HC Deb 19 July 1979 vol 970 cc1980-1
16. Mr. Norman Atkinson

asked the Chancellor of the Exchequer what is his present policy in regard to the possible introduction of either a voluntary or statutory incomes policy.

Sir Geoffrey Howe

I have no plans for introducing such a policy.

Mr. Atkinson

Will the Chancellor accept that that answer will be reassuring to those trade unionists who believe that Government researches into the creation of a standard of living index is a forerunner to the introduction of a statutory incomes policy? That fear can now be put to rest. Does the Chancellor agree that trade union wage bargainers should now try to get for themselves wage agreements that will at least protect their members from any increases in the cost of living?

Sir G. Howe

I can understand why trade union wage bargainers might wish to achieve such a result. The reality is that in a society where growth over the past five years has been at or below 1 per cent., and where our total national resources are practically static, it would be unrealistic for trade union bargainers to believe that they could protect their members' living standards against the changes that are taking place. The reality to which they should pay attention—and it is crucial that they should—is the limitation on the resources available to the organisation for which their members work. It is only in that sense that we can achieve some reconciliation between the outcome of responsible collective bargaining and the realities which the nation must accept.

Mr. Michael Brown

Does my right hon. and learned Friend agree that the experience of prices and incomes control and statutory incomes policies over the past 20 years confirms that inflation has always been higher at the conclusion of such policies? Therefore, will he resist any temptation to indulge in such policies in the future?

Sir G. Howe

It is the experience to which my hon. Friend draws attention, and which has been shared by Governments of both parties, that leads us to the conclusion that the whole thrust of our policies should be designed to avoid that kind of arbitrary action.

Mr. Arthur Lewis

Reverting to the Chancellor's original reply, is he aware that those of us who have been here for some years know that each Government give a pledge against an incomes policy and within months they break it? How long does he intend to keep to his original pledge'?

Sir G. Howe

For the reasons that I have given, the experience of each Government has fortified successive Governments. Certainly it has fortified the determination of this Government. The whole thrust of our policies is designed to avoid recourse to the kind of arbitrary action that has proved so unsuccessful in the past, under Governments of both parties.