§ Q1. Mr. Meacherasked the Prime Minister when next he, expects to meet the TUC/CBI to discuss phase 3.
§ The Prime Minister (Mr. Edward Heath)No dates have been fixed but I have made clear that we are ready to continue discussions at any time.
§ Mr. MeacherAs all the Prime Minister's plans depend on a 5 per cent. growth rate, will he explain that this will probably lead this year to a £1,000 million balance of payments deficit, and how he proposes to handle that with a repegged £, and proposes to get the necessary capital investment without inflating the money supply and stoking up inflation all over again? When will he admit that he has locked himself in the blackest of economic situations, which makes his promise of higher real wages soon virtually worthless?
§ The Prime MinisterI do not accept the hon. Gentleman's allegations. The dubiety of his figures has already been made clear in public.
§ Sir Gilbert LongdenAre we unlikely to achieve any of those desirable things that the hon. Gentleman was talking about if we have a series of strikes? Has my right hon. Friend any comment to make upon the justification of the employees of the gas industry to hold us up to ransom?
§ The Prime MinisterI do not usually comment on the details of any particular strike or proposed strike. I should not have thought that there was any justification for those who are asking that they should have more in their pay packets to abstain from work and thus reduce their own pay packets, especially when Parliament has passed legislation under which the standstill is being operated and when Parliament is dealing with the legislation for stage 2.
§ Mr. GrimondIs the right hon. Gentleman aware that there is growing concern that decisions about our economic future are being taken out of the hands of the House? Will he give a guarantee that in any conversations with the interested bodies the interests of the public will be fully protected? They are the people who either suffer or benefit from the policies which emerge.
§ The Prime MinisterI cannot agree with the right hon. Gentleman that decisions on economic policy are being taken outside this House. Decisions on general economic strategy and tactics are always taken by the Government of the day. They are always open to debate in this House, and they are carried through with the support of this House. It has surely been customary for many years for Governments to discuss with representative bodies of all kinds in our society the particular issues with which they are concerned. This is not limited to the CBI and the TUC. Those concerned in local government know particularly how many consultations are carried out with representative bodies.
§ Mr. Bruce-GardyneIf we are to have a phase 3, can my right hon. Friend ensure that the first priority for the nationalised industries under phase 3 will be the earliest possible return to the observance of proper financial targets?
§ The Prime MinisterObviously when the nationalised industries are running at 640 a deficit, as they have been since they complied with the CBI's request for price limitation, that is not a change which can be brought about in one step. Therefore, the whole question of the financing of the nationalised industries must be looked at in a phased programme.
§ Mr. Harold WilsonOn the question of decisions being taken outside this House—for example, the issues on which the right hon. Gentleman was so unclear on Tuesday, of the law-making bodies—is it not a fact that the former Leader of the Liberal Party, who is now shaking his head, is a member of the party that voted for the Second Reading of the legislation that provided for that? [Interruption.] I said that he was a member of the party which voted for it. That is up to him. Will the Prime Minister further clear up some confusion and business uncertainty about what he said in the House last week before he left for America? He said that the control of prices, the restriction of profits, would relate to increased turnover, that the more the turnover, the more the restriction, while the White Paper clearly relates price control to profit margins, not total profits. Does his statement in the House last week represent the Government's policy or does the White Paper state the Government's policy?
§ The Prime MinisterOn the first point, I must again remind the right hon. Gentleman that the agencies will be working under a Statute passed by the House and under the code which must be passed by the House. They are, therefore, regulatory bodies, not law-making bodies. The right hon. Gentleman only confuses the issue unnecessarily in trying to proclaim that they are law-making bodies, because they clearly are not.
On the second point, there is no contradiction in these matters. The point I was making was that with increased turnover businesses should be able to pass on some of the increased profitability which comes from it, because of the reduction of overheads, in reduced prices as well as in meeting the target for increased wages. There is nothing incompatible with what is said in the White Paper, because the White Paper specifically said that allowance would be made for increased productivity leading to increased profitability.
§ Mr. WilsonI thank the right hon. Gentleman for what he has just said. Perhaps he missed some of the public comment on the matter because he was out of the country. Did not the White Paper specifically refer to retail margins and not to the turnover in paragraphs 11–15 and the appendix, in its references to prices and profits? Will the right hon. Gentleman look at the question again? I shall not press him further on it today.
§ The Prime MinisterI read the comments in the Press although I was away at the time. There is no incompatibility, because the White Paper talks about the overall profits of companies. Therefore, we are bound to take account of the increased productivity, quite rightly, and the TUC pressed us upon the point. Part of the increased productivity should go to keeping prices down. That is the path companies ought to follow, and the White Paper says so.