PRICE AND PAY CODE (Hansard, 13 March 1973)

§ Q5. Mr. Meacher
asked the Prime Minister what recent talks he has had with the TUC and CBI regarding the Price and Pay Code.

§ The Prime Minister
I have not yet met either the TUC or CBI to discuss the consultative document on the Price and Pay Code. I expect to have a meeting with the CBI on 15th March.

§ Mr. Meacher
Since The Grocer shows that food prices have risen since the freeze by an annual rate of 28 per cent.—[Hon. MEMBERS: "Oh."] That is the figure given in The Grocer magazine. Why was it that the Government pointedly refused to increase family allowances in the Budget, since it is clear that the Price and Pay Code is largely an instrument of wage restraint, and how can the Government seriously expect co-operation when they stand idly by as low wage earners are made poorer?

§ The Prime Minister
I do not accept the hon. Gentleman's figures—indeed, as 1113 yet nobody has ever accepted any figures from the hon. Gentleman.

§ Mr. Meacher
They come from The Grocer.

§ The Prime Minister
My right hon. Friend the Chancellor of the Exchequer dealt with family allowances last night and the hon. Member for Oldham, West (Mr. Meacher), who pretends to study these matters, should know that increasing family allowances is not a solution to the question of the low paid.

§ Mr. Tom King
When my right hon. Friend meets the CBI, will he pay particular attention to the genuine representations on the problems of investment—namely, that while the Government recognise the need for investment, it does not seem possible under the present criteria for the present encouraging increase in investment to continue?

§ The Prime Minister
Yes, Sir. The purpose of the consultations is to take account of representations made by the CBI and other bodies. At the same time, since emphasis is placed on the need for facilities for investment, one must take into account the other factors, such as improvements in productivity, which come from an expanding economy and much greater turnover.

§ Mr. Harold Wilson
I deplore the Prime Minister's offensive reference to my hon. Friend the Member for Oldham, West (Mr. Meacher). Will he now answer a question which I have put to him twice before and which I also asked the Chancellor of the Exchequer in the Budget debate? Will he now tackle the question of leapfrogging interest rates in the City due to the right hon. Gentleman's policies? Will he agree that the building societies are now almost forced to put up lending rates to the highest level in history, whatever arm-twisting may be carried out by Ministers between now and Friday? This is due not to Russian harvests or to trade unionists in building societies or any other of the right hon. Gentleman's alibis, but to the Government's own policies which allow a free market to operate in the City.

§ The Prime Minister
I do not accept the right hon. Gentleman's usual exhibition of his opposition to the City and all that it does. On interest rates we are 1114 doing the same as the right hon. Gentleman did, which is to keep the freedom to change interest rates to deal with the money supply and the economy.

§ Mr. Wilson
Is the right hon. Gentleman aware that there is as much criticism of this policy in the City as anywhere else? Is he also aware that he is not following the old tradition of using Bank Rate in monetary management? There is no control in the City now and the Government cannot influence things unless they change their policy of having a free market in the City—a policy under which base rates and inter-bank lending rates leapfrog over one another and destroy liquidity in the building societies. Has not the Prime Minister understood that yet?

§ The Prime Minister
I do not know where the right hon. Gentleman gets his views from the City because I do not know where he lunches and dines. [HON. MEMBERS: "Cheap".] From the point of view of monetary control, there is of course monetary control by the Treasury and by the Bank.

§ Sir Harmar Nicholls
To return to the Question, when eventually my right hon. Friend meets the trade unions can he impress on them that the traditional British way of settling an honest difference of opinion is to accept the decision of an arbitrator or umpire? Could he not impress on them the merit of following such a course, and does he not agree that the greatest slander circulating in the country is the Opposition's suggestion that we do not have in this nation men who are qualified to be umpires in such matters as these?

§ The Prime Minister
In the context of the policy laid down by Parliament, whether in the Act or the code, arbitration and conciliation are available. I agree with my hon. Friend's remarks. I have already emphasised that all the means of conciliation available in the Department of Employment are open to trade unions, but it must be in the context of what Parliament approves either in the Act or in the code.

§ Mr. Atkinson
Does the Prime Minister agree that the basis of the Government's policy at present is to reduce the share that goes to wage earners? Does he accept that most of 1115 the disputes now taking place are in relation to 1972 wage arrangements? Will he also accept that the cost of living, as reflected in retail prices, rose by 8 per cent. during 1972? If it is necessary to add a further 4 per cent. to that figure to allow for the difference in take-home pay and gross earnings, does the right hon. Gentleman recognise that the minimum now needed by a wage earner to keep pace with the rise in prices is 12 per cent.? If the Government are allowing only £1 plus 4 per cent., does not this mean that wage earners will receive a smaller share?

§ The Prime Minister
No, Sir. It is not the Government's policy to reduce the amount taken as a share of GNP by the wage earner. If we look back to 1972, a year to which the hon. Gentleman refers, we see that there was an increase of 16 per cent. in earnings and 7½ per cent. in prices. It is difficult to put any credence on the figure produced by the hon. Gentleman. In the tripartite talks it was precisely the point of how one could deal with the share going to investment, to wage earners and to others concerned—management and so on—which we asked the trade unions to discuss with us and to reach agreement with us. It is unfortunate that we failed.