HC Deb 17 October 1972 vol 843 cc21-5
Q1. Mr. Ashley

asked the Prime Minister how many meetings he has had with the Trades Union Congress and the Confederation of British Industry during the recess.

Q5. Mr. Sheldon

asked the Prime Minister if he will make a statement on his latest meeting with the Confederation of British Industry and the Trades Union Congress.

Q9. Mr. Joel Barnett

asked the Prime Minister if he will make a statement on his latest talks with the Conferation of British Industry and the Trades Union Congress.

The Prime Minister (Mr. Edward Heath)

A further all-day meeting in the series of tripartite discussions between the Government, the TUC and the CBI took place yesterday at Chequers: this was the third such meeting since the House rose for the Summer Recess. The three parties reaffirmed their main objectives for economic management in the present situation, namely faster growth in national output and real incomes; an improvement in the relative position of the low paid; and moderation in the rate of cost and price inflation. A detailed discussion took place on proposals to achieve these objectives tabled by the Government at the previous meeting, and on other proposals put forward subsequently by the TUC and CBI.

It was agreed that the staffs of the three parties should further examine the various points raised at yesterday's meeting, and that the three parties should meet again on 26th October to agree on proposals which would meet their common objectives and provide a satisfactory basis for economic management over the coming 12 months.

Mr. Ashley

No one will quibble with those admirable objectives, but is the Prime Minister aware that, however willing trade union leaders may be to negotiate and accept his package, it will explode in their hands unless prices, dividends and capital gains are included?

The Prime Minister

That, with great respect to the hon. Member, is a matter for the trade union leaders representing the General Council to decide, and this, of course, is what the discussions have been about, hut, in the same way as prices are important, so increased wages as an element of costs are important. Both these things were recognised by all three parties to the talks and both were fully discussed.

Mr. Sheldon

And yet in an interview with The Times early this month the Prime Minister said that if a voluntary prices and incomes policy was not done it would have to be done by statute. Since the Prime Minister has repeatedly denied this, can he now say where he stands on this matter?

The Prime Minister

I have always said that the Government want a voluntary policy. This has been made absolutely clear to the other two parties to the talks and all three parties to the talks have agreed about it.

Dame Irene Ward

Could I ask my right hon. Friend, who during all these negotiations has very rightly drawn attention to those living on small fixed incomes and the lower paid, to consider what I think is necessary, and that is to have some quick investigation into the need for continuous attention for those living on small fixed incomes? I find it rather difficult to know how in these negotiations this point can be made. Would my right hon. Friend please add this to the very important negotiations he is carrying out, and which we hope will have a successful result? Heating for the old is very necessary.

The Prime Minister

All those who are on small fixed incomes, all those who are living on retirement pensions, all those who are living on social security benefits, are those who will benefit most from dealing with inflation. The policy agreed by the three parties to the talks was that the lower paid in all forms should be those who should benefit most, and this was the object of the proposals put forward at the request of the other two parties to the discussions.

Mr. Barnett

Will the right hon Gentleman now please answer the question asked previously? In view of all he has said in the past, has he ruled out a statutory prices and incomes policy?

The Prime Minister

I have always said that what the Government require is to have a voluntary policy, and as this is agreed by both the TUC and the CBI the Government's view is reinforced.

Mr. Alfred Morris

Will the Prime Minister at least make it clear that there can be no question of chaining the police officers to the proposed £2 limit for pay increases? Is he aware that, while they have had an increase of only 6½ per cent. in the last year, there has been a general increase in wage rates of some 29 per cent? What action is the right hon. Gentleman taking to make sure that representatives of the Police Federation are given some voice in these discussions?

The Prime Minister

By general agreement between the three parties to the talks, the statement in the communiqu£ after the meeting on 26th September specifically asked that all those dealing with wages or prices should not take any action while these talks were going on which would invalidate them. That was a request made by agreement between all three parties.

Mr. Harold Wilson

Does the Prime Minister's last answer mean that the suggestion made when he first announced the Chequers package on 26th September, that the public sector would start being affected by the Government as employer on the lines of the £2 limit, no longer applies? Secondly, recalling the exchanges which we had earlier in the summer, will the right hon. Gentleman give an assurance that the rents of council houses and, separately, the rents of private houses will not be allowed under his package to rise by more than 4 per cent. in the year following 26th September?

The Prime Minister

On the first point, the request was not made to the public sector alone; it was made to everybody, whether in the public sector or the private sector, dealing with prices or with wages. It covered both fields, and the whole sector. On the second question, the matter of rents has been raised by the TUC—not the current increase but in 1973—and that is therefore a matter under discussion.

Sir Harmar Nicholls

Although certain hon. Members opposite seem to be disturbed that there might be a reasonable agreement on this issue, will my right hon. Friend keep in mind that the nation as a whole recognises that it is vital that there should be an agreement? I hope he will keep to the point which he has made already and will work sensibly from the base he has laid, despite the disturbance and apparent resentment of hon. Members opposite.

The Prime Minister

I think that all three parties to the talks feel that there has been very wide public support for the talks, for the approach and for the proposal put forward. I can assure my hon. Friend that we will continue with this. Indeed, I think that the nine hours spent in discussion yesterday are sufficient proof of that.

Mr. Pavitt

In spite of the Prime Minister's request, may I ask him whether he has noticed that there has been a big rise in wholesale prices in the last two weeks and that a large number of commentators have suggested that this is in order to make sure that the rises take place before there is any restriction in retail prices later? Will the right hon. Gentleman take this into consideration in his discussions, realising that if prices rise before the agreement, and if profits can be retained in dividends a few years after the agreement, wages will be in a very bad position indeed?

The Prime Minister

I do not think that there is any specific evidence that wholesale prices have been rising in expectation of this agreement. No one in the talks has suggested that. On the other hand, there is a very determined effort by everybody in the talks to ensure that retail prices are kept down.

On the question of profits, there is also a recognition, which has been very clear from all three parties, that if there is to be continuous growth—not only in the two years which we are discussing but beyond that—there must be a much higher level of investment, and this must come from profitability. Everybody knows that without that we cannot have continuous growth after this immediate period.