§ 6.17 p.m.
§ Debate resumed.
§ THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES)
My Lords, I must confess to a surge of pride in our institutions, which went through me when I heard the last Act before the Lord Chancellor vacated the Woolsack, but I hope that will not prevent me from saying what I have to say to the noble Lord, Lord Erroll of Hale, who at the moment is absent, in as straightforward a way as I can possibly manage. The usual rule on which I have tried to work is that I answer only the people who are in the House at the time when I speak. On that basis I ought to be sitting down, but I see that the noble Lord is coming.
Only two noble Lords who are members of the Party opposite had a "go" inside the House of Lords this afternoon, but they may have been having "goes" somewhere else. They are probably more interested in starting prices than in rising prices. I think that the noble Lord, Lord Erroll of Hale, has been adequately answered this afternoon 1160 by practically everybody who has got up on this side of the House. I thought, too, that he was adequately answered by the remarks of the noble Lord, Lord Byers, who made a particularly good speech. There may have been a few things with which I did not agree; nevertheless I would accept most of what he had to say. I am not going to make a long speech; I do not need to. We have had an important debate, when the life of the country is at stake so far as prices and everything that goes with them are concerned, but there have been only two speakers from the Opposition side and one from the Liberals. Here, on this side, are the people who are really interested and who have given of themselves this afternoon.
Now the noble Lord, Lord Erroll of Hale, started off by talking about our Election promises. In all conscience, the noble Lord, Lord Leatherland, has gone back far enough, but I will go back just one stage further. Do you remember that poster about "Mend the hole in your purse"? The noble Lord had it up in Altrincham. Do you remember what they did afterwards? He was nodding at the time the noble Lord, Lord Leather-land, was talking, but if he will read it in Hansard to-morrow it will be nice bed-time reading.
There is one matter on which I want to take up the noble Lord seriously and on which I want to get him right, because there will be times when we shall be facing each other across this House in the months and, I hope, years to come. He said, as I remember it, that it is a delusion that the Government can expect manufacturers to keep down prices by efficiency. I give the noble Lord the opportunity to deny that or alter it, just as he wishes, and I will take him up on it or let him go.
§ LORD ERROLL OF HALE
My Lords, I do not wish to take up too much of the noble Lord's time, because he has a commendable reputation in this House for brevity. I was going to refer to this matter in my own final remarks.
§ LORD RHODES
Oh! The noble Lord is just like the noble Earl, Lord Dundee—catching up on himself after he has made a bloomer. That is precisely what happened last Wednesday—and I have been reading Hansard for last Wednesday. What a debate!
§ LORD BYERS
My Lords, may I interrupt the noble Lord? Will he not exert more pressure on the noble Lord to get an answer out of him? We cannot leave it like that.
§ LORD ERROLL OF HALE
If noble Lords will not object to my intervening yet again, I will say perfectly clearly now that what I said was that it was a delusion to expect firms to absorb increased costs imposed by the Government through increases in efficiency, because they were already doing this very thing all the time; and, secondly, that any increases in efficiency should be passed on to the public in the form of lower prices, which will be denied to John Citizen through the Government's increasing of industrial costs.
§ LORD RHODES
Unless the noble Lord is good at getting Hansard to alter what he has already said, that will not he as it will appear in Hansard tomorrow.
§ LORD ERROLL OF HALE
I must intervene immediately on that point. I never have Hansard altered except to deal with grammatical changes.
§ LORD RHODES
It is very nice to hear that, because we are assured now that we shall get in Hansard to-morrow morning exactly what he said. I stand by my interpretation, and I am sure the noble Lord, Lord Byers, will corroborate it.
My Lords, it is possible to hold prices by efficiency. The noble Lord, Lord Byers, was talking last week about directors and business experience, and I will give him one of my own experiences. I was in Germany attending the Inter-staff Fair last week, and, on the Thursday morning I read the most garbled version of a speech of a noble Lord in this House that I have ever read. It represented the noble Lord, Lord Byers, as patronising the Labour Party because it had no businessmen in it, because it had no directors in it. But he was not patronising at all. What he was doing was stating a fact. He was stating a fact, not only for his own Party but for ours. This is something which has been going on for ages. I remember, if I may say this to the noble and learned 1162 Lord the Lord Chancellor, learning the part of the Lord Chancellor in Iolanthe, when I used to be in amateur theatricals. I can see myself bouncing about the stage now, saying—and it was because of his disappointment that he had not been allotted a beautiful maiden, who was his ward:There is one for thou and one for thee,But never, oh never, one for me".I think it is a gross mistake; but I consider the noble Lord, Lord Byers, overrated the importance of awarding that kind of distinction. It is necessary to acquire the knowledge that goes with that kind of office, but I think that it can be overrated.
§ LORD BYERS
My Lords, the noble Lord was not here. I asked only for two or three people of the stature and experience of the late Dick Stokes. That is all I asked.
§ LORD RHODES
There is chance for some of us yet!
Now let me say this to the noble Lord, Lord Erroll of Hale. From the end of the war (and this is in line with his speech) my company held prices against wage increases until 1961. We did it by investment in efficiency and productivity, doing more on the same floor space with less labour, and doing it better. We failed in 1961 for the first time, and the reason why we failed is right at the centre of this problem.
This is a personal experience, and I will describe it. The demand for an increase in the wage rate that year was 3 per cent. That is near enough to the norm to which we have got accustomed now—accepting a 3½ per cent. yearly increase for the sake of my illustration. At the same time, it had been agreed between the employers and the employees that there should be a reduction of 2¼ hours in the working week. The working week was 45 hours, so that meant it was to become 42½. Anybody can get a pencil out now and can work out for himself what the percentage really was. In theory, it was 5.88 per cent. By the time we had had it in operation for six months and had analysed it on a good costing basis, we found that it was nearly 8 per cent., and the reason for that was that the departures from work and the little acts that go on in the course of the 1163 working day were still as numerous in a shorter working day as they were in a longer one. So it is the extraordinary happenings in terms of hours plus wages that can give a twist to the upward spiral which is the despair of many manufacturers in this country to-day. They are looking to the Labour Government to get them out of this dilemma—and we are hoping to do it.
The noble Lord dealt with nothing else but pay rises. He never mentioned the question of capital gains or anything else which had to do with the other side, as he himself indicated to the House—nothing whatever. Does the noble Lord not see that one section of this population has had the advantage of being able to offset inflation the whole time since the war? If you had the money to put into equities, you would put it into equities. A person like myself did very well. If you had the money you could offset the inflation. This was seen to be obvious. Everybody knew that the people who had money were able to offset inflation. The truth is that this has had one of the most salutary effects on the Tory Party. I will come back to that in a minute.
I want to say to the noble Lord, Lord Byers, that some of his ideas were good. I think it would be a good idea if teams were to go around explaining this, because in the last thirteen years nothing was done in the way of explaining to the people what this policy means. Will the noble Lord come with me?—because on this I will go with him, and not be ashamed to do it.
On his point about the postmen, I can say that a study of the problem of greater efficiency of the postal services is already being tackled, as is explained in the White Paper on Post Office prospects. This has been put into operation. In addition to inquiries already in hand, industrial consultants have been called in to conduct a widely-based investigation into ways of raising the level of productivity and profitability of the postal services. I think that really adequately answers the noble Lord's question. If I did him an injustice when I thought hardly about him, nevertheless, after reading in Hansard his full statement, I both admired it and got a little laugh because after that this document in my 1164 hand argued that 40,000 directors cannot be wrong. They refer to what we are doing as "woolly". And then—and this is the most (shall I say?) curious set of metaphors in juxtaposition that I have ever read in my life—the ones who say the Labour Party policy is woolly go on to say this to the people who have not seen the light of day, those who are not as enlightened as the noble Lord, Lord Erroll of Hale, and seem not to have noticed the crack in the ice, the plume of smoke from the volcano, the shifting of the landslide. It curdles the blood.
§ LORD BYERS
My Lords, surely the noble Lord is not attacking me. If he reads my speech he will see that I particularly dissociated myself from this Right-wing nonsense.
§ LORD RHODES
My Lords, I am saying that I am indebted to the noble Lord for drawing my attention to it. It could have been, as I go abroad from time to time, that I missed it.
To the noble Lord, Lord Killearn, who made his maiden speech to-day, may I say that we hope we shall have the pleasure of hearing him often in the future? And then we heard from the noble Lord, Lord Sainsbury, to whose knowledge of the retail trade I bow. Who is there in this House or outside that has a better knowledge of the retail trade than he? His speech was sound, experienced and statesmanlike. I liked his crack about the Tories, the way in which they had discriminated in their increases. They four times raised the price of tobacco, but only twice did they raise the price of alcohol. They ought to have spread it out more evenly than that. But his knowledge and his statements about the incidence of prices were quite correct.
I should like to apologise to the noble Lord, Lord Hilton of Upton, who joined us from the House of Commons and who was a first-class colleague in that place, for not hearing his maiden speech. I apologise also for not hearing the noble Baroness, Lady Phillips. To the noble Lord, Lord Hilton of Upton, I would say that we look forward to hearing from him in future, because I know the fund of experience that he has in all things to do with the labour side of agriculture, and also in other practical matters. The noble Lord, Lord Leatherland, gave a 1165 long recital of price rises and the rest. I am certain there is no Member on this side of the House who will not reach for his Hansard to-morrow and put it in his knapsack ready for the next election.
To the noble Lord, Lord Segal, may I say that I thought his lead-in about the direction was excellent. The noble Lord, Lord Citrine, finished off the debate and spoke about the pressing of wage claims. He qualified his remarks by saying that new conditions now meant that the trade unions were conditioning themselves to national productivity. There is indeed a new air about.
My Lords, I should like to end on a serious note. The history of the present situation has been well understood. We are all in danger of embarking on a series of platitudes or going round in circles until we are sick and weary of hearing ourselves talk on this subject; that is, if we do not believe in it. It is the easiest subject to moralise on. There are five categories: public investment expenditure, private investment expenditure, public consumer expenditure, private consumer expenditure, and the last, the fifth, the balance of payments. The cycles have gone on through the years. We have had "stops" and "goes", and everything that has gone with them which I do not want to labour; but they have always ended with the last category, with balance-of-payments deficits. And what a whacking big one it was when we took office! It is now admitted by the noble Earl, Lord Dundee, to be £745 million. Anybody reading the Hansard of last week would wonder at Opposition speakers getting as involved as they did last week.
We have had experience of devaluation, of full employment, of pressure on prices. We have had numerous experiences of "stop" and "go"; of depression, of reaction reducing wages and profits and slowing down the rate of economic growth. Devaluation, "Stop-Go"—all are examples of our failure to be able to cope. Nobody can deny this. For thirteen years the Tory Government used its series of "Stop-Go" measures. I do not blame them for that—they did not know how to tackle it. When they found out they were not able to do it. They tried three types of remedy. First, the"Guiding 1166 Light", under Mr. Thorneycroft; next, the pay pause, under Mr. Selwyn Lloyd; and then the National Incomes Commission. There were genuine efforts to do something, but they could not get to grips with the situation. I say to the noble Lord who initiated the debate that if the Party which formed the last Government were faced with the problem to-morrow, they would not be able to cope with it again. It is beyond them.
It is interesting that the Royal Warrant instructed the Commission to study and report on the case history referred to them and to have regard to:the desirability of keeping the rate of increase of the aggregate of money incomes within the long-term rate of increase on national production.It also told them to take into consideration the fairness of wages according to work done—productivity, if the noble Lords wish—and to the need for efficient deployment of manpower; to consider profits as well as wages, and to take into account the repercussions on other employments of any particular settlement. Everything to do with incomes; but never, oh never, a mention of prices—not one.
May I ask the Opposition whether they repudiate any of those desirable objects? Is the noble Lord, Lord Erroll of Hale, one of those who suffer from schizophrenia on this matter, as do the rest of the Tory Party? Does he believe in an Incomes Commission, or does he not? I am hoping that when the noble Lord winds up this little debate he will be able to say to us, "I, at least, am pure". After all is said and done, he tackled my noble friend very vehemently about his conviction—that is not quite right, about the likelihood—or was it convictions in a police court about which the noble Lord was talking? Perhaps he will tell us whether he is a believer in an incomes policy or whether he is in the other camp; whether he knows in his heart of hearts that it cannot be done.
There is a big difference between what has been done in these last few months and what was done at the National Incomes Commission. There are two outstanding and highly important differences. One is the definite commitment in the 1965 White Paper to an expanding 1167 economy, to overall economic growth and to anannual increase of money incomes per head which is consistent with stability in the general level of pricesanddistributed in a way that satisfies the claims of social need and justice.The other difference between the policies of 1963 and 1965 is that whereas the former was merely the stated policy of the Government, the latter is the deliberately stated intent of all the principal organisations of business and employers, as well as of the Trades Union Congress.
I do not think that the noble Lord and his friends ever really understood the importance of this action on the part of the unions. The noble Lord does not understand the mistrust that has been in the minds of the trade union people for many, many years. The sort of thing they experienced has been bred in them. The noble Lord, Lord Segal, was talking of the victimisation of the old days. My Lords, let me tell you something from my personal experience where this sort of thing sinks deep. When Victor Grayson stood for Colne Valley in 1907 I was twelve years of age, and I had just began work. The noble Lord, Lord Byers, knows Colne Valley very well—
§ LORD RHODES
We shall have to watch the noble Lord.
Two years after that, my father attended a political meeting, and for his pains, although he was a marvellous workman, he was dismissed. Unfortunately, I was unemployed, too—at the age of fourteen. We walked to every mill from where I lived. The noble Lord, Lord Byers, will know the village; he came to speak there in the election. We called at every single mill between Saddleworth and Huddersfield. I do not care who knows it now. I am not ashamed—indeed, I have a kind of inverted pride about it, although it sank deep for a long while. We called at every mill and they lifted their little inquiry windows and then slammed them down. We walked to Huddersfield, and we stood on the platform at Huddersfield station. I looked at my father and I saw that he was crying. I had never seen a man cry before. 1168 My Lords, when you see you own father cry, you learn something. He said, "Nobody seems to want us." That is what went into the hearts and minds of these people. That is what the Tory Party could not see when they were going, in their sort of superficial way, to ask the unions to join. That is what they will never do.
But there are other things besides this, if there is full employment. I say this to everyone—and I am perhaps old enough for some advice from me to be accepted. As there is full employment, with more vacancies than unemployed, then it follows clearly that increase of productivity is essential if income per head—the declared objective—is to grow. The noble Lord said that we were under a delusion that we could become efficient, What has to be realised is that, while in the newer industries productivity is reasonably easy, in the industries which have a long tradition it is not easy.
Previous Governments have neglected to see that there was an endeavour to make quite certain that the productivity of machines should at least match the wages that were paid extra, year by year. I do not say that can be done year by year. I do not think that it can be done in four years. It may be done in five years, or in ten. That is what we have to work for and what the people of the country have to understand. That is why the industries, the traditional ones, are looking for the increased productivity of the machine. They should be able to get it. That is one reason why the Labour Government set up the Ministry of Technology.
The Tories perceived the resentment aroused by "Stop—Go". They saw the resentment caused by the pay pause which they adopted, and the policy of the "Three Wise Men", the "Guiding Light", and the N.I.C. They could do nothing about it. But when we have a really decent, first-class effort to do something about this impasse, and break through it, what do they do? They come here this afternoon with a mean, little squalid attack on it. I say that there are different sorts of patriotism and different reasons for having a Union Jack on the table at Election time. We must remember Nurse Cavell's words, "Patriotism is not enough"; and in my view an attack on this policy by the Opposition is unpatriotic.
§ 6.50 p.m.
§ LORD ERROLL OF HALE
My Lords, we have had an interesting and stimulating debate this afternoon and I hope that your Lordships will permit a few final remarks, although, by the nature of things I cannot possibly reply to all the many and interesting points which have been made. Before I go further, I should like to congratulate my noble friend Lord Killearn on an outstanding maiden speech, and to say, as others have done before me, that we hope to hear him contribute to our deliberations on many occasions in future. The noble Lord, Lord Hilton of Upton, of course was a colleague of mine in another place, and although I did not feature very much in agricultural debates I remember hearing him on several occasions. I was delighted to hear him make his maiden speech to-day, although I should like to apologise to him for not being able to listen to all of his speech this afternoon.
I thoroughly enjoyed the speech of the noble Lord, Lord Leatherland, because obviously he had done his homework under the file named "Erroll". I do not know whether he secured it from the office of the Sun or from Transport House, but I must congratulate his organisation on keeping a very good file of Press cuttings and hand-outs over the years. I admit frankly that I had forgotten about some of the things I was reminded about this afternoon. I should like to correct only one thing for the record. He said that the Board of Trade was the Department responsible for prices under successive Conservative Governments, but we dismantled the outworn apparatus of price control which started during the war and was continued by the Labour Government after the war, as we were determined to let competition play its part in keeping prices down. While I was President of the Board of Trade, the Board of Trade had no statutory control over prices whatsoever. I have been interested to notice that the Labour Government has not so far seen fit to take measures of price control, and that, as I mentioned in my opening speech, is going to be one of the weaknesses of the Prices and Incomes Commission. When it is set up, the Government will not have any means at hand 1170 of enforcing any of the Commission's pronunciamentos.
I am sorry that the noble Lord, Lord Citrine, has not been able to stay, but I should like to thank him for the kind remarks he made about me. I have always held him in high regard, both as head of the Central Electricity Board (as it was then called) and also as one of Britain's greatest trade union leaders in his day. It was significant, I thought, that in his speech he was cautious in his attitude towards the Prices and Incomes Commission. He spoke out of his wealth of practical experience and also out of his share of bitter memories, as did the noble Lord, Lord Rhodes. He realises that what is desired is not going to be achieved easily. And I thought that he was right to say so as a supporter of the Front Bench opposite.
I should like to apologise for not having resumed my place when the noble Lord, Lord Rhodes, first stood up, but I was in the Library, looking quickly at the evening newspaper, in which, on the front page—it is almost daily news nowadays—I read that electricity is up 2s. in the pound in the London area: just one more increase which industry is expected to absorb and which, of course, will not matter very much to the housewife, because, as I am sure will be put out, it represents an average increase of only 3d. per household per week in the months to come. Of course, some industries and efficient firms within particular industries are able to absorb certain increases in costs, but for all of them there comes a point when those increases cannot be absorbed any longer. The noble Lord, Lord Rhodes, gave a striking example from his own industrial experience, experience for which I have the greatest respect. But, even so, it does not help industry if increased overheads are loaded on to it by Government actions. It makes the struggle just that much harder. Not only is it less likely that it will be possible to hold prices, but it certainly rules out any hope of securing price reductions through increased efficiency and increased production.
The extreme example is to be found in the Post Office which, as we accept, is a labour-intensive industry and is peculiarly sensitive to increases in labour costs. We know why the increases of 1171 postal rates came about. The noble Lord and others referred to the White Paper, but noble Lords opposite are singularly silent on the speech made by the Postmaster General, Mr. Wedgwood Benn, a few days ago, when, doubtless thanks to the preliminary report of his American consultant firm, he is already foisting on the public the idea that there should be only one delivery and one collection a day, and that the public, as distinct from business, should get their letters last. This is a low standard, to which the Americans are accustomed in their postal service, as distinct from their telephone service. I am not surprised that already we are not only having to pay higher prices for our letters by post, but are also being prepared for a further deterioration in the standards of service provided by the Post Office.
On the price of alcohol, which was referred to as having gone up twice in the course of thirteen years of Conservative government, I noticed that noble Lords opposite made no reference to the year 1959, when the price of beer was reduced by 2d. a pint. They also made no reference to many other tax reductions—far too many for me to list this evening—for which we were responsible. Were we able to have a longer debate to-night, I could provide a list which I am sure would impress noble Lords on all sides of the Chamber, including even the noble Lord, Lord Byers, whose speech I very much enjoyed.
Some reference was made to the way the prices of the services provided by the nationalised industries have been kept down, in contrast to the easy way in which private enterprise could often put up prices. On this point, I would say, for the Record, that from October, 1951, to May, 1964, the Retail Prices Index showed an increase in the field of clothing, footwear and household durables of 18 per cent. During the same period all other goods, except the services provided by nationalised industries, went up by 60 per cent., while the price increases of nationalised industries amounted to no less than 95 per cent. This shows, indeed, how nationalised industries have been able to put up their prices, and if noble Lords will look at their evening 1172 papers to-day they will see the latest example of that.
I have only one short comment to make on the two interesting speeches of the Government spokesmen to-day. I should have liked to observe a greater degree of humility in their approach to this problem. The noble Lord, Lord Rhodes, suggested that we had failed three times in this matter. I would not say so much that we had failed as that we had made three attempts, which had still to prove themselves successful. But we on this side of the House know from our own experience how very difficult it is to achieve the objectives which the present Government have in mind. All we learned from the Government spokesmen to-day was that the Government are hoping desperately, whistling to keep up their courage—
§ LORD ERROLL OF HALE
Whistling to keep up their courage, windy—[Interruption.]—windy, worried and fearful that they may be on the way out, that they may be dismissed from office by a public outraged at the difference between their promises and their performance.
I am sure your Lordships will appreciate that I do not wish to end on a controversial note. I will close by thanking all noble Lords who have so courteously taken part in the debate this afternoon. I hope that everyone feels we have had a good, constructive afternoon; and in that spirit I beg leave to withdraw the Motion.
§ Motion for Papers, by leave, withdrawn.