Wage Settlements (Hansard, 29 July 1975)

§ 6. Mr. Michael Latham
asked the Secretary of State for Employment what 1480 machinery he proposes to set up to examine wage settlements in excess of£6 a week.

§ 7. Mr. Aitken
asked the Secretary of State for Employment how he proposes to monitor pay settlements to ensure they do not exceed the limits set out in the White Paper; and if he will make a statement.

§ 21. Mr. Madel
asked the Secretary of State for Employment what arrangements he has made for monitoring pay settlements after 1st August; and if he will make a statement.

§ 33. Mr. Brittan
asked the Secretary of State for Employment whether he will make a statement as to the machinery to be used for monitoring pay settlements to ensure that they do not exceed the limit specified in the White Paper "The Attack on Inflation".

§ Mr. Foot
Paragraph 28 of the White Paper, Cmnd. 6151, sets out the need for accurate information on pay settlements and intended settlements. We are having discussions with the TUC and CBI about the arrangements for collecting such information. In addition, the consultative document on amendments to the Price Code issued by my right hon. Friend the Secretary of State for Prices and Consumer Protection proposed that applications to the Price Commission for price increases should include information on pay settlements relevant to the application. This information will be passed to me to determine whether there has been any payment of remuneration in excess of the limits.

§ Mr. Latham
Since manifestly nobody is in charge of checking the failure or success of pay policy, let alone of enforcing it, how can it carry any public credibility?

§ Mr. Foot
If such a policy is to succeed at all, it is very much better that it should command massive voluntary support. That is the basis on which we are seeking to carry through the policy. I am not prepared to agree to the ultra-pessimism of the hon. Member, who does not think that anything will work.

Mr. Tom Ellis
Does my right hon. Friend agree that the present moment might be psychologically the time at 1481 which to develop and improve the social contract? Would it not be appropriate now to seek to give it precision, to seek to achieve tripartite agreement and to give the contract some power of sanction to be applied jointly by the three parties?

§ Mr. Foot
The document produced by the TUC at the end of our discussions was entitled by the TUC "The Development of the Social Contract". That document embraced not only wage settlements but a whole series of other measures. If my hon. Friend is suggesting that we should also proceed with the other measure referred to in that document, I am in general agreement with him.

§ Mr. Aitken
Why is the Secretary of State limiting consultations on this matter to the TUC and CBI if the settlements most likely to fall outside the guidelines are those made by organisations and employers who are not members of those two organisations?

§ Mr. Foot
The purport of these questions apparently is to the effect that we should set up a much more precise, large-scale, bureaucratic organisation to conduct a vastly bigger examination of the whole question. We do not think that that is the best way to go about the matter. We believe that we can achieve the objective by eliciting general voluntary support for the scheme. That is the basis on which we have reached agreement with the TUC.

§ Mr. Heffer
Does the Secretary of State believe that the scheme will cause a great number of anomalies? For example, will it not exclude those who work on "the lump" in the building industry while leaving controlled those who work under national wages agreements? Does he also agree that the scheme will not apply to other industries—for example, to engineering—and is it not clear that lawyers and many other people will not be affected? Is it not evident that the situation will be clear for those who work under productivity agreements, for example the miners, whereas workers who do not operate under such agreements will not be faced with such a clear situation? Will not this cause a great deal of discontent? Is it not clear that as the scheme continues there will be a great number of problems in industry 1482 which will rebound upon the Government?

§ Mr. Foot
I entirely agree with my hon. Friend that a great many anomalies are bound to occur, and there will be a great number of difficulties which we shall have to overcome. On the question of productivity agreements, the House will be aware from our discussions last week of the understanding which we reached with the TUC on that question. I am not saying that the system will work 100 per cent. perfect, but we are trying to devise a scheme whereby fresh arrangements about productivity agreements will not upset the whole scheme. My hon. Friend may say that the operation of the scheme will give rise to certain anomalies. That is true, but the failure to deal with the general problem of inflation would give rise to many other problems too.

§ Mr. Madel
As the Government have said that the£6 limit must not be exceeded—and, indeed, have indicated that many people must take less than£6 per week—should we not have an incomes information unit to explain to the public that, in view of the inflationary situation, some industries will not be able to pay anything like the£6 per week?

§ Mr. Foot
I do not want to go in detail over the matters which we discussed so fully last week. We felt that this was the best way to go about the matter. I agree with the hon. Gentleman that more information about what is proposed and the way in which it will operate must be made public. Some of these points will emerge from the debates which we are having in the House of Commons. The proper time for the Government to engage in any explanation of those decisions more widely in the country will be in the days after the. House of Parliament has passed the legislation.

§ Mr. Moonman
Of course the policy can work, but is it not as well to bear in mind that only 60 per cent. of wage claims can be recorded and that that is insufficient? Will my right hon. Friend accept that we shall not get the information right unless we obtain it from every company engaged in wage claims?

§ Mr. Foot
I do not accept what my hon. Friend says. I believe that if we 1483 were to seek to operate the scheme with 100 per cent. coverage we should have to go in for compulsory notification. That would involve further penalties and elaborate devices to carry it through. Therefore, we have sought—we feel rightly—to avoid a system of compulsory notification which would make the whole operation far more difficult.

§ Mr. Brittan
As the Secretary of State month after month has repeatedly said that it would be impossible to monitor the old, undeveloped social contract, how does he think that it will now prove possible to monitor the new, fully-developed, fully-fashioned social contract?

§ Mr. Foot
I do not think that the two cases are on the same basis. One of the reasons why we welcome discussions between the TUC and CBI in respect of the monitoring of settlements is that we want to improve the situation. We believe that it will be possible for us to survey the settlements made so that we shall be able to judge the response by the public to the policy in general terms.

§ Mr. Wellbeloved
Is my right hon. Friend aware that the Government's voluntary aproach in trying to cope with the grave inflationary crisis has the support of the overwhelming majority of the working people? Therefore, will he continue his valiant efforts and not be put off by his erstwhile Friends or by the irresponsible elements who constitute a minority of the Opposition? I know that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) knows that I, too, am a building trade worker.

§ Mr. Foot
I should not like my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) to be described as an erstwhile Friend, because he is still a very good friend of mine. I shall not accept that implication from my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved). My hon. Friend the Member for Walton, has strong doubts about the policy which he can express to the House in the ways in which we conduct our debates. I repeat that I am a good friend of his, and because we conduct arguments over these matters I am no less a friend of his than I ever was. My view is that, this policy having been agreed with the TUC, it would be a tragedy for the nation if the House of 1484 Commons were to turn its back on that agreement. I believe that the best course we can take is to carry through this policy. I know that there will be difficulties and troubles for people in the course of it, but if we can carry it through we can make a serious contribution to ending the inflationary threat that faces us.

§ Mr. Hayhoe
Do not these questions and answers show that the Government's policy is riddled with holes and anomalies and that the Secretary of State is not prepared to do anything to stop them?

§ Mr. Foot
What these exchanges illustrate is that the hon. Gentleman and many of his hon. Friends have not yet been able to make up their minds.