Michael Heseltine – 1966 Maiden Speech in the House of Commons

Below is the text of the maiden speech made by Michael Heseltine in the House of Commons on 14 July 1966.

I was deeply aware of the regard in which my predecessor, Sir Henry Studholme, was held in this House. It is matched by the affection extended to him in the Tavistock Division. He represented that Division with great distinction for 23 years. I am particularly conscious, as I am honoured to rise for the first time to speak in this House, of the standards he set when he was a Member of Parliament.

I know from what I have heard in this debate:hat we shall hear objections to the working of the Bill. We have heard some of them expressed by my right hon. Friend the Member for Barnet (Mr. Maudling). As a director of a company in the recruitment field, I saw something of these difficulties and I wish to make reference to them, but before I raise those questions I should like to raise what to me are questions which are fundamental not only to the Bill, but to the thinking of hon. Members on both sides of the House.

I wish to ask what right the House has to assume that there is a concept of national interest to which each of us as citizens owes a prime obligation in the every-day conduct of our job or business. If such a claim can be made of us I ask whether the making of that claim will so stimulate our energies and talents that the country will derive the greatest benefit from our endeavours.

There are two conditions which would be necessary to be fulfilled if we are to accept the concept of true national interest. The first condition is that it is capable of definition and that that definition must be acceptable not only to a political party, but to hon. Members on both sides of the House.

The second is that all sections of the nation shall be expected to share in any sacrifice which might be required by serving the national interest. I believe that on these two counts the Bill is unacceptable. By keeping the economy in its present over-heated state, many hon. Members would believe that we are acting against what we would term to be the national interest. There is no consensus on this subject today.

On the second point, only statutory control would enable the trade unions and the large industrial concerns to have the confidence that they were not embarking on an experiment from which the less controllable parts of the private sector would opt out. Even if the First Secretary were able to introduce legislation of the sort which would ensure control, I do not think that this would encourage on the part of each of us the sort of endeavours that the right hon. Gentleman would require. The First Secretary is concerned to involve the public in the problems facing the country. The overwhelming majority of the public are now aware—the First Secretary of State must take some of the credit for having educated them—that the only way in which the country can enjoy increasing benefits is if we can get faster growth.

There are two other considerations which I ask the First Secretary to bear in mind. First, a policy of full employment does not mean that each one of us is entitled to expect that the same job will be available to us in the same place throughout our lives and industries cannot automatically expect Government protection from historical trends and from overseas competition. Secondly, the only way to extract the maximum effort from the majority of our citizens is to reward by financial incentive. Businessmen will respond to one thing, and one thing only—the opportunity to increase their salaries, their profits, and the capital value of their companies.

If we wish, as I am sure we do, to enlist the nation’s greatest efforts, tangible rewards must be placed within the reach of everyone. There is no doubt that the First Secretary is one of the most persuasive and eloquent members of the Government. He has gained remarkable success in persuading people to say that they agree with the targets he has set, but I urge him to realise that it is one thing to persuade people to say that they agree. It is quite another thing for those people to go away and carry out what they have said they agree with. If the First Secretary could be present at every management meeting, if he could stand behind all the retailers’ counters, and if he could travel daily with the men going to work in Britain’s factories, then I believe that in a short term such a policy would be credible. The fact is that such an idea is patently absurd and, therefore, an alternative solution is required.

There can be few hon. Members who have not engaged in some negotiation which, in theory at least, would now fall within the purview of this legislation. There must be few who have not negotiated a salary increase, who have not evolved a pricing structure, or who have not disposed of capital in order to secure the maximum return. These are commonplace activities. I do not believe that behind the closed doors of human motivation considerations of the national interest weigh in the balance. I believe that it would be unhealthy if they did.

There is involved in this discussion this afternoon an obligation as fundamental as any that we may owe to the nation. We have obligations to ourselves. There are many hon. Members on this side of the House who believe that we serve our community best by maximising the return on our own endeavours. Of course there are exceptions to every generalisation, but for the generalisation I would say that the community grows stronger where its members set out to maximise their earnings and where its companies strive to maximise their profits.

It is the Government’s duty to establish beyond any doubt what they consider the national interest to be and, once they have so defined the national interest, not to urge or to beg or to plead, but to legislate on behalf of that national interest. That must be the purpose of the Government. Responsibility for interpreting the national interest cannot be spread into every trade union conference room, into every board room, nor, indeed, into every private home. Surely it is the responsibility of us in the House to lead. If we surrender that right we shall fail in our obligations to those who have sent us here.

There are many practical difficulties facing this legislation. I want to say something about the problems which confront anybody trying to hold or recruit salaried staff today. The shortage of skilled and trained management staff is acute. The temptations facing them to move from one job to another are intense. A small but significant group of these people are particularly tempted by the carrots dangled in front of them from America. I know of one occasion only this week when a telephone call out of the blue offered a man a 300 per cent. increase on the salary he was earning.

Even the employee devoted to his own job cannot avoid the £8 million worth of recruitment advertising which will appear in the national press in 1966. Indeed, it is indicative of the problem that in 1961 recruitment advertising in the national Press amounted to £4,193,000. By 1965, the figure had more than doubled to £8,535,000. It is now widely accepted by employers that, to recruit a suitable candidate for middle management, the advertising costs alone in the national Press can exceed or amount to up to £250.

I mentioned earlier the temptations on employees to seek increases by changing their jobs. These employees are sought by specialist registers which are prepared to distribute their names to company after company until they are offered another, and usually higher paid, job. Job changing, which is usually synonymous with an increase in salary, is increasing.

It is further encouraged by the growth of employment agencies. Between 1956 and 1965 in the whole of the London County Council area licences were issued to 300 new employment agencies. This was an annual rate of 37. In the year ended 31st March, 1966, the Westminster City Council which took over most of the responsibilities in this respect from the London County Council, issued 93 licences to new employment agencies.

The latest development of this activity in this country is the establishment of the professional head hunter. There is nothing new in companies making offers to employees of outside organisations, but I believe that it is a new practice new being established that lists of highly qualified, specialised staff are approached, without any indication of dissatisfaction on their part, and offered new jobs, often at a greatly increased salary.

Against this background, the background which has built the job-changing market into a highly specialised operation, it s simply of no value to tell employers that they should try to hold their staff to a 3 per cent. or 4 per cent. norm, or even lower—the figure is now to be reduced. Employees often do not want to leave the companies that employ them; but they will not, as a general rule, remain with their employers if their salary scales fall below the national average. As we all know, every application for an increase in salary or for a new job is a special case for the person submitting it. Today, no employer can lightly refuse one of his good staff an increase in salary of £100 or £150, because he knows that the replacement will almost certainly be more expensive and probably not of so high a calibre.

I have seen it argued that, although this section of the market cannot really be controlled by a prices and incomes policy, it is not a section which ought to concern us particularly because of its size. It is undoubtedly a fairly small market, but it is not obscure. What is happening in this market is an example to the majority of people in other sections of the community. The ripples spread out and the majority cannot be expected to accept readily a policy which they know does not apply to the minority.

Further, although the highly volatile section of this market is probably restricted to the younger, more highly qualified personnel up to 40 years of age, this section of the salary market is the dynamic for a much larger market. Forty per cent. of employees are now salaried. Part of the 40 per cent. covers the public sector and is, therefore, theoretically, under Government control. But this sector is directly linked with the private sector because interchangeability of career patterns is considerable. One of the most thorough and accurate salary surveys is based on co-operative research between private sector companies and nationalised industries. No major industry can afford to develop the reputation that its pay scales have fallen behind those of other industries.

There are further independent salary surveys caried out by recruitment agencies. These concentrate on people who are basically job changers and are, therefore, more likely to be bidding up the market. The purpose of the surveys is to enable companies to discover whether they are falling out of line with national trends. Throughout a given period, these surveys consider thousands of salary standards and the pattern of all new and usually rising levels of remuneration developments. The surveys are then distributed widely to personnel managers, encouraging them to bring their existing staff into line with the salaries being commanded by those changing their jobs.

There is only one impression that one can see from the salary market. Under present conditions of demand for staff, it is in a totally uncontrollable state. There are so many employees and employers that any form of control that is not imposed and not seen to be imposed cannot work. The Bill substitutes statutory exhortation for Ministerial exhortation, but the force of that exhortation is no stronger.

Indeed, I believe that we are acting out a charade, because by the time the Bill becomes law the measures that the Chancellor of the Exchequer has taken, and those he is to take, will have removed the need for the Bill. The Government have committed themselves to a policy of deflation and if the steps not taken up to now are not sufficient to raise the level of unemployment the Government will take further steps. I believe that they have accepted that as the policy they must pursue.

In the short run, it is simply not necessary for hon. Members on this side of the House to answer the question,”What would you have done?” The Chancellor has answered it for us. The core of the problem is the need to pursue policies which can obtain growth on which the ability of the Government and the public to have a choice must be based. We need a major redeployment of our resources and to retrain labour. I accept that this means paying higher unemployment benefits in order to remove the fear of unemployment but we must inject a wider degree of competition and ask ourselves not what other industries we should nationalise but what nationalised industries can be denationalised. Above all, we must so adjust our taxation system that every citizen is encouraged to earn more.