§ 14. Mr. David Howell
asked the Secretary of State for Economic Affairs whether, in view of the increase in average weekly wage rates in the 18 months July, 1966 to January, 1968 of 8.1 per cent. as against 7.4 per cent. for the 18 months before that he now proposes to proceed with a policy to direct restraint on wage rates as the main weapon against inflation.
§ Mr. Howell
Is the Minister aware that these figures show, at best, that the Government's present statutory policy will be useless and, at worst, will bring legislation into disrepute? Is it worth all the cost and bother and agony to his hon. Friends to make this kind of policy the centre of his economic planning?
§ Mr. Shore
The answer to the second part of the hon. Gentleman's question is "Yes". The answer to the first part is that he is misinterpreting the figures here. It is true that incomes rose very sharply during the first 18-month period and rose almost as much again during the second 18-month period. However, during the second 18 months, a good deal of the increase was a carry-over from the pipeline increases that were there in July, 1966.
§ Mr. Iain Macleod
The Secretary of State has referred to the White Paper. Is he aware that, when both his predecessors produced White Papers on these matters, they made statements to the House and faced full questioning on them? Why did he run away from the House yesterday?
§ Sir G. Nabarro
But is the Minister not aware of the fact that in his own White Paper he puts a maximum increase on incomes of 3½ per cent. during the coming year and in ensuing years, whereas manifestly the cost of living increases in this year will be two or three times that amount? Would he not agree with his hon. Friend the Member for 591 Manchester, Blackley (Mr. Rose) now that there will be grave industrial unrest as a result of his policy?
§ Mr. Shore
It is perfectly clear and has been to everyone that, during the first year following devaluation, 1968, prices would rise more than incomes. That is part of the penalty to be paid for devaluation. But it must be balanced against the very great advantages to the future of the British economy that devaluation will bring.
§ Mr. Edwin Wainwright
Is my right hon. Friend aware that the Government's determination to restrict wages makes the workers more than ever determined to go forward for increases of wages? Would he not look again at the problem of productivity as a possible means of achieving the desired objective, rather than restricting wages?
§ Mr. Boyd-Carpenter
Will the right hon. Gentleman recall that the long speech to which he has referred was made when no questions could be asked or answered? Was his failure to make a statement yesterday on the White Paper due to his belief that it was too trivial or too unpopular?
§ Mr. Dickens
Will not my right hon. Friend agree, firstly, that we need no advice from right hon. and hon. Gentlemen opposite about freezing wages, because they would freeze wages by creating large-scale unemployment? Secondly, can he now say whether the Government will continue their consultations with the T.U.C. along the lines of the rather more rapid economic growth foreshadowed in the T.U.C.'s recent economic review?
§ Mr. Shore
I can assure my hon. Friend that we are prepared to consider with the T.U.C. and with industry all 592 measures which will lead to a more rapid rate of growth. That is what the planning consultations that we are having and have had with them are about. As to the first part of his remarks, my hon. Friend is quite right. The alternative being urged upon us from right hon. and hon. Gentlemen opposite is the simple one of large-scale unemployment and deflation.