HC Deb 27 March 1975 vol 889 cc675-6
6. Mr. Norman Lamont

asked the Chancellor of the Exchequer whether he will make a statement upon the different movement of wage increases in the public and private sectors, and their implications for the Government's anti-inflationary policies.

Mr. Healey

Since the abolition of statutory pay control, there has been little difference between the public and private sectors in the level of settlements, excluding the special cases. The rate of settlement throughout the economy as a whole nevertheless remains too high, and this is why we have repeatedly called for strict adherence to the spirit of the TUC guidelines if we are to avoid the twin evils of rapid inflation and rising unemployment.

Mr. Lamont

The right hon. Gentleman may be aware that the recent apparent moderation in the rate of increase in the latest figures is obviously encouraging, but has he noticed that there have been some estimates from sources which he has quoted on other occasions that the rate of increase in the public sector is increasing, or is at least not falling? Does he agree that the fact that the public sector is so removed from the normal market influence is worrying and is another argument for saying that the public sector should not be extended?

Mr. Healey

I have looked carefully into this matter. The evidence is not unambiguous, but there is no conclusive evidence that so far the public sector settlements have been substantially in excess of those in the private sector. Both have been running at about the same rate. I recognise the force of what the hon. Gentleman says and I should tell the House that I have no intention of allowing excessive settlements in the public sector to be loaded on to the taxpayer.

Mr. Rost

Has the right hon. Gentleman recommended to his Cabinet colleagues that the guidelines of the social contract should be tightened up?

Mr. Healey

No, Sir.