HC Deb 11 July 1974 vol 876 cc1535-7
10. Mr. Molloy

asked the Chancellor of the Exchequer if he will seek to have further meetings with the TUC and CBI to discuss economic matters relating to combating inflation; and if he will make a statement.

Mr. Healey

I regularly meet the TUC and CBI, in NEDC and elsewhere, to discuss all aspects of economic policy, including the problems of inflation. I am in contact with both at the moment, and am in fact looking forward to a meeting with the CBI this afternoon.

Mr. Molloy

While thanking my right hon. Friend for that reply, may I ask him whether he does not agree that, as inflation is the foe and increased productivity the means of combating it, he should be prepared to talk with the TUC and the CBI about the possibility of amending tax regulations as they apply to industrial overtime?

Mr. Healey

I do not know that I would gain very greatly by working out specific proposals on this with the TUC and the CBI. It is a matter constantly put to me by my hon. Friends and by my constituents. It is never far from the forefront of my mind.

Mr. Winterton

Does the Chancellor agree that one of the main problems facing industry today is that of liquidity, which has been made considerably worse as a result of his March Budget? Does he not further agree that from last December to the present date there has been a dramatic reduction in industrial investment intentions?

Mr. Healey

The liquidity of British industry as a whole stood at £10,000 million gross at the end of the year. I am glad to say that it showed no signs of falling, gross, over the first quarter. I am well aware that some firms do have liquidity problems. I have instructed the banks to take account of their needs if they should be approached for particular help. I am glad to say that so far the banks have had no excessive requests for help of this nature.

Mr. Robert Carr

Does the Chancellor stand by the recent speech he made in Durham to the effect that excessive pay increases were the greatest danger to inflation over the coming year? If so, will he make it clear in his forthcoming talks with the TUC and the CBI that the higher pay increases are the more dangerous it would be to reflate?

Mr. Healey

It would have been helpful if the right hon. Gentleman and his hon. Friends had borne this in mind when they constructed phase 3 of the counter-inflation policy. Conservative Members will know, perhaps better than my hon. Friends, how many companies are now facing intense problems in their liquidity flow because of the automatic application of threshold agreements. I do stand by what I said. The General Council of the TUC has taken the same view and made clear in its advice to its constituent members that it believes that, by and large, wage increases over the coming year should be limited to what is required to cover the increase in the cost of living. The whole country would feel that it would be gracious of the right hon. Gentleman, as a former Secretary of State for Employment, if he were to express his satisfaction at the terms and form of the guidance given.