Social Contract (Hansard, 9 July 1974)

§ 16. Mr. McCrindle
asked the Secretary of State for Employment what progress he has made in establishing the social contract.

§ 26. Mr. Pardoe
asked the Secretary of State for Employment if he is satisfied with the progress of the social compact between the Government and the trade unions.

27. Mr. Ioan Evans
asked the Secretary of State for Employment if he is satisfied with the progress made regarding the social compact between the Government and the Trades Union Congress.

§ Mr. Foot
Some good progress has been made. Much the most important development in this field has been the publication of the TUC General Council's report on "Collective Bargaining and the Social Contract", published on 26th June, which I believe provides a constructive framework for pay negotiations after the compulsory pay controls are abolished.

§ Mr. McCrindle
Does not the right hon. Gentleman feel on reflection, however, that the broadcast he made during the weekend about the social contract was unforgivable and unjustifiably complacent? Does he accept that even those of us who wish him success in the venture upon which he has embarked are nevertheless fearful of the effects of a failure? In view of the catastrophic inflationary effects if he does not succeed in achieving the social contract, will the right hon. Gentleman say what contingency plans he and the Government have in mind?

§ Mr. Foot
No one who heard what I said on Sunday could have described it as complacent. My first sentence was that no one in his senses could doubt the seriousness of the situation that the Government had to face. I said that right at the beginning. What I also said was that the situation was not worse today than it was at the end of February and the beginning of March. Indeed, in many respects it is much better—the whole House will agree about that—because 1133 at that time we were involved in an industrial smash-up which was the worst since the 1920s or the 1930s. Of course, the situation has improved.
As for the dangerous inflationary situation no one in the Government is denying the dangers, but those dangers were there when we took office. What we have been doing is to take steps to prepare to curb that situation, and the social contract is one of the essential measures for achieving that objective.

§ Mr. Pardoe
Does the Secretary of State realise that there are some hon. Members, on the Opposition side of the House at least, who will wish the social contract success and wish him well in his task while maintaining a certain scepticism about the likelihood of success? Does he accept that no one in this country, either wage earner or salary earner, can expect more than compensation for the increase in the cost of living over the next 12 months at least? Does he really believe that the social contract will be sufficiently binding to ensure that? What teeth will he put into it to ensure that it will work?

§ Mr. Foot
I welcome the hon. Gentleman's sceptical enthusiasm, if that was what it was, or enthusiastic scepticism. I am not quite sure which way round we should have it. But we cannot guarantee that it will be successful. We believe, however, that the statutory system was an almighty failure. Therefore, we are setting out on a different system. We shall discuss the new system in the House next week. The Pay Board order is being laid today. Assuming that the Prices Bill receives Royal Assent today, the order will be laid and we shall discuss the matter next week. This refers to the social contract. The abolition of statutory controls is an essential part of the social contract.
The trade unions would certainly not have been prepared to enter into any such arrangements and understandings if it had not been that we were carrying out our pledge in that respect as in many others. Therefore, that is part of the social contract too. I look forward to the hon. Gentleman's support when we come to that. As for putting teeth into it, if by that the hon. Gentleman means restoring compulsory controls, we have no intention of doing that.

Mr. Evans
Does my right hon. Friend agree that the statement of policy issued by the TUC is very good reading? Does he support the conclusion that priorities should be given to negotiating agreements which would have beneficial effects upon efficiency, reform the pay structure and improve job security to complement the action that has been taken by Mr. Len Murray, the General Secretary, and the TUC General Council in delivering their side of the contract?

§ Mr. Foot
I certainly agree with my lion. Friend. The whole country owes a debt to Mr. Len Murray for the way in which he has spoken on these matters both at trade union conferences and elsewhere, and I hope that we shall have support from it. Of course, my hon. Friend is quite right to draw the attention of the House to that special feature in the statement of the TUC. The matter raised in the previous question by the hon. Member for Cornwall, North (Mr. Pardoe) was already referred to in that document. I invite the House to read the whole document and to study it in detail.

§ Mr. Peter Morrison
Will the right hon. Gentleman explain how the activities of National Health Service employees at Charing Cross Hospital fit in with the social contract?

§ Mr. Foot
The argument that they were having was not concerned with pay questions or questions directly concerned with the social contract. That matter, therefore, does not arise.