HL Deb 16 December 1964 vol 262 cc461-4

The Objectives

The Government's economic objective is to achieve and maintain a rapid increase in output and real incomes combined with full employment. Their social objective is to ensure that the benefits of faster growth are distributed in a way that satisfies the claims of social need and justice. In this way general confidence will be created in the purpose of the national plan and individuals will be willing to make their utmost contribution towards its implementation.

2. Essential conditions for the achievement of these objectives are a strong currency and a healthy balance of payments.

The Economic Situation

3. The economic situation, while potentially strong, is at present extremely unsatisfactory. Drastic temporary measures have been taken to meet a situation in which the balance of payments was in serious deficit, with exports falling behind imports. But these measures can provide only a breathing space.

4. To achieve a more permanent solution, we must improve the balance of payments, encourage exports and sharpen our competitive ability. Our longer-term interests lie in reducing the barriers to international trade. We must take urgent and vigorous action to raise productivity throughout industry and commerce, to keep increases in total money incomes in line with increases in real national output and to maintain a stable general price level. Unless we do this we shall have a slower rate of growth and a lower level of employment.

5. We—Government, management and unions—are resolved to take the following action in our respective spheres of responsibility.

The Government

6. The Government will prepare and implement a general plan for economic development, in consultation with both sides of industry through the National Economic Development Council. This will provide for higher investment; for improving our industrial skills; for modernisation of industry; for balanced regional development; for higher exports; and for the largest possible sustained expansion of production and real incomes.

7. Much greater emphasis will be given to increasing productivity. The Government will encourage and develop policies designed to promote technological advance in industry, and to get rid of restrictive practices and prevent the abuse of monopoly power, and so improve efficiency, cut out waste, and reduce excessive prices. More vigorous policies will be pursued designed to facilitate mobility of labour and generally to make more effective use of scarce manpower resources, and to give workers a greater sense of security in the face of economic change. The Government also intend to introduce essential social improvements such as a system of earnings-related benefits, in addition to the improvements in national insurance benefits already announced.

8. The Government will set up machinery to keep a continuous watch on the general movement of prices and of money incomes of all kinds and to carry out the other functions described in paragraph 10 below. They will also use their fiscal powers or other appropriate means to correct any excessive growth in aggregate profits as compared with the growth of total wages and salaries, after allowing for short-term fluctuations.

Management and Unions

9. We, the representatives of the Trades Union Congress, the Federation of British Industries, the British Employers' Confederation, the National Association of British Manufacturers, and the Association of British Chambers of Commerce accept that major objectives of national policy must be:

to ensure that British industry is dynamic and that its prices are competitive; to raise productivity and efficiency so that real national output can increase, and to keep increases in wages, salaries and other forms of incomes in line with this increase; to keep the general level of prices stable.

10. We therefore undertake, on behalf of our members: to encourage and lead a sustained attack on the obstacles to efficiency, whether on the part of management or of workers, and to strive for the adoption of more rigorous standards of performance at all levels; to co-operate with the Government in endeavouring, in the face of practical problems, to give effective shape to the machinery that the Government intend to establish for the following purposes:

  1. (i) to keep under review the general movement of prices and of money incomes of all kinds;
  2. (ii) to examine particular cases in order to advise whether or not the behaviour of prices or of wages, salaries or other money incomes is in the national interest as defined by the Government after consultation with management and unions.

On behalf of the Trades Union Congress On behalf of H.M. Government On behalf of the Association of British Chambers of Commerce
(Signed) RICHARD WILLS CHARLES HEY
On behalf of the British Employers' Confederation
(Signed) COLLISON (Signed) GEORGE BROWN (Signed) MAURICE LAING
GEORGE WOODCOCK JAMES CALLAGHAN GEORGE POLLOCK
DOUGLAS JAY On behalf of the Federation of British Industries
RAY GUNTER
(signed) PETER RUNGE
NORMAN KIPPING
On behalf of the National Association of British Manufacturers
(Signed) LESLIE JENKINS
HAROLD GRAY
6th December, 1964.
THE EARL OF DUNDEE

My Lords, I do not think it would be useful to discuss this matter until we have seen the joint statement of intent which will be published in the OFFICIAL REPORT to-morrow, and perhaps not until the next stage in the proceedings has been entered upon. I am a little concerned to hear that the Minister of Economic Affairs is in a state of excitement about this. Perhaps it is my Scottish caution which prompts me to hope that he will not get too excited too soon, because excitement is not always the best accompaniment to wisdom in tackling such a difficult and complicated problem as this. In respect to Professor Paish and others, I think most of us are agreed that we ought to do all we can to achieve a reasonable and effective incomes policy. We look forward with great interest to the publication of this statement, and with still more interest to the subsequent discussions between the trade unions and management. Meanwhile, I should like to thank the noble Lord, Lord Shackleton, for repeating the Minister's Statement.

LORD SHACKLETON

My Lords, I am much obliged to the noble Earl.

11. We stress that close attention must be paid to easing the difficulties of those affected by changed circumstances in their employment. We therefore support, in principle, the Government's proposals for earnings-related benefits and will examine sympathetically proposals for severance payments.

12. We—Government, management and unions—are confident that by co-operating in a spirit of mutual confidence to give effect to the principles and policies described above, we and those whom we represent will be able to achieve a faster growth of real incomes and generally to promote the economic and social well-being of the country.

Certainly there is some excitement at this, one of the most important stages that is being taken towards strengthening the economy. I hope that some of the excitement may even communicate itself to the other side of the House.