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PRICES AND INCOMES POLICY
The White Paper also makes it clear that the Government's policy for maintaining expenditure cannot succeed unless there is reasonable stability of prices and wage rates. The fundamental issue is simple. It is little use injecting purchasing power to keep up the volume of employment if the additional money all goes in profit. It is equally useless if it all goes in wages and you get no production for it. If the effect of making more money available, for example, for housing, is simply to put up the price of houses and not to get more houses and more workers employed, the Government's policy will fail. The adjustment of wage rates must go on through the ordinary processes, but the general level ought to be related to productivity. I do not object to that principle. If we had had through the nineteenth century a rise of wages comparable to the productivity of the working people, the standard of living in this country would have been about double. The people were not organised then.
Mr. A. Bevan (Ebbw Vale) This is one of the crucial points in the Whole matter. What instrument does the right hon. Gentleman intend to use to raise wages to the index of production?
Mr. Bevin We have to discuss it with the parties and work out the methods, just as Parliament, I hope, will work out the legislation as we go along. I have not worked out the precise methods, but I have asked my trade union friends, industry and everybody to realise that this is an essential thing that must be done. If it is to be done, we have to alter the old catch-as-catch-can methods that we have had in the past. [HON. MEMBERS: "Hear, hear."] I am glad my hon. Friends behind me cheer. No one has had more throws in the wrestling system with wages than I have had, but the catch-as-catch-can method was not always on one side. I would like to see that old system in wages go. We want to relate wages to efficient production. There are many industries which I have had the honour to represent which were on this basis. The result was that our wages came out of the sweated level up to a decent standard. The adjustment of prices will also go on, but there must be no action on the part of any sectional interest to force prices to an artificial level. The test of good management and distribution, if this scheme is to work and consumption is to be maintained, is how near the cost of production the producer, when he comes home and becomes a consumer, can buy his own goods.
We want to get rid of casualisation of labour. I will not elaborate that point now. The House knows enough about it and how demoralising it is. The less casualisation there is, the more efficiency you get in industry. As one great industrialist once said to me, "Keep a steady pressure up; by a steady pressure on wages you will make the man on top use his head." Nothing promotes efficiency more than a steady pressure on organised industry. Another matter that enters into this problem is the hours of labour. This, again, will need to be very carefully and scientifically studied. The growth of mechanisation makes for the right use of the organisation. If I may offer a predilection of my own, it is that if I had a choice between a few minutes off a day, or an extension of the annual holiday, I would prefer the annual holiday.
Mr. Barstow (Pontefract) Why not both?
Mr. Bevin Sometimes you cannot get both.
Mr. Barstow Certainly you can.
Mr. Bevin That depends on the industry. When you are reducing on the one hand, you must not reduce to a point which makes it difficult, whereas longer holidays give an opportunity of bringing your maintenance up to date and rejuvenating your industry while your main productive workers are off. That may be a real economic asset, while serving two purposes. That is the point I want to make. I am open to argument and conviction but these are points, I think, in the new economic adjustment. Indeed, the new responsibility of the State develops important machinery at the centre. We must have the analysis of a great deal more information about our economic life. I hope there will not be too much talk about forms. We must have the information, in order to arrive at a right judgment. There must be a systematic review of our resources at home, so that we can use them, with our exchange position, to the absolute maximum, both material resources and human.