigation by the Board?

Mrs. Castle

The House was informed that we intended to get in touch with Mr. Hambro, and we did. A letter from him in reply to our earlier approaches is on its way. In view of the earlier answer, I do not propose to comment on Mr. Hambro's case.

Mr. Heffer

Why has not this action been taken before, since many of us on this side have for the past two years consistently pointed out that only organised workers are brought under scrutiny by the Prices and Incomes Acts? Second, can my right hon. Friend explain why some hon. Members opposite think that it is a witch-hunt when higher salaries are to be investigated but not a witchhunt when working-class earnings are investigated?

Mrs. Castle

I entirely agree with the point implicit in the last part of my hon. Friend's supplementary question. It is an indication of the whole attitude of hon. Members opposite in this matter. They always believe in these investigations so long as they are unilateral.

In reply to the first part of my hon. Friend's question, there are two reasons. Only since the coming into operation of the Companies Act have we had a source of real information. That is one important factor. Second, as I have said to the House already, the policy has been evolving all the time, and, if we are tightening up in other directions, we should certainly tighten up in this.

Mr. Biggs-Davison

Was not Mr. Jocelyn Hambro grossly in error in saying that the right hon. Member for Huyton (Mr. Harold Wilson) is the worst Prime Minister since Lord North? Is not he the worst Prime Minister ever?

Mr. Frank Allaun

On a point of Order, Mr. Speaker. As I have on the Order Paper a Question about Mr. Hambro, are not these questions out or order?

Mr. Speaker

I thought that the hon. Gentleman's Question was answered.

Mr. Allaun

I have not made my point clear, Mr. Speaker. I have a Question about Mr. Hambro on the Order Paper, not for today but for some days hence. In the circumstances, do not these questions and answers anticipate that Question in dealing with the matter today?

Mr. Speaker

It is not out or order to ask such supplementary questions as arise from the answer today. The rules governing supplementary questions are not as rigid as those for other matters.