HC Deb 17 February 1972 vol 831 cc610-1
Q1. Mr. Sheldon

asked the Prime Minister if the public speech of the Chancellor of the Exchequer on 27th January at Leeds on economic matters represents Government policy.

The Prime Minister (Mr. Edward Heath)

I understand that the hon. Member has in mind my right hon. Friend's speech in Leeds on 28th January. I would refer him to the reply I gave on Tuesday to similar Questions from the hon. Members for Bolsover (Mr. Skinner) and Heywood and Royton (Mr. Joel Barnett.)—[Vol. 831, c. 238–40.]

Mr. Sheldon

Is it not astonishing that in that speech the Chancellor of the Exchequer failed to take into account the damage caused by the coal strike which was then under way? When he said, in the middle of the coal strike, that his objective was to maintain the economy on an even course, surely that was the strongest indication of the inability of the Government to understand the serious impact of this strike and its effect on industry and the general life of the country.

The Prime Minister

At the time my hon. Friend made his speech on 28th January, the Government were hoping for a settlement between the two parties concerned. That was our hope until Thursday of last week.

Mr. Hastings

Will my right hon. Friend remind the House of what the Chancellor said in that speech about excessive wage settlements and about picketing? Will he ask the right hon. Gentleman the Leader of the Opposition whether he agrees with those statements?

The Prime Minister

I read the statement to the House on Tuesday, and it was to the effect that wage restraint is necessary in order to achieve price restraint and at the same time to reduce unemployment. I do not think there has ever been any dispute between the two sides of the House about that.

Mr. Atkinson

But there undoubtedly is a great difference between both sides of the House, and therefore will the Prime Minister reconsider his answer? In that speech the Chancellor of the Exchequer said that men had literally "priced themselves out of work", but at the same time the right hon. Gentleman and his colleagues in the Cabinet are always saying that those areas which have produced the greatest unemployment have the lowest wage costs per unit of production. May we be told what the Prime Minister is saying? Are the unit costs down in terms of labour, or is the Chancellor correct in saying that unemployment has been caused by high wages?

The Prime Minister

My right hon. Friend the Chancellor is absolutely right, and this has been the theme running through all questions of wages and prices since 1945. Surely the answer depends on the degree of increases in productivity compared with increases in wages. It is regrettable when low wages are combined with slowly increasing productivity. What the country needs is a rapid increase in productivity and consequent high wages.

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