§ The Secretary of State for Employment (Mr. Robert Carr)
I announced on 23rd July that the future of the National Board for Prices and Incomes was being reviewed in the context of a wider examination covering the work of the Monopolies Commission and other relevant bodies. We have now reached the conclusion that the Board should be wound up—[HON. MEMBERS: "Shame."]—when the work on which it is at present engaged has been completed. Legislation be introduced in due course.
In the public sector, there is a clear need for co-ordinated machinery for advising the Government on the remuneration of certain groups for whom no negotiating machinery is, for one reason or another, appropriate. The Government intend therefore to establish at an early date three Review Bodies with a degree of interlocking membership. One will advise on the remuneration of the boards of nationalised industries, the Judiciary, senior civil servants, senior officers of the Armed Forces and such other groups as might be appropriately considered with them. Another will advise on the pay of the Armed Forces generally. A third will advise on the remuneration of doctors and dentists in the National Health Service. These three Review Bodies will have at their disposal and working to their directions a secretariat provided by a new Office of Manpower Economics.
The Government also intend to use the new Office of Manpower Economics to service any ad hoc inquiries which are necessary from time to time to examine in depth particular pay structures and related problems. The Office will also carry out analytical and educational work on more general matters affecting pay and its relation to productivity, either at the request of Ministers or with the approval of Ministers. The Office will not be part of the Government machine and its reports will be independent. Consultation will take place with the interests concerned about the detailed arrangements.
A statement on the Government's proposals for strengthening and developing the work of the Monopolies Commission will be made at an early date.
§ Mrs. Castle
Is not there one simple political fact behind all this jargon about a new Office of Manpower Economics, namely, that in future prices will be allowed, nay, encouraged, by this Government to rise without any check as to whether such increases are justified, while the right hon. Gentleman's Department will continue to operate an arbitrary incomes policy, as Tory Governments have always done? Is he aware that this is bound to toughen the determination of workers to press for higher pay increases, especially where those workers are low-paid? Is he further aware that, in our White Paper of last December, we spelt out a positive policy to help the low-paid? Can he tell us his policy for helping the low-paid, apart from refusing to conciliate in their disputes?
§ Mr. Carr
That is far bigger than has even been offered by any Government before to these or to any other group of workers, and far, far bigger than was envisaged by the right hon. Lady and her right hon. Friend the present Leader of the Opposition when they published their White Paper and sought the endorsement of the House to it less than a year ago.
§ Mr. Leadbitter
On a point of order. We on this side of the House are confused, and perhaps the right hon. Gentleman will help us. When he refers to people in the Health Service having an offer of 14 per cent. it would be helpful to know on what.
§ Mr. Carr
—and three times bigger than they said was the maximum which ought to be offered. As to the new machinery which we proposed, the right hon. Member for Blackburn (Mrs. Castle) chooses to call it "arbitrary". Here again, I can only say that if what she operated was a non-arbitrary policy, I suspect that the country will not mind an arbitrary one.
§ Mrs. Castle
Is the right hon. Gentleman aware that when the previous Government offered 15 per cent. to the doctors pending a reference to the National Board for Prices and Incomes, right hon. and hon. Gentlemen opposite said during the election campaign that it was outrageous, but they have since increased it to 20 per cent.? Is not this question of low pay a relative one, and is not that one reason why it is essential to bring the policy for reviewing all wages and salaries under one body, which is what we did when the National Board for Prices and Incomes was in operation?
§ Mr. Carr
I would only say that lower-paid workers did not do very well out of it. What we are doing here is to set up Review Bodies with interlocking memberships and a common secretariat in those sectors for which there is no negotiating machinery of the normal kind. We believe that this arrangement will provide more uniformity and a more logical look at these particular bodies. Incidentally, it will avoid doing what caused the outrage on the doctors' question, to which the right hon. Lady referred, and give a body of workers, whether they be professional or any other kind, a Review Body and then refer the recommendations of that Review Body to another Review Body. That will not happen under our proposals. If the recommendations of the Review Body are made to the Government, the Government themselves must take their view upon them.
§ Mr. Harold Wilson
Would not the right hon. Gentleman be wise to check a few facts before making some of these sententious remarks in the House? Would 671 he, for example, look at the record of settlements in the Health Service last year? Will not he find that in the case of lower-paid workers there were payments made, authorised by the then Government, of well over 14 per cent.? Is he also aware that, so far as the doctors are concerned, he, his leader and the present Chancellor all fought the election on the basis of saying that it was outrageous that we should pay only 15 per cent. and demanded full payment of 30 per cent., which when they got into office they did not do?
§ Mr. Carr
What I said was outrageous, what I believe is outrageous, is to appoint a Review Body for any group of workers—in this case we are talking about doctors—and, having led it to believe that it is the Review Body, then to refer recommendations of that Review Body to another. That is not going to be done; it is not going to be done in future.
§ Mr. Harold Wilson
Can the right hon. Gentleman give an assurance that every report of the three independent bodies—because he is now setting up four agencies to replace one—can he now give us an assurance that every report of an independent Review Body in respect of the professional workers he has mentioned will have its award automatically met by the Government without further review.
§ Mr. Carr
The Kindersley Committee disappears; the Plowden Committee disappears. So we have three bodies instead of two. And the third one is dealing with the Armed Services, which were hitherto dealt with by the National Board for Prices and Incomes. So there are three where there were three before, in effect [Laughter.] There are three for three. The office has not been increased, as the right hon. Gentleman suggested. The Office of Manpower Economics, if you like, is equivalent to the staff of the old National Board for Prices and Incomes staff, staff whose expertise will be maintained and built on. The staff, incidentally, will probably be between 150 and 672 200 less than the staff at present of the National Board for Prices and Incomes. So there will be a major reduction in staff.
As to the status of the recommendations of the Review Bodies, the recommendations of the bodies will be accepted by the Government unless there are clear—
§ The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw)
Laugh on the other side of your faces now.
§ Mr. Boyd-Carpenter
What guidance will be given to the new Review Bodies as to the principles which they should apply in determining what is the proper remuneration in these difficult fields?
§ Mr. Carr
I think that we shall have to consult the chairmen of these Review Bodies when they have been established. One of the reasons for the machinery we are proposing is that by having interlocking membership and a common secretariat we can get greater uniformity both of principle and of methodology when these different salaries are looked at; but this, I would say to my right hon. Friend, is something which will have to be considered with the Review Bodies and with the new Office when they have been established.
§ Mr. Wiggin
Can my right hon. Friend tell the House who will be the Chairman of the present Prices and Incomes Board for the rest of its life?
§ Mr. Thorpe
Are we to take it that there is now no special Review Body to look at the low-paid public servants, such as the teachers, probation officers, nurses, and others, for whom, very often, comparability studies cannot be undertaken under the normal negotiating procedure? Is the right hon. Gentleman aware that last week the Government withdrew grant from the Consumer Council, this week they are stripping the Prices and Incomes Board? Prices, as such, are unknown to the new organisations. Why have the Government such a contempt for the consumer? Is it because they are quite unable to work out a coherent policy for prices and incomes?
§ Mr. Carr
I would say to the right hon. Gentleman that there has never been a Review Body for low-paid workers. [interruption.] Well, if hon. Members opposite feel that the National Board for Prices and Incomes has fulfilled that rôle, I hardly think that the low-paid workers of this country feel that. What we have made quite clear is that this new Office of Manpower Economics which we are establishing can also act as a secretariat to any particular ad hoc review we wish to set up in depth into any particular sector of wages and salaries. As to the prices question, we have made quite clear earlier that, in our view, the best protection for the consumer, both as to prices and services, is to be found not in statutory control, which has been tried and found not to work over the last six years, but is to be found in the process of competition. That is why, as I said at the end of my statement, my right hon. Friend will shortly be making a statement about our plans for strengthening and developing the work of the Monopolies Commission to this end.
§ Mr. Holland
Does my right hon. Friend recall that the National Board for Prices and Incomes has in the past been used as an instrument for statutory interference with the right of free industrial negotiations, and can he give an assurance 674 that none of the new Review Bodies can be used in this way?
§ Mr. Carr
Yes, indeed I can, and that, of course, is the basic reason why the National Board for Prices and Incomes had to be wound up. I think that most people inside and outside this House would agree that in its early days the Board did work which was of value and could have been of greater value if it had not subsequently been misused for the wrong purposes and therefore brought itself, through no fault of its own, into disrepute.
§ Mr. Atkinson
Would the right hon. Gentleman clarify some figures which he has given? Last week he referred to a 14 per cent. increase on behalf of National Health Service workers and also local authority workers as representing an increase from £21 to £24 per week based on 43.7 hours. Now he has used that figure again, referring to 14 per cent. as 35s. which, to me, would suggest a wage of something like £12 6s. Would he, therefore, say whether he is talking about 14 per cent. on £12 6s. or 14 per cent. on £21?
§ Mr. Carr
I am not sure of the extent to which that is relevant to this Question, but I shall be delighted to answer the hon. Gentleman if you will allow me to, Mr. Speaker. What I was referring to last Thursday was the question of average earnings, and I was saying that the average earnings of local authority manual workers last year was of the order of £21 but that if they accepted the offer on the table from the employers it was likely that the average earnings would rise from £21 to £24. I did not say 14 per cent., because we were talking about average earnings and actual figures. What I was referring to today was the overall percentage of labour costs, and I was saying that in terms of the lowest-paid workers that represented an offer of 35s. a week or thereabouts on the basic rate.
§ Mr. Costain
Can my right hon. Friend say what saving will be established in the number of staff by the new organisation?
§ Mr. Moyle
Having abolished the Prices and Incomes Board, will the Minister now take the next logical step and advise all sections of employees that their logical attitude is now to use their bargaining power to get the maximum settlements that they can on every conceivable occasion? Secondly, since there is no longer any prices and incomes policy, will not he have to make the conciliation services of his Department available without reservation to employees and employers who are in dispute?
§ Mr. Carr
I should have thought that anyhow for the last ten months, when earnings were rising at about 12 per cent. a year compared with the White Paper's normal 2½ per cent. to 4½ per cent., what the hon. Member proposes was exactly what was happening—that is a fact which he must admit—under his Government. What we have always said and what we still say is that it is not possible to have a statutory incomes policy that works without a much larger degree of direction of labour and wages than the last Government contemplated—and, I hope, than any Government would care to contemplate. What we must do is try to persuade both sides of industry that if they want to get the maximum increase in real earnings—and that is what we all want to achieve—there must be more restraint in connection with the rate in which money earnings increase in any one year.
§ Dame Irene Ward
With regard to my right hon. Friend's statement on Service pay, will he include Service pensions in the work of the Review Body? It was difficult with all the row going on to hear exactly what my right hon. Friend said. As for the Review Body to deal with doctors and dentists, will nurses, physiotherapists and other workers supplementary to medicine be included? It is tremendously important for the Health Service as a whole, and especially in relation to pensions. My right hon. Friend knows that there is great consternation about the position in which these workers now find themselves.
§ Mr. Carr
Nurses and those in professions supplementary to medicine would 676 not come under the Review Body because they are already covered by existing joint negotiating machinery. The question of Service pensions is a separate matter. Public service and Armed Service pensions are always dealt with separately.
§ Mr. Sheldon
In referring to the setting up of these Review Bodies, the Minister pointed out the educational function of discussing incomes. Is he unaware of the educational function of discussing prices also? Is not this all part of the same pattern—to make sure that the consumer's voice is not heard, which was first shown by the scrapping of the Consumer Council? If the Minister is so sure that his policy will result in the lowering of prices, why is he so anxious to avoid an objective discussion of prices, which might show him to be successful?
§ Mr. Carr
The last Government proposed to unite the Prices and Incomes Board and the Monopolies Commission into a single new commission. As the hon. Member knows, we did not—and still do not—agree with that. I have announced today what I propose to put in place of the Prices and Incomes Board and, as I have said, my right hon. Friend will shortly be announcing our plans for strengthening and developing the work of the Monopolies Commission—because it is in that area where competition was not thought to be fully effective that discussion with and the voice of the consumer can be most effectively brought to bear.
§ Mr. Ridsdale
Am I to understand that there is no need for the question of public service pensions to go before the Review Body today because they have a separate Review Body? Secondly, since I have so many pensioners and other people living on low fixed incomes in my constituency, I am beginning to get a little tired of the hypocrisy of hon. Members opposite shouting in one breath that we should help them and in the other shouting for higher wages through their connections.
§ Mr. Arthur Davidson
If competition is to be as fierce as this Government obviously intend, can the Minister explain—he has not done so yet—exactly why his Government have decided to abolish the Consumer Council? Surely at this time there is even more need for some independent, authoritative body to act on behalf of the consumer and protect him from the worst excesses of competition, such as shoddy goods and over-selling. Will the Minister answer the question?
§ Mr. Carr
That is more a question for my right hon. Friend than for me, but it is the belief of this Government that competition is the consumer's best protector—perhaps not a perfect one—both for prices and quality. We intend to make it as effective as possible. The action of the last Conservative Government, first in introducing the Restrictive Trade Practices Act and then in abolishing resale price maintenance, did far more for the consumer than all the right hon. Lady's boards and statutory controls over the last six years. We believe that the use and development of such methods will be of more help to the consumer in future than the alternative method that we are now dismantling.
§ Mr. Allason
Can my right hon. Friend say how frequently these Review Bodies will meet to carry out their reviews?
§ Mr. Heffer
Does not the Minister agree that he is being very hypocritical this afternoon when, on the one hand, he says that his Government are abolishing the statutory incomes policy—and he knows that I agree with him on that—but, on the other hand, are coming up at a later stage with proposals which will hamstring the trade union movement and make it much more difficult for the trade unions to become involved in proper collective bargaining? If he really wishes to show his compassion for lower-paid workers, is it not time that he told the 678 municipal authorities to settle with the workers at present on strike and help the lowest-paid sections of industrial workers?
§ Mr. Carr
No. I do not agree with the hon. Member that there is any hypocrisy or inconsistency in our policies. I do not accept that our industrial law proposals will have the effect that he predicates on trade unions. I believe that trade unions in other countries have found that the framework of law has in no way weakened their ability properly to win the best possible pay and conditions for their membership. Indeed, as the hon. Member knows, trade unions in other countries have been tending to run ahead of ours in their success in recent years. What we are concerned about is the increase in real earnings. I beg the House to believe that some restraint in the pressure for money income increases in one year, coupled with a more orderly approach to collective bargaining—particularly at plant level—coupled with every effort to make competition as effective as possible, is the best package for the consumer and for the maximisation of real earnings.
§ Sir H. Legge-Bourke
Is my right hon. Friend aware that one of the most welcome features of what he has said today is that it will mean that the Government are denying to themselves the power to refer to another Review Body the recommendations of the first Review Body, as right hon. Gentlemen opposite did when in power? That being so, will my right hon. Friend also see whether there are ways in which we can get public service workers considered as a whole and ensure that there is not only a linked membership of the three bodies which he is setting up but also some linking between the Armed Forces body and the bodies dealing with the police?
§ Mr. Carr
I agree very strongly with the first part of my hon. Friend's question. It is definitely our intention to make sure that, having got the recommendations of these Review Bodies, we shall normally accept them, but, as I said, we must, as any Government must, reserve the power and the duty to take our own view upon them. But we shall take our own responsibility and not shuffle it off on to anybody else. As to the relativities to which my hon. Friend 679 referred, we hope that this new Office of Manpower Economics, in addition to providing the secretariat for these three bodies, will come to be the centre of study and guidance, voluntarily used, in this country, and that therefore it can be of benefit in gradually bringing about a more rational and fair pay structure between all sorts of workers and professions. But what we must realise is that this improvement in fairness and rationality of our pay structure is something which, in a free society, can only be achieved very gradually, and that to try to do it—[Laughter.] The right hon. Lady, the Member for Blackburn (Mrs. Barbara Castle) may laugh—
§ Dr. Shirley Summerskill
Would the right hon. Gentleman tell us what action the individual consumer can now take to complain against an unjustified and unreasonable price increase, as it cannot be reported to the Prices and incomes Board? Would he remember the pledge given by the Prime Minister on this matter to the housewife just before the election?
§ Mr. Carr
The hon. Lady is wrong in thinking that it ever could be reported to the Prices and Incomes Board. It never was possible to report price increases to the Board. They could be reported to individual Ministers, and only a tiny fraction was every reported to the Board. Of course, this whole system just did not work. As we have made clear in previous statements, we are voluntarily maintaining early warning, early notice of price movements in the key sectors, so that the Government are aware of what is happening, and we will attempt—[Interruption.] We shall certainly not fail to do more than the last Administration. We believe that a more efficient economy, with more effective competition, will in practice do more to help the consumer than the charade of detailed reporting and statutory control.
§ Mr. Finsberg
Would my right hon. Friend clarify one small point? He said towards the end of his statement that the noble Lord, Lord Peddie, had agreed, in his capacity as Deputy Chairman of the P.I.B., to continue dealing with the remaining references. Is this to be in addition to his other task, as Chairman of the Post Office Users Council, since I would have thought, in view of the representations which many of us are receiving about, for example, the iniquitous arrears charge being imposed by the Post Office on its telephone subscribers, that this would have called for full-time activity on his part?
§ Mr. Carr
I cannot go into Post Office charges, but it is true that Lord Peddie is continuing as Chairman of the Prices and Incomes Board for the remaining six months or thereabouts of its life until its present work is completed. I have no reason to ask him to give up his other valuable appointment, and I do not believe that it is incompatible to do the two.
§ Mr. Arthur Lewis
The right hon. Gentleman referred to the winding up of the Prices and Incomes Board. I think that one of its last reports suggested a 33⅓ per cent. increase, some £3,000 on £9,000, for the top military brass. In view of his reference to 14½ per cent. for the dustmen and the local authority workers, may we be assured that he will not accept this 33⅓ per cent. as suggested in that report?
§ Mr. Carr
The hon. Gentleman must await my right hon. Friend's consideration of that report and announcement upon it, but I would say to the House that something which we all have to take into account—difficult thought it may be in looking at these matters—is that one of the factors which any Review Body, any secretariat, any wage negotiation for that matter, must take into account is the availability of people to occupy particular jobs. We must face the fact that we are dealing with doctors and senior managers in nationalised industries, that we are operating not only in a British market for these people, but in an international market, and that we will not get the better management, the higher standard of service, which we all demand if we do not offer the people who are expected to take on these great responsibilities 681 something equivalent to what they can get either in private industry in this country or in industry and professional service abroad.
§ Mrs. Sally Oppenheim
Will my right hon. Friend accept that, although we entirely agree that competition is the best protection for the consumer, progressive legislation such as has been introduced by previous Conservative Governments is probably necessary also for the future protection of the consumer?
§ Mr. Benn
On the prices side, where someone complains about a price increase from someone who enjoys a monopolistic position—for example, a firm which has invested in a particular system which it cannot change—can such cases be taken up with the Monopolies Commission in the same way as we referred I.B.M. to the Prices and Incomes Board following devaluation, when the firm reached a price decision which was adversely affecting users of that equipment in this country?
§ Mr. Barnett
Would the right hon. Gentleman confirm that what he has said today means that he is now trying to get a voluntary incomes policy? If so, what sort of success can he hope for when his right hon. Friend the Chancellor makes the sort of statement that he did last Tuesday? On prices, would he confirm that it is his policy not only to allow price increases as they stand, or as the companies can get them, but positively to encourage them, so that they can get the extra profits for investment?
§ Mr. Carr
The sort of price increases which we are suffering at the moment and will continue to suffer for some while 682 to come are the inevitable result of the fact that increases in earnings had been going up under the last Government six times faster than national production. In that sort of situation, no Prices and Incomes Board, no form of statutory control or compulsory early warning, can prevent it from happening. What we must do is get a better balance between increases in earnings and increases in production, a more effective machinery to ensure competition or to supervise in the public interest where competition is not effective. It will not then be perfect, but it will be the least imperfect situation that we can arrive at.
§ Mrs. Castle
Is the right hon. Gentleman aware that what he is now saying would have a much bigger impact if it tallied with what the party opposite said during the past few years, and, above all, what they said in the election when, instead, to the contrary, they told the people of this country that the inflationary spiral could be broken by the Tory Government acting directly on prices? Now we are expected to listen to a directly opposite tune and the workers are expected to swallow it. Is he not aware that he has cut the moral ground from under this Government's feet in operating any voluntary incomes policy at all?
§ Mr. Carr
The right hon. Lady nods her head. She knows and I know what we mean by breaking the inflationary spiral. It would be a miracle if we or any other country in this world today could get to the state in the foreseeable future of no inflation. What we are talking about is bringing these inflationary pressures under a degree of control that is at least competitive—and, in our case, has to be somewhat better than competitive—with the performance of other countries; and more tolerable for the pensioners and lower-paid people.
§ Mr. William Hamilton
Is the right hon. Gentleman saying that there is to be no official body at all to protect the 683 consumer? If he is pinning his faith on competition to bring down prices, how does he explain the revelations on a television programme the other night about rigged contracts for public buildings? Is that competition? Or are the Government intending to introduce legislation to prevent that kind of abuse of the public purse?
§ Mr. Carr
I did not see the television programme in question, but one thing is quite notable; that if this terrible thing was exposed then the paraphernalia of the late Government's machinery failed to expose it, so that at least we are not getting rid of anything which proved capable of stopping that kind of abuse at all. I repeat: publicity, the power of the consumer, competition—these are the most effective—not perfect, but the least imperfect—means of getting progress in this direction.
§ Mr. Spriggs
In view of the Minister's statement that he believes in fair play for the lower-paid worker, and in view of the fact that hundreds of thousands of workers today do not receive a living wage for a full week's work, would he be prepared to prove his words by supporting legislation for a national minimum wage of £17 a week?
§ Mr. Carr
I must say that I think that that supplementary question comes a little oddly from the hon. Gentleman coming, as it does, only five months since his own party left office after nearly six years in power. His own party's Government are in this respect as responsible as anybody for the conditions we have now, and, indeed, rejected the proposal the hon. Gentleman has made.
§ Several Hon. Members rose—