HC Deb 01 February 1973 vol 849 cc1603-7
Q1. Mr. Meacher

asked the Prime Minister what official meetings he had with the TUC and CBI during the Christmas Recess.

Q4. Mr. Spearing

asked the Prime Minister if he can now announce the date when he expects to meet together representatives of both the TUC and the CBI.

The Chancellor of the Exchequer (Mr. Anthony Barber)

As my right hon. Friend is in the United States, I have been asked to reply.

My right hon. Friend had four such meetings, two with representatives of the TUC and two with representatives of the CBI. My right hon. Friend has made clear that we are ready at any time to have further discussions either bilaterally or on a tripartite basis.

Mr. Meacher

When the Prime Minister discussed fairness at these meetings, did he explain to the TUC that under the present Government, according to the Treasury's estimates published in HANSARD, the average wage-earner has gained an extra £250 net while the average executive has gained about £1,250 net—five times as much—and if shareholding gains and housing capital gains are included, an extra £30,000, or 120 times that much? Is not the right hon. Gentleman the biggest barrier to fairness that this country has to get rid of?

Mr. Barber

I must say, first, that I agree with Professor Alan Day, who said that some of the hon. Gentleman's figures are grossly misleading—

Mr. Meacher

And your figures.

Mr. Barber

—and his conclusions practically meaningless. In fact, the present Government have done far more than the previous Government for the relief of poverty.

Mr. Spearing

Is the Chancellor aware that the hospital ancillary workers who are represented on the TUC were last Friday offered a wage increase of £1.86 under the £1-plus-4 per cent. formula? Can the Chancellor say why he thinks it fair that under phase 1 they would have been eligible to receive £2 a week whereas under phase 2 they are apparently to receive less?

Mr. Skinner

Phase 3 will be worse.

Mr. Barber

We have set out our policy quite clearly in the White Paper and the objective, as the hon. Gentleman knows, is to control the rate of inflation, and this we are succeeding in doing. I have no doubt that, by and large, we shall receive the support of those who put their country first.

Sir H. d'Avigdor-Goldsmid

Will my right hon. Friend make clear that whatever arrangements are made for the control of profits there will be scope for companies to maintain and to increase their own investment?

Mr. Barber

We shall make quite certain that the limitation on profits, as we have expressed it in the White Paper, will leave an adequate margin for investment. In deciding upon the formula which is set out in the White Paper, one of the factors uppermost in our minds was the absolute necessity of not taking any action which would prejudice capital investment. This is why the limitation on prices is related to costs and to net profit margins over the last five years as a percentage of sales rather than to a set norm. This will enable real profits, like real wages, to continue to grow with the expansion of the economy, and this will make possible the increase in capital investment.

Mr. Edward Short

Is the right hon. Gentleman aware that we on this side of the House are just as concerned as he is about the wellbeing of this country and curing inflation? Indeed, judging from some of the things that he has done we are a good deal more concerned. Does he really believe that any prices and incomes policy can be fair and generally accepted if it does not deal with capital gains, especially on land and houses?

Mr. Barber

I accept that the right hon. Gentleman wishes to act in the national interest. I express the hope that he and some of his hon. Friends will support trade union leaders like Mr. Anderson of NALGO, Mr. Chapple of the Electrical, Electronic, Telecommunication Union and Plumbing Trades Union, and Mr. Jackson of the Union of Post Office Workers, who have urged that consultation with the Government on the policy should continue. Land, to which he referred, is dealt with in the White Paper.

Mr. Tom King

Does my right hon. Friend recognise that the confusion and concern mentioned in The Times today about the treatment of profits underlines again the urgent need for the earliest pos- sible publication of the codes on pay and prices? May I urge that these codes be published at the earliest possible moment?

Mr. Barber

The time which will be taken between now and publication depends largely on the consultation that we have always said was desirable and, indeed, necessary, before we settle the details of the codes.

I think that I dealt with the first point raised by my hon. Friend. When answering Questions on Tuesday my right hon. Friend the Prime Minister, to whom reference was made in that report in The Times this morning, referred to excessive profitability, not to increased profitability.

Q6. Mr. Bruce-Gardyne

asked the Prime Minister if he will invite the heads of the nationalised industries to join his discussions with the CBI and the TUC about counter-inflation policy.

Mr. Barber

I have been asked to reply.

A representative of the nationalised industries took part in the talks leading up to the decisions on the second stage of the programme for controlling inflation set out in the recent White Paper, and we will obviously want to discuss the implementation of the policies with the nationalised industries.

Mr. Bruce-Gardyne

I thank my right hon. Friend for that reply. No doubt he read the profoundly worrying remarks by the Chairman of the Electricity Council on Tuesday. As the finances and boardroom morale of the nationalised industries are in a somewhat parlous state, may I ask why it was decided that the pricing restraint imposed on the nationalised industries under phase 2 should be more severe and restrictive than that imposed on other loss-making concerns?

Mr. Barber

That was obviously one of the factors to which we gave the most serious attention. As my hon. Friend knows—because we have discussed the matter on a number of occasions—I have never sought to deny the disadvantages of holding down prices in nationalised industries which are in deficit. But, bearing in mind the overriding importance of controlling inflation, we came to the conclusion that in present circumstances this was the right policy, and I have no doubt that it is.

Mr. Palmer

Does not the right hon. Gentleman agree that the Government have treated the nationalised industries very badly in this respect?

Mr. Barber

No, Sir.

Dame Irene Ward

When my right hon. Friend is considering all the very difficult matters concerning the nationalised industries, will he remember that retirement pensioners and those living on small fixed incomes want help with heating allowances? As he has so rightly and generously said that the question of old-age pensioners will enter into the Counter-Inflation Bill, will he remember to do something so that they have adequate heating, which I do not think they have now?

Mr. Barber

We have already increased the real value of the national insurance benefits by about 7 per cent., allowing for the increase of prices, and that excludes the £10 lump sum provided at Christmas. We have also undertaken to have annual reviews. Therefore, I think we have acted reasonably in regard to retirement pensioners, and this is an earnest of our will to look after them.

Mr. Atkinson

Is it the Government's view that any future tripartite talks should be in the form of representations from the parties taking part, or that they should be in the form of negotiation about policy matters?

Mr. Barber

We shall be very happy to carry on conversations with any of the parties concerned, bilaterally or in tripartite talks, formally or informally—in whichever way is considered best. I say that because I know from the published statements of a number of trade union leaders, to some of which I have referred, that there are those in the TUC who would like to continue discussions with us, and those who have said publicly that they also believe that the TUC should be represented on the pay and prices boards. It would be a great help if those Labour Members who have considerable influence on the trade union movement would, in the national interest, support those trade union leaders who take that responsible view.