HC Deb 26 March 1968 vol 761 cc1159-62
Q5. Mr. Ridley

asked the Prime Minister why he gave an assurance to the Trades Union Congress that the Government would not seek compulsory powers to enforce a prices and incomes policy at the time of devaluation; and if he will make a statement.

The Prime Minister

As I made clear in the answer I gave on 5th March to a supplementary question by my hon. Friend the Member for Salford, West (Mr. Orme), no such assurance was given.—[Vol. 760, c. 224.]

Mr. Ridley

Then what was the point of allowing the T.U.C. to go on with the charade of trying to get an agreed voluntary incomes policy if, in any case, the Government meant to legislate to enforce it? Why was it that the trade union leaders thought that the Prime Minister had given such an assurance?

The Prime Minister

The hon. Gentleman has got it wrong. What has been tried and done is of enormous importance. We have seen a great revolution in industrial affairs. To describe it as a charade was quite unworthy. As for talks with the trade union leaders, as I have made clear in the House, on the night of devaluation I informed Mr. Woodcock, whom I saw, as I did Mr. Davies of the C.B.I., that we were not contemplating further legislation in this matter—[HON. MEMBERS: "Oh."] We were not at that time. I have said this. But, as I have already told the House, when I met the T.U.C. to discuss its voluntary vetting scheme—the one which the hon. Gentleman called a charade—I stated our full position about what might be needed and the dangers that its scheme might break down or might not be fully effective. I said that, if that occurred, there would be increased taxation, restraint on growth and higher unemployment. It would also reopen the question of a tougher incomes policy backed by statutory powers. That statement was made to the T.U.C. Economic Committee on 5th January.

Mr. Orme

Would my right hon. Friend not agree that the Government's change of policy in relation to introducing legislation is meeting widespread opposition throughout the trade union movement? In the interests of getting the economic growth that he wants, would he not withdraw the legislation and remove one of the main barriers between his Government and the trade union movement?

The Prime Minister

No, Sir. I recognise, however, the very, very great difficulties this presents for trade unions and their members. That is why, as my hon. Friend knows, I appealed to him recently to use his great influence with so many on the shop floor to bring home to them the fact that he must recognise—the need for an effective incomes policy.

Mr. Speaker

Mr. Heath.

Mr. Heath


An Hon. Member

Welcome back, Ted.

Mr. Heath

The Secretary of State for Economic Affairs has told the House that, when the Government ask for powers over prices and incomes, they will ask for them in a form which can be easily renewable. Is the Prime Minister aware that we believe that, if the Government want such powers, they ought to try to take them on each occasion by a separate Bill? If the Government are to ask for them to be renewable, will he assure the House that it will be done in a form which will allow a separate debate and vote, and not just be put into the Expiring Laws Continuance Bill?

The Prime Minister

I take the right hon. Gentleman's point, but the Expiring Laws Continuance Bill allows not only a separate debate, but a form of amendment in that certain parts of an Act can be dropped for all time. If we have what we had before—a simple provision that after a debate and a Division the whole of the scheme either goes on or does not—that gives the House less control over the future of the situation.

Mr. Alexander W. Lyon

Is my right hon. Friend aware that there are many on this side who do not share the views expressed earlier by one hon. Member? All that is required of this Government is that they should get this country out of an economic mess.

The Prime Minister

Yes; and one essential part in this is that the Government must succeed where our predecessors failed in getting an incomes policy. They totally failed in their incomes policy because they were not prepared to take action over prices or over dividends or to deal with the various fiscal reforms that were needed. They were not prepared to do any of these things. Their idea of an incomes policy was a very tight and unfair grip over the public sector with no control over profits in the private sector, both combined for short periods at a time with chronic deflation.

Sir C. Osborne

Does the Prime Miniter really think that he can make compulsory powers work against the bitter opposition of the trade unions?

The Prime Minister

I do not for a moment under-rate the very great difficulties of making this work. It has never been wholly satisfactorily carried through. I have given the reasons why it failed before 1964, but I do not under-rate the extreme difficulties. That is why we want to rely as far as we can, even now, on the voluntary system for which the T.U.C. were given powers, though it has very grave doubts whether those powers will be allowed to work. We want to supplement them, and we feel they must be supplemented in this way. As we said to the T.U.C. yesterday, when the grim alternatives are fully realised, particularly concerning further industrial growth and unemployment, I think that, bitter and repugnant though this is, a large number of trade unionists will realise how necessary it is.