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Wages, Salaries And Dividends

Volume 649: debated on Tuesday 21 November 1961

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asked the Chancellor of the Exchequer when he now expects the Government's pay pause policy to be discontinued.

I have nothing to add to or subtract from what I said in the House on 7th November in reply to the right hon. Gentleman the Leader of the Opposition.

Is the Chancellor aware that that was a most unsatisfactory reply? In view of recent developments, is he not behaving very like the emperor without clothes? Does he know that the rest of the country see that his pay pause policy has collapsed in ruins around him? What has he done to fulfil the pledge he gave on 25th July, as reported in column 223 of HANSARD for that day, to the effect that the policy on wages would be worked out to relate them to productivity?

On the first part of that question, I do not agree with the hon. Member at all. As I have said, the purpose of the pay pause is to try to check increases in costs, which is of primary interest to British industry and exporters. If it fails, it will be a very bad day for the people who have to earn their living in this country. In reply to the second part of the question, I am certainly carrying out what on 25th July I said I would carry out, but I do not think the time is yet ripe to make a statement on it.

Is the Chancellor aware that support for his pay pause has rested largely on the assumption that it would be fair to all sections of the community, whether organised or not? Will he bear this in mind in negotiations which are taking place, or have taken place in the last week?

In view of the Chancellor's notable triumph at London Airport in this matter last week, would he now agree that all he has achieved is that the Government are standing firm on the principle that agreements can be broken but, so far as the purpose of the pay pause is concerned—namely, keeping wages down—they have utterly failed in that wages have been raised at London Airport more than they would have been under the original application? If that is to be the pattern in future, could he not have solved the problem for teachers by promoting everyone to be a headmaster?

The Question deals with the general issue. I still maintain that it is in the national interest that there should be restraint in increases in personal incomes. The problem facing the country is to export enough to earn our living in the world. That depends on costs, and, as the right hon. Member knows full well, personal incomes, wages and salaries are a very large element in costs.

Will the Chancellor now say, in view of all that has happened in the last week in the pay pause, whether the Government now intend to reverse their decision in respect of some of the agreements that have been broken? Secondly, will he say whether in his view the pay pause is intended to extend to dividends and rents?

In reply to the first part of that question, I have nothing to add to the original Answer or to the statement I made in reply to the Leader of the Opposition in the debate on 7th November. In regard to dividends—[HON. MEMBERS: "Rents."] The right hon. Member asked about dividends—[HON. MEMBERS: "And rents."] In regard to dividends and all other forms of increases in personal incomes, I hope that my request will be taken note of.

Is the Chancellor oblivious to what has been happening in the real world in the last two or three days? Does he still go on saying that he hopes this policy will succeed in face of what is happening before all our eyes? How does he reconcile what is happening with his refusal to do justice to white-collared workers?

I do not accept at all what the right hon. Member says. With reference to the one specific matter, the settlement in the electricity supply industry, the Prime Minister is to make a statement at the end of Questions.

Would my right hon. and learned Friend agree that it is abundantly clear that the results of his policy are that strikes pay?