Social Contract (Hansard, 20 May 1975)

§ 12. Mr. Ioan Evans
asked the Secretary of State for Employment what further discussions he has had with the TUC regarding the implementation by the Government and the trade unions of their side of the social contract.

§ Mr. Foot
I took part in the meetings of the TUC-Labour Party Liaison Committee on 21st April and 19th May when the operation of various aspects of the social contract was discussed. I am glad to say that there is continued agreement between us about the central rôle of the social contract and the need to secure firmer adherence to the pay guidelines in order to reduce the rate of inflation and combat unemployment.

§ Mr. Evans
I thank my right hon. Friend for that reply. In view of the fact that the Government have gone a long way to fulfil their side of the social contract, particularly as regards the social wage and the need to restrain the future rate of demand for pay increases, will the Secretary of State give serious consideration to the positive proposals put forward by Jack Jones?

§ Mr. Foot
Yes, I agree with the preamble of my hon. Friend's remarks and we shall certainly give careful and urgent consideration—as I am sure will the TUC General Council and others—to those ideas.

§ Mr. Baker
Will the Secretary of State take this opportunity to deny the rumour which was circulating yesterday—I am sure it is only a rumour—that Mr. Jones was persuaded by the Government to float the idea of pay rises on those lines so that there could be a warm and positive response by Ministers? I am sure that that is a travesty of what took place. Will the right hon. Gentleman assure the House, however, that Mr. Jones is not naïve enough to succumb to this strategy and, indeed, that the Government are not clever enough to suggest it?

§ Mr. Foot
I do not know where the hon. Gentleman gets his rumours, but that one is so absurd he must have manufactured it himself.

§ Mr. Pardoe
Is the right hon. Gentleman aware that there could not possibly be any truth in that statement, because 1203 it is a well-known fact that Mr. Jack Jones derived his idea from suggestions put forward by my hon. Friends and myself at a time when the Conservatives were engaged in their profligate and spendthrift stage 3? Is he also aware that this is the second occasion on which Mr. Jack Jones has accepted Liberal policy, the first being the statutory minimum income? Will his Department come round to that idea too?

§ Mr. Foot
As for the first part of the hon. Gentleman's remarks about where Mr. Jack Jones gets his ideas, as the Duke of Wellington said on a more famous occasion, if the hon. Member believes that he will believe anything. Mr. Jack Jones's ideas are serious and will be seriously considered. That is further proof that they did not come from the hon. Member for Cornwall, North (Mr. Pardoe). As for the statement that the suggestion related to a proposal for a statutory minimum income, that is not the case and the hon. Member should not confuse the issue by making any such suggestion.

§ Mr. Noble
Will my right hon. Friend accept that many trade unions have already settled well within social contract guidelines, notably the textile workers, who yesterday reached a settlement which in every respect was within the social contract? Will he, therefore, press upon the Cabinet that the Government can best ensure that the social contract is observed in future by protecting the jobs of those who have acted so responsibly?

§ Mr. Foot
My hon. Friend has put his case very well and ingeniously. I agree with the first part of his remarks. Settlements of that nature do not receive enough publicity, so it is a good thing that he has mentioned that matter today. In regard to his comments about the textile industry, I am sure that the Government will pay full regard to the representations which have been made.

§ Mr. Hayhoe
At a time when unemployment is rising, would not more jobs now be available if the Secretary of State had done more to reduce the number of inflationary wage settlements and had made his side of the social contract work?

§ Mr. Foot
The present system is not one under which the Government are 1204 able to lay down the law on what is or is not a proper wage settlement. One of the difficulties with which we have had to deal all through these months is to try to clear up the mess left by the Conservative Government, who tried to lay down such rules. [Interruption.] It is no good Conservative Members trying to shake their heads on this matter, or even succeeding in shaking their heads, because many settlements outside the guidelines in recent months have been due to the fact that those settlements went back two or three years into the period of statutory control.

§ 16. Mr. Peter Morrison
asked the Secretary of State for Employment whether he continues to be satisfied with the working of the social contract.

§ 22. Mr. Adley
asked the Secretary of State for Employment if he is satisfied with the working of the social contract; and if he will make a statement.

§ Mr. Foot
As I told my hon. Friend the Member for Bolsover (Mr. Skinner) and the hon. Member for the City of Chester (Mr. Morrison) on 24th April—[Vol. 830, c. 1216–19]—both the Government and the trade unions have sought to fulfil the social contract, which covers a whole range of policies. But firmer adherence to the spirit of the TUC guidelines is certainly required if we are to avoid higher unemployment and curb inflation.

§ Mr. Morrison
In view of the assurances given by the Secretary of State earlier this afternoon, will he say exactly how he intends to tighten up and enforce the social contract?

§ Mr. Foot
I did not suggest that we should tighten up the guidelines in that sense. The Government suggest—and I am sure that the trade unions are seeking to help us—that we should ensure that there is a more faithful observance of those guidelines. That is not the same as a tightening of the guidelines. I believe that that is the best way in which we should proceed. It is on that basis that we are holding discussions with the TUC, taking into account the further proposals made by Mr. Jack Jones and others.

§ Mr. Adley
Now that Mr. Jack Jones has joined the Chancellor of the 1205 Exchequer and the Leader of the Opposition in recognising, however regretfully, that the social contract has failed, is not the right hon. Gentleman aware that a few of his right hon. and hon. Friends are the only ones left who believe in the myth that we are supposed to be able to control inflation? Now that inflation is running at 30 per cent., what must it reach before he recognises the problem-40 per cent. or 50 per cent.? When will the Secretary of State recognise that the Government's present proposals are stoking the fires of inflation?

§ Mr. Foot
Since the premise of the hon. Gentleman's question was baseless, the rest of his questions do not arise.