Prices and Incomes Policy

HC Deb 27 July 1971 vol 822 cc193-4

11. Mr. Ashley

asked the Chancellor of the Exchequer if he will now make a statement on his recent discussions with the Trades Union Congress and the Confederation of British Industry on the subject of a prices and incomes policy.

Mr. Barber

The measures I announced on 19th July and the C.B.I. initiative on price restraint go a long way to meet the hopes which have been expressed by the T.U.C. I look forward to the further discussions which are to take place at the N.E.D.C. meeting on 4th August.

Mr. Ashley

Is the Chancellor of the Exchequer aware that his conversion to a prices and incomes policy is belated though welcome? In view of the fact that the C.B.I. and the T.U.C. are now showing fresh interest in this matter, subject to certain conditions, does he not agree that a few hours' discussion at the N.E.D.C. is grossly inadequate? Would he consider establishing regular machinery so that the debate about a prices and incomes policy can be hammered out during the next few months?

Mr. Barber

The Government's relations with both the C.B.I. and the T.U.C. are good. If any meetings additional to those which take place under the auspices of N.E.D.C. are necessary, further meetings will be held.

Mr. James Hamilton

What steps does the Chancellor intend to take on the new White Paper in regard to rents, which for many local authority tenants will result in a rent increase of over 5 per cent? How does he expect the T.U.C. to stand still and not make wage applications when rent increases will exceed the 5 per cent. put forward by the C.B.I.?

Mr. Barber

We have gone a long way on prices, and we have done what the T.U.C. has asked us to do and what the previous Government never did: we have taken action directly to affect prices. By reducing S.E.T. by half and by the cuts in purchase tax which I announced last week, there is no doubt that we have taken action. I hope that the T.U.C. will now consider what helpful action it can take to ensure that future pay settlements do not undermine the better outlook we now have on prices.

Mr. Roy Jenkins

In view of the new situation following the measures the Chancellor has taken in relation to his claims concerning S.E.T. and purchase tax, can he give us his estimate of the likely rate of price increase over the next 12 months?

Mr. Barber

No, Sir. Furthermore, the right hon. Gentleman never did so, and I am sure he was very wise.