David Knox – 1978 Speech on the Loyal Address

Below is the text of the speech made by David Knox, the then Conservative MP for Leek, in the House of Commons on 1 November 1978.

I agree with the speech made by my hon. Friend the Member for Flint, West (Sir A. Meyer). As we have come to expect from him, he made a reasonable, sensible and moderate speech. My hon. Friend always makes a real contribution to sensible debate in the House.

I am grateful to have the opportunity to speak at such an early stage in a parliamentary Session which might not last long. Indeed, it might be over within a fortnight. I confess that, like my hon. Friend the Member for Flint, West, I am rather sorry that the House has reassembled without hon. Members having the opportunity to face the electorate. It is pleasant to see some colleagues here who did not expect to return after the Summer Recess. I am referring to those right hon. and hon. Members who do not intend to take part in the next General Election rather than those on the Labour Benches who represent marginal constituencies. Although it is pleasant to see those who were to have retired, I think it was a great mistake not to have a General Election last month. I do not say that in a particularly partisan spirit.
The Government do not have a majority in the House. They do not have a permanent arrangement with one of the minority parties to give them a majority. In such circumstances, the Government can only limp along from day to day, not knowing whether they will be in office a few clays later. Such uncertainty cannot be good for the country.

No one knows where he stands. Decisions by employers and trade unionists will be more difficult. Urgent decisions will be deferred because no one will be sure about the future political environment. The inevitable continuous electioneering atmosphere will have an adverse effect on the quality of government. All that can only be damaging to the country. It would have been much better for us to have had an election last month. The uncertainty would have been removed. Everyone would have known which party was to be in power over the next few years. The people would have had a much better idea of the future political environment. The quality of decisions within and outside Government would have been better, and the new Government would have been able to get on with the job of governing the country.

But, although we did not have a General Election last month, we could well have one later this month or next month, and it is because I believe that the present uncertainty is damaging to the country that I hope the Government will lose the vote at the end of the debate and so be forced to an immediate General Election. I hope that the minority parties will put the country before party and join my party in voting the Government down.

The hon. Member for Dunbartonshire, East (Mrs. Bain) made a very able speech this afternoon, but she was vague about the SNP’s intentions at the end of the debate. She dragged in a large number of issues, but the essence of the decision by the nationalists must hinge on devolution. The reference by the hon. Member for South Ayrshire (Mr. Sillars) to the advertisement which the nationalists have put in Scottish newspapers indicated the truth of that.

Of course, there must be a temptation for the nationalist parties to argue that they will sustain the Government in office either positively or by abstention until the devolution referendums have taken place. From their point of view, that is a superficially attractive argument. I believe that it is important that these two referendums should take place quickly, because the sooner the uncertainty about the future government of Scotland and Wales has been resolved, the better it will be for the United Kingdom as a whole and the individual countries within it.

The importance and urgency of early referendums on Scottish and Welsh devolution cannot be said to be an argument for sustaining the Government in power. I say that, first, because, as my right hon. Friend the Member for Cambridgeshire (Mr. Pym) has made clear, a Conservative Government would hold the referendums on 22nd March next year, and that is very similar to the Prime Minister’s pledge this afternoon. No one who knows my right hon. Friend would ever believe that he would not fulfil that promise.

I say it, secondly, because there is no reason for sustaining the Government in power. If they had wanted to hold the referendums quickly, they could have ​ done so in September and October, as some of us advised in the summer. Presumably they did not do so because they wanted to exercise some leverage on the nationalist parties over the next few months.

The nationalists may, of course, argue that a Labour Government will campaign for a “yes” vote whereas a Tory Administration would campaign for “no”. The hon. Member for Dunbartonshire, East made quite a bit of that argument. No doubt the nationalists would argue that the attitude of the Government of the day is an important influence on the outcome of a referendum. I doubt that. If anything, I should have thought that Government support for one side or the other could well be counter-productive. I do not get the impression that Governments of any particular party are particularly popular or influential on the views of the people. But, in any event, it seems clear to me that there will be an emphatic “yes” vote in Scotland for devolution. The argument is therefore not valid when applied to Scottish devolution. I know much less about Wales and I therefore refrain from forecasting the outcome of the referendum in that country.

It seems clear to me therefore that there is no great advantage for the nationalists in their sustaining the Government in office. There is the possible disadvantage, if they do so, that their right-of-centre voters will desert them at the next General Election in fairly large numbers. I need scarcely remind members of the SNP, holding as they do constituencies such as Galloway, South Angus and Perth and East Perthshire, how much they have to lose if they back the Government. It must therefore be in their interests to vote with the Conservatives at the end of the debate.

In the past few weeks there has been a great debate in the country about incomes policy. I welcome that debate not least because it is taking place within political parties as well as between them. It is right that such a debate should take place. Whether we have an incomes policy is an important economic issue, but it is as well to remember—and the media would do well to bear this in mind—that it is by no means the only economic issue that faces the country. And it is perfectly possible to be a loyal member of the Labour or Conservative Party and yet not necessarily to be in full agreement with the current official attitude of either party to incomes policy.

I hope that the debate on incomes policy will continue with greater emphasis placed on the issue and less emphasis applied to the personalities. I have been convinced for some considerable time that, in the imperfect conditions which obtain it this country, an incomes policy is an essential tool of economic management, both as a means of limiting inflation and as a means of maintaining a higher level of employment than would otherwise exist.

That is not to say that I would not prefer genuine free collective bargaining, but frankly that is not an option. In practice, free collective bargaining in this country is neither “free” nor “bargaining”. Quite simply, it is the exercise of monopoly power. Monopoly power, wherever it appears, is bad and must be restrained. When monopoly power is exercised in the labour market, an incomes policy is probably the best means of restraining some of its excesses.

Of course, incomes policies have defects, but these pale into insignificance compared with the defects of so-called free collective bargaining. So-called free collective bargaining between 1969 and 1972 resulted in the inflation and unemployment of the early 1970s. So-called free collective bargaining in 1974 and 1975 led in the years immediately following to the hyper-inflation and the excessive unemployment of that time. So bad were the consequences of that period of free collective bargaining that we are still suffering from both the inflation and the unemployment that arose.

No one would claim that any incomes policy is perfect, nor that any incomes policy in the future is likely to be perfect either. Nor would the strongest supporters of incomes policies claim that such policies in themselves were sufficient.

But there is no doubt that the incomes policy of the last Tory Government was highly successful in restraining domestically generated inflation in 1973 at a time when imported inflation in the form of much higher commodity prices was playing havoc with the general level of prices in this country.

There is no doubt that the present Government’s incomes policy has played a significant part in reducing inflation from 26 per cent. to 8½ per cent. over the last three years. That is why it has had my general support. That is not to condone the irresponsibility of the Government when they allowed inflation to escalate to 26 per cent. in the first 16 months of their period of office. It is only to recognise that when they started to do something more sensible it was in the national interest that they should be given general support.

The Government have now suggested that incomes increases in the next 12 months should not exceed 5 per cent. I think that that policy can contribute to a further reduction in inflation and to the avoidance of even higher unemployment than we now have. It consequently deserves support. However, the Government’s policy seems somewhat rigid and inflexible, but it is the only incomes policy we have, and even with its defects it is better than no incomes policy. It should, therefore, be supported by all those who have the national interest at heart, and that means by all Conservatives.

Let me clarify one point. Even though I think that the present pay policy is inflexible, I do not doubt for one moment that 5 per cent. is right as a global amount. Therefore, if one is to have a more flexible approach, that must mean that some would get a little more than 5 per cent. and some a little less. It does not and should not mean that everyone should get 5 per cent., some rather more and most people far more—otherwise, all that will happen will be an inevitable return to the hyper-inflation from which we are still in the process of escaping.

If one looks at the last few years and at the period between 1972 and 1974, when the Tory Government’s incomes policy was in being, one finds that there is one very considerable difference. I refer, of course, to the behaviour of the Opposition of the day. During the period of the Tory Government’s incomes policy, the then Labour Opposition lost no opportunity to attack it and to try to undermine it. From the Prime Minister downwards, members of the Labour Party gave every encouragement to people to defeat the then Government’s policy, even though that policy was very much more generous than the incomes policy of the present Labour Government.

Since the Labour Government introduced their incomes policy in 1975, the present Conservative Opposition have behaved responsibly. No attempt has been made to undermine the Government’s policy. No encouragement has been given to people to try to smash it. As my right hon. Friend the Leader of the Opposition said at the Conservative Party conference at Brighton, speaking about the Prime Minister:

“Let me put his mind at rest. We are not going to follow in his footsteps. We will not accuse him of ‘union bashing’. We will not support a strike in breach of an agreement. We will not act irresponsibly—and he knows it.”

The Conservative attitude to the Labour Government’s incomes policy has been a model of responsible opposition, and I hope that the new Labour Opposition will copy it after the next General Election.

I should like very briefly to express regret about two omissions from the Gracious Speech. First, there is no mention of proposals to implement the Erroll Report on liquor licensing. It is now six years since the committee reported. Ever since, the Home Office has dithered on the issue and done nothing at all. In the meantime, the Clayson report on Scottish licensing laws, which was published after Erroll, in August 1973, was implemented in the Licensing (Scotland) Act 1976.

There is considerable evasion of the licensing laws in this country. There is great public concern about them because they are old fashioned and reactionary. If the Government wanted to use the time in this Session to effect a useful and helpful social reform, I cannot see why at long last the Home Office could not have come around to producing a Bill to deal with this problem.

The second omission, which I regret very much, is the Government’s failure to implement the recommendation of the Speaker’s Conference in the 1970–74 Parliament to lower the age at which people can stand for Parliament. It is nine years since the voting age was reduced from 21 to 18. The Speaker’s Conference in the 1970–74 Parliament recommended that the age at which people could stand for Parliament should also be ​ reduced from 21 to 18. The current situation is anomalous. It seems to me regrettable that the Government do not propose to take the opportunity to implement that recommendation of that Speaker’s Conference as well as the recommendations of the Speaker’s Conference in the current Parliament.

We do not have a lot of legislation for the Session. It would seem to me not unreasonable to ask the Government to reconsider both these points. We have plenty of spare time. Let us have Bills on both of them and so effect two very useful reforms.