HC Deb 02 May 1968 vol 763 cc1308-425

3.58 p.m.

The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Secretary of State for Employment and Productivity Order 1968 be made in the form of the draft laid before this House on 23rd April. The effect of this Order will be that all the functions of the office of Minister of Labour will be transferred to the new office of Secretary of State for Employment and Productivity. It will mean, also, that the title Ministry of Labour will be discontinued.

I should like, first to pay tribute to the Ministry of Labour and to its staff and, in doing this, a tribute to my predecessor in office, my right hon. Friend the present Minister of Power.

The Ministry of Labour was created on 11th January, 1917, at a crucial point in the First World War, when victory hung on the need to make better use of our manpower and to step up the production of munitions, and on the maintenance of peace in industry. During the Second World War it was given responsibility for mobilising our manpower for the Services and war production. It did this with a success unparalleled by any other country. Throughout its existence, the Ministry has played a vital rôle in improving industrial relations and helping managements and employees to settle their disputes.

In recent years, under the leadership of my right hon. Friend it has extended its responsibilities. The Government, in partnership with employers and unions, have pushed forward great changes in industrial training. Redundancy payments and wage-related unemployment benefit have been introduced.

My right hon. Friend took the initiative to do away with the scandal of casual employment in the docks, to improve industrial relations in the motor industry, to encourage the railway unions and managements to negotiate on pay and efficiency and generally to develop a more positive policy of intervention in relations between management and work-people in the interests of industry and the country.

Today, we stand at a crucial point in another war—an economic war—which is not merely a temporary one because we have had to devalue, but an enduring one, because this country has not yet succeeded in adapting its thinking or attitudes on industrial structure and industrial behaviour to post-war needs and developments. In winning this war, manpower is again a key element. If we are to win we must plan the use and development of our manpower resources as urgently as we plan everything else. We must get away from the paternalistic attitude towards labour, give workers a chance to participate in the process of decision-making through the whole of our industrial structure and put productivity and its essential relationship to a higher standard of life into the centre of the stage, where it must be. The slow evolution towards a more interventionist policy towards these ends must be given a new stimulus and the various threads of Government policy in these fields knitted together more closely. This is the purpose behind the creation of my new department and why I am moving this Order today.

In the work of the new Department the knowledge and experience of the Ministry of Labour will be invaluable, but it must be reinforced in certain important respects. Although the Ministry has increasingly recognised the importance of productivity deals and encouraged them wherever possible, it has never been adequately equipped for this task, either centrally or locally. We all know that the battle for productivity must take place on the shop floor; it cannot be won in Whitehall, at productivity conferences, or in the board rooms of companies. They are important for setting the scene, but the hard slog of negotiating the transition to new wage patterns or new methods of organising work must be done at grass roots level, among the men and women who will benefit by them or suffer from them.

The Ministry of Labour has for some time been giving a service to management and to unions through its industrial relations officers, of whom there are now 55, based throughout the country. In addition to offering their services as conciliators when trouble threatens, they seek to advise managements on how to deal with unfamiliar problems in the labour relations field and they provide information about practices that have proved successful elsewhere.

During the 12 months ended 30th June, 1967, they made over 2,500 visits to firms for this purpose alone. This is work which has been largely unpublicised and it must now be extended in scope, backed by local productivity teams and reinforced by expertise at the top.

I intend to establish a new productivity division in the Department charged with the specific task of looking for opportunities of raising productivity through the more efficient and productive use of manpower in industry. I do not think that a division on traditional Civil Service lines is what we need here, nor do we merely want researchers or theorists because productivity is a very down-to-earth job. What we need is a mixed team of people with practical knowledge of the industry, both on the side of trade unionism and management, together with administrators and economists, possibly headed by someone from outside the Department. The team will work closely with industry at national level, with employers' associations, with the trade unions and with individual firms to inspire direct work in the field through local productivity project teams.

We shall have to evolve this work through experience and I do not start with any rigid ideas, either about the form of the organisation or how it might pursue its work. But its duties will be limited to particular cases of productivity bargaining. As it gains experience, I hope that it will carry out more general appraisals of the way in which manpower is deployed and rewarded in particular industries.

It will work closely with the Economic Development Committees and actively follow up the work of the National Board for Prices and Incomes. I shall be discussing my plans in detail with the unions and employers, and I hope to announce the new head of the division shortly. In this way my Department will complement, on the manpower side, the stimulus which the Government are now giving to greater productivity through the application of technology and the encouragement of industrial change which is particularly the concern of my right hon. Friend the Minister of Technology.

Mr. David Winnick (Croydon, South)

Could my right hon. Friend clarify one point? Many of us have been concerned that, even in this day and age, many firms, even large firms, refuse to recognise trade unions. Is there any chance at all that under the reorganisation of the Department there will be a change of policy, a more positive effort, to get firms to recognise trade unions in 1968?

Mrs. Castle

I believe that we shall never make effective progress towards these productivity deals unless the trade unions are brought right into the heart of decision-making. This is one of the problems the Royal Commission will be looking at. I would like to discuss this point in greater detail in the light of the Commission's report. I am very well aware of the importance of the point which my hon. Friend is making.

Sir Edward Boyle (Birmingham, Handsworth)

Could the right hon. Lady tell us how the announcement she has just made fits in with the present responsibilities of the Department of Economic Affairs on the use of manpower?

Mrs. Castle

Does the hon. Gentleman refer to the announcement regarding the new productivity division?

Sir E. Boyle


Mrs. Castle

This, as I have said, complements the work which is being done both in the economic planning field and the technological field by my right hon. Friend the Minister of Technology. The planning of manpower resources has always been a very important aspect. We want to develop the Ministry of Labour work and bring it into a closer relationship with the drive for productivity.

The new productivity division will also help us to humanise the technological revolution, which must take place in this country. It will do it, first, by showing workers how they can benefit from such changes through their own wage packets and, secondly, by facing the human problems well in advance. In other words, by preparing in advance to cope with redundancies so that we can face them better, providing the necessary retraining, as well as coping in a more civilised way with redundancies when they do occur. I am convinced that we must give greater attention much earlier to the problems that are caused by the necessary modernisation and contraction of our great industries, such as railways, docks and textiles, and to the problems caused by mergers and by rationalisation. Here again, we cannot afford to wait on events.

I intend to strengthen the Department on the side of forward manpower planning, to ensure that we foresee these problems and have time to take the action necessary to minimise hardship and waste. When redundancy does hit workers they are entitled to every possible help. Consultations have been going on through the National Joint Advisory Council and the Ministry and, as a result, I am hoping soon to issue a booklet of guidance on dealing with redundancies, based on the practices of progressive managements. It will stress the importance, in the first place, of forward planning of manpower requirements by firms themselves which, as I have said, can often avoid or minimise redundancies. It will give guidance on the arrangements for dealing with redundancies when they are unavoidable; the need for consultation with the workers' representatives will be underlined; the help which my Department can give will be explained.

We are all united on the need for greater productivity. Most of us have been urging that for years, but it is one thing to advocate it, and quite another to get it carried out in practice, because it carries hazards for the worker. In some cases he can see it leading to redundancy for other workers, or even, eventually, for himself. That is why forward manpower planning is so important.

There is only one way to convince the worker of its benefits, and that is to link productivity with his pay packet. That is why it is common sense to bring the responsibility for prices and incomes policy under my aegis. The policy that we put forward in the White Paper on Prices and Incomes is designed to impress on everyone the fact that there is a way to break out of the wages straitjacket, and that is by paying for higher wages through higher productivity. It is the only way open to us.

Stabilising wages costs is an essential element in our economic strategy because it is the only way to safeguard our international competitiveness. No amount of deflation can do the work, because deflation slows down investment and retards a forward movement to greater productivity. Nor is it an answer to say, as some people do, Let wages rip and then claw back the excess purchasing power by fiscal means because by then the damage has been done and our international competitiveness has been injured—the competitiveness on which our exports, and therefore our hope of growth, depends. Stabilising wages costs need not mean holding down wages if we link wage increases to productivity, and it will be one of the key jobs of my Department to drive that lesson home.

Sir Edward Brown (Bath)

I am interested in the proposition about getting increased productivity and more money for the worker. In relation to the increased productivity, can the right hon. Lady say who will prove what to whom? Will the Prices and Incomes Board intervene, or will it be left to a company to declare increased productivity, that will be accepted as open and honest, and the increase in wages will be permitted without the matter being referred to the Board?

Mrs. Castle

The whole purpose of the new Department will be to take an initiative which will enable productivity bargains to be concluded which are within the scope of the Prices and Incomes policy, and, therefore, no question of reference will arise. It is this need to take the initiative which can be so vital on the conciliation side of my Department's work.

Some managements and unions have embarked on productivity deals with great success. Over a whole range of industries agreements have been reached to achieve more economic working by such means as a reduction in overtime, freer interchange of tasks between different groups and grades of workers, removal of restrictions on output, manpower reductions, and changes in patterns of work. We all know the examples of Esso, Shell, Mobil, British Oxygen, the Electricity supply industry, I.C.I., Petro chemicals, C.I.S., and many others, but we need to see productivity bargaining developed on a greatly increased scale, and quickly. The country cannot afford to wait for either management or unions to take their own time, and that is why I propose to take the initiative.

Some of my hon. Friends have argued that industries such as engineering already base their wage systems on productivity through a system of payments by results, and, therefore, there is not much scope left for increased productivity, but a good productivity deal embraces much wider concepts than merely payment by results. Let me give the House one example. It must be accepted that a man may have to undergo training and retraining more than once in his industrial life, and that when he does he must have the right to expect his fellow workers to accept him and give him the chance to use his skill. The vital rôle of training and modernising industry can surely not be denied by anyone.

Sir Harmar Nicholls (Peterborough)

This is perhaps the most important part of the task of the right hon. Lady's Department. Is she prepared to urge the unions to accept a shorter period of apprenticeship?

Mrs. Castle

That is the whole point that I am making in this part of my speech. I agree with the hon. Gentleman. It is no good expanding the provision for training and retaining if, at the end, the men we turn out are not able to use their skills.

Mr. Eric S. Heffer (Liverpool, Walton)

Is my right hon. Friend aware that in some industries, for example, the building industry, some unions have accepted a shorter period of apprenticeship, but the difficulty has been to get the employers to accept it? It is not merely a question for the workers' side.

Mrs. Castle

My hon. Friend may be right. I have stressed this in all my discussions about my new work. I am not suggesting that the change in attitude towards productivity and greater flexibility has to come from the trade union side alone. On the contrary, there is an equal rôle to be played in educating managements, and I attach just as much importance to that.

I want to expand our provisions for training and retraining. The foundations have been well laid, but we want to see much quicker results in terms of greater efficiency and skill. During this year a further five industrial training boards will be set up in addition to the 21 already in operation. These five new boards will be for printing and publishing, paper and paper product industries—both expected by early next month—distribution, food and drink, and leather. By the end of this year about 16 million work-people will be covered by boards, and about £120 million will be applied to the payment of training grants. More than 500 training advisers will be giving firms active help in meeting their training needs alongside the work of industries on the boards.

The Department will increase its own contribution to the industrial training effort particularly in the Government training centres. There are now 38 centres compared with 25 in October, 1964. By 1970, we shall have 55 centres, with a capacity for turning out 3½ times as many trained men and women a year as were trained in 1964.

An example of the great progress being made in training has come before me within the last few days. I have received for approval the Engineering Industry Training Board's module system for training craftsmen, as it is shortly to be published. It incorporates many radically new training concepts. The length of training is to be based, not on the traditional apprenticeships, but realistically on what has to be taught and the rate of learning of the individual. It is expected that most craftsmen will need to return to the training system at intervals throughout their careers to learn new skills and to be brought up to date.

During training the attainment of approved standards will be measured by a system of tests. Most important of all, the system will provide for greater variety and flexibility in the development of the individual's skills throughout his career, depending on the firm's need and his own aptitude. We must put our workers in a position where they can adapt, and adapt readily and rapidly, to technological change. The module system will be a major step in that direction.

Managements must do much more about training. This applies to skilled and semi-skilled workers, to supervisors, managers, and boards themselves. There is a vast largely untapped potential in men and women now doing work below the skilled level of which they are capable, and below their aptitude. Willingness to accept these changes in training can form a vital element in productivity deals. Protective attitudes which regard a craft as something which can be learned immediately leaving school are outmoded and indefensible. It will be part of my job and that of my Department to go into industry and tackle problems of this kind.

But the prices side of our prices and incomes policy is crucial, too. My new Department will be responsible for coordinating the Government's attack on price increases. We discussed those pretty exhaustively, if not very fruitfully, yesterday. As I said then, some increases in prices are inevitable as a result of devaluation. But that is no reason why we should tamely accept unnecessary price increases. On the contrary, it is all the more reason why we should be determined to rule them out.

Under the White Paper on Prices and Incomes Policy, there are firm criteria against which proposals for price increases must be rigorously tested. I shall strengthen the early warning system for prices. I shall promptly follow up the reports of the National Board for Prices and Incomes. I propose to take extensive new powers in the new Prices and Incomes Bill, including the power to require the reduction of prices and the control of rent increases. I have asked my hon. Friend the Joint Parliamentary Secretary, my hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), to concentrate on this vitally important side of our work.

In all these ways, and in others, I intend that my new Department will be equipped to play its full part in the successful working out of the Government's broader economic and industrial policy. I have no doubt that it will measure up to the challenging tasks ahead as splendidly as has been done in the past. I have no illusions whatsoever about the tough time that lies ahead, about the arguments which will take place with unions and management about productivity, prices and incomes policy, work practices, training requirements, restrictionist attitudes on both sides, out-of-date ideas and methods.

I believe that these problems can be solved only if opportunities for collaboration in this work are given to workers to an extent unknown in the past. I believe that the participation of workers in decision-making at all levels is the key to success. The time has come for the Ministry to increase its interventionist policies. The time has come to intervene in the solution of problems at the point before they become more acute.

Mr. John Page (Harrow, West)


Mrs. Castle

The hon. Member says, "Shame". Everyone in the House believes in interventionist policies. Certainly, industry believes in Government intervention to help it in its export drive and on its way. It is, therefore, hypocrisy to suggest that we are not agreed on this point. But there cannot be an interventionist policy which succeeds unless we have a more forward planning policy on the manpower side as well.

Sir Harmar Nicholls

Before the right hon. Lady's words are given statutory force, will she promise us that she will look at the present situation to see how much Government intervention exists from the time that one starts to build a factory until one turns out the product? It is certainly one of the biggest obstacles which I know to the productivity which she says she wants.

Mrs. Castle

Industry is increasingly asking for Government intervention of that kind. The export drive cannot succeed without Government backing for what industry is trying to do. It is, therefore, only logical and common sense that there should be a similar interventionist policy in industry so as to get away from the days when the workers were casualties of blind economic forces and the Government left them to face the consequences of the technological changes which can create such human problems in their lives.

Great gains are to be won in securing the efficiency and fullest productive use of our manpower resources and in obtaining the positive productivity changes on which our higher living standards depend. We need an opportunity policy. It will be the job of my Department to create the opportunities and to make them clear.

4.35 p.m.

Mr. Robert Carr (Mitcham)

There is one point on which we can all join in what the right hon. Lady the Secretary of State said, and that is in paying tribute to the work which the Ministry of Labour has done since it was set up in the earlier part of the century and to all those who have served in it. As an ex-Parliamentary Secretary in that Department, I join even more wholeheartedly in that tribute than I might otherwise have done. I think that all of us must be sad about the demise of the Ministry.

As I listened to the right hon. Lady, I began to wonder what it was all about. When I heard her closing remarks, I began to fear that I knew what it was all about. When she says that industry is asking for more of the sort of intervention to which my hon. Friend the Member for Peterborough (Sir Harmar Nicholls) referred, she must be, to use the immortal words, "stark, staring bonkers". If I were a trade unionist, just as if I were an employer, I should live in considerable terror if she really means the sort of intervention at which she hinted.

We can wholeheartedly agree with what the right hon. Lady said about training and developing the personnel management advisory side of the Ministry of Labour. There would be no need to change the name of the Ministry of Labour or its terms of reference in order to go ahead with the work which the Department has been doing for a long time. Do everything to speed it up, by all means, but there is no need for all this window-dressing. I wonder whether, instead of all this flummery, the Government might have done a great deal more to achieve the purposes about which the right hon. Lady spoke, by a decision not to postpone the raising of the school-leaving age.

The Order confers two distinctions on the right hon. Lady. She will bear the longest title of all her colleagues in the Cabinet, and will become the first member of this or any other Government to be referred to as "Mrs. Secretary". That is an honourable title, and we congratulate her. "First Secretary of State and Secretary of State for Employment and Productivity" is a very honourable and impressive-sounding title. But what is in a name? Those who work in industry are pretty cynical about grand titles. We have come to know from experience that when they are not symptoms of megalomania they are usually used to camouflage little men. As big a man as Ernest. Bevin managed to do all he needed to do under the old, simple, plain title of "Minister of Labour". The replacement of the down-to-earth Ministry of Labour by the glamorous-sounding new Department seems to us to be just another example of the Prime Minister's love of indulging himself in engineering draughtsmanship in relation to the machinery of Government.

In this connection, the Prime Minister reminds me of Emmett. His drawings are certainly ingenious and they are vastly entertaining, but they do not work. Indeed, one wonders whether they are seriously meant to work sometimes.

The Ministry of Land and Natural Resources no longer exists. The Department of Economic Affairs, conceived, so we are told, in a taxi cab and born in the image of the right hon. Gentleman the Member for Belper (Mr. George Brown), degenerated, first, into a temporary vehicle for the Prime Minister's overlord-ship, and is now debased into an unnecessary rump of a Department which serves as a sinecure for a Minister who, in American terms, might be called a "favourite son". One of the right hon. Lady's own right hon. Friends, who is not here today, recently described the Department of Economic Affairs in a newspaper article as "that Twentieth Century Folly", in which it would appear that the Minister's chief task would be "totting up his statistics".

The new thing that we are discussing today is, I think, in line with these gimmicks of the past. It is the second time that the right hon. Lady has taken over a Department with a grand and brand-new title. Last time it was an exercise in kidding the developing countries that they were going to get much more aid. As they know only too well, "kidding" was the operative word. Now we cannot help feeling that this is largely another exercise in kidding—kidding the wage earners that their standards of living can rise when in fact it is the deliberate policy of the Government that they should fall, and kidding the consumers that prices will be brought down when in fact it is again the deliberate intention of Government policy that prices should rise. So the right hon. Lady stands in the breach as the consumer's champion, the worker's guide, philosopher and friend, and now, apparently, the economic salvationist of the nation. But in fact is not this probably just another vast propaganda exercise?

As I have said, nearly all the substantial sensible things which she said in her speech—and many of the things which she said were substantial and sensible and carry completely unanimous support inside and outside this House—needed none of this glamorous dressing up either for their impact on the country or for their practical effectiveness.

I turn to the structure of this new Department. We were told that the old Ministry of Labour is to be strengthened, expanded and streamlined. All those words appear in the official briefing emanating from Government sources when the announcement was made. The Department is to be expanded certainly, but whether it is to be strengthened is much more questionable. The Minister did not say very much about it being streamlined, let alone how. Streamlining involves a certain slimming process. From what she said, it would appear that it was about to embark upon a pretty hefty fattening process.

The right hon. Lady said that the Ministry had never been staffed adequately at national, regional or local level for the tasks it had to do, which she is now extending.

She talked about local productivity teams and a new Productivity Division, but she said nothing about the real division of responsibility. I hope that the Minister of Technology, who I understand is to wind up the debate, will tell us a lot more about the real division of responsibility between this new Department we are setting up today and his Department and the other sponsoring Departments for trade and industry, the D.E.A., the Treasury, and the National Board for Prices and Incomes. If, when she talked about productivity, the right hon. Lady was really limiting what she had in mind to stimulating productivity via improved and more constructive industrial relations and, by more training, we agree with her. We are glad that she is following not only action which we took when in power, but proposals for future policy which we have made over the last year or two.

I fully agree with her when she talks about publishing a new booklet. When my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) and I were at the Ministry of Labour we published a booklet called "Positive Employment Policies", drawing the attention of industry to the practice of the best companies on such things as future manpower planning and the like. I am sure that booklet could be greatly improved as a result of the best part of another 10 years of experience and development behind it. But none of these are dramatic new things. If the right hon. Lady means that she intends her Department to go beyond the stimulation of productivity by means of training and industrial relations, she is stepping straight into the responsibility of the National Board for Prices and Incomes, the other Departments and all the rest of it. We cannot help feeling that if we are not careful this broth will be spoiled by far too many cooks.

What about the cost? It is surely symptomatic of the Government's whole approach to Government expenditure that the First Secretary of State, coming to this House today to propose the establishment of a new Government Department, said not one word about the extra cost involved. If she is to do what she said, if this is not just a glorious technicolor poster, "Come to glorious St. James's Square", it will cost money, and this House should be told about the Government's estimates of the extra cost. Will the combined establishments of the new Department and what is left of the D.E.A. be greater or smaller than at the moment, and by how much? Surely some estimates have been made. If not, surely they should have been and Parliament should be informed.

What is the sum total of all the minor costs? The right hon. Lady's Ministry has, I think I am right in saying, getting on for a thousand local offices throughout the country. Every one of those, to take what may seem a silly example, has to have a new bit of signwriting over the door. All the stationery has to be reprinted and all the forms have to have new headings. How much will all this cost, and what for?

I turn now to some of the main subjects in which the right hon. Lady has made clear, either today or in her speeches outside the House, she intends to be particularly active. First, prices. Although "Prices" is not in her title, the right hon. Lady has already made it clear that she intends to be a most active interventionist in this sphere. One cannot help remarking that in her past incarnation at the Ministry of Transport she has been more noteworthy for policies which put prices up than for ones which bring them down. Now that she has translated herself, how will she work in getting prices down?

Here, again, there is a serious matter of organisation. What will her relations be with the other Departments concerned? What Departments will receive the early warnings about prices? Will they still be the old Departments, or will her new Ministry be the Department to which all early warning notification of prices go? Whichever Department receives the early warnings, which Department will decide on the merits whether there should be a reference to the National Board for Prices and Incomes, and whether or not to use the Government's new powers to order price reductions? Will it be the right hon. Lady or will it be the Ministers of the sponsoring Departments of each trade and industry concerned?

Sir Harmar Nichols

Or the Attorney-General?

Mr. Carr

Or the Attorney-General, questions my hon. Friend the Member for Peterborough. If I were a Minister in any one of the sponsoring Departments I would be putting out my guard dogs against the predatory activities which I should be fearing from the Right hon. Lady. There is endless scope for inter-Departmental jealousies and wranglings and other demarcation disputes which will make "screwy" strikes in shipbuilding seem harmless by comparison.

So far, it seems that she intends to make war principally on the small man in the high street. If she is going to indulge in high street snooping, I beg her at least to do it scientifically I suggest that she consults Marks and Spencer and other similar companies about how they exercise price and quality control over their suppliers effectively and fairly but non-bureaucratically.

Does she think, however, that she can make much impact in this way or that her interventions can be anything but arbitrary, unfair and effective to only a tiny degree? Surely the bigger fish should be caught as well, or are Lord Robens and the Coal Board too heavily armed for the Government? While she is talking about prices in the high street, the Coal Board calmly puts up the price of coke by a £1 a ton without the matter even being referred to the Prices and Incomes Board. Where is the consistency or fairness in that? As my hon. Friend the Member for Finchley (Mrs. Thatcher) said when winding up yesterday's debate, the nationalised fuel industries have put up prices far more than the private enterprise food industries.

As the public are sensible enough to understand, the trend of prices depends on economic policy, and the most effective single instrument specifically to keep down prices was the abolition of resale price maintenance by the present Leader of the Opposition in 1964. I do not remember the right hon. Lady or her party giving it enthusiastic support. Indeed, I remember the right hon. Member for Belper describing it on Second Reading on 10th March, 1964, as a "little tiddler" of a Bill. I noticed that, yesterday, the right hon. Lady claimed some credit for its effect. It has done far more than all her tinkerings and snoopings will do for the rest of this Parliament.

Now I turn to the central question of incomes and productivity. We genuinely welcome the right hon. Lady's new emphasis on productivity, which is precisely the line which we have been advocating for a long time. For example, to refer to what one knows best—one's own speeches—on Second Reading of the Prices and Incomes Bill last summer and in the Budget debate this year, I drew attention again to the impossibility of achieving an incomes policy by operating on only one side of the equation, by trying keep the balance simply by holding down earnings and not by trying to raise productivity.

I said then, as we have said over and over again, that where we in this country have failed is not in being less successful in holding down earnings than other countries—in fact, we have held down earnings more successfully than almost any other major industrial country—but in raising productivity and increasing production to match earnings. So we welcome this new emphasis. What we are concerned about is how it will be done—

Mrs. Castle

Does the right hon. Gentleman recall that, in his Budget speech to which he is now referring, he also claimed that, under the Conservative Government from 1958, the labour unit cost of production had risen by only 2 per cent., claiming to be quoting the O.E.C.D. Observer, whereas it rose under the Conservatives by five times as much, namely by 10 per cent.? Is he now prepared to retract that figure from the records of the House?

Mr. Carr

It would have been an unusual courtesy from the right hon. Lady had she informed me that she intended to refer to my speech—

Mrs. Castle

I raised this matter in the House yesterday, so, if the right hon. Gentleman was taking such an interest in the debate on rising prices, he might have had the courtesy to read my speech, in which he would have found that challenge.

Mr. Carr

The right hon. Lady might do the House the courtesy of listening to what I said. It was her lack of courtesy yesterday in not informing me in advance to which I was referring. Had she done so, I could easily have made it clear—

Mrs. Castle

Do it now.

Mr. Carr

That is easy. The first thing that the right hon. Lady should do is read exactly what I said. I admit that, in the text of HANSARD—I admit that, since I failed to correct it, I must be assumed to have said it—I left out two words, "per annum". I am not trying to deny that I made a slip in the House, because I cannot prove that I did not, but I should have thought that to anyone knowing this subject at all it would have been glaringly obvious that I was referring to annual rates.

Anyway, I was quoting these figures so as to compare our performance with the record of other countries. If I left out the words "per annum", it may have given a false impression about the increase in this country, but, of course, it gave an exactly similar false impression about the increase in other countries and in no way invalidated the point of my argument, which was that, in Britain between 1958 and 1964, under an incomes policy not backed by statutory power, labour costs rose by no more than in other major industrial countries studied by O.E.C.D., with the exceptions of the United States and Canada.

If the right hon. Lady will reread my speech, she will see that that was my point. Even if, in error, I stupidly left out the words "per annum", that did not invalidate the point of my argument—

Mrs. Castle

But is the right hon. Gentleman aware that he still has not got it right, which suggests that he did not understand his own figures or the argument that he was advancing? He left out another word, namely, "average". It was not simply a question of whether unit labour costs under the Conservatives rose by 2 per cent. per annum instead of only 2 per cent. over the period, as he implied, but also of whether they rose by only 2 per cent. in any year or whether this was an average.

The whole point of my argument to him, which he has not answered, was that, at periods in the Conservative Administration, labour unit costs were as high as 6 per cent. per annum, and therefore the word "average" is the important one for the economic argument. As I said yesterday, if we are to get this prices argument on any sound and rational economic basis, we must take into account factors like that.

Mr. Carr

Anyone who likes to get hold of the O.E.C.D. Observer of April, 1966, from which I was quoting, will understand the position and will know the validity of the comparison which I was making. In this case, averages over a period are relevant. Of course there must be fluctuations, and the only purpose of my argument was to show, over reasonably comparable periods, what had happened without statutory control compared to what had happened with that control and how we had succeeded com- pared with other major industrial countries.

The answer over that period—it is a perfectly fair one to take—was favourable to Britain and to the success of operating an incomes policy without statutory controls. The right hon. Lady may wriggle and twist and stand herself on her head as much as she likes, but she cannot alter the facts which were brought out in that argument.

To return to this debate, we welcome the right hon. Lady's emphasis on increased productivity. What we are concerned about is how she will achieve it. We are concerned that what she has said today may add confusion between Ministries if she means what she seemed to mean. We are even more concerned about something of which she said nothing, namely, whether she means to try to achieve this by giving the green light to vague national agreements, in which the extra productivity is an insubstantial promise for the future while the increased earnings are both real and immediate.

If that is the sort of encouragement which she will give, then she will soon sink the Chancellor's policy without trace. Real productivity bargaining must be at company or plant level. If we are to get this process really moving, we must encourage the development of responsible and constructive voluntary collective bargaining. The long-term effect—and this has been our complaint all along—of statutory incomes control is that it weakens, not strengthens, this vital process. The chief responsibility for intiative must rest with the managements of companies throughout the country. One of the great deterrents to such initiative in many industries is the present lack of confidence on the part of managements that agreements, once made, will be honoured.

It was noteworthy that, in her first speech in her new capacity, the right hon. Lady failed to refer to this vital problem. She said not a word about what she hoped she might do about it. That being so, what is her real philosophy towards free collective bargaining. Does she really believe in it? In a party political broadcast on 10th May of last year she said: As a left-wing Socialist with Dick Crossman and many others, I have produced documents analysing the sort of policy a Labour Govern- ment must have. If it is to have proper planning, we said, then it must plan incomes. She owes it to the House and industry to explain how a belief in planning incomes is consistent with a belief in free collective bargaining and the voluntary system. So far, her actions do not seem to indicate that she has a real belief in free collective bargaining and the voluntary system, even as a means of operating an incomes policy.

I give as an example the right hon. Lady's early reference of the seamen's negotiations to the Prices and Incomes Board, for which she has already been rebuked by Mr. George Woodcock of the T.U.C. I understand that she referred the matter to the Board before the T.U.C. and C.B.I., the voluntary machinery, had had a chance to deal with it in the proper way. How can anyone believe in her intention to strengthen the voluntary machinery if she does not even give it a chance to operate before referring matters to the compulsory machinery?

What about the free movement of labour? She talked grandly today about planning the use and development of manpower. What did she mean by that? Coupled with all her statements about interventionism, it makes one wonder where we might find ourselves if she is in her present office in a few years' time.

In connection with prices and incomes, does she really stick to the recent Government White Paper and, if so, why has there been such a long delay in introducing the Bill which we were promised would be brought in shortly after Easter? Will there be a change and, if so, when will we know about it? Has the right hon. Lady at last realised, on behalf of the Government, that the trade union movement will not co-operate with an Administration who insist on using the threat of gaol as the ultimate sanction for labour discipline over earnings? Has she at last realised that, up to now, statutory control has produced no real effect while it is doing a lot of long-term damage? Has she at last realised that compulsion feeds on itself and that if the Government go on down this road, permanent powers of ever-increasing intensity will be needed to achieve the minimum of effect?

I was disappointed—indeed, shocked—that the Secretary of State did not give more attention in her speech to an ob- vious but fundamental matter; the conflict of rôles which her Ministry now has. It is the conflict between the new rôle of operating an incomes policy—a rôle which is liable to stimulate industrial strife and dispute—and her Department's old statutory duty of conciliation and arbitration. Warmonger and peace-monger. Can one be credible as both or either in the long run? Who will be left to arbitrate in the end? Will it be the Prime Minister over beer and sandwiches in Downing Street?

We are all agreed that there is a dilemma here. Many people have suggested over the years that we should transfer the conciliating function away from Government to an independent conciliating authority or agency. My hon. Friends and I have always rejected this idea because of the danger that if one separated conciliation from all responsibility for overall Government economic policy in the national interest, the professional interest in making peace at any price might mean peace being made at too high a price.

I believe that it is right to keep it within the Government and to submit it to the discipline of the overall tests of economic policy. There is not, therefore, a clear black and white division here, and we see that it is a question of degree. I suggest that to have the Minister of Labour trusted as a conciliator—as almost the spokesman for these matters within the Cabinet, but subject to the discipline and pressure of her Cabinet colleagues and to the other aspects of national policy—is the way to get the balance right. I fear that putting these matters under one Minister will result in getting the balance dangerously wrong for the future. The pros and cons of this difficult point should have been argued out more closely by the right hon. Lady.

There are a number of effects of this change in the machinery of Government as a whole. I have referred to the possible confusions, overlappings and demarcation disputes between Departments over prices and productivity. We are owed an answer to the question we have asked and I trust that it will be given when the Minister replies to the debate. An aspect of this change which greatly concerns us is the fact that it adds one more to the number of economic Departments. At present we have the Treasury, the D.E.A., the Board of Trade, the Ministry of Technology and now in addition we are to have the Department of Employment and Productivity. All are concerned with these matters.

There is a growing weight of opinion—not only academic and historical but the opinion of experienced people of both parties—people who have served in Governments and Cabinets—that the more complex the nation's affairs become, the more we need a single Economics Ministry to handle these matters. But far from reducing the number of Departments involved, the Government are increasing that number, and this is an extremely serious matter.

We cannot help wondering why this has happened. As I said, many of the sensible and sound remarks of the Minister meet with common agreement, but no change of name or function of the Department was needed to bring them about. We suspect that one main reason for putting the prices and incomes policy under the Ministry of Labour is because of the failure of the D.E.A. under its present leadership to carry the necessary authority either in this House or outside. I regret to say that we suspect that there is a strong party political motive as well; that of propping up the Prime Minister's authority and maintaining the political balance.

It is also perhaps a question of the belief that the Left can talk to the Left. That used to be one of the great illusions of the Labour Party in foreign affairs. Will it prove any more valid a principle in the conduct of industrial relations? Will the right hon. Lady manage to remain the darling of the Left? If so, what will happen to the Chancellor and his policies and the hopes of achieving a substantial balance of payments surplus?

Whatever we may think about the merits of these Departmental changes or the reasons for them, my hon. Friends recognise that the right hon. Lady has a difficult task, and we wish her well in it. A great deal will depend on the skill, tact and trust which can be created by the Minister who must undertake this task. I assure the right hon. Lady that it is no derogation of her undoubted ability and energy to question whether her temperament and mode of approach, as well as her interventionist talk, are suited to this work of exceptional delicacy and difficulty.

She told the Labour Party Conference in 1966: "I am an impatient woman." She repeated exactly the same description of herself to the Labour Party Conference in 1967. Is impatience the quality which is needed? Or is the real requirement statesmanship in which determination is tempered with patience and a steady firmness illuminated by understanding? Would not those qualities be more needed than hectic activity, detailed interventionism and a journalistic flair for propaganda? As one thinks about these changes, of name and apparently of purpose and of mood temperament and conduct, one wonders what Ernest Bevin would have thought about it all.

5.10 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

We have listened with very great interest to my right hon. Friend the Minister and to the right hon. Member for Mitcham (Mr. R. Carr). I think that the House will agree that the decision to dissolve the Ministry of Labour is probably one of the most important and historic decisions that has been before the House for a long time. We ought not lightly to pass over this moment without going into the whole of the matters very critically and spelling out, as each and every Member sees the situation and the possibilities that exist, the dangers and the opportunities which are presented at this time.

It is quite clear that there was a need for a change in policy. As the right hon. Member for Mitcham rightly said, many of us—this is not confined to one side of the House—have long argued, as we argued in our election manifestos in 1964 and 1966, that the real answer to our economic problem was to get a higher level of growth and productivity. The answer was not to cut back, to pursue a policy of stop-go, of devaluation, and so on. Therefore, it is very welcome that we shall now have, I hope, a dynamic Ministry, for we have a dynamic Minister who will concern herself with the problems of productivity.

I am very much a believer in interventionist policies, but I have to admit that I am a little worried about general and loose talk about intervention. I want to know precisely what type of intervention we are talking about. To give an example of what I have in mind, I am not opposed to intervention in industry which assists and boosts industry. What I complain about is that those who get assisted by interventionist Government policies complain to the Government that they do not get enough and then talk about backdoor nationalisation.

I should like to see a little more interventionist policy with reference to conciliation in the Liverpool bus strike. I recognise that my right hon. Friend inherited the Department and may not be responsible for the lack of intervention which has left our people marching the streets in Liverpool for eight weeks, but I should have thought that interventionist policy in relation to conciliation there is absolutely vital and important.

I have argued before in the House for that type of intervention, with more trouble-shooters throughout the country, which could be used much more effectively and quickly to bring disputes to a close and to solve problems more quickly than they have been solved in the past. So I welcomed the intervention by my right hon. Friend in the dispute at Oxford. That was very timely intervention, but it was noted that there was still no intervention in the strike in Liverpool. The lesson was drawn that the dispute in the Oxford district was concerned with exports, whereas in Liverpool no exports were involved.

Mrs. Castle indicated dissent.

Mr. Heffer

My right hon. Friend is shaking her head, but I am telling the House what those on Merseyside think. I am not condemning my right hon. Friend, for she inherited a Ministry and she is starting with new ideas, but I must warn her that when considering intervention she must not over-stretch herself. She must be careful not to intervene in the way she did between the seamen and employers before they even got round the table to arrive at a decision, particularly in view of what happened to the seamen in 1966.

That was a traumatic experience for the seamen and for everyone in the trade union movement who was involved. I hope that intervention will not go to that sort of length, for then it stops being intervention and becomes Government control in relation to a wages problem. I am not prepared to accept that.

I am not prepared to see the whole trade union movement, which has been built up over the years on the basis of improving the conditions of the workers and maintaining and developing their standards, eliminated as a result of that type of Government intervention. Otherwise, the movement becomes—as it is in the Soviet Union and many other Communist countries—largely the agents of production and productivity, with the workers having no real say about wages and conditions. I do not believe in, nor do I accept, that theory. I do not accept that the democratic Socialist philosophy means that type of intervention.

Therefore, I say to my right hon. Friend, do not take this question of intervention too far. Certainly, we want an interventionist policy. I will back that to the hilt, but we do not want a policy of the kind which could mean the ending of the democratic trade union movement as we have known it in this country.

Even at this late hour, I appeal that something should be done to make some intervention possible in the dispute in Liverpool. My friends who are walking the streets of the city would be delighted about that. We are awaiting a document, but it is a long time coming. I do not blame my right hon. Friend for that, but the document has not appeared and our people are still involved in the dispute.

The right hon. Member for Mitcham raised a fundamental point about the character and rôle of the Ministry in future. Obviously, it will have a double-sided policy, a dual character. On the one side, there will be interventionist productivity policy, pushing ahead with productivity agreements and boosting productivity, and, incidentally, concerning itself with holding back certain wage claims. The other aspect will be conciliation, but care must be taken lest, in attempting to resolve one set of problems, new problems are thrown up. That would be a mad hatter's tea-party. The two facets of the policy must be clearly explained to us.

I come to the productivity, prices and incomes aspect of the work. My right hon. Friend inherited the White Paper. I am sure that she played no part in drawing it up.

Sir Harmar Nicholls

She was a member of the Cabinet.

Mr. Heffer

But she did not approve it.

The whole emphasis of this amazing document is now on productivity. The ceiling is 3½ per cent. It is not an annual increase of 3½ per cent. Many workers would be delighted with an annual increase of 3½ per cent. The norm is nil. It is not possible for every section of workers to become involved in productivity agreements. One-man operated buses could be introduced, but what could be done for the next stage of increased productivity? Must the schedules be tightened? Must the drivers stop for only two seconds, resulting in would-be passengers ending up flat on their faces, having failed to board? Productivity can be taken only so far. How do nurses or firemen increase their productivity?

Some people and groups of workers cannot be involved in productivity agreements beyond a certain extent. Thus, they are not able to increase their earnings, because they are not at the point of production where they can put pressure on to increase their wages. I always understood that our policy was to help such groups of workers, possibly at the expense of some of those at higher levels. In that case, give the busmen their £1 a week, because they work many hours to get their £20 a week. The overall earnings should be based on the total income, after taking account of excessive overtime. What counts is the basic rate. Workers should not have to work a great deal of overtime to get a decent wage.

Paragraph 38 of the White Paper says: The criterion justifying increases on grounds of comparability needs to be applied selectively". What does that mean? I have been in the trade union movement all my life arguing about increased wages. One basic argument was always comparability. When another section of workers increased their wages, we submitted that we were being left behind. The criterion is now to be selectively applied.

Paragraph 41 says: Pay increases based on a rise in the cost of living are not justified under the criteria, and should not be conceded. Thus, two of our basic arguments have gone out of the window. There can be no comparability, except selectively. An increase cannot be asked for because of an increase in the cost of living.

Productivity is all that is left, but that cannot apply to all sections of workers and ought not to apply to all workers, except where there can be genuine productivity based upon new technological advance. I have always understood that, in trying to help people in industry to work more efficiently and under better conditions, we did not want them to work harder, in contrast with what the White Paper says, but that new methods should be used to gain increased productivity.

We are in the midst of a technological revolution. I agree that better human relations are wanted in industry. The workers must be involved in decision-making. They are not at the moment. This is our way forward. It will not be achieved by merely speeding up the production process, because it is dehumanising, not humanising. The Penguin publication "Work" contained a story told by a man working on the line. He said that whilst he was working he used to see a man called Fred on the other side of the line. One day Fred had a heart attack and dropped on to the floor. Somebody took him away. A couple of minutes later, somebody else was there and the job went on. Fred did not return: he had died. That was dehumanising. This is what is happening in modern industry. The worker is becoming alienated from his environment.

The right relationship will be secured by the worker being involved in decision-making, particularly in this technological age, otherwise he will become a mere cog in this enormous industrial wheel. It is vital that he has the chance to make a real contribution in the decision-making in the factory.

There must be new forms of democratic management. Hon. Members opposite will now begin to part company from me. I am not talking about the old idea of workers' control. That is a somewhat outmoded concept. I do not quite know what it meant. Everybody understands what democratic management is. There are plenty of examples of this throughout the world—some successful, some not successful, some partially successful. We should see what we cart do to adapt our methods of management to the ways of involving the workers in decision making.

I realise that I am speaking for some considerable time, but this is an important and fascinating subject which is vital to our future. I want to say something about trade union attitudes to change. I pointed out in an intervention that resistance to shorter periods for apprenticeship does not entirely rest with the trade unions but that many employers resist them as well, because otherwise they would have to pay full wages earlier.

When I was an apprentice, the apprenticeship lasted seven years, and in the last two years I was as good as any operative who had been working 20 years. For those two years my employer got my labour very cheaply. Many employers still have that sort of concept. I believe that my employer even wanted £20 to let me become an apprentice.

Sir Harmar Nicholls

The hon. Gentleman intervened in response to my intervention and I am sorry that he cited only the building industry. I am sure he will agree that in the engineering and ancillary industries the resistance is more from the union side than from the employers. I do not say that with joy, but it is a fact.

Mr. Heffer

I do not deny that trade unionists are in many cases reluctant to change. That arises from the fear of unemployment. If we could eliminate that fear once and for all and guarantee full employment, half the demarcation and restrictive practice disputes would disappear. There is another factor as well. One of our problems is that we have far too many unions and far too many unions in each particular industry. I have long believed—and this will be sacrilege to some of my fellow trade unionists—that we should be working towards having a construction building craftsman who could be adaptable to doing a series of different jobs in the building industry. Probably if I said that at a trade union conference I should be chased, but it has to come.

Mr. James Hamilton (Bothwell)

My hon. Friend is talking about the construction industry, of which I know something. Perhaps I can give an example to follow up his argument to its logical conclusion. On his thesis, he would expect a bricklayer to be capable of doing steel erection work, but obviously he could not do it. That is not the sort of job he is trained or is desirous of doing. On that basis the most serious thought and attention would have to be given to such problems.

Mr. Heffer

My hon. Friend has put better than I could the problems, but he has cited two extremes. Of course each union has its arguments for protecting its membership, and I am not against that, but there must be some recognition that some trades are more adaptable to change than others. It would not be absurd, for example, to say that the bricklayer, plasterer and tiler could be interchangeable. The crafts covering timber could be interchangeable. If we could bring about a reduction in the number of craftsmen in the industry, this in itself would be an important step forward. But the solution rests in the growth and development of industrialised building because, under that system, sooner or later we should be able to develop an industrialised building craftsman who might be outside the terms of the old-time craftsman altogether. We must consider something along these lines.

I want to return to my point about having one union for each industry. This is an absolute "must" for us. It will not solve all our problems. It has not solved all the problems in the United States, where there is one union for each industry. But it has solved a great number of them, and when there are disputes between sections of workers they are settled within the context of one union. Where a number of unions are involved, so are prestige, general secretaries, national chairmen and executive committees. We must face up to that problem.

My right hon. Friend the Secretary of State for Employment and Productivity could do a great service to the Labour Movement and to the country. It has been suggested that we do not know when the new prices and incomes Bill is to be introduced and that there has been a delay. I hope that that delay will last for the next four years and that there will then be another four-year delay and that ultimately the Bill will be delayed altogether. I believe that what is wrong at the moment is that our people have no confidence in the prices and incomes policy because it has primarily been an incomes policy with very little done about prices.

My right hon. Friend is beginning to tackle prices. I welcome that, but a couple of swallows do not make a summer. We have not yet reached a position where there has been any fundamental change in relation to prices. As my right hon. Friend takes over this Department, let us by all means have a gigantic productivity rise; let us have the whole emphasis in that direction; let us press on with increased incomes on that basis. But let us do the country and the Labour movement, in particular, a great service. Let us avoid a great number of problems and conflicts—possibly vast industrial troubles—by eliminating the concept of a permanent wages incomes policy which can, in my opinion, lead down a disastrous road for our movement.

5.38 p.m.

Sir Harmar Nicholls (Peterborough)

We have just heard the hon. Member for Liverpool, Walton (Mr. Heffer) at his best. It is a pity that occasionally he intervenes on some subjects in a different manner and lets down the great impact he can have when he is on his subject. We have heard from him in the last few minutes the authentic voice of the trade unionist, and I hope that the right hon. Lady will pay heed to the message he was trying to get over to her, because he was talking as a practical man who knows the problems and possibilities and potentialities. On this occasion, I am delighted to be able to congratulate him and to say that he has made a real contribution to the good development of the Government of this country.

We are discussing a Statutory Instrument. This is not a debate with a highfalutin' title. It is about a humble Statutory Instrument which will merge certain Ministries. Yet the hon. Gentleman was right in saying that what will flow from the debate on this instrument will be momentous. He is right in saying to the right hon. Lady that we want spelt out in greater detail what is meant by some of the words she used.

What is meant by "intervention"? It can mean anything or nothing. It can be something helpful or disastrous. The intervention of the right hon. Lady in the seamen's strike was mentioned—it was disastrous. Perhaps that was because she was the impatient lady that she told the Labour Party she intended to be. I am sure that this Stautory Instrument will go through, and the merger of the Departments will be made official and, as a result, the right hon. Lady will have great power because of this. We cannot have loose talk, words with several meanings. We must know as soon as possible what "intervention" means, both as applied to wages and prices.

She is to take new power to intervene in the prices that the retail shops in the High Street will be putting on their goods. What power will she take? The power to look at their books, to look at their balance sheets before they are submitted to the Registrar? One has to tie this debate up with yesterday's, when the right hon. Lady was taking great pride in the restrictions imposed on rent increases. I will not argue the rights and wrongs of the Prices and Incomes Board restricting increases to 7s. 6d., but she took great pride in that, whatever the economic circumstances, there was now that ceiling on rent increases.

We know perfectly well that this increase in rent was not put on out of malice, or because people enjoy putting up the rent. The increase was suggested by the local councils because, to balance their accounts, they need the extra money. If they do not get it from the rents they will have to get it from the rates—unless the Government are to provide it out of taxes, and that has been denied pretty forcibly. If it is to come from the rates, then for the most part the ratepayers in most communities are the retail shopkeepers. If their rates are to rise because of this pride in keeping rents down, how are the Government to stop the shopkeepers recouping their increased rates by putting up the prices in their shops? Those are some of the questions that must be spelled out in greater detail and in language that we can understand.

This question of being clear is important. I am always reminded of the story of the British Tommy talking to the Chinese soldier. The Chinese soldier said to the Tommy: "I can't understand it. Whenever you British go to war you always win. Whenever we Chinese go to war we always lose. Why is that?" The Tommy said: "That's easy. Before we go to war we always pray". That Chinese soldier said: "It can't be that. Before we go to war we alway pray". "Oh", said the Tommy, "but who the bloody hell can understand Chinese?" There is a message in this. We cannot have Ministers talking in a language that is not understood by the people who have to adhere to what they are saying. I support the hon. Member for Walton in saying that there must be this clear language.

I wonder whether this Statutory Instrument and all that it implies is necessary. To begin with, I wonder why the Leader of the House is not commending it to Parliament. It is his job. It is not fair to ask the two Ministers who have to operate it and who are talking virtually in their own defence about what they will do in future to have to carry through the job of recommending to Parliament this terriffic alteration in the structure of Government Departments.

The only one with which I have been connected was when I became a junior Minister in 1955, and that was the merging of the Ministry of Food with the Ministry of Agriculture. If there ever were two departments crying out to be merged at that time it was those two. I have vivid recollections that it was the Leader of the House who recommended this to the House and the Minister of Agriculture who wound up the debate. I have also recollections of the vociferous opposition that came from the then opposition Labour Party. They voted against it, yet that was a merger crying out to be recognised. This current one is not. I do not see the need for this; indeed I can see a lot of reasons why the merger ought not to take place.

This is not a matter of a Minister fitting in with a Ministry, which was the case with the merger I have mentioned. Here the Government are asking Ministries to be uprooted and turned inside out in order to fit in with what I am certain is, for the most part, political gimmickry. If ever there has been a Department that has been knocked and turned about and twisted and shoved more than it ought to have been already, it is the Department of Economic Affairs.

Mr. R. Carr

It ought never to have been.

Sir Harmar Nicholls

When it started it had great powers because it had a very forceful character at its head, the Deputy Leader of the Labour Party, the Deputy Prime Minister—his special baby, conceived in the taxi-cab, and baptised with all the holy water that the right hon. Member for Belper (Mr. George Brown) could get. Then he had all the power and responsibility for looking after entry into Europe. The Europe power was taken away from the Department, then the right hon. Gentleman left it, and then the Prime Minister stepped in to save this great institution that was considered so important.

He never did anything, but he had the title rôle and he had a junior Minister—a very able one I have no doubt, because his reputation in the Labour Party stands too high for him to be anything else. He is technically able, but he was a dismal failure in terms of being the Minister in charge of the Economic Department of this Government. The reason why this merger has been brought about is not because there is a crying need for all these responsibilities to be handled by one Minister It is partly because the Government have to relieve this Parliamentary failure, and take the Department from a junior Minister failure to a senior Minister who was a political success. The other political reason behind it, and I do not want to be accused of being deliberately partisan on these matters, is because this Government have a Right-wing Chancellor, a Right-wing President of the Board of Trade, and in order for the thing to be balanced for party reasons, there has to be a Left-wing social service Minister in the form of the right hon. Member for Coventry, East (Mr. Crossman) and a Left-wing Minister in charge of economic matters—the right hon. Lady.

My right hon. Friend the Member for Mitcham (Mr. R. Carr) made it quite clear how in her broadcast the right hon. Lady said that she was proud to be a Left-wing Socialist, with Left-wing Dick Crossman keeping up the balance of the party. She said that, not me, and it is that sort of thing which makes it quite clear to me, as a politician, that the aim behind this is nothing to do with helping to get productivity on the move and improve the economic strength of the country—

The Minister of Technology (Mr. Anthony Wedgwood Benn)

The hon. Gentleman is doing less than full justice to the argument. He will recall that the present Leader of the Opposition was given a task to be Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade—a title considerably longer than that of my right hon. Friend the First Secretary. It is a fact that in grappling with some very formidable problems facing her, innovations of this kind in the machinery of government have been adopted, as they have been by all parties. He ought not to make an election speech on this issue.

Sir Harmar Nicholls

The right hon. Gentleman is very astute. He did not earn the title of being one of the Labour Party's "whiz kids" for nothing. I had already dealt with the point of his intervention and said that I knew that there were cases when Departments ought to merge. I had already said that the Ministries of Food and Agriculture ought to have merged, and the example which the right hon. Gentleman has quoted is another which it was right to have happened. However, the present case is not a merger which ought to have happened on its own merits, and, to some extent, the hon. Member for Walton shares my doubt about it. While it is right to have some mergers, this is not just such a case. There is not an overwhelming economic reason for it. The real reason for it is a political gimmickry one. It is to keep the balance between the Left and Right wings of the Labour Party. It is not the first time that it has happened, because it has gone on throughout the history of parliamentary government. But it should not be on the record that some high level economic reason was crying out for the merger.

The right hon. Lady is such an effective politician that she would not have taken on the job unless she had some idea of the likely future strategy. My estimate is that she will have a rough ride. Possibly she will have bitter quarrels with many of her hon. Friends and members of the trade union movement, and they will continue until about Christmas. She understands that and takes it on with all the verve that the colour of her hair leads one to believe that she has. However, she would not have taken on the job if she had not thought that, after Christmas, bearing in mind the possibility of a General Election, she would be in a position to give something away to please her friends. It is the Prime Minister's strategy that she should do the tough stuff up until Christmas. That is necessary, otherwise the Chancellor will resign. Once the position is straightened out, the giveaway will come. That is the political strategy behind this proposal. It may not work out, however.

I join with the hon. Member for Walton, and my hon. Friends who have wished the right hon. Lady well. Now that the merger is coming about, she had better succeed. She is carrying the burden of the most important part of the efforts which we shall make to continue our existence as a leading industrial Power. I hope that she will not allow her impatience or prejudices to interfere with matters.

She has said that she intends to take power to reduce prices. I believe that we want to know exactly what she means by that. Then she has said that she will be more interventionist, and again we want to know what she means, because she could intervene to the point of becoming a dictator. The powers taken in the White Paper read by the hon. Member for Walton, are such that could give the Government powers of dictatorship, if that is the sort of line that they want to follow.

It is important that the right hon. Lady carries with her both managements and workers, and she must show the tolerance and understanding shown by Ministers of Labour since the war. Beginning with Ernest Bevin, and coming down through Walter Monckton to the present day, we have been fortunate in having Ministers of Labour who have understood the need to go forward with managements and men and not to be dictatorial and hectoring.

Since taking on her present job, I have seen the right hon. Lady on television. She has shown signs of adopting a hectoring attitude. It may be that the one mistake that the Prime Minister made in asking her to take on the job was to give it to a woman who is inclined to hector. As men, trade unionists do not like being hectored by women. Men have enough of that from their wives without having it from someone else's wife. It maybe that the wives of trade unionists who saw the right hon. Lady with her pointing finger and hectoring tones on television said to their husbands, "You would not take it from me. Why is it that you are prepared to take it from her?" I hope, instead, that the right hon. Lady will use some of her undoubted charm, because she will then achieve some success.

Having suggested that there is no need for the merger, now that it is to go through, let us hope that it will be a success. My advice to the right hon. Lady and to the Prime Minister is to pay attention to what the hon. Member for Walton said, because he was talking good sense. I hope that the right hon. Lady will not approach her task with the idea that there is bitterness and antagonism between managements at top level and workers. There is not. On occasions, there are disruptions and ill feelings, but for the most part, the co-operation that both the right hon. Lady and the hon. Member for Walton, have called for exists in industry today. Workers are consulted. They have their means of communication. They use them to the full, and they are very helpful. There are occasions when, lower, down, possibly at chargehand level, some disruption is caused.

If I may tell another story, it is one in which the hon. Gentleman may be interested because it is true and it happened in his own parish of Widnes in Liverpool—

Mr. Heffer

A very good place.

Sir Harmar Nicholls

There is nothing wrong with it. I object to some of the sounds emitted by it but, for the most part, it is all right. When there was all the talk about joint consultation, a chargehand in one of the local foundries called the men together and said, "Our approach in future has to be different. The new phrase is 'joint consultation'. We have to work together. I have to listen to what you say, because of your experience and knowledge, and you have to listen to what I say. In that way, we shall move ahead together. We shall only win the war if we do that." When he sat down, one of the men started to say, "All that I have to say is", and he was interrupted by the chargehand who said to him, "You can keep your mouth shut, for a start." However, that did not come from the man at the top. It came from a workman carrying out the instructions of the management, and that was his reaction.

I want to clear away the suggestion that there is terrific antagonism between top managements and workers. For the most part, there is not. In the old days, there may have been. Today, both sides are eager to work together and in many instances are doing it well.

I do not want the right hon. Lady, with her impatience and hectoring, to interfere with that development. She was a great disciple of Aneurin Bevan. I was an admirer of him as a Parliamentarian, and I had many talks with him outside this Chamber. I was always impressed with his deep-felt belief that what we had to do if we wanted to get the best out of our machinery and our economic investment was to see that the machines which were expensive and already installed were worked to the full. He said, "We have to reach the point where we can get a shift system, and, having installed these complicated, intricate and expensive machines, they must not stand idle."

It is to that end that the Minister of Technology should work. Having persuaded the Chancellor to give investment allowances to enable the necessary machines to be installed, the right hon. Gentleman must use his influence to see to it that they are worked the maximum number of hours so that the nation can gain the greatest benefit.

I wish the right hon. Lady well. She has a great task ahead of her. I wish the venture success. It is only her temperament which might make it fail, but she has time to improve on that.

6.0 p.m.

Mr. Edwin Brooks (Bebington)

The hon. Member for Peterborough (Sir Harmar Nicholls) has concluded his speech in characteristically chivalrous but barbed language. Many of his comments express what is felt by Members on both sides of the House, a sense of considerable uneasiness at the present state of the economy and of the politics of the country. None of us is any longer in doubt about the feelings of disillusion and even despair of many of our constituents.

It is against this sombre backcloth, where many of our established institutions and habits of political thought seem to be at risk, that this debate is taking place. I agree with the hon. Member for Liverpool, Walton (Mr. Heffer), that this is an extremely important debate. Although, on the face of it, it is a relatively straightforward change of designation, behind this there is an extension of a principle which has steadily encroached upon our society during recent years, a principle of increasing intervention by Government in the detailed articulation of prices and incomes.

From the outset I have seen the overwhelming need for a policy which relates prices and incomes, on the one hand, to the growth of productivity, on the other. Anyone who fails to see the need for such a relationship is no longer in touch with reality in this country, or in any other advanced industrial society.

Although many of us, and, I suspect, all of us deep down, recognise the necessity for some such relationship to be defined and, as far as possible, accomplished by Parliament, a growing feeling that some of the essential ingredients for successful policies along these lines have so far not been discovered and added to the mixture presented to us by the Government.

The question we face today is not whether we plan incomes. The question is how we shall plan them. There is bound to be some measure of control exercised by Government, otherwise the inflationary pressures which threaten our society, and have been doing so for many years, will entirely overwhelm not only our economy but our political institutions.

One can very easily forget that the success of the Government's rôle in exercising a restraint throughout society to prevent such inflation depends not so much upon dotting the i's and crossing the t's of the masses of footnotes which appear in the reports of the Prices and Incomes Board, but in establishing a relationship of confidence among ordinary people in the integrity and purposes of the Government, a feeling that the Government is on their side. This feeling has, it seems to me, often been quite unnecessarily jeopardised.

This Government of all Governments has to remember its roots, but not merely in order to wallow in historical nostalgia. It must remember that when this party grew in the 19th century, and in the early years of this century, it was trying to meet social squalor and the problems of a society of inequality in which millions of ordinary people knew that throughout their lives they would lead an underprivileged existence. They felt that the "powers that be" were against them, and that there was no hope for them, nor indeed for their children.

It was to people like this that the arrival of the Labour movement and its political expression in Parliament offered so much hope over these long years. It is this sense of hope which today is being unnecessarily jeopardised as a result of what appear to be failures of Government to achieve a fair prices and incomes policy.

On an occasion like this, instead of wallowing, to use my own phrase, in generalities, I would like to devote myself to the analysis of a particular problem, which seems to me, in the way it has evolved over recent months, to illustrate the complexities and confusion into which some aspects of the Government's policy have strayed.

I refer to the dispute over the municipal busmen's pay. This, in many ways, has come to be a test case. Within the last few days we have had yet a further example of Government intervention. Perhaps there will be further examples in the days to come. In my own area, on both sides of the River Mersey, the lives of hundreds of thousands of people have been seriously handicapped during recent months as a result of strike action arising out of this dispute. We have not yet come to the end of this unhappy road.

The Prices and Incomes Board has recently published three Reports on busmen's pay; they are Reports Nos. 16 and 50 and, very recently, Report No. 63. The Prices and Incomes Board is now considering in even further detail some agreements which are being negotiated in muncipal undertakings. There is a wealth of documentation on the industry. It is possible, by exploring the Reports in a measure of detail, to see some of the ambiguities which are evident in the way in which this matter has been handled.

In the White Paper, Cmnd. 3590, are listed the Government's criteria, the third of those criteria being that increases can be provided where there is general recognition that existing wage and salary levels are too low to maintain a reasonable standard of living.

The Government are facing a period during which prices are bound to rise as a result of devaluation and the Budget. At a time like this it is peculiarly the responsibility of the Government to ensure that the living standards of lowly-paid workers are not dropped to what one could quite easily call subsistence levels.

The municipal bus industry is a particularly complicated industry, in that take-home pay is made up of three distinct items. There is the basic pay which has, over the years, been defined by the N.J.I.C. for the industry. Secondly, there are the rostered payments which are made to the men who have to turn out in the early hours of a cold winter morning or work until very late at night, and who often have to deal with louts and other unsavoury characters. Thirdly, there is the voluntary overtime which many men engage upon.

In Report No. 50 of the Prices and Incomes Board, which appeared last December, the details of the financial structure are set out in some detail. It must be[...] borne in mind that the rates vary between summer and winter, reflecting the voluntary overtime demand in the winter compared to the summer months. In July, 1967 the basic weekly rate for municipal busman was only £12 17s. per week. This low level is confirmed in the more recent Prices and Incomes Board Report. With the rostered earnings for the extremely difficult and unpleasant duties which are of necessity imposed upon the busmen, the average earnings, including the basic weekly rate, rose to £15 14s.

It is necessary to stress that this addition to the basic rate arises out of the difficulties and the discomforts which are involved in the industry. For example, if a man working in a factory a normal eight-hour day were expected to get up at three or four o'clock in the morning and to go home late at night in company with unsavoury people, he would probably expect an addition to his basic rate. Therefore, the addition of rostered payments does not require any qualification of my suggestion that the low rate of basic payment was lamentable.

On top of that, there are payments for voluntary overtime. According to the figures given for July, 1967 they lead to the average take-home pay of the municipal busman rising to £22 6s. 5d. a week. So in terms of take-home pay, it is true that the municipal busman is not one of the low-paid. Therefore, it has been argued—and the argument is repeated in the P.I.B. Report No. 63—that the municipal busmen should not qualify under the third criterion for increases in pay which I earlier read out.

The implications of that argument are very disturbing. On page 14 of the P.I.B. Report No. 50 there is a table comparing the rates of pay of the municipal busmen with workers in various other industries, including those which, it is argued, are comparable with the municipal bus undertakings. The average number of hours worked by municipal busmen in order to get an average weekly earning of £20 18s. 11d. was 52.6, according to Table 3, and the average hourly earnings were 8s. The semi-skilled engineering time workers, who the Report suggests are broadly comparable, had somewhat lower weekly earnings of £19 9s. 11d. But this sum was earned as a result of only 45.3 hours' work on average a week. The average hourly earnings were 8s. 7d.

As the Report goes on to say, in a blinding flash of insight: It will be seen that the weekly earnings of busmen compare reasonably with those of other workers, while their hourly earnings are considerably lower,… The whole point is that because their hourly earnings are so much lower, because their basic rate for working a 40-hour week plus, is so low, they must go to work during hours which other men can devote to leisure activity.

It was in the light of those considerations that I was rather disturbed about the arguments used last December to justify the standstill on the negotiated increase of £1 a week for the busmen. It seemed to me, for example, that if the overtime argument is to be excluded and we are simply to talk in terms of take-home pay, as distinct from basic rates, we should reach the following reductio ad absurdum argument. Let us assume that the municipal busmen had decided to cease to work any overtime, including rostered overtime, but only to work those hours for which they were to receive the basic rate. The consequences for many municipal bus undertakings would have been very serious.

The busmen would then have qualified under the criterion on low pay, and I suggest that they would have been awarded the £1 increase. Let us assume that they got it and the following week decided to remove the restrictions on rostered and voluntary overtime and had gone back to working as much overtime as they could. In such a situation, unless the Minister told them that they must not work overtime on the grounds that that was making them too affluent, the men would have got completely around the argument used against them by taking this sort of action. It is that sort of inconsistency and confusion that seems to me to be recognised with varying degrees of understanding at the grass roots level and to be causing so much sense of frustration.

The P.I.B. deliberated again and in its wisdom produced the third detailed Report, Report No. 63, on busmen's pay, which contained some very interesting figures. One is that there is an overall labour turnover rate of 47 per cent. a year in our economy as a whole. The implications of that for prices and incomes policy are most interesting. Leaving that aside for a moment, we see spelled out clearly in the Report that turnover is very high in the industry. It is clear that shortages from establishment have been considerable, particularly in some of the larger establishments, for at least two years, and show no signs of being removed in the near future, certainly not in the light Of present Government intervention.

The Report adds that turnover rate is particularly severe among the newer recruits in their first months of service. The implication seems to be that that in some way diminishes the argument about the high turnover rate, because if the older men are happy to stay on it is not too bad. In fact, the argument is the other way; it is that the industry cannot hold new recruits. New men come in, presumably wanting to do the job, but find that it does not satisfy them and leave in a few months. That is a serious situation.

The Report says that some establishments are not necessarily a true reflection of need. That is true, but I suspect that many establishments in the economy, those of civil servants and elsewhere, are no true reflection of need either. The P.I.B. seems to qualify the impact of this by going on to say …in some areas it has been managerial policy not to attempt to recruit up to full strength, in order to maintain earnings at acceptable levels. That is only another way of saying that the basic earnings are so low that it has been necessary to keep down the staff so that those who do work shall have the opportunity of working for nearly 53 hours a week in order to receive a respectable take-home pay. The more one looks at that sort of argument, the more specious it seems. In—

Mr. John Page

Has the hon. Gentleman noticed that throughout his speech, which is very interesting and which I am trying to follow very carefully, and which has an important message for the new Ministry set up today, not a single Minister of the four in that Department is here? Would he care to ask one of the Government Whips to send for one of the Ministers so that he can listen and take note of what he is saying?

Mr. Brooks

I have sufficient confidence in my words of wisdom to be sure that somewhere, sometime, they may be read by those who matter in these things. If the hon. Gentleman does not mind, I shall pursue my speech as expeditiously as possible.

In paragraph 41 of Report No. 63, the Board says: We found that lower hours of work are governed largely by personal preference or by the health or domestic circumstances of individuals. That is not a particularly exceptional finding. What it really says is that where the health of the busman is such that he cannot work these very difficult hours he will find himself hurt as a result of the low basic rate.

There is often a great deal of misunderstanding about the way in which the working class people get take-home pay. All too often managerial and salaried workers have the impression that as one goes through life one will steadily improve one's position—the increments flow in steadily as a result of the original term of contract. But that does not happen with many people. As they grow older they find that their opportunities become fewer. Their health begins to suffer and they have not the energy and resilience they had when they were young. The navvy of 20 or 30, full of strength and vigour, is often a man to be envied, but only so long as he has his strength and youth. As the years go by he finds himself unskilled and all too often unwanted. He has no value on the labour market when he reaches his fifties and sixties.

The argument that because men can, if they have the health, work long hours of overtime and have respectable take-home pay misses out the point that as they get older they do not have that ability. The Board says that the domestic circumstances of individuals affect overtime. Of course, they do. If men want to stay at home with their wives and children they will not have the same opportunities to earn overtime.

That was what the battle was all about in the 19th century. The Chartists drew up demands to limit the hours of the working week. One of the tragedies since the Second World War is that the hours worked on average in industry have diminished hardly at all. We have had a spurious battle for a 40-hour week, but all too often overtime has been the prerequisite of having a respectable take-home pay. The implications of this for the efficiency of industry have been spelled out recently in a detailed paper submitted to the Royal Commission on Trade Unions and Employers' Associations.

The Report goes on to say: But in general we conclude those who earn least usually do so either because their commitments are low, or because they value leisure highly, or because there is more than one wage-earner in the family. It may be argued that those who earn relatively less are doing so as a result of a deliberate decision on their part; the argument which I suppose the P.I.B. is putting forward is that if everybody has a right to work a 53-hour week "What is wrong with this?"

I say there is a lot wrong with this. What is wrong with it is that the basic rate has been kept down for years as a result of this dependence on overtime. Overtime is the curse of industry today. It is becoming a means whereby, all too often, people spread out their work quite unnecessarily so that they can go on to time-and-a-half or double pay. We have employers offering overtime as a "perk" so that they can attract labour to their firm. This is what is involved in wage inflation.

Instead of the Government being so obsessed about whether or not the busmen should have their pound or not, they would do far better to look into the structure of wages, not only in the bus industry but in industry as a whole. I would like to see this sort of approach: the consideration of the fundamental factors such as overtime, which shape incomes in this country. I want to see more emphasis of this sort.

Finally, I would return to this point about the turnover of 47 per cent. a year in industry. I was very surprised by this figure, which I had not realised was nearly so high. This means that almost half the workers in Britain are changing their job every year. Do we know, when they transfer, if they are moving into jobs where the same rates are offered? Are we sure that they are not repeatedly moving across the country in pursuit of higher wages offered by industrialists who are hungry for labour and want to hoard it? The migration in the United States is now so enormous that one can describe America as a nation of urban nomads. They are always on the move, and we are moving the same way.

I suspect that the prices and incomes policy involves an image of a stable society in which all men stay in their jobs all their working lives and each year their wages go up by 1, or 2, per cent., going on ad infinitum. If this is the prospect offered to men in industry they will try to get out and go somewhere else; there will be more instability.

Those of us who want the Government to succeed in this extremely difficult and necessary task of relating productivity to incomes—and I have no doubt about how necessary this is—must seek from the Government a better indication in these very critical months ahead—this "long hot summer" to which we have to look forward in labour relations—of an understanding of what makes ordinary people "tick". This is not just appealing in a demogogic way to people outside. If the Government lose the trust of people who put them into power, there will be no joy for their Government at the next election; in the long run, there will be no joy for democracy, because of a vast disillusion with the competence of economists, politicians—the lot.

6.25 p.m.

Sir Edward Brown (Bath)

I intervene because I felt there was a necessity to give a farewell to the Ministry of Labour and perhaps give a welcome to the new Secretary of State for Employment and Productivity.

It has been said by one or two Members, "Why is there a need to change the name?" I recall, as chairman of the Industrial Relations Committee, advising the Conservative Party in 1957, I made a similar recommendation to my own party, that we should change the name to that which has been given to the right hon. Lady under this Order. Whilst I do not accuse her of cribbing, therefore, I believe that we have left our clothes again and have soon had them stolen.

I am not so much concerned with the academics of the argument here; I am more concerned with a number of declarations which have been made in the House by the right hon. Lady. They affect every man, woman and child in the country. I refer to the words used by the right hon. Lady about intervention, which have rather shocked me.

Intervention means interfering. While it is necessary that the Government should have powers to interfere when there are bad industrial relations between employers and employees, I fancy the term which was used here today means that the right hon. Lady intends to interfere between the worker and his pay. This is a declaration of war which, in the present circumstances of the quarrel going on between unions and the Government, will auger very badly for human industrial relations, for the next few months at least.

We have already seen that the whole of the union front at the moment is anti-Government; one can only say that it is the Government's own fault. Looking at it another way round, merely by changing the name of the Ministry of Labour to that of Employment and Productivity does not necessarily mean that we shall wave a magic wand and cure the problem. Even if we have a Ministry of Employment which is positive we have still half a million unemployed. Where is their productivity? Are we not going to put them into useful occupations in order to increase the productivity and wealth of the country? Our rising standard of living can only come from this.

If we now say that we cannot do anything about it at the moment, let us consider the industries in which we are bringing in automation and computer aids. This will put an enormous number of people on the redundancy and the unemployment market. The term "Ministry of Employment", at the present stage, seems to be an unwarranted one from that point of view.

From now on, every union, meeting in annual convention, will be considering the declaration made in the House today. It is a sad day for all the workers that we have heard from the Government Front Bench, that there is to be direct interference. The right hon. Lady also made it quite clear she would interfere in prices. Will interfere after gas, electricity and postage and telephone prices have been allowed to rise? These are all Government services whose costs have been allowed to increase without reference. Everything else, it seems, will now be made the subject of reference.

What is to be the test of productivity? What is to be the test by which the worker will receive his productivity increase? Must it be referred by the company to the Prices and Incomes Board, and will it have to wait in the queue for months, before knowing if the productivity and the increase that goes with it have been approved?

The Minister has not given a clear exposition of this matter. All she has said is that where productivity has been proven there shall be an increase. When we come to debate the new Prices and Incomes Bill, the House must press for detailed knowledge on this subject.

Meantime, from this House goes a message of distress to all the workers, of whom I was one before I became a Member of Parliament. I am proud to have been associated with them, but now the trade union movement is reflecting on its so-called friends in the Labour Government. The message going out from the House is firm and clear. It is that there will be rigid control over incomes, but maybe the Government will do something about prices. I can only conclude that instead of getting a welcome where-ever she goes, the right hon. Lady will be received with extremely bad taste, and the speech of the hon. Member for Liverpool, Walton (Mr. Heffer) should serve as a text for the Government for the period ahead of them.

6.30 p.m.

Mr. Brian Parkyn (Bedford)

I listened with interest to the speech of the hon. Member for Bath (Sir E. Brown). I should like to address myself to the speech of my right hon. Friend the Minister, who introduced the Order in such a forthright and positive way. We know that if my right hon. Friend gets her teeth into something she gets it moving because she is dynamic. That is why we believe that she is in the right appointment.

Speaking about redundancy, my right hon. Friend said that those who were made redundant should be entitled to every possible help. One reason why I feel moved to speak briefly today is that tomorrow in my constituency a majority of the 500 or 600 workers of Loewy Robertson will be put out of work by the take-over by Davy Ashmore of the Tube Investments plant. Fortunately, in Bedford, we have an unemployment rate which is below the average for the country—it is only 1.4 per cent.—and many of them will be absorbed in other local industries. It is fortunate too, that another local company, Brookhurst Igranic, has recently decided to move many of its operations from Chester to Bedford. This will provide more opportunities for employment.

In spite of that, it seems to me that this new Ministry and the Secretary of State responsible for it will need to ensure, if we are to have the movement of labour which I believe is essential, and we are to build up a rationalised kind of industrial structure, that we get more than mere Government suggestions. There must be some kind of Government directive that companies must accept as a first responsibility a responsibility to their workers who have helped to build up the companies, and helped to make the profits.

I accept that companies must come and go. I accept that some will rise, and some will fall. This is an inevitable part of life. I therefore do not argue against redundancy. It, too, is inevitable, but companies should be made to accept the responsibility that when they find they have to redeploy their workers, or make them unemployed, they must ensure that the workers are redeployed before any further action is taken by the companies.

I know that there are practical difficulties involved in redeployment. We found this recently in Bedford. There are the problems of retraining and removal expenses. Many workers believed that they would get removal expenses from the employment exchange, only to find that the workers who were most likely to want jobs in other parts of the country were the higher-paid workers who were not able to get removal expenses, and that those who could claim such expenses were generally those who were able to get alternative employment locally, and therefore did not need them.

If there are redundancies, workers are faced with the old problems of housing, schools, and pensions. All these are part of the necessary infrastructure which we need if we are to have the easy facility for firms to rise and fall, and for labour to move about easily without being penalised, as so often happens. People often find themselves faced with the possibility of becoming unemployed. I recognise that with an unemployment rate of only 1.4 per cent. the employment machinery of the employment exchange in my constituency is perhaps rather rusty to cope with some of the problems.

My right hon. Friend spoke about industrial training, and the industrial training boards. She spoke, too, about training managements, and I believe that she was right to emphasise that. One reason why we in this country have a strong dichotomy between workers and management—and it is in this respect that I do not agree with my hon. Friend the Member for Liverpool, Walton (Mr. Heffer)—is that there is still the idea that management is not a skill, but something with which one is born, or which one acquires, or which one can take for granted provided that one has been to the right kind of school, or has the right kind of father, because one is a born leader.

It is only during the last 10 to 15 years that firms have begun to recognise what has been recognised in the United States for a long time, namely, that management skills have to be learned. If someone wants to operate a lathe, or do welding, or do a management job, he has to learn how to do it. We need to place much more emphasis on training in management skills. This ought to be shouted from the house-tops, not only to the firms which are small, and perhaps inefficient, and in which one can see the need for this skill, but also to the larger organisations and companies in which one still finds people holding senior managerial positions without the ability, skill, or qualifications to carry out the difficult job which it is necessary for them to do.

Sir E. Boyle

Would not the hon. Gentleman agree that that applies not only to the management of existing plant and staff, but to the management of research and development in larger firms as well?

Mr. Parkyn

I agree with the right hon. Gentleman. Much of the research and development resources of the country are squandered because of ineffective management of research and development.

The problem often arises because a man who has been trained on the bench is made the manager of the laboratory. It often arises in chemical companies, where there is no possibility of advancement for a chemist or physicist who works on the bench. Having worked with his hands, when he gets to his mid-thirties, the only possibility for advancement is to move over to administration and management. He has no managerial experience, although he may well be a skilled chemist, engineer, or physicist. I know that Unilever, at Colworth, has a parallel line of advancement between the managerial staff and the scientific staff on the bench so that no one has to move from one side to the other.

If one accepts the idea that we need more industrial training in management, and that managers are skilled workers just like other types of skilled workers, one needs to consider a little carefully the idea of participation in management. I have been involved in experiments in industrial democracy for more than 20 years. Participation in management is extremely important in order to create a sense of participation and involvement in what is being done, but I believe that this understanding of industrial democracy is a mistake because in the final analysis there is no reason why a person who is skilled in operating a lathe, or in welding, should participate in management, any more than someone skilled in management should participate in operating a lathe, unless one or other of these skills involves him in having other authority or responsibility within the organisation which would be precluded without this participation.

Therefore, participation in management is important only in so far as it creates a sense of participation in management. But, as an answer to the problem of industrial democracy, a company should be responsible to the workers, owners and consumers, the three bodies to which every company should be responsible and not merely to its shareholders. This is perhaps another subject, but I wish to refer to it in order to elaborate on what my right hon. Friend said about industrial training. The important thing about a company is its accountability. It is more important that it should be accountable to the workers rather than that the workers should participate in management.

Many hon. Members have devoted much of their speeches to the question of prices and incomes. While I agree with my hon. Friends below the Gangway on many issues, I have to part company with them on prices and incomes. We must work towards the complete elimination of the market system. We have already done that very successfully in agriculture, which reached a very low ebb between the wars. For a variety of reasons outside our control—the battle of the Atlantic and the need for food—the agriculture industry was rigged. It is no longer a capitalist or market economy in the ordinary sense of the word, nor is it Socialist. It is something quite different.

The agricultural industry is rigged extremely successfully and, as a result, we have perhaps the most efficient agriculture industry in the world. That has been done by controlling and planning it extremely effectively. Year by year, the Ministry of Agriculture, with the help of the National Farmers' Union, has been able to estimate more and more carefully the demand for products.

Something of that kind is necessary in industry. Therefore, I believe in working towards a planned economy which gets away from the market system, and in which prices and incomes are planned. I realise that there are enormous problems in this, but those of my hon. Friends who feel that this will ultimately go against the interests of organised labour are arguing for the maintenance of a laissez faire economy. The laissez faire economy, from the time of Adam Smith, helped to build up this country and many others, but it has reached its point of no return. We must get away from it and develop something new. My hon. Friends who feel as strongly as I do will, in spite of all our misgivings about the way in which prices and incomes may be controlled, support any effort to get away from the market system in prices and incomes.

6.43 p.m.

Mr. Tim Fortescue (Liverpool, Garston)

I must sincerely apologise to the House for having only just come in to the debate. I had other engagements and I could not be present earlier. I am particularly sorry that I did not hear the speech of the hon. Member for Liverpool, Walton (Mr. Heffer), about which I have been told. I believe that he made a case based almost entirely on the present bus situation in Liverpool. I wish briefly to speak on this matter.

Before doing that, however, I should like to advert to a remark made by the hon. Member for Bedford (Mr. Brian Parkyn). He said, to my astonishment, that the Minister of Agriculture and the N.F.U. were getting more and more suc- cessful in planning demand. I do not know whether he has considered the milk situation in this country and on the Continent of Europe. We have had the biggest flood of milk ever in this country. Europe has had its biggest flood of milk ever. It is impossible to see how it will all be economically marketed. The supply of milk has been planned since, perhaps, 1931 and certainly since 1933, and we are still producing much more than we want. I do not think that the hon. Gentleman's remark holds water, if that is the right phrase.

Mr. Parkyn

I completely accept what the hon. Gentleman says. One can say the same thing about eggs over the last two years. There will always be difficulties of this kind. But, speaking broadly, which is what I was doing, the planning is more effective than it was 20 years ago.

Mr. Fortescue

I am not sure. However, that is not the matter which I wish to pursue.

About five weeks ago, I asked the then Minister of Labour, whom many hundreds of thousands of people are sorry is still not in that office, whether the then situation concerning the bus strike in Liverpool was not complete proof that the prices and incomes policy of the Government was a failure. In his good-humoured way, the right hon. Gentleman said, "If the hon. Member believes that, he is barking up the wrong tree".

It is now five weeks later. The bus strike has been going on for eight weeks. There is no sign of its being solved. The tree up which I was barking is still very much present, and it is beginning to look like the right tree instead of the wrong tree. The position in Liverpool is and has been for weeks entirely inflexible. Nobody has been able to do anything about it, and no one looks like doing anything about it until the Prices and Incomes Board reports. The employers and employees are, or could be, in agreement. They were in agreement at one time on the payment of a 23s. a week increase. This was referred to the Government who referred it to the Board. The Board has taken many weeks to consider it, and it will probably take several weeks more.

Meantime, no buses are running in Liverpool. Everyone is walking, and everyone is fed up, with the Government, the Board, local Members of Parliament, the Liverpool City Council, Uncle Tom Cobley and all. There is great resentment, because the legislators of this country have got themselves into a position where there are not any buses running, although the drivers want to drive them and people want to travel on them. But that cannot be done under the Government's policy.

One of these days—we were told before 21st May—the Prices and Incomes Board will report and there is—and here I wish to choose my words carefully—at least the possibility that the Board will say that the claim should not be met. Then who does what to break the deadlock? Is it conceivable that there will still be no flexibility, that Liverpool will still have no buses and that the Government will still dig in their toes and say that nothing can be done? This is not only possible, but probable.

Therefore, as a result of the Government's policy, we have the almost unthinkable situation that it is impossible to stop a strike which is not a quarrel between employers and employees. There is no way of solving the problem within the Government's policy. If that is the prices and incomes policy with which this country is to be landed—and we have had only one dramatic example of it so far—where will it end? What is the future of any Ministry of Labour, or whatever the Department is now called, which attacks labour problems in this way and leaves the people who send us here to walk, grumble and resent?

Mr. Heffer

I do not disagree with a great deal of what the hon. Gentleman says because we have been arguing strongly on the same side for a settlement. But I think that he would agree that the responsibility for this dispute does not lie entirely on the shoulders of the Government by any means. Greater efforts could have been made by the Liverpool transport committee to solve the problem. An Order has not been made and the increase could have been paid. At that stage, if the Government had stepped in, they could have accepted sole responsibility. I think that the hon. Gentleman would agree with that.

Mr. Fortescue

I do not want to go into the rights and wrongs of the doings of the Liverpool transport committee, but there was a stage when it was in agreement with what the men were asking. The committee wanted to pay and would have done so if it had been a free agent at that time.

I am sorry, but I do not remember the second point made by the hon. Member.

Mr. Heffer

I referred to the fact that there is no Order, and that the committee could have paid.

Mr. Fortescue

Exactly. It could have, but it has not. Because of the way in which this policy has been implemented by the Government there has been no Order, and so there is a strike which seems to be going on indefinitely. There is no sign of any method being found to solve it.

Mr. John Page

There is a way in which this deadlock could be resolved—if there were agreements between the employers and the employees about the increase. It can be agreed that the money shall be paid, but retained as a nest egg to be allowed in 12 months' time, so that the employees could then receive the benefits of the rise that was agreed now. I am being quite serious. This method should be tested in this case.

Mr. Fortescue

I know that that can be done, but I was referring to the possibilities of settling the strike and the method suggested by my hon. Friend would certainly not do that.

6.51 p.m.

Mr. Michael Foot (Ebbw Vale)

I do not wish to delay the House for very long. I agree with what was said by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). Those who have participated in the debate will agree that it is an extremely important one. It is right that we should examine the proposition put before the House. I want to make a few suggestions and comments upon the Government's proposal.

First, I apologise to my right hon. Friend the Minister for not having been present at the beginning of the debate. If I say anything which conflicts with what she said before I arrived I apologise afresh. Nothing would have given me greater pleasure than to give an unqualified welcome to the appointment of my right hon. Friend to her new post. I believe that she has the great qualities of intelligence, ability and courage, and I would like to see her succeed in her task. She has been a most successful Minister in her other posts, and if anybody can succeed in this job she can.

Having said that, however, I must go on to say that I have grave doubts about the course on which the Government are embarked in respect of the policy they are pursuing in this case. I still say that I hope that my right hon. Friend will succeed but I believe that she will have the chance of success only if certain fundamental factors about the situation are accepted by herself and the Government. I say that in relation, first, to the prices and incomes policy. I do not intend to reverse anything said by my hon. Friend the Member for Walton; I agree with everything he said on this subject.

The Government seem to be getting into a dilemma. One reason why they find such opposition from the trade union movement to what they propose is that they appear to be implementing a policy that would put trade union leaders and secretaries out of business. If the Government's prices and incomes policy became permanent that would be the case. If the Government said that this policy was to be a permanent feature of our economic system many trade union secretaries, presidents and other officials would have to spend most of their time trying to persuade their members why they should not make wage claims.

That would be an impossible position for any trade union secretary. It would mean that he was acting in contradiction to his office. He would have been elected to the job in order to sustain and improve the conditions of his members, and if this policy became a permanent one at least a section of the trade union movement would be in permanent conflict with the Government. It may be said that that dilemma is unavoidable in our economic system. That may be so, but if we try to make the policy a permanent one that dilemma will undoubtedly be created.

If, however, the Government say, "We do not intend to make this policy permanent; it is only a temporary arrangement", they have a much stronger argument. If they say, "We must have this policy for a period of six months"—or some other period—"because we want to have a chance of escaping from the present economic impasse. We ask for a consideration of our position in view of that fact", that is a different policy, which has much more to commend it.

If that were the policy of the Government they would have a much better chance of succeeding. It would still be based entirely on the voluntary system. I believe that it is still not too late, if the Government made the decision now, following the appointment of my right hon. Friend. Some have said that my right hon. Friend was not responsible for drafting the White Paper. We do not know who, precisely, was responsible but my right hon. Friend was a member of the Cabinet and must accept collective responsibility. If it were possible for the Cabinet now to say, "We still prefer to carry on with the voluntary system; we are not advocating a permanent policy and do not propose to go ahead with that part of the legislation", I believe that they would even now evoke a considerable response from the trade union movement. They would certainly receive a better response than their present proposals have had.

This is so particularly because once the Government decide to go ahead with their prices and incomes policy in roughly the form they have indicated they will, in a sense, lose control over what situation will blow up into a crisis. The Government will not be able to foretell in respect of which clash with which trade union at which time the real trouble will arise. The Government said that they were blown off course by the seamen's strike. They did not foresee the clash at that time. The Government, in a sense, surrender control over the situation. Once they lay down precisely that they are going to proceed step by step eventually to some form of sanctions they will be resisted by considerable part of the trade union movement.

The Government have not resolved the dilemmas of this situation and, great as is my admiration for the skill of my right hon. Friend, I believe that these dilemmas are too great for the Government to resolve under a permanent system. They would be much better advised, if they feel it essential to hold down wages to the level they deem advisable, to proceed on the basis of voluntary appeal, especially because the system is always bound to work unfairly. The wages of the wage earners are controlled but the salaries of vast numbers of other people are not. The system is bound to be permanently unfair.

That being so, the Government should make their appeal not on the basis of saying, "We think that this is a fair policy"—they cannot persuade the people of that—but on the basis of saying, "This is essential in order to escape from the immediate economic impasse". I agree that it would be difficult for the Government to make such an appeal for a second time, having tried it previously. But that is all the more reason why they should not try to enforce their prices and incomes policy by legislative sanction.

I fear that if my right hon. Friend, with the backing of the Government, proceeds to use legislative sanctions to carry through this policy the Government will be moving towards a headlong clash with the trade union movement. This is an extremely serious situation. Relations between the Government and the trade unions are worse than I have ever known them to be. I would like to see my right hon. Friend, having just taken up her new office, take every chance of repairing those relations. My suggestion would be one step—the withdrawal of the Government's proposal on prices and incomes. It would not mean the withdrawal of the whole policy.

I think that my right hon. Friend could go ahead with that part of the policy dealing with prices. There is nothing wrong in saying that one cannot equate intervention about wages with intervention about prices. One is concerned with commodities and the other with people's livelihoods. I think that we could have a prices policy, which is a much less conflicting thing to do in some respects, particularly in view of the way the Government operated it before they had to intervene in wages.

The question of incomes and how the Government is to intervene is a question to be decided much more by fiscal methods. It can be done much more fairly by fiscal methods than by trying to intervene in collective bargaining throughout the country.

There is another factor which is even more important for the success of my right hon. Friend in her office than the question of prices and incomes, important though that is. This other factor is the main reason for my intervention in the debate. My right hon. Friend referred to this matter in the latter part of her remarks. I repeat, I am sorry that I was not here at the beginning of her speech.

Overwhelmingly, the most important factor which will govern the success of her operations is the level of employment throughout the country. She is taking the title of Secretary of State for Employment. I am not quite sure that it is fair on her, because the level of employment is decided much more by the policies of the Treasury than by the Ministry of Labour. But she is taking the title of Secretary of State for Employment. Therefore, the question of the level of employment enters directly into the debate.

This is far and away the most important subject at the present time. It is just as important, if not more so in one sense, than the race problems that we have been debating. It is so intimately connected with the race problems that it cannot be disentangled. If there were no fear of unemployment abroad in this country at the present time we would have much less emotion about race problems. It is the fear of unemployment which is responsible for bringing the poisonous explosive factor into the whole situation. The fear of unemployment drives people to say things about their fellow citizens which they would not say in other circumstances. The fear of unemployment is the most dangerous thing at the presnt time, and that fear arises from substantial facts, as I am sure my right hon. Friend will agree.

The deflationary policy has produced longer periods of unemployment than we have known for a long time past. Over the past few weeks many of us have been seeking, by every possible means, to get from the Government a clear statement of their employment policy. A question that we can certainly put to a new Secretary of State of Employment is: what is their employment policy? I would never have expected the situation to arise when a Labour Government would not be eager to answer that question. But there has been no answer. We raised it in the debate last week on the Finance Bill.

Mrs. Castle

My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said that he was not here for the whole of my speech, so perhaps he missed this bit. I did not elaborate on it, because there are other occasions when one can. My answer to that question was specific. I said that the only hope for this country was to get labour unit costs down. That does not necessarily mean get wages down, but wages in relation to costs of production. I made it clear that deflation holds up investment and holds up the whole movement towards productivity for the reason my hon. Friend has given. It is simply because we are driven relentlessly back to the only alternative between our inflationary catastrophes, on the one hand, and the deflationary no answer, on the other. We have to come back to this fact: how do we compete on an expanding basis? It is only by getting our labour costs per unit of production stable that we can get employment and a good standard of living.

Mr. Foot

I appreciate my right hon. Friend's reply, but it is not the full answer to what I am asking. Time and again, Governments—particularly Labour Governments—have said that their financial policy is very largely designed to create or maintain or sustain a particular level of employment or a low level of unemployment. That has been one of the main objectives of policy. Indeed, looking back to 1945, in pretty well every Budget the Chancellor of the Exchequer has indicated the level of employment or unemployment which he thinks will result from the financial measures he has taken. It is one of the primary tests of his policy, if that is not a conflict in semantics. This is where we have no answer from the Government, and I do not believe what my right hon. Friend has said answers the question.

We had a statement last autumn about employment policy, which presumably governed the policy of the previous Minister of Labour. That was the policy at one time stated by the present Governor of the Bank of England, who said that we should have a larger margin of unused resources than in years gone by. That was accepted by the previous Chancellor of the Exchequer, although it was partly repudiated by the Prime Minister. We would like to know whether that policy is repudiated. It should be repudiated by the Government now. If my right hon. Friend tries to operate that policy her dangers will be greatly increased.

Many people, apart from myself and the unemployed—and I will come to the figures of unemployed in a moment—are concerned. The country does not know the answer to the problem, and there is conflicting testimony about it. My right hon. Friend no doubt saw in The Times of Thursday, 25th April, 1968, the article written by Mr. Peter Jay, the economics editor, and a most reputable correspondent. He wrote: The real truth is that the devaluation strategy necessarily implies no significant fall and possibly a small rise in unemployment coupled with a temporary reduction in living standards. Leaving aside the question of living standards—which is important, but I am not arguing that—is Mr. Peter Jay right about the level of unemployment, because that conflicts with what was said by the Government after devaluation?

One reason why I was in favour of devaluation was because I wanted to see the possibility of this country closing the gap. I thought that was a contributory factor. A further reason why I strongly supported devaluation was because I believed it would enable the Government to decide the level of unemployment more than had been possible previously. Indeed, the Prime Minister, soon after the devaluation decision, stated to the country that in his belief it meant we would be able to bring down the level of unemployment more speedily than would otherwise have been the case. I welcomed that statement, but it appears that there has been a partial retraction of that policy in the scale of the deflation operated by the Chancellor of the Exchequer.

In our opinion, and in the opinion of Mr. Peter Jay and many other experts, the deflationary content of the Chancellor's Budget was designed to maintain a higher level of unemployment than for many years past. It is a very serious question, because all the other policies of the Government, all the attempts of my right hon. Friend to get productivity agreements, all the attempts to get agreement with the unions on other matters, and all the other policy agreements which she has still to get, whether she has a compulsory policy or not, depend on what people think will be the level of unemployment.

In the development areas, including my constituency, the position is very serious. Unemployment is the number one question at present. I hope that every day when my right hon. Friend enters her Ministry her first question is, "What is happening to the level of unemployment?" In the development areas, where we have 4 or 5 per cent. unemployment, or where it is perhaps creeping even higher, we know that we will not get the real relief which we deserve and require, despite all the Government's measures, until there is a general expansion of the economy.

The idea that one can solve the problems of the development areas in isolation from the rest of the economy is, of course, quite false. One can take many measures in the period of recession, as I give the Government credit for having done, to ensure that when expansion comes the development areas have a much more fruitful development than they might otherwise have. That is possible when we get the expansion, but when will we get it? How long will we wait? Will we have to wait 12 months or 18 months—which is it?—which seems to be the Chancellor's policy?

This is why some of us argue that the deflation in the Budget is too severe. Therefore, however much my right hon. Friend asks, as I hope she does, every day about the level of unemployment, the only answer she can receive is that it depends on the Chancellor's policy. That is what so many of us are arguing. I will not go into all the other arguments which are brought forward when we say, "Let us speed up the expansion and get the growth rate going much faster; let us get the 6 per cent. which the T.U.C. talks about." I know that there are many other complications which it would be out of order to discuss, such as how we deal with our international competitors and so on, but the rest of our argument hangs together.

If only my right hon. Friend could say that she would go full speed ahead, as I am sure she would like, to escape from the present high level of unemployment, the chances of co-operation with the unions on a voluntary prices and incomes policy would be enormously multiplied, as would those of altering the extremely apprehensive atmosphere—to put it no more strongly—which now prevails between the trade union movement and the Government.

I therefore urge the Government to consider that unemployment is the matter which they should be considering at every Cabinet and every meeting of whichever Committees deal with the problem. Every discussion should be on the lines, "How soon can we get the expansion? Are we content with the prophecy which is accepted by many outside the House that the unemployment level will be rising for quite a long time?"

Indeed, the figures for the last two months have not been explained by anyone. Perhaps the Government have not explained them because they are still trying to decide exactly what they mean. I do not mean that as a taunt, because they might take some time to interpret, but those figures are alarming and should make us very concerned, particularly in view of the previous prophecies about the falling level of unemployment.

Therefore, it appears—I put it no higher—that the present unemployment figures justify those of us who said that the Budget was much too deflationary rather than the Government's policies. When my hon. Friend takes this title of Secretary of State for Employment, it means that she is responsible to the country for the level of employment. This cannot be decided in the Ministry of Labour. The primary place where it is decided is the Treasury, in the calculation of economic policy. Some of us here and many more outside the House believe that the Government have made the wrong calculation in this respect.

That is why we urge them to reconsider the scale of deflation which they have applied and to consider the pace at which they are proposing to escape from this recession. But they should not underestimate the seriousness of the fear throughout the country about people's jobs. Fear is the worst enemy of this Government, the fear of people that they will not be able to solve their economic problems as we promised that they would. That fear contributes to all the other dangers which we have to face and in particular to the hideous scenes of the last few weeks of racial tension mounting and being seized upon and stirred up.

I agree with the Government's measures to try to deal with that particular problem, but they will not solve that or most of the others unless they can show the country, by deeds and not by words, that one of their main aims is to reduce the unemployment level as fast as possible all over the country so that, in particular, they can bring some relief to areas like mine, which have had heavy unemployment not merely for weeks but for months and years, which have hardly escaped from the last recession and where patience is wearing very thin indeed.

7.17 p.m.

Mr. John Page (Harrow, West)

I hope that the reputations of the hon. Members for Ebbw Vale (Mr. Michael Foot) and Liverpool, Walton (Mr. Heffer) will not suffer too much when I say that I agree with every word they said about incomes policy. The First Secretary has had a remarkable warning from all except one of those who have spoken from her own back benches, and she must heed it. Anyone like myself, in day-to-day touch with manufacturing industry, knows that what they have said about their fears is absolutely sound and that to ignore it would be foolhardy.

I was about to say that this is the first time that I have taken part in a debate when the right hon. Lady was in the Chamber. I will be gallant—although it is stretching gallantry rather far—and continue to offer her my congratulations, although she is no longer here, on the eminent position which she occupies and on taking over the Ministry of Labour, which has, I think, the civil servants with the best reputation for helplessness of any in the great Departments of Whitehall. The Minister whom she succeeds was greatly respected on both sides of the House and I only wish that his actions had been as robust as his words so often are.

This is the second time in a week that I have attended the "funeral service" of a great national organisation. The other was the occasion of the final parade of Fighter Command, when it was merged into Strike Command. I hope that what has been said by the hon. Members for Ebbw Vale and Walton does not mean that the amalgamation of the Ministry of Labour will also turn out to be a "strike command".

The right hon. Lady today said very little about her responsibility as First Secretary, a post which she holds with that of Secretary of State for Employment and Productivity. Nothing has been announced about her powers as First Secretary. I presume that she is not succeeding to the mantle of her predecessor who is now the Foreign Secretary and who had the over-lordship of home affairs. It would be interesting to know more about the position of the right hon. Lady as First Secretary. She has obviously been given that position as a co-ordinator and probably the first among equals. Is she the first among equals at the D.E.A., the Board of Trade and the Ministry of Technology? What responsibilities go with her position?

It would be churlish of me not to applaud the nomenclature in the title of the Ministry of Employment and Productivity, because in a pamphlet published in 1964, along with a number of my hon. Friends, including my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis), my hon. Friend the Member for Bath (Sir E. Brown) and my hon. Friend the Member for Somerset, North (Mr. Dean), I suggested this new name. I feel, however, that many supporters of the Labour Party in the country will regard the dropping of "Labour" from the Ministries as being a confirmation of an attitude which the party's followers have for so long suspected was part of the general policy. Is it wise that the present time should have been chosen to name the new Department the Ministry of Employment and Productivity? Considering the remarks of the hon. Member for Ebbw Vale, perhaps it might more directly have been named the "Ministry of Unemployment and Stagnation".

The right hon. Lady will take over many of the responsibilities previously held by the Secretary of State at the D.E.A. Could we have some enlightenment about that? That Department will have little to do, except to do the statistical donkey work for the Prime Minister. It has a Secretary of State, a Minister of State and a Parliamentary Secretary and very little apparent work to do. May not the Secretary of State find himself presiding over an as obsolescent Department as the Board of Trade which, I understand, has not met since 1850? One of our famous predecessors in the House, Sir Alan Herbert, once described the President of the Board of Trade's position as This high official all allow, Is grossly overpaid; There isn't any Board, and now— There isn't any Trade. Perhaps the same thought might be applied to the Secretary of State at the D.E.A.

The right hon. Lady outlined the spheres in which she wants to make changes with the new productivity division in the new Ministry. She explained that she wanted to place greater emphasis on training and retraining. I assure her that in both aims she will get the greatest support and co-operation from my hon. Friends. She said that she would turn her mind to redundancy payments and the whole problem of redundancy. I hope that she will take a cool look in perspective at the present position of redundancy payments under the Act.

In my view—and this is reflected by the comments of many thoughtful people outside—the present redundancy scheme is costly but is not producing the results which were intended when it was introduced. It appears that too often men can receive redundancy payments when they do not need them. I give the example of the television technologists and engineers who, as a result of a change of ownership of a company, find themselves unemployed for less than a day. There is a danger that redundancy payments can be received by individuals at a time when they do not need them.

The trouble is that, having received them, they then join another firm, from which they may be declared redundant a few months later, when the payments they received earlier are spent. In that case they will not be in a position to make use of such payments at the time when they really need them. There is a basic illogicality in the golden handshake principle of the Act and I would go a long way to supporting a new, adequate redundancy scheme under which those who Reed redundancy payments get them when they most need them.

Mr. James Dempsey (Coatbridge and Airdrie)

The hon. Gentleman is arguing an interesting theory. Would he apply exactly the same principle to a company director who receives a golden handshake?

Mr. Page

Such a director probably has a longer term of contract. [HON. MEMBERS: "Answer."] It is fair to say that the higher one climbs up the ladder the more difficult it becomes for one to obtain an equivalent occupation elsewhere. In any event, the shareholders of a company would be right to criticise something of this sort if they felt that the other directors had acted wrongly in granting a golden handshake.

Mr. R. F. H. Dobson (Bristol, North-East)

The hon. Gentleman was arguing something quite different. He said that redundancy payments should be given only in cases of need. That was the point of my hon. Friend's intervention, which I trust he will now answer.

Mr. Page

To give a facetious answer, where a golden handshake is given on the sacking of a member of a board the amount he receives in redundancy payments from Government sources should be deducted from the sum received from the company. To return to my theme.

The spotlight should be focussed on the redundancy payments situation in the docks. Perhaps I should restrict my remarks to the London Docks, because I would not wish to speak for docks elsewhere. We are building up to a situation of great difficulty in the London Docks—I will not go into the matter in detail now—and at this stage, when a new look is being given to this issue, serious consideration should be given to the deployment of dockers in the new Dock Labour Scheme which, I understand, is not working efficiently.

I come to the Minister's policies in connection with prices and incomes legislation which her Department will be producing at as yet an unknown date. I speak as a small businessman. Like most small businessmen, I am completely bewildered by the present state of the prices and incomes legislation. Those who are connected with large businesses and organisations can afford both the advice and the time of specialists to tell them where they stand on the whole question of prices and incomes, but only 5 per cent. of the directors, personnel managers, shop stewards, trade union leaders and trade union officials in the country can say what the present position is when referring to the individuals whose interests they have to consider.

Probably only one businessman in a hundred, except those connected with large organisations, understands the position. Those businessmen who read the speech of the Secretary of State for Economic Affairs during the Budget debate will be as enlightened as hon. Members who were in the House and listened to his explanation of the White Paper on the day he made the speech. I am very anxious to find what new machinery the right hon. Lady and the new Department will set up, what provision they are preparing for the present situation and for the Bill to be presented.

There is the prices side and the incomes side. Yesterday, the Secretary of State said that she would attack unreasonable and unnecessary price increases and take powers to reduce them. The criteria for the reduction of prices is given in paragraph 18 of the White Paper. I should have thought that for that criteria to be discussed in connection with any individual price or a group of prices months of investigation by cost accountants, industrial consultants and others would be needed to discover whether an increase was reasonable or not, always provided that there was a definition of what the right hon. Lady considered reasonable.

In paragraph 24, we have the remarkable statement in connection with prices The Government consider that in principle there should be no automatic maintenance of distributors' percentage margins when their prices are increased to take account of higher costs. If the right hon. Lady is to send her investigators to intervene in the traditional price margins and agents' margins which are applied in trade and industry, they will have a gigantic task. It will affect not only the largest organisations but every little tobacconist's and newspaper shop.

Surely the answer to this is competition. To insist that there is competition, to be very alert to the dangers of monopoly and to act swiftly against monopolies, would have my entire approval. If the right hon. Lady is to try to investigate all the price increases which have to take place, in many cases because of devaluation, transport charges, S.E.T. and other things, it will be a task not worth putting her hand to. She may say that she may look at one or two important items. That would appear sensible and it would be interesting to see what results she obtained.

On existing wages and incomes policy, I wonder whether there is a businessman who knows at present whether or not he is entitled to give an increase to any of his employees. As I understood the speech of the hon. Member for Walton, there is a nil norm, unless one can apply the criteria on page 8 of the White Paper. This means that the majority of individual work people could probably expect no increase in pay even though this is a time of rising prices.

Can the Minister tell us what is the present position of the small businessman confronted by a situation in which an important employee will leave him unless he is given a substantial increase of more than 3½ per cent.? When the old Prices and Incomes Board was discussed it was thought that the norm applied only to companies or groups of work people of more than 100, but the important speech in the Adjournment debate about the Glenthrothes draughtsmen on 25th March contains the statement by the Joint Parliamentary Secretary to the Ministry of Labour: Of course, my hon. Friend is right in saying that the agreement affected only 15 draughtsmen, but to my mind the numbers involved are irrelevant. If we are, as he agrees, to have a prices and incomes policy it cannot be a policy only for people who choose to co-operate in it and who choose not to oppose it in militant fashion. Equally, it cannot be a policy simply for large firms."—[OFFICIAL, REPORT, 25th March, 1968; Vol. 761, c. 1125.] This means that every negotiated wage agreement in a small company may apply to 10 or 15 people, or one or two people, and an increase above 3½ per cent. cannot be agreed unless the employer gets the agreement of the Ministry of Labour. Will the Minister say that if a shopkeeper wishes to give an extra £1 a week to one of his employees and that £1 would be well above the 3½ per cent., if the employee will not agree to accept either no increase or a 3½ per cent. increase; in order to comply strictly with the regulations the employer would have to ask permission of the Ministry to give the increase?

The position of employers must be stated clearly. I believe that I am right in the appreciation I have made, but I hope that I may be told I am wrong. If I am wrong, that makes the whole of the White Paper and the whole situation absolutely and completely ludicrous.

We have a working population of 23 million. According to the latest statistics, which are for 1961, 8 million are employed by companies employing more than 100 workers or with 100 employees at a particular plant. On those figures, there are 15 million workers employed in companies with fewer than 100 employees. Those are the best figures I can get from the Library, and I gather that they are the latest. I should be interested to hear from the Minister if I am wrong.

The right hon. Lady says that she will take further powers of control, and that she believes in a strong Government interventionist policy. She will control wages and salaries, ignoring the whole system of collective bargaining and, as far as I can see, abolishing any function for the trade unions which have supported the Labour Party for so many years. There is total control of dividends. If the right hon. Lady applies the criteria in the White Paper she will have it within her authority to say whether prices are fair, and if she considers them to be unfair, she can order them to be reduced. I believe that she would thus have in her hands complete control of profits as well.

With the control of wages, salaries and incomes, dividends, prices and profits, this country would be over the hump and into a Socialist State. There would be complete control of every industrial activity from Whitehall. If, as I expect, this policy fails, the right hon. Lady and the Government will be driven to further controls. They will have to introduce direction of labour and forms of rationing again. Those are the only alternatives left, unless they adopt the policies either of the majority of members of the Labour Party and those of their back benchers or the enlightened policies of the Conservative Party, which believes in Government withdrawal, not Government interference, greater incentives and greater competition.

Until either the right hon. Lady abandons her policy or the country abandons the right hon. Lady, I do not think that we shall get on our feet.

7.44 p.m.

Mr. William Small (Glasgow, Scotstoun)

The hon. Member for Harrow, West (Mr. John Page) has rather unfounded fears about an early stage of Socialist control.

I shall take for my starting point on the question of intervention the nation's international competitive position. I am referring not to the balance of payments deficit, but to the report of the Commission of the European Economic Community. After post-war years, during which the nation was principally under a Tory Government, the Commission reported on whether we as an industrial nation could bring our economy to a level at which we could be found acceptable to the Common Market, and we were found wanting.

The Government have intervened in the economy in many ways. I put it to my hon. Friends the Members for Ebbw Vale (Mr. Michael Foot) and Liverpool, Walton (Mr. Heffer) that we are the only nation in the world with free trade unions that have a political arm forming the Government. On coming to office in 1964 the Government's biggest job was to take care of yesterday's workers, for whom the previous Government could not sustain the level of the social wage. When the present Government came to power they increased pensions.

What happened in terms of intervention was Rochdale, Devlin, Geddes and Plowden, all of whom made recommendations for change. Together with that change there has been a fever of rationalisation, with big industrial mergers during the past four months, in order to sustain the nation's economic position.

But what is important to me, speaking as a trade unionist, is the failure of the so-called benefits of collective bargaining, which is sometimes referred to as if it were nice cosy meetings. During the past 20 years collective bargaining has never brought a reward for the lower-paid. We still have the lower-paid, we still have the differential, which the Government are trying to close by introducing certain guaranteed living standards.

Wage negotiations always used to be referred to industrial tribunals which made awards, but the previous Government dismissed them on the basis that they were inflationary. The National Board for Prices and Incomes is the first body set up in this country to make recommendations in terms of productivity agreements. Previously, there were Royal Commissions whose processes were slow, but today the Board makes recommendations within three or four months of a reference to it. The productivity agreements recommended by it are acceptable to employer and employee alike.

The Governmen thave also taken responsibility for training in industry. The most important factor in a modern society is trained and skilled manpower. Previously, the training was left to laissez-faire apprenticeship arrangements of individual firms, and their totality decided how much money would be spent on training manpower. The present Government intervened in the market place to make sure that the skilled labour is available.

That is the difference in the approach of the two parties. As an ex-negotiator in trade union affairs, I have searched the soul of the Tory Party and the employers. I wondered whether, if the party opposite would ever introduce guaranteed contracts of employment. I never found it in any of their manifestos or literature. The same is true of redundancy payments. Therefore, speaking on behalf of trade unions, I can say that the Government have given many examples of making things easier than they were hitherto. The difficulty is to find mental discipline in a free society.

Mr. John Page

I may have misunderstood the hon. Gentleman, but I think that he said that the last Government did not introduce contracts of employment. Surely his memory is at fault. I believe that they did introduce them. I remember having great fights with the present Minister of Power upstairs in Committee on the subject.

Mr. Small

I take the point. In fact, we strengthened the system. The philosophy was there when the present Government took office and we strengthened it.

The great problem is the ability of our society to compete with others and to that degree I support my right hon. Friend's views in terms of her becoming Secretary of State for Employment and Productivity. We have had the Minister of Labour operating in the market place and intervening and introducing the notion of industrial training through the Industrial Training Act and other measures. I hope that my right hon. Friend will be as successful in her new Department as she was as Minister of Transport.

7.52 p.m.

Mr. Peter Mills (Torrington)

It is not often that hon. Members on this side of the House agree so much with what is said by hon. Members opposite. Speaking for myself, I agree with most of what was said by the hon. Member for Ebbw Vale (Mr. Michael Foot) in a very good speech. His remarks about the fears of our folk were 100 per cent. accurate. The basic fact is that people fear unemployment, and that is the whole basis of the race relations problem we have been thinking about lately.

The hon. Member for Liverpool, Walton (Mr. Heffer) made a very fine and brave speech. His views on the trade union movement and its future are first class. I am sure that he is right. It would be well if the Ministers concerned listen carefully to what their hon. Friends are saying even if they do not listen to me and to my hon. Friends. Hon. Members opposite have put the problem clearly and I am grateful to have been in the House to hear their speeches.

In considering this Order, the first thing which springs to mind is whether it is a wise move at present. Does it really help with our problems? I do not think that it does. The hon. Member for Ebbw Vale pointed out the problem—the fear of unemployment. I do not think that this amalgamation and the new title will assist very much towards its solution. I hardly think that this is the time to increase the size of the Ministry—and it will be increased considerably. This is not the time either to confuse people with new names and long titles.

There was nothing wrong with the title "Ministry of Labour". We had grown to know and understand the Ministry and I pay tribute to it. It has been of great benefit over the years and without the wise help and guidance that it and its various Ministers have given, goodness knows what the situation would be today. In all dealings I have had with it, the Ministry has always been courteous and helpful. I believe that it will be missed by many people. Workers and managements knew what it was all about and what it stood for, and we should pay it a tribute tonight.

What are the advantages of this change? The right hon. Lady says that it is to take the initiative. That is a laudable aim. But my experience was that the Ministry of Labour took the initiative in many ways. It took the initiative in my constituency. It was not only helpful, but was the spearhead in seeking to bring new industry into the area and in encouraging both management and men. The right hon. Lady said that another advantage would be the work for productivity. But is it the case that the Ministry of Labour was never interested in productivity? I am sure that it was. I am not sure that the advantages she has suggested are all that valid.

Certainly there are disadvantages. There is the danger that the new Ministry may not be so impartial. People trusted the Ministry of Labour and its Ministers to be completely impartial. In many of the crises and strikes we have had, they have played a big part because people trusted them and felt that they were impartial and that would give a fair hearing. I hope that will not be lost in the change.

The right hon. Lady referred to the productivity division. That is to be welcomed, and if the old Ministry did not have such a section and was not really interested in that aspect it is right that it should be included in the new set-up. She also talked of "teams in the field". This was interesting, but she should be a little careful about it. People in the regions and in particular industries in them do not take too kindly to a team coming into their areas thinking that it knows all the answers. I hope that the right hon. Lady will take my advice and try and ensure that some of the local officials who have been working on these problems in the regions and in particular industries will not only be consulted but will be in the team themselves, because local knowledge is an important factor.

Again, it is right that the right hon. Lady should remember that large numbers of workers and business people are in a position where their productivity is difficult to increase. Agriculture, for instance, has one of the best productivity records. A farm worker does all sorts of different jobs and it is difficult to say to him, "You must increase your productivity if you want an increase in your wages". The Minister would do well to remember that not everyone can increase productivity, but should still, with the rise in cost of living and the amount of work they are doing, have a wage increase.

The late Ministry of Labour was set up for a variety of reasons. It had many duties and responsibilities and I trust that these will continue without interference. The training of workers, the finding of employment, the encouragement, in which it has been so successful, of young people, and the interest that local employment officers have in young people, must all continue. In the remoter areas like mine, where the Ministry has taken a very real part in advertising jobs further afield, again this work must continue.

In this great new drive for productivity the established work of the Ministry must continue. All that is needed is for the right hon. Lady to leave the Ministry as it is, to ask it to concentrate a little more on productivity at its local branches—in other words, to emphasise the need for productivity and to seek to encourage payment by results in all the agreements that it can make. I know that this is not always possible, but it should encourage it.

Where I disagree very strongly with the Minister is that I believe that the very words "control" and "intervention" stifle increased productivity. I do not like the words, and I suppose, to be honest, that that is the reason. When one starts to talk to men and management about compulsory control and intervention, this in itself will stifle any increase in productivity and the desire to work harder.

This is not the way to go about it. Success will come by incentives, by reduced taxation, allowing the money to remain in the pockets of the worker, so that he is encouraged to work harder. The Minister will fail if she seeks to bring in more and more control and intervention. She speaks of the need for training boards. In the industry in which I am interested, agriculture, we have had a very lengthy debate about this. Any attempt at enforcement of the establishment of the training board in that industry, without the co-operation of the farming community, is bound to fail. All training boards will fail unless there is real co-operation between men and management and the new Ministry.

I am interested in Government retraining because in my area we seek to retrain a large number of the unemployed in the new industries, brought into the development area, under both Governments. There are very real dangers here because nothing is more depressing for a man who has perhaps come out of agriculture or some service industry, to be retrained at great expense only to find that there is no job for him, or to have a job for two or three weeks and then be thrown out of work.

I have a letter here from a man, admittedly not in my constituency, which illustrates the point. He says: Please could you assure me that this country is not going mad? By this I mean that I have just finished a Government retraining course as a motor mechanic and now, two weeks after starting work, I have, along with two others, just been made redundant because of the rise in S.E.T. Whether this obnoxious tax is really necessary is past my capability of reasoning but I have been informed by the Labour Exchange manager that this course that I was on cost the taxpayer £1,100, as well as the unemployment benefit I was receiving. Here is a perfect example of what I am trying to say about these retraining courses. It is perfectly ridiculous that Government measures should destroy these training schemes. These problems must be looked at carefully, because nothing is more demoralising for a man to be retrained only to find that, because of S.E.T. or some other reason, he is made redundant.

If this Ministry is to work it will need great tact on the part of the Minister. She will have to adopt a different attitude, and I say this respectfully, to that which she has taken in the Transport Bill, and on other Measures. This will need extreme tact, wisdom, grace and patience, because the next year or 18 months will be critical for this sphere of employment. Even though I do not agree with the measures taken here I hope and pray that for the sake of the country we may overcome our problems, and that is why I wish this measure success.

8.8 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

We have been waiting for a couple of weeks or so for this Order and the right hon. Lady has been illegitimate and is illegitimate until we approve it, since her name does not approximate to the name of the Ministry. It was significant that the Prime Minister, in making this appointment, should decide to put a lady in the Ministry and to change its name—I suppose on the assumption that a rose by any other name would smell as sweet. It is basically the same Ministry as before.

The right hon. Lady's predecessor spoke about a bed of nails. It is only a week or two ago since we, when the right hon. Lady was in charge of the Transport Bill, would have gladly provided her with such a bed. I hope that if she finds herself on a bed of nails she will find a mattress to give her some comfort in the task lying ahead of her.

The importance of this Ministry may not be reflected in the number of hon. Members attending the debate. It should be recognised that there is a Finance Bill in Committee upstairs and I believe the Transport Bill, also. There are other hon. Members who are interested in the debates taking place there, and this shows the difficulties of having counter-attractions to the Chamber. This measure is of vital importance because the country is in good or bad shape according to the standards of the Ministry of Labour. This has always been so, and will probably be more so in the future under the new Ministry.

The change of name is good. As my hon. Friends have said, it was recommended by us in a booklet which we produced a year or two ago. It is good because it gets away from the old image of a Ministry of Labour concerned simply with unemployment, so that, when a man went to the employment exchange, he was simply joining the dole queue. The Ministry used to be concerned almost solely with the payment of unemployment benefit and a peace-making rôle in industry.

During the last 10 years, under successive Ministers, who have seen the Department undertake greater responsibility and wider tasks. Today, it is involved in training and retraining, in redundancy and what to do with those who are redundant, in productivity—until recently related principally to wage negotiation. The Ministry has also secured an expanding rôle as a peace-making fire-brigade force in industry. It also provides a very wide advisory service which is used to the great advantage of those in our community who are involved in industrial relations.

I want to deal with one or two of those wider rôles in the context of what the right hon. Lady said earlier. She spoke about the setting up of a productivity division. I have no objection to that, because such a division could no nothing but good, although I will come in a moment to problems which may arise in confusion with other outside bodies with similar responsibilities.

The right hon. Lady suggested that the chairman, or head of this productivity division, who would be announced in due course, might be someone from outside the Department. I am not sure that that is a good idea. It would be better if a Minister or a senior civil servant was appointed to head the division. My reason for saying that is that we already have the National Board for Prices and Incomes which has some independence and is headed up by Mr. Aubrey Jones. It is possible that anyone coming into the Ministry to head up a new division in this way, presumably on a temporary basis, may find his function unrelated in the public eye to the Ministry itself. In fact, his function should be right in the centre of the Department's activities. There is something to be said for outside independent people sitting on committees which are involved in the division, but that is all.

The right hon. Lady did not tell us very much about the rôle of the new division. It may be that she has not thought it through herself as yet. There is bound to be some kind of conflict with the National Board for Prices and Incomes unless she is very careful. The Board has the advantage of independence, and its reports can look at any industry without fear of complication within the Ministry of Labour or even within the Department of Economic Affairs. But who will be looking at whom?

Will the Ministry be looking at the National Board for Prices and Incomes, will the Board be looking at the Ministry, or is this a gimmick which the new Minister feels that she has to create? If it is, it could be a very expensive gimmick. If it is a means of educating, informing, and giving help on request to firms asking for it, it can do a useful job. If it goes much further and intervenes, as the right hon. Lady suggested that she would like it to, I beg to doubt whether it might not be that, in due course, she will run into trouble. Certainly, she will find herself in a confusing situation with the Board.

The right hon. Lady also spoke about a new forward manpower planning department. I think that the expansion of the Ministry in involvement with future manpower planning is something which we all felt to be necessary. It is even more necessary in view of the training programme. But it is no use finding out what manpower will be available, when it will be available and the needs of new industries against old industries, if there are inadequate retraining facilities. When the right hon. Lady first came to the Ministry, she must have realised how inadequate retraining facilities are.

The right hon. Lady might study with profit a Report which the Estimates Committee produced on statistics about six months ago. In it, we deal with manpower statistics, make some useful comments and arrive at some worthwhile conclusions on the use of computers through the Central Statistical Office.

It is obvious from her speeches up and down the country that the right hon. Lady is anxious to establish herself as the great battler for keeping down prices. She intends to go in fully armed to prevent rises in prices. That may appeal to her, but I am not sure that it will assist her Ministry as such or, indeed, that the new Ministry of Employment should be involved in dealing with the prevention of rising prices. She may see herself as a Lady Canute holding back the waters, but she will find others of her right hon. and hon. Friends out in the sea pushing the waters towards her.

What happens if she is involved in discussions with unions and employers on suggested rises in wages above the 3½ per cent. norm? She will be told that she and her Ministry—not another Ministry and not the employers—have failed to keep down prices. She will be disarmed in the negotiations that she is trying to assist on the wages front.

The right hon. Lady talked about the intervention of the Minister early on in wage negotiations. She spoke about collective bargaining, as though the Ministry would now have a new rôle, with the Minister coming in at an earlier stage. However, if she comes into collective bargaining at too early a stage and then negotiations fail, who will be the long-stop? In the past, either the Ministry itself or someone put forward by it has acted as the last stage and sorted out difficulties when the two sides to a negotiation have reached the end of the road. If she does not know already, she will soon come to know that, very often, the dragging out of negotiations is one way of holding up an increase coming too soon after the previous one. If she intervenes at too early a stage, the increase which has to be granted may be three or four months ahead of what is justified.

This brings me to the incomes policy. Real productivity bargains are wanted. "Phoney" ones—and there are plenty of those—are not justified. These are due to weak management or to managements who in an inflationary situation want to take the advantage of giving in. If one insists that industry should give increases, which need not necessarily be limited, where there is a productivity content that is meaningful and that brings down unit costs, the other side of the coin must be that one must hold increases that are not meaningful in productivity terms.

I go a little further than some of my right hon. and hon. Friends on an incomes policy. I think it is necessary, if one accepts the need for increased productivity, to accept that there must be a holding back of those who seek to take advantage without regard to productivity.

This can be done, in the main, through a voluntary system, backed by legislation which does not go too far and does not last too long. The trouble today is that the prices and incomes policy has gone on year after year. Any Government can justify an incomes policy at some stage if things are getting out of hand. The Government have arrived at the situation where they are trying to plan wages, and they are in the position of having permanently to keep down the demands of the unions. This cannot be right and, because it is unpopular with the unions, it is obviously very difficult continuously to make such a policy work.

Mr. Dempsey

I am extremely interested to hear that the hon. Member believes in the principle of an incomes policy, and that it should be a voluntary one, but that legislation should be available for its enforcement. Is that not a negation of a voluntary incomes policy?

Mr. Lewis

In so far as there is a period of seven months or longer when wage negotiations are held up statutorily, I supported that in the last Prices and Incomes Bill, and, therefore, on this I have been consistent. When one gets to the Part IV element, with the situation continuing not just for one year but for two years or more, and where the Government are forced to take an absolute line, then flexibility goes, and if flexibility goes it is very difficult to get productivity.

I will not sit down before suggesting certain ways in which the Government can help to achieve productivity. The Government are involved in a very large area of industry today. They are involved in the nationalised industries, in the Government contracts that are given out by Ministeries and in Government grants. If the Government cannot influence the industries in which they are involved, the industries which they own and those which they support to produce good productivity agreements then they certainly cannot have any influence in the private sector.

The National Board for Prices and Incomes has done a good job of work in its surveys. It has got down to the root of the matter in most cases. Provided that the Government insist that recommendations on productivity made by the Board are kept, the Board has a valuable rôle to play.

What is left? There is a large section of industry which it is very difficult to influence, and the Minister should certainly seek to influence that section. If, however, the Minister seeks to get down into every nook and cranny, into every little firm, in order to restrict rises, then she will be in trouble. The Government ran into trouble through trying to organise a tight system of control before. They sought to control not only over large employers, but even the small employers who employ 200 or fewer people.

During the fortnight when we have been waiting for the introduction of this Order, the right hon. Lady has made more than one speeceh to trade unions. She has done her best to persuade them to be reasonable in their demands upon the economy. All hon. Members on this side of the House hope that she will have success. If she is successful in her Ministry she will not save the Government. Things have gone too far for that. She will, however, help to redress some of the damage that the Government have done. Therefore, we wish her well.

In the long run, the ability of the country to produce at the right price and to sell abroad depends upon it having an industrial society whic his peaceful and which will accept the restraints which are necessary in the present situation.

8.27 p.m.

Mr. Ian Lloyd (Portsmouth, Langstone) I owe the House an apology for inflicting my views upon it a second time in such a short period. It will be the same needle, the same rather hoarse loudspeaker, and the best I can hope to do is to change the record. I hope you, Sir, will accept that the circumstances are exceptional in that so many of us who are vitally interested in this subject are being occupied elsewhere.

I am both repelled and attracted by the right hon. Lady's speech. I am repelled by its inconsistencies and I am attracted by some of the extraordinary statements which have been made which verge on the fringe of idealism and seek to achieve unanimity in the House. I was struck by her use of metaphors of war and peace. We heard so much about battles and wars. I was reminded the other day that the Russians have just produced a film of "War and Peace" which lasts for six-and-a-half hours. This perhaps suggests that very long discussions of prices and incomes policy require a certain amount of restraint on the part of those who are compelled to listen to them.

More seriously, I think that there is a dangerous point here. It has always been one of the great temptations of central planners to confuse the aims and objectives of peace with those of war. War is a very simple matter: the criteria are very simple and dogmatic. Peace is an infinitely complex matter: the criteria are totally different and very much more difficult to bring together and to focus as single agreed aims, especially in complex industrial societies such as ours.

The right hon. Lady was very strong on her interventionism. She used a number of phrases on which I want to comment. She talked, first, about a more positive policy of interventionism. She then said that she wanted to encourage technological and industrial change. I wonder if the right hon. Lady, who, with the Minister of Technology, must obviously profess an interest in this type of subject, has made herself familiar with the recent study at the Massachusetts Institute of Technology of this very question of technological change. I read this study the other day with the most profound interest, because I believe that the M.I.T. understands something about technology, and I believe that the United States economy understands something about the application of technology. It was, therefore, of particular interest to me that the main conclusion of the study was that the transformation of invention to innovation—its industrial application—was primarily a function of entrepreneurship and that this was the most outstanding single quality to be found amongst all those, or the great majority of those, who had built up industries on the now famous industrial mile outside Boston.

The second aspect of the right hon. Lady's interventionism was forward manpower planning. This, too, is always an engaging phrase. How far forward can Governments look? Can they look any further than the industries whose forecasts they use? After all, the Government's long-range forecasts of manpower requirements must depend very intimately on the aggregates of manpower requirements supplied to them by industries. I think back to one of the most complex and interesting attempts to forecast the national requirements of a great country—the Paley Commission in the United States, which called on the resources of over 100 universities. Nevertheless, within a short period of about 10 to 15 years the Commission was proved to be seriously wrong on about 50 per cent. of the forecasts it had made. This makes me very afraid of talk of Government's interventionism, particularly when the right hon. Lady talks about taking over the training, supply and control of labour, as she did at one time.

The next phrase used by the right hon. Lady was that the country cannot afford to allow management and trade unions to take their own time. This I thought to be a most frightening phrase. The immediate questions which came to my mind were these: why not? What does it mean? Does it mean now that Whitehall knows best in this sphere, too, that what is good for Whitehall is good for the nation, to paraphrase an old and famous phrase? Does it not suggest that General Motors seemed rather modest in the claim which was made for it?

The next phrase which the right hon. Lady used which terrified me was this. She said, "I propose to take extensive new powers to reduce prices". Governments do this with, I think, considerable irresponsibility. They look at only one side of the coin. Socialist Governments particularly do not understand the price mechanism, because they dislike it. However, they are compelled to look at it in a wider context, because my experience of Government intervention in prices in one sphere—the shipping industry, which is subject to Government interference, not only in Britain but in a number of countries—is that Governments are very conscious of prices but are rather inconsiderate of such things as the return on capital. They are rather inconsiderate of the necessary flow of resources to replace the industry's basic assets, and they have no responsibility whatever for losses. They are concerned solely with prices. This is a rather naive approach to overall control, whether by Governments or by anybody else. Therefore, this other aspect of the right hon. Lady's interventionism rather frightens me.

The right hon. Lady then suggested that it should be acceptable to industry. I think that she made the claim that the present Government's wide-ranging interventionism was acceptable to industry. This is hardly surprising. If a Government arrange hand-outs of one sort or another, whether on the fiscal front, or industrial grants, or research grants, or the many other varieties of assistance which a Government can contrive, is it surprising that industries of all kinds should decide to climb on to this particular band waggon? It certainly does not surprise me.

It seems that this begs a very much bigger question, which is simply this. Does this type of interventionism result, in the end, in a better overall use of national resources? This is the question which must be asked. I would suggest that it is a very difficult question to answer, for the simple reason that we never know what the alternative use of these resources would have been and what the results of these alternative uses would have been. We can make intelligent guesses, but we can never know.

I turn now to the question of productivity, because this lies at the centre of the debate. The right hon. Lady stressed it over and over again, and naturally she had unanimity in the appeal she made. There is a great danger in this wording, because it seems to be little more at times than a semantic method of combining a series of possibly conflicting aims into one. It is as if we say: "Let there be productivity; let there be light." We want light and we want productivity.

What does it mean? It can mean higher output; it can mean better output in terms of quality; it can mean a combination of higher and better output—more shoes or shoes that last longer, or some more shoes that last longer. It can mean more sustained output. Instead of producing 20,000 pairs of shoes in 9 months we produce them in 12 months, or perhaps 25,000 pairs of shoes in 12 months. All these present complex policy problems not easily resolved by saying, "Let there be higher productivity".

Does it mean higher output per man hour, man week, man month, or man year? Each criterion would result in a different conclusion in different contexts. Does it mean higher output per £ of capital invested? Again, I suggest, different criteria applies in different contexts. If there is a shortage of skilled men one set of criteria will apply; if there is a shortage of unskilled men another set of criteria will apply; if there is a shortage of industrial capacity yet another set of criteria will apply. This is fundamentally a question of confusing total optimisations with sub-optimisations—if I may introduce those somewhat gargantuan words into the debate. In dealing with small sectors and small problems it is easy to sub-optimise, but it is much more difficult to reconcile and value equally desirable optima.

I do not think it is enough to bow down before the altar of productivity, or, indeed, to do something else which the right hon. Lady suggested: simply to link productivity with the pay packet. This is very obsolete, economic thinking. Most people today do not link things simply with their pay packets. They are concerned with their pay packet; they are concerned with their status; they are concerned with their security and with the contribution which they can make to our national life. One hopes all this will be increasingly in the forefront of their thinking.

It is not enough to say we must link productivity with the pay packet; we must link it over the whole range of those motivations which we know lie at the centre of the reactions of the average man to his industrial environment. We must ask over what period must productivity be maximised. For what purpose must it be maximised? Do we want to increase productivity in some sectors of the economy or in all sectors of the economy? Clearly, the answer is important, because we do not want to improve productivity in the output of horse-shoes—here I am using it in a general sense, because we do still use some horse-shoes somewhere—or wireless valves of the type that are needed for wirelesses of 15 or 20 years ago. We do not want to increase productivity in the output of tramp ships or cargo liners, because both these types of vessels are rapidly becoming obsolete. We do not want to increase productivity in the output of portal cranes. We should not, as a modern society looking at the ports, be thinking of introducing portal cranes into the system.

This is a more profound question: whether the whole mechanism in considering this type of problem is not sufficiently geared to the problem of industrial obsolescence. Should we not be much more concerned with devising effective, economic, skilful, socially-acceptable techniques for eliminating obsolescent industries? Or are we rather inclined as a nation to react to the political forces—very powerful and understandable, it could be—in some of these industries, when we should really be accelerating their disappearance from the scene? Is not our whole economic and social machinery in need of radical overhaul in that context?

I turn, now, to another important subject which the right hon. Lady raised, the question of the participative State. This tends to be one of those semantic phrases which is used because everyone knows that it is a good thing to involve people in decisions. We all favour it in principle, but it is the details that are difficult.

Perhaps I might refer to one example, The Government are anxious that industrialists should use discounted cash flow. I have some understanding of that, but I would not pretend that it is more than limited. I am to some extent, or was, a trained economist and statistician. How many industrialists have a thoroughgoing understanding of discounted cash flow analysis and apply it regularly, as a matter of routine, to their industrial and investment decisions to which it could make a contribution? I suggest that the proportion is very small. The involvement of management alone in this type of decision presents considerable problems, but there are few people on the shop floor who understand discounted cash flow, or could in any intelligent way be brought into the final decision which would result from an analysis of that kind.

My second example is the increasing—and justifiably so—use of what is known in the computer industry as the P.E.R.T. programme to take industrial decisions. There are a variety of P.E.RT. programmes in use, and each has its merits. The assessment of the merits is complex. All those who understand these questions, ought to be involved in the decision, but I do not see how, with a clear conscience, and with any sense of reality, anyone can advocate that the man on the shop floor or the man in the office who is affected by these decisions inevitably and unavoidably must be involved in them, because that would reduce the general quality of decision-making for society to a low level.

There is the third example of the important question which is increasingly coming to the fore, the choice of computer. What could be more complex for any organisation than to decide the type of computer which it needs to provide its higher management with the control information that is required? This is an extremely complex decision, and very few people are competent to make it. There is no point in pretending that we will involve the chaps on the shop floor using lathes or tools in this type of decision, because they do not understand it and it will require from them a considerable effort to understand the whole range of factors involved.

Most of these decisions have some effect on almost everybody. They are entitled to talk about them, and they should be consulted about their effects, but surely the essential quality of modern industrial and national leadership is that it is in a sense a vertical delegation of confidence based on results? That is what we have to try to achieve.

I turn, next, to the question of trade unions and training which is of profound importance because, as the right hon. Lady said, the retraining of large sectors of our industrial work force is bound to acquire an increasing priority, and become increasingly important as this century progresses.

I have great sympathy with some of the examples given by the hon. Member for Liverpool, Walton (Mr. Heffer), because many years ago I spent a day talking to a number of representatives of the typographical union. They were arguing that it required five years to produce a modern printer. I think that the trade involved in that discussion was that of lithographic printer. Before having that argument I had been around about 100 printing works and seen what that type of skill involved and required. Even allowing for the sort of misjudgment which is so easy to make on a skill of which one has no personal experience, I came to the conclusion that any reasonable man could be taught to do that sort of thing, using modern techniques of training in about six months to a year. I had this long argument with them and said, "Surely if it is possible to train someone to fly a Lightning fighter or Victor bomber in eight months", which is the sort of period in which it can be done, it should be possible to teach someone to be a lithographic printer. They denied this strenuously and we could not come to any agreement.

There has been some progress since then, but until, broadly speaking, the trade unions accept that in this day and age the flow of technology is so rapid and the contribution made by modern training techniques can be so great that our approach must change and management must change, we shall not make the sort of progress that we should make.

It may be said that since I have made, to some extent, a destructive speech I should say what my proposals are concerning prices and incomes. What lies at the heart of the debate are the alternative proposals before us for increasing the real wealth of the economy and of the people. It is an increase of this real wealth which opens the options of Governments, companies and individuals. If it does not increase, the options remain the same and the problems are just as difficult of solution. If we succeed in increasing real wealth, we widen the options and at least some of our problems disappear.

The most important single factor to which the country can pay attention—and the lead must come from this House—is better industrial communications between industries, between those in industry and between departments of industry in connection with knowledge, research, experience, attitudes and reactions across the gamut of ideas and human relationship. I am prepared to say without fear of contradiction that anyone who has personal experience of any large organisation, almost from the House of Commons downwards, must realise at a very early stage in any project which he seeks to promote that communication is the essence of the difficulty. Because somebody does not know, he does not understand; because he does not understand, he obstructs; and because he obstructs, no change takes place. Therefore, communication lies at the very heart of the matter.

I commend to the House, although they are perhaps some years old now, some studies of this question made by the Acton Trust which took as one of its examples the effectiveness of communication in the National Coal Board and provided us with the astonishing fact—I forget the exact percentage—that about 5 to 8 per cent. of the directives put out by the Coal Board reached the coal face and were understood by those concerned. This is very general. It is no reflection on the Coal Board. It is an aspect of large scale human organisation which lies at the heart of all attempts to increase national output and productivity.

My second point is simply this. We need, not a centralisation, but a dispersal of informed judgment in economic affairs. Almost everything which has happened in the last two or three years had led, not to the dispersal, but to the centralisation of economic judgment. Economic matters are so complex and, in this age of increasing technology, will become more complex, that it will be more and not less dangerous to centralise our major economic decisions.

Thirdly, we must improve both the economic and the social machinery for running down old industries. We pay more than lip service to the requirements of declining industries. One of the greatest millstones round this country's neck in recent years has been the very considerable economic burden which we have willingly borne because of the social factors involved in giving continuing support to industries which should have been assisted in their decline long ago.

We should put much more emphasis on an astringent and invigorating rejuvenation of price mechanism. I have the greatest faith in the price mechanism provided it is allowed to operate.

I would not be so foolish as to pretend that it always operates perfectly or can always be allowed to operate with complete freedom, but in most situa- tions where it has been possible to make comparisons between the efficiency of the allocative process, by decree or by centralised decision—by rationing or some other arbitrary assessment of the allocation of resources—and the results of the operation of the price mechanism, it seems to me that the price mechanism has won hands down every time.

That is why one of the greatest contributions my party made to the efficiency of the economy was the abolition of resale price maintenance. The process of the price mechanism is working effectively. That is why I advocate an acceleration of tariff reductions. Whatever we are committed to under the Kennedy Round, this is a good thing. Let us push it on further, because it is no service to industry to let it live in a cloud-cuckoo land, behind high tariff walls. Sooner or later the facts of economic life break through and industry finds it more and not less difficult to compete.

The present climate—for which the Government are largely responsible—of looking at physical output and saying, "This is valuable; this is what we must encourage", and looking at the output of the mind—the things that people do on desks and on design tables—and saying, "That is no good, or of no value; we should discourage it. We should tax it"—is an attitude of mind from which the country must seek to escape at the earliest opportunity.

I offer one example to prove my point. No more valuable economic activity is carried on in Britain today than the attempt by a number of scientists to produce what are known as high-level computer languages. A high level computer language is simply a device to enable the decision makers of today—most of whom have very little knowledge of computer languages but who are having to face problems and to decide what to do about them—to use the computer as a tool to help them make their decisions.

High level computer languages are very similar to the English language. We can ask the computer a question by putting it almost in the same terms as would be done if it were asked in the English language. The translation of this question into a mode which the computer can understand is a very complex technical matter, but the more successfully it is done the wider will be the use of these machines and the greater their contribution to our industrial economy—and, broadly, the more rapidly will we escape from some of the millstones that we have put around our necks and some that we carry anyway and always will.

This is the most valuable single economic activity of all, but under the present dispensation it is regarded as a service and therefore as something which should be taxed. It is therefore taxed rather more heavily than is the man who is still making horseshoes. I suggest that when the Government reach a situation in which this is the type of conclusion that they present to the country the time has come for a change.

8.54 p.m.

Mr. James Dempsey (Coatbridge and Aidrie)

I shall not be so long as some hon. Members opposite have been. I could have dealt in close detail with the subject matters of their speeches and still spared the House much of the time they took up.

We are here to congratulate the new Minister of Employment and Productivity. Her first duty is to plan our society so that we have full employment. If we put the unemployed to work we shall increase the value of our goods and services, together with the incomes of our people. That is why, when the Macmillan Government intimated that they would accept an unemployment rate of two per cent. of the insurable population, we condemned them. We condemned a philosophy that resulted in half a million people remaining unemployed—some of them for a long time.

My right hon. Friend should make it clear that we dissociate ourselves from any such philosophical approach towards employment. Unless she takes the courage in her hands to take that initiative there will always be some doubt cast, that even our Labour Government are considering a permissive number of unemployed in our society. Of course, nothing could be further from the truth.

If the right hon. Lady embraces this attitude of mind she should pay due regard to the development areas. After all, the purpose of a development area is to share the employment potential of the country, to give to the men, women, boys and girls in the North and Scotland simi- lar opportunities as in the South of England. They still do not have those opportunities. As I see the situation, my right hon. Friend, in addition to having to deal with private enterprise, will have to deal with public enterprise—our own Government Departments.

We have a Ministry of Public Building and Works which, in spite of our protests, hands out, without any competitive tender, large-scale contracts to a firm in the South of England. After we protest, it hands out contracts for the building of three colleges of education in Scotland to the same firm, despite the fact that we have some of the most skilled tradesmen in Europe. Notwithstanding all these protests and representations, within the last four weeks the same Ministry has handed out to the same firm a further extension of the new savings bank being built in Glasgow, without giving any Scottish contractor the right to tender for the job. There is something wrong with the Government's planned potential employment for the development areas when this type of practice takes place. I counsel our new Minister to note these remarks, which can be substantiated. I have already made my protest to the appropriate Ministry.

Is it intended to reduce Scotland's unemployment population, which is twice as large as the remainder of the United Kingdom? Indeed, in my constituency and in other parts of the county, we have three times what is described as the national average for unemployment. In our part of the country it is galling and nauseating to talk of full employment, on the one hand, and, on the other, to give to contractors who have full employment in many parts of the South opportunities to proceed with further contractual interests and earnings at the expense of people north of the Border.

This point should be made and make it. I am no Scottish Nationalist—I do not intend to be one—but it is wrong to conceal from our new Minister the practices which are taking place under our Government. I hope, therefore, that she will resolve to do all in her power to end this irregularity. It is economically unwise, morally wrong and politically unacceptable to present contracts to firms based in the South of England, which have no industry in the development areas in Scotland, without giving the indigenous contractors the right to make tenders for the work.

If we are determined to have full employment, as a Government and as a movement, we have to face the fact that, despite cash grants, investment allowances and the other opportunities which local employment offer, we are still not attracting into these areas the necessary diverse forms of employment. We are still not inducing enough industries to our localities to provide even the same employment average as that of other areas. If these public efforts fail and private enterprise fails, there must be only one other approach and that is for the Government to set up corporations in these areas to develop their potential. Why should not the spending Departments, manufacturing Air Force, Army, Navy and Post Office equipment, establish their own corporations and do this job, putting the unemployed to work in these parts of Scotland? This is sound Socialist planning, which is what we entered the House to do.

If some action could be taken, we could eliminate the protest movement by means of which some elements are gaining political popularity in Scotland. We failed to do the job we were elected to do, so of course the public will turn to some other body which will promise a policy like this and will guarantee the Scottish people the right to work and leisure. I recognise that work potential and earnings necessitates an incomes policy, which has been agreed by the Labour movement, but some elements seem able to fiddle the policy.

The managing director of a progressive firm told me that it is not difficult, as long as one is not a P.A.Y.E. tax payer. He pointed out the many devices available to employers, managers and directors whereby private income can be translated into company income and vice versa, with hidden reserve and contingency funds which will be pocketed later as private income. But the wage-earner cannot do this. He cannot have a lost increase made up, and this causes intense feeling.

Amateurs become professionals overnight and get increases of thousands a year. How can this be done? I heard from a reliable source of a football team whose manager promised them a £200 bonus per man at half time if they scored two clear goals. They got a productivity bonus. How was this possible, when bus drivers were refused £1 a week? How can 11 people who kick a ball of leather about get hundreds of pounds a week bonus while bus drivers, who have more than 50 lives in their hands, cannot get £1 a week?

My right hon. Friend has been given a task which probably Solomon could not solve, but if she could eliminate these iniquities in the operation of the policy, she would go down in history and would win the support and applause of all responsible citizens. I have spoken not to place additional burdens on my right hon. Friend's shoulders, but to draw her attention to certain anomalies and the need to overcome them. To win the support of the trade union movement to an incomes policy, she must create a climate in which workers will be induced to accept that such a policy can be fair, rational and provide a guarantee of security.

I wish my right hon. Friend the best of luck in her new office. I hope that she will be successful. If she is, she will earn the undying gratitude of the Labour movement, particularly if she can bring an end to these anomalies and create in the minds of people a belief that this is a practical proposition which can be voluntarily applied, voluntarily accepted and voluntarily pursued and will result in full employment and rising incomes.

9.6 p.m.

Dame Irene Ward (Tynemouth)

I apologise to the right hon. Lady for not being able to be in the Chamber for her speech. I am sure that I would have enjoyed it because, like my hon. Friends, I appreciate the difficult and tremendously important job she has undertaken.

I find it more than depressing that on this matter of vital importance to the economy and to the position of Great Britain in the world there should have been so few hon. Members present to take part in the debate. As I attempted to point out at Question Time earlier, a large number of hon. Members are incarcerated in Committee Rooms upstairs discussing various Measures.

The hon. Member for Ebbw Vale (Mr. Michael Foot) made an interesting speech in which he rightly pointed out that the Treasury is greatly involved in the right hon. Lady's task of solving the problem of whether we have unemployment or increased employment. She will have to accept some control and direction from the Chancellor. It is farcical, therefore, that at a time when the right hon. Lady is presenting her case in the Chamber, the Chancellor should be addressing hon. Members in a Committee Room upstairs about the Finance Bill—a discussion from which most hon. Members are excluded—which must directly relate to the problems which this almost empty House of Commons is attempting to discuss. This is regrettable for the future of the country and for any possible solutions to the problems which the right hon. Lady must tackle.

I have sensed that throughout our discussion of prices and incomes, from the time when decisions were taken on this issue, nearly all the speeches have been slanted to discussing the problems of the industrial worker. There have been notable exceptions, particularly the speeches relating to agriculture. By and large, the whole argument has been based on the difficulties and future of the industrial worker, and little has been said about white collar and professional workers.

The participation of those in the professions and in groups of what are known as white collar workers is very important to the future of the economy. I hope that I am not maligning the right hon. Lady for she may have mentioned those groups, but the whole of the argument which I have heard has been slanted towards the position of the industrial worker. Very few who have taken part in this debate have found an opportunity to say something about the professional section of the community and the white collar workers.

From what I have heard of the debate I gather that much of it has centred on the Liverpool bus strike and what flowed from it in relation to prices and incomes policy. We have a bus strike in Newcastle-upon-Tyne which arose for almost the same reasons as that in Liverpool. We are no further forward to finding a solution. If productivity agreements can be made they should be negotiated on a sound and practical basis. I understand that there is a suggestion for a new agreement by which one man would operate a double-decker bus. After collecting large sums of money he would have to go to far away places with it. Naturally he would be anxious about his security. I am not sure that I could agree that the basis for such an increased productivity agreement was a sound and reasonable one.

I have a great deal of sympathy for the counter staff in post offices. People in lower income groups find it difficult to negotiate new productivity agreements. In the professions supplementary to medicine there are those in the Chartered Society of Physiotherapy, radiographists, dieticians and nurses. We have heard very little about the part which such people will play in the new policy, but this is a very important section. I should like to know how their position is to be equated in the new policy.

If ticket collectors work harder and do longer shifts they can collect tickets only from people who travel on the railways.

Mr. Peter Mills

What about the undertakers?

Dame Irene Ward

There are so many sides to the question that we have not had an opportunity of discussing or receiving from the Minister any information on them.

The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) spoke about "the movement" and so on, but the policy is one to help the nation get out of its present economic position; we are discussing an overall plan for the nation. Therefore, everyone with the right to earn a livelihood in the nation is tremendously concerned with it, and I hope to goodness that we shall not go on talking only about the industrial worker, the trade unions, and the employers and managements concerned with trade unions, when there is a very wide range of important personnel about whom we have heard absolutely nothing.

I return to what I was trying to say about the supplementary medicine group, those who work under the Ministry of Health, and those in local government. In many ways they are absolutely hamstrung by the general idea of increased productivity. There are hundreds and thousands of men and women in industry, management and in the professions, as well as white-collar workers, who would gladly try to help Great Britain, even though they condemn the Government for their disastrous economic policy.

There is still a vast number of people who will always come forward when Great Britain is in danger, whether there is a threat of war or a threat to the economy. But we must be fair to everybody. Increases for people supplementary to medicine are negotiated through the Whitley Councils. The Government have the whip hand, and nobody can do anything about it. That is why I hope that in future we shall not discuss the problem only from the point of view of the industrial worker and management. We should discuss it over the whole field, and do the best we can to stimulate and encourage those who are anxious to try to help Great Britain and look, a little unsuccessfully, for fair and just treatment from those who form the Government of the day.

9.19 p.m.

Sir Edward Boyle (Birmingham, Handsworth)

We have had an interesting, valuable and at times wide-ranging debate. I should like to go back to the opening speeches, starting with a point made by my right hon. Friend the Member for Mitcham (Mr. R. Carr), who reminded the House that by the Order we are, in effect, creating one more economic Department.

That is a very different development from that which many right hon. Gentlemen opposite have advocated at one time or another. A number of very interesting articles have been written by ex-Ministers of the party opposite—by the right hon. Members for Belper (Mr. George Brown) and Battersea, North (Mr. Jay), for example. Those two right hon. Gentlemen, though they differ in most things, at any rate agree that there should be a single Minister with over-riding responsibility for economic policy.

It is worth remembering, as my right hon. Friend reminded us, that we now have no fewer than five economic Departments—the Treasury, the Department of Economic Affairs, the Board of Trade, the Ministry of Technology, and the Department of Employment and Productivity—not to speak of the Prices and Incomes Board as well.

I agreed with much of the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot). And I welcomed the tone, almost worthy of my right hon. Friend the Member for Flint, West (Mr. Birch), in which he gave no doubt his own view as to the relative importance and, indeed, primacy of the Treasury. I also share the view of my hon. Friend the Member for Tynemouth (Dame Irene Ward) that it is a great pity that we should have had to have this debate on the first day of the Committee stage of the Finance Bill upstairs.

I do not think that we should part with this Order without considering its implications for the future of the Department of Economic Affairs. There is one point about the Mark II Cabinet which will commend a measure of agreement in the House. It was put, not unfairly, by the Financial Times of 6th April. Commenting on the right hon. Lady's new position, the Financial Times said that it had become clear …that Mr. Peter Shore, the Economic Affairs Secretary, lacked either the capacity or the authority to push through the Government's new prices and incomes policy in Parliament or outside it". I do not think that will have seemed an extreme statement to any of us who listened to the third day of the Budget debate.

But, apart from the personal aspect, let us consider just what the functions of the D.E.A. now are.

We are told that the D.E.A. is now to concentrate on achieving a more effective use of the nation's real resources and on planning the physical means to make devaluation work. But the right hon. Lady is now responsible for the work previously carried out by the whole of the Industrial Policies Division of the D.E.A. And surely the work of drawing up export targets for each industry could be carried out as well, if not better, by the Board of Trade. It is hard to see a continued justification for the D.E.A. now remaining as a separate Department represented in the Cabinet.

My right hon. Friend pointed out, correctly, two ambiguities in the right hon. Lady's position. First, can she remain the darling of the Left, still on speaking terms, if only just, with the hon. Member for Ebbw Vale, with whom she had an exchange this afternoon; and if so, what happens to the Chancellor's strategy? Secondly, and perhaps more important, there is the conflict of her rôles within industry.

Is the right hon. Lady primarily in her present appointment to seek peace or war, as my right hon. Friend put it? There is a real danger of her getting the worst of both worlds—of her not being believed when she threatens to be tough and not being trusted when she seeks to conciliate. She had much to say today about intervention. She spoke of the need for "the slow evolution towards more interventionist policies".

I have never been a doctrinaire opponent either of planning or of intervention where circumstances justify them, but I must say that it is phrases like that which always put me off the economic policies of the Labour Party. Like the hon. Member for Liverpool, Walton (Mr. Heffer), who courteously explained to me that he could not be present for the end of the debate, I greatly dislike general and loose talk about intervention and this is what we had too much of from the right hon. Lady today.

Mention of the hon. Member for Walton, leads me to ask again when we are to have the new Prices and Incomes Bill. I was struck by his view that it should be delayed by four years. Some of us have had our moments of independence in this House, but I do not think that I have previously heard an hon. Member say that a major aspect of legislation to be introduced by his own Government should be delayed by four years.

Certainly, the Government cannot have been encouraged by certain things said below the Gangway this afternoon. I do not want to anticipate the debate that we shall have if the Bill is introduced. I know that this is a difficult subject. We have had sincere speeches from the opposite benches, expressing different points of view. I agree very much with the words of my right hon. Friend the Member for Barnet (Mr. Maudling), on the last day of the Budget debate. He said: …I have long believed in the need for an incomes policy, but its basis should be voluntary and its purpose should be clearly positive, to ensure that real incomes rise as rapidly as possible. This at times clearly means restraining the growth of money incomes to what the economy can afford. This is what I understand by incomes policy."—[OFFICIAL REPORT, 25th March, 1968; Vol. 761, c. 1028.] So do I. On this subject. We had some good and fair points made in the debate. I thought the hon. Member for Walton was impressive when he said that workers must have a real say over wages and conditions, and a real sense of involvement, and also when he spoke about the danger of workers becoming alienated. Of course, it is not only industrial workers about whom one feels there is a danger of their becoming alienated at the present time. The hon. Member for Bebington (Mr. Brooks) made a very good point when he said that those of us who are not wage earners ought to remember that pay increments do not just come in as industrial workers get older. He was right to remind us of that.

I thought that the right hon. Lady made rather heavy weather of my right hon. Friend's perfectly reasonable quotation from the O.E.D.C. Observer of April 1966, saying that the United Kingdom had a pretty good record compared with other countries over unit labour costs in manufacturing between 1958–1964. By the time the right hon. Lady made her second or third intervention I was reminded of the occasion—she may recall it—many years ago in debate, when a former Member for Harrow said that the right hon. Lady was "no dog".

I come next to an important point made by the right hon. Lady. I welcomed the emphasis that she put on productivity, although I had some sympathy with my hon. Friend the Member for Portsmouth, Langstone (Mr. Ian Lloyd), who said that we sometimes over simplify this subject. Even on this point the right hon. Lady somewhat overdid her image of a new broom sweeping clean. As the right hon. Lady is aware, this productivity issue is an extremely difficult one, when one comes to work it out in detail.

The right hon. Lady, like the right hon. Member for Belper and the present Foreign Secretary, is stressing the productivity aspect on the prices and incomes policy, but in the only case where the Government actually brought a productivity question to the Floor of the House—an Order concerning the Birmingham Car Delivery Drivers—productivity actually went down because pay was frozen, and the men refused to work the agreement which involved bringing back faulty cars on return journeys from the dock.

There was complete confusion for about six months about whether the Attorney-General would promote a prosecution. My hon. Friend the Member for Worthing (Mr. Higgins) has kindly looked up the details for me and it is worth remembering in regard to this matter, which is one of the few Orders on this subject actually brought before the House, that it took the Ministry of Labour six or seven months to decide, or rather to decide that it could not decide, whether it was faced with a productivity agreement.

I warn the right hon. Lady that one may start with brave words about productivity, but that her new unit and its economists will be faced with some difficult decisions. Neither the right hon. Member for Belper, nor the Foreign Secretary, nor Mr. Frank Cousins, when he was a Member of this House, ever really provided an answer to one very important question, namely, if we set this primacy on productivity, what happens if productivity doubles but the demand for the product declines? In those circumstances, is a wage increase justified? In other words, I think that the right hon. Lady and her advisers must decide firmly if they intend to give what we would consider to be the right emphasis to the interests of the consumer.

There are also some important decisions to be taken in the light of devaluation. As I understand the position, the Government feel that price increases on imported goods are justified after devaluation but that a price increase on a substitute for imported goods is not. As a result, investment and profits in import-substitute industries are being curtailed in a number of cases.

Again, the Government's attitude to prices tends to be ambivalent. If they hold them down, devaluation becomes less effective and consumer demand is not reduced. If they do not hold them down, the cost of living rises. The right hon. Lady will know the great unfairness caused when the Coke Board can put up the price of coke by £1 a ton without any reference to the National Board for Prices and Incomes.

There is a real difficulty here. On the one hand, in working out her strategy, obviously the right hon. Lady will not want to frustrate the purposes of devaluation or take any step reversing the Chancellor's policy of trying to curtail consumer demand. At the same time, there is more public concern over the cost of living and price rises than any other aspect, and I suggest that, whatever policy is followed, it must be seen to be fair and equitable.

I agree with my right hon. Friend the Member for Mitcham that it was a bit too much when the right hon. Lady started claiming for herself credit for the consequences of the abolition of resale price maintenance. I agree that that was one of the most obviously sensible and valuable means of enabling market economies to work more satisfactorily.

Before coming to my concluding remarks, I would like to make a few comments on the subject of education and industry, following the right hon. Lady's speech. She spoke today about the importance of adapting more readily to technological change and the importance of learning new techniques. In this context, we have to consider not only industrial training and the advance of technical education, but the need to raise standards of education in the schools as well. We say, first, that there must not be any further postponement of the raising of the school-leaving age. That is a vital reform if we are to have the flexible manpower which we shall require in the 1970s.

I am grateful to the hon. Member for Manchester, Gorton (Mr. Marks) who was courteous enough to inform me that he had an Answer today on the subject of a single school-leaving date. I am glad to learn that the right hon. Lady is now taking up the matter with both sides of industry. I intend no discourtesy when I say that I hope that she will make rather more rapid progress on this subject than the right hon. Member for Leyton (Mr. Gordon Walker), because this is an important reform which could be carried out at relatively little cost.

I would like to take up the question of industrial training. I felt that the right hon. Lady measured the success of the Industrial Training Act too much simply by the number of new boards being set up. Surely we all agree that the 1964 Act was only the beginning. In a way, it was the equivalent of the 1870 Act in education. We on this side of the House would be the first to concede that there is much more to be done in getting the right balance between the interests of industry, and those of education, on the training boards. I hope that the right hon. Lady will devote a good deal of attention to this subject, and, if so, she can count on the full support of this House.

Then I would like to come on to management education, and that leads me to say how much I welcome the fact that the Minister of Technology will be replying to the debate. He and I have never before faced each other across the Dispatch Box, although 20 years ago we debated almost nightly on the other side of the Atlantic to our mutual profit and, I hope, sometimes to other people's entertainment.

The right hon. Gentleman does, I hope, realise the very great importance of this subject of management education. Surely this includes the understanding of how to measure financial requirements, the management of research and development—about which I welcome what the hon. Member for Bedford (Mr. Brian Parkyn) had to say—the understanding of the part that can be played by the development of computerisation, and also the grasp of modern marketing techniques.

I hope that the right hon. Gentleman will say something tonight about his contribution to productivity. I would ask the right hon. Gentleman particularly if he could perhaps say something about the work of the National Physical Laboratory and the work of institutions within his own personal responsibility. Could he tell the House whether there is any truth in the suggestion that before too long the whole range of civil science policy may come under his Department? This, again, is a genuinely difficult question. On the one hand, it seems obvious that one cannot easily separate responsibility for the universities from responsibility for university science. Yet I know that many people are bothered by the division of responsibility in this House for civil science as a whole. I would suggest that there might here be a case for very wide measure of consultation which could include some hon and right hon. Members of this House.

In conclusion, I would like to say that we all recognise the importance of the right hon. Lady's job. At the same time, it would be a mistake to attach too much importance and too much significance to the latest Cabinet reshuffle of the right hon Gentleman the Prime Minister. After all, Governments must be judged not just by the machinery which they set up, but by the decisions that are taken. I would say that the biggest criticism that can be levelled against the Government arises, curiously enough, not from their actions, disastrous as these have frequently been, but rather from their persistent inaction. Time and again they fail to make up their mind and to take any clear decision until the passage of time has eliminated all alternatives but one, and their freedom of choice has gone by default. I would hope that the Prime Minister might have learned a lesson from his experience with the Department of Economic Affairs. Certainly, the right hon. Gentleman the Member for Belper, to judge from his recent articles, has done so.

Administrative reorganisation does not change the problems which have to be solved. Moving civil servants around in pantechnicons rather than Ministers in limousines does not make decisions any easier. Above all, tinkering with the framework of government is not the same thing as actually governing.

I would suggest that the Government should spend more time dealing with the problems which they must face, and less time trying to persuade the nation that they are dealing with them. I recall the Declaration of Intent, the National Plan, the productivity conferences, the semi-public brawl over the expenditure cuts and the Prime Minister's personal public relations exercise when he took charge of the Department for Economic Affairs last year, and the extraordinarily offhand way in which he let it be known casually in this House that it had served its purpose and that he had relinquished command.

The Government must also stop pretending that problems do not exist when they should be seeking solutions. I well recall the accusation of "moaning minnies and wet editorials" days before the July, 1966 measures; or the claim that the balance of payments had reached a "position of basic balance and growing strength" less than two months before the devaluation of the £.

I would suggest to the party opposite that it is not unpopular because it has taken tough but necessary measures. It is unpopular for one very simple and good reason, namely, that its economic policies have failed.

The hon. Member for Ebbw Vale was fully justified this afternoon—and this point was taken up by my hon. Friend the Member for Torrington (Mr. Peter Mills)—in reminding us that we have today a combination of balance of payments weakness, continued sterling uncertainties and, at the same time, more unemployment than we would wish to see. I entirely agree with those who have said that it is vital that we get this right. I do not want to say anything tonight on this subject that would be unwise. But quite obviously, a society whose position in the world has changed, which has continuing economic difficulties and frustrations, is more likely to react to these frustrations by trying to find a scapegoat, whereas surely all of us in the House want to see Britain's competitive position sufficiently strong so that we can offer worth-while opportunities to all the citizens of this island, absolutely irrespective of their race or colour.

No amount of high-sounding titles, no Government reshuffles—with all respect to the right hon. Gentleman the former Leader of the House, no Mark II or Mark IV Cabinets, no amount of Press and T.V. coverage, no amount of unofficial guidance or public relations officers, no amount of fine speeches, can be a substitute for the right decisions at the right time. It will be by her capacity to reach these decisions and by nothing else that the right hon. Lady's tenure of her office will be judged.

9.40 p.m.

The Minister of Technology (Mr. Anthony Wedgwood Benn)

I am sure that my right hon. Friend the First Secretary of State will accept entirely the statement the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) made at the end of his speech, which was that she would want to be judged by the result of the policies that she pursues.

This has been a very wide debate—in fact, wider than the Motion before the House. It has fallen into two quite separate parts. The main occasion for the debate was the transfer of prices and incomes functions from the Department of Economic Affairs to the Ministry of Labour, which has now been renamed the Department of Employment and Productivity. Much play has been made by some hon. Members, including the right hon. Gentleman, about the use of a new title for the Department. This has been criticised by some hon. Members. I intervened earlier to point out that under the Conservative Government an attempt was made—I do not say that it was wrong to try it—to reconstitute the Board of Trade on a new basis dealing with industry, trade and regional development.

I was very surprised that the right hon. Gentleman appeared, at least in my judgment, to under-estimate the importance of institutions in reaching the right decisions. Decisions arise out of institutions as well as out of the minds of Ministers. It is right and proper—indeed, the right hon. and learned Member for St. Marylebone (Mr. Hogg) is always saying this, in my opinion quite rightly—to experiment with institutions if the decision-making process is to be got right.

The prices and incomes policy has been transferred to the old Ministry of Labour and the Department has been renamed, for three reasons. The first is that prices and incomes is the central element in overcoming the economic problems that have cursed this country under Governments of both parties. Those of my hon. Friends who have spoken—and there were some who criticised the prices and incomes policy—would be wrong to read into this transfer of responsibility any weakening of our commitment to that policy.

The second significance of the change, however, is that it is very widely agreed—I certainly take this view, and I know that my right hon. Friend the First Secretary does—that the prices and incomes policy not only must be presented more positively but will work only if it is associated with equally active efforts to get productivity up so that the prices and incomes policy can produce rising living standards.

The third significance of the change is that the old Ministry of Labour, which was always an economic department—it is not new for the Ministry of Labour to be an economic department—is now one of the major economic departments.

Before dealing with some of the points made by hon. Members, I want to deal with one or two points raised by the right hon. Member for Mitcham (Mr. R. Carr). He first asked me a question about staff. The answer is that the Prices and Incomes Division's moving from the D.E.A. involved 33 people. These are high level staff concerned with the evolution of the prices and incomes policy. My right hon. Friend mentioned her plans for a Productivity Division, about which she will no doubt say more later. I can assure the right hon. Gentleman that the overall staff ceiling referred to by my right hon. Friend the Chancellor earlier is not affected by the change.

The right hon. Gentleman also asked, quite rightly, about the effect that this would have on the interdepartmental relationships which existed when prices and incomes were administered by the D.E.A. The answer to that is simply that the new Department of Employment and Productivity will stand in exactly the same relationship to the sponsoring Ministers, including myself, for example, who are responsible for prices on the engineering front, in exactly the same way as the D.E.A. did before. It is widely known that the two Departments were involved when there were references made to the Prices and Incomes Board. For example, in relation to industries for which I have responsibility, this is first of all studied in the sponsoring Ministry—my own—then followed by discussions with the D.E.A., as it was, now with my right hon. Friend, and reference is made jointly, where appropriate, to the Prices and Incomes Board.

Whatever criticisms there may be of the way the policy operates, demonstratively this has proved a very satisfactory way of looking at the individual price references or price notifications that come to Ministers. There is, as the right hon. Gentleman will know—indeed, the veil of secrecy is beginning to be lifted from the structure of Cabinet committees—the most elaborate interdepartmental arrangement for examining problems of this kind.

Another point which has been made bears on whether there is a conflict of rôles between intervention and conciliation. This is an interesting argument because it conflicts with a point which was made so powerfully by the hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) in another context about the need for communications in industry. I fully accept what he said about this, and I thought it a most telling passage in his speech. If it is true that communication is at the heart of the success of modern industrial relations—whether from the point of view of alienation, as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) did, or from the point of view of good management as he was doing—and if it is true in relation to a particular firm that communication is important, how much more important it is in relation between Government and the entire wage settlement process. What my right hon. Friend is trying to do is to bring to bear such influence as she is able early enough to see that this situation does not get to the point where so many firm positions have been taken up that one might get a very damaging clash.

It is true that the Ministry of Labour, even as a conciliator, has always had a difficult task, but I feel sure that the more positive rôle—which is intended to be positive in every sense—that my right hon. Friend intends to pursue in intervening early enough, far from conflicting with the conciliatory rôle, may help to reinforce it. I am glad the point was raised because, quite clearly, the community is very concerned with the consequences of industrial disputes that fail to be settled peacefully.

I come now to some of the other points made in the debate. I would join with what has been said by a number of Members on both sides of the House about the very impressive, sincere and knowledgeable speech made by my hon. Friend the Member for Walton. I did not agree with everything that he said, but he did speak with very deep feeling on this. He pointed out—and no Minister needs to have it pointed out, but it is certainly right it should be done—the difficulties of the prices and incomes policy upon which we are set.

We hear a great deal about intervention, and it is always Government intervention that we hear about. I would like to put to the House an interpretation of "intervention" which I have not heard put forward in quite this way. It is this: that every wage and price settlement reached in a community like ours "intervenes" on to other issues which are of national concern. If there is intervention today—and there is intervention in the inter-relationship between Government and industry—it is an intervention that makes itself felt on the Government side as it reacts to a situation which may develop in industry, at least as much as the other way round. There is a parallel for this in another connection, namely, it is what technology is doing to us that really matters and not what we are doing to technology. I will come back to that in a moment.

I would ask my hon. Friends who are concerned about intervention in the field of prices and incomes to ask themselves this question: how do we deal with the situation when certain wage and price settlements are arrived at without regard to the national interest, and the national interest can be as critically affected as it manifestly is? I have heard many criticisms—and I shall come back to some made by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot)—of the policy upon which we are firmly set, but I have never heard—and certainly have not heard today—anyone provide an answer to the question, "What happens if this prices and incomes policy does not do the job which it has to do in the next eighteen months?".

I must refer to one other point made by my hon. Friend the Member for Liverpool, Walton. He said that technology de-humanised people. I do not accept that. Going round, as it is my privilege and job to do, a number of advanced factories, the thing that strikes me about technology is not how it de-humanises, but how it elevates those who are associated with sophisticated machinery. There is nothing more de-humanising than seeing a man with a shovel shifting coal. But a man on top of an expensive bulldozer, or get him to use modern mechanical handling equipment, or as I saw it in my old job in the Post Office, get a man to type out postal codes or to work on modern sorting machinery, and we see a man who, far from being de-humanised, is wanted for his mind as well as for his brawn.

Having said that—and this is where the hon. Member for Langstone was right—it is true that in the process of specialisation that goes with that ordinary people are alienated from the immensely complicated decisions that go into the make-up of the organisation. If we could get away from the idea that technology de-humanises—which is a negative attitude which prevents us getting increased productivity and is wrong—and concentrate on the communication and participation points to which my right hon. Friend referred, I think that we could make a lot more sense of a complicated and difficult problem.

My hon. Friend the Member for Ebbw Vale always speaks with great conviction. He said that he would not mind if this was temporary. He said, "If you say to me that we are in a mess, and we must do this for a while, we might wear it, but if you say that it is permanent, I am afraid that it is not on". My answer to that is that the relationship between prices, incomes, productivity, employment, growth, and living standards is permanent. We cannot any longer separate prices and incomes from prospects for employment. We cannot separate prices and incomes from living standards. We cannot separate the extent to which the Chancellor of the Exchequer is able to allow growth to go forward from prospects in export markets which is closely linked to prices and incomes.

What the Government are saying—and it is important that this should be understood is that they have done no more than identify a permanent relationship between what, in less sophisticated societies and economies, are things that can be looked at separately in watertight compartments. Given the fact that this country's great problem over the last twenty years or more has been its failure to get growth because we were held back on balance of payments grounds, and given the close relationship between prices and incomes and competitiveness in export markets, I cannot offer my hon. Friend any escape from that relationship. How it is organised, and the interrelationship of voluntary to the statutory, are things which have to be considered and discussed, but no Government of any kind could possibly say to the public with any honesty that they could look forward to the time when prices and incomes could be looked at in islotion from the whole planning process of the country's economy.

I know that nostalgia leads one into saying funny things. I have heard some odd things said about the unfairness of the prices and incomes policy, as if by contrast not having one, led to fair answers to this prices and wages problem. The idea that the strength of a man's negotiation position is in any way related to the morality of his claim, to the social value of his claim, is rather unsatisfactory. I could point to many examples—and I know that other Ministers who have these responsibilities could do so, too—of the fact that one of the first consequences of the prices and incomes policy was that those in the public sector who had suffered under an earlier Administration when there was more of a free-for-all were brought into a position of greater comparability.

Finally, my hon. Friend the Member for Ebbw Vale raised, quite rightly, the whole relationship of this matter to employment and expressed anxieties about the level of unemployment and asked what were the Government's intentions and hopes. He knows, and I think that the whole House knows, that the level of employment depends once again on our balance Of payments position. The only time that we have had rising unemployment since the war has been when we have deliberately, as Governments, had to put a damper on because of balance of payments deficits. Therefore, the problem of employment is intimately related to the success of the prices and incomes and productivity policies. There are new elements in the employment problem which I wish to deal with in the few moments left to me relating to technological redundancies and rationalisation.

I turn very briefly to some of the points raised by the right hon. Member for Handsworth. He asked about the D.E.A. and made a criticism of it, but the medium-term planning work done by the D.E.A. in real resource terms and in terms of industrial and regional policy bears very much on the central problems of this country's economy. The right hon. Gentleman would be making a great mistake if he thought that, because of the development of the Department of Employment and Productivity, the D.E.A. did not have a very important rôle to play, because its rôle in regional policy has been growing in a way which is very helpful to the regions, particularly the development areas.

The right hon. Gentleman also asked about science policy. I cannot deal with this at great length, but I can tell him what I have said when asked about this matter before. To divide academic science from technology has been proved to be not only workable but very sensible. The science budget is one thing. But if we have a certain amount of money and say, "This is all we can afford to spend", the scientists will advise us on how to use it. But as the Minister of Technology I have no budget. I have to justify my expenditure in terms of the return to be obtained on the investment. There is no reason to believe that a change of science responsibilities is likely to take place.

May I finish by saying a few words about the longer term meaning of productivity.

Mr. John Page

Before the right hon. Gentleman reaches his peroration—and I believe that this is exempt business, so that we are in no desperate hurry—would he answer two questions—

Mr. Speaker

Order. Even if it is exempt business, interventions must be brief.

Mr. Page

First, could the right hon. Gentleman explain the right hon. Lady's position as First Secretary? Secondly, must every price increase above 3½ per cent. be sent to the Minister for approval?

Mr. Benn

The first point is not before the House. The post of First Secretary, created during the life of this Government, as it happens, has been occupied by most Ministers responsible for prices and incomes. When my right hon. Friend the Member for Belper (Mr. George Brown) was in charge of prices and incomes, he was First Secretary. When my right hon. Friend the Member for Fulham (Mr. M. Stewart) was in charge of prices and incomes, he was First Secretary. Except for the last six months, the First Secretary has always been responsible for prices and incomes.

I had better leave the hon. Gentleman's second point about the detailed arrangements for price increases for the debate on the Prices and Incomes Bill. It would involve going into too great detail to deal with it in a debate of this kind.

I finish by saying something about productivity in a way which, curiously, has not emerged from this debate.

The more one looks at the problem of productivity the more one becomes involved with a whole host of other aspects of industrial policy. In trying to make the prices and incomes policy more positive my right hon. Friend, with the help of her new Productivity Department, will be searching for productivity bargains that might yield higher incomes.

It being Ten o'clock, the debate stood adjourned.

Ordered, That the Proceedings on the Air Corporations Bill and the Commonwealth Telecommunications Bill [Lords] may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Gourlay.]

Question again proposed.

Mr. Benn

I was saying that my right hon. Friend will be seeking in every case to make it possible for those who are putting in claims to find ways by which productivity bargains can finance them. Beyond this there are all sorts of other possibilities in which my Department which is responsible for technology will find opportunities of co-operating with the new Department of Employment and Productivity. We are long beyond the days when productivity was a matter of exhortation—when Ministers said that "exporting is fun", and adopted the sort of exhortatory methods used during the war. But it is clear that there is a tremendous task of communication to be performed in bringing home to managements and trade unions the new means by which productivity can be raised by the use of new methods.

About 20 different productivity services run by my Department have developed over the last few years. There is the Production Engineering Advisory Service, the Numerical Control Advisory and Demonstration Service, the Low-cost Automation Centres, the Computer Advisory Service, the National Computing Centre, the Computer-aided Design Centre and the Institute of Advanced Machine Tool and Control Technology at East Kilbride, among others, which will make available for my right hon. Friend's purposes a complex system of productivity services, not one of which involves exhorting anybody to do anything, but each of which is available if management wants to increase its cash flow or workers want to increase their amount of take-home pay as a result of a productivity bargain.

It is true that technology offers the best hope for our nationally escaping the straitjacket that has limited our growth in past years. For the individual trade unionist making his claim, or management trying to increase its cash flow, it is by the application of modern technology that the chances are most likely to develop.

Mr. R. Carr

How do the right hon. Gentleman's productivity teams fit into this? Why is it necessary to put them between the right hon. Gentleman's services and the ultimate user? Is not this one extra link in the chain?

Mr. Benn

The right hon. Gentleman did this last week. He flatters me by anticipating what I am going to say, and by showing that I am making my speech in the right order, even if he does not agree with what I am saying.

There is opening up between the Ministry of Technology—which has had 3½ years to get into its stride, and has developed some formidable services—and the new Department of Employment and Productivity a relationship which is not only necessary but very beneficial. I shall explain how it will work.

Let me look at it first from the negative point of view. All technology, by definition, tends to replace men by machines, and when a new technology is introduced, to the extent that my Department's cause flourishes the trade unionist affected by the change is likely to find himself facing the possibility of redundancy. Now by much earlier action in manpower forecasting and planning—which is a development of the old Ministry of Labour's rôle—the Department of Employment and Productivity working on the problems that my Department is supervising can tackle them in such a way as to humanise these changes.

Secondly, if my right hon. Friend is not just looking for a productivity bargain for May or June, 1968, but is trying to open up possibilities of a productivity bargain in 1969 and 1970, it is to the wide range of services that we have developed that she will naturally want to turn to find out what new methods will be the basis of the productivity bargains for next year and the years after. I do not want to make too great a claim for this new relationship but I can say, as Minister of Technology, that since I have been in the job I have become increasingly conscious of the need for exactly this function to be performed somewhere in Government. I see a prospect in this new Department that it may actually occur. After the rundown of the mines and railways, next comes containerisation and computerisation. Let no one be in any doubt about the effect that this will have on office work, and on the life of anyone who earns his living, whether by his hands or by his brain. Everyone will be very greatly affected by the introduction of new machinery at an accelerating rate over the next few years.

This brings me to another point of great importance—the rôle of Government in creating employment. I do not wish to reopen the question of the Industrial Expansion Bill, now going quietly through its passage in another place. But one of the functions of Government today, faced with this change in technological advance and the redundancy that comes with it, is to create new employment opportunities. The job of Government is to create jobs and this involves new governmental equipment. This may be possible in conjunction with my right hon. Friend.

I now come to research and productivity, because the products and jobs of tomorrow will be emerging from the laboratories of today. One reason why we have adopted a much more rigid view of the economic justification for research is because we cannot afford to have research workers working in areas where they are not likely to produce economic returns in terms of jobs for the future. If we have been citicised for running down defence and defence research by the party opposite, for running down Culham, as we are doing, and for our space decisions, I must point out that it is partly because we are conscious of the fact that we have to relate our very valuable research efforts to the need to create the means by which productivity can increase in future.

This also illuminates our attitude towards industrial structure.

The hon. Lady the Member for Tyne-mouth (Dame Irene Ward) will know of the importance of the Geddes Committee and the Shipbuilding Industry Board in trying to increase productivity by restructuring that industry. It is by restructuring the computer industry, for example, that we shall get all kinds of improvement in employment. Aero engines, G.E.C.-A.E.I. and B.M.H. and Leyland are major structural changes which provide us with the possibility of higher productivity in future.

Finally, one word about marketing, to which reference was made. It is no good making things if we cannot sell them. The amount of work which needs to be done in marketing to create jobs for people is enormous. I read Joe Chamberlain before going to Birmingham recently. He had a perfect market oriented view. He knew what nineteenth century imperialism was about. In the nineteenth century one pinched the market by sticking up one's flag and the natives bought one's goods. The doctrine is now dished out one hundred years later as the doctrine of a "market oriented economy", as if it was a new American invention. But the British imperialists knew it all along. All we have to do is reorient ourselves from the idea of having to own the market to the idea of cultivating it, and we are almost home and dry.

A great number of our efforts, whether looking at technological agreements with the Russians or the possibility of a European Centre of Technology or from the point of view of the Kennedy Round, represent conscious attempt by Government to make productivity rise more rapidly, by expanding the market.

To sum up on behalf of my right hon. Friend and myself, this has been a most useful and helpful debate. There is not total agreement on many of the issues we have discussed, but I am certain that by placing the responsibility for prices and incomes in the old Ministry of Labour, and by giving it a new form and new terms of reference and a new title to get away from the rather cloth-cap image of the Ministry of Labour, it will reinforce in the minds of the public the inescapable truth of our position, namely, that economic growth, jobs, pay, social services and our survival as a nation depends on our success in relating what we take out of our economy into what we are able by skill, work and effort to put into it.

Question put and agreed to.

Ordered, That an humble Address be presented to Her Majesty, praying that the Secretary of State for Employment and Productivity Order 1968 be made in the form of the draft laid before this House on 23rd April.