HC Deb 13 April 1976 vol 909 cc1136-9
Q1. Mr. Norman Lamont

asked the Prime Minister when he next intends to meet the CBI and the TUC.

Q2. Mr. Tim Renton

asked the Prime Minister when he next proposes to meet the TUC and the CBI.

Q5. Mr. Molloy

asked the Prime Minister what arrangements he has to meet the TUC and CBI.

Q6. Mr. George Rodgers

asked the Prime Minister when he next intends to meet the TUC and the CBI.

Q10. Mr. James Lamond

asked the Prime Minister if he will be meeting the TUC and the CBI in the near future.

The Prime Minister (Mr. James Callaghan)

I hope to meet both the TUC and the CBI shortly after the recess.

Mr. Lamont

Will the Prime Minister in fairness explain why the tax bill on everybody—regardless of whether he belongs to a union, regardless of the wage increases he has had, and regardless of whether he accepts Government's policy—should be determined by bargaining, with the TUC, when the Prime Minister said two years ago that if the social contract broke down we should drift into fascism? Did he have in mind the sort of "corporate Statism" that we have now?

The Prime Minister

The hon. Gentleman seems to be repeating some of the arguments used in the debate yesterday. I have no doubt that the general debate will go on. As regards the relationship between wages and the Budget, I should think that even the hon. Gentleman would acknowledge that no Chancellor of the Exchequer can construct his Budget today unless he takes account of the likely movement of wages. Therefore, if he is a wise man, as he is—and that leads me to a later answer that I shall be asked to give—he will seek to achieve an understanding and agreement with those who are bargaining about wages.

As for the corporate State, I thought that my right hon. Friend the Lord President of the Council destroyed that hoary old argument in a brilliant speech yesterday.

Mr. Molloy

Does not my right hon. Friend agree that to combat inflation we require the full co-operation of the TUC and the CBI, and that it does not help if in one week Opposition spokesmen, including the Leader of the Opposition, agree with that and the next week return to their damaging, silly policy of indulging in fruitless trade union bashing?

The Prime Minister

I agree with my hon. Friend, but on this as on so many other matters the Opposition, I regret, are not only divided but have a split mind. It is only a few weeks since the right hon. Lady would a wooing go. I thought that she was making good progress with the trade unions. Who could fail to respond to her charm? [Interruption.] Hon. Members speak for themselves. It was only last night, when the matter was put to the test and we saw the reactions of Conservative Back Benchers, with their acidulated dislike of the trade unions, that we realised that her wooing was bound to fail.

Mr. Renton

If the Chancellor of the Exchequer is such a wise man, why did he make the extraordinarily ill-timed remark last night that he might have to be satisfied with a second-best incomes policy? Is not that abandoning the country to the likes of Kenneth Gill, the Communist member of the TUC General Council, who has already rejected the 3 per cent, wage deal out of hand?

The Prime Minister

It is the right of the Opposition to pursue these questions. I do not dispute that. But I suggest to hon. Members on both sides of the House that if we are to attempt to overcome inflation, and try to reduce it to half the level that it is this year, we should now permit a period of reflection and discussion between the TUC and my right hon. Friend the Chancellor and others, in order that these questions may be worked out without the House intervening, until the matter comes back to the House in the light of the reports that my right hon. Friend will be making in due course.

Mr. Rodgers

When my right hon. Friend next meets the TUC and the CBI, will he focus attention on the problems of the textile industry? Is he aware that the labour force in that industry has diminished by over 30 per cent, during the last nine years, and does he agree that the case for stringent import controls is now overwhelming?

The Prime Minister

I know the difficulties of the textile industry. Indeed, only yesterday my right hon. Friends the Secretaries of State for Industry and Trade met the TUC Textile Clothing and Footwear Industries Committee and had a full discussion about this matter. The Committee pressed its view that imports of some of these items should be cut, but went on to say that it thought the Government's actions on imports to date had been helpful. In my view, it would be best to continue to keep these matters under review and seek to help the industry as much as possible in other ways.

Mrs. Thatcher

Now that the Chancellor of the Exchequer has announced what he himself called the "second-best pay strategy", will the Prime Minister say whether any items other than tax reliefs are negotiable against pay increases?

The Prime Minister

I do not think that my right hon. Friend the Chancellor of the Exchequer announced a second-best policy. [Interruption.] I was here listening, and some of those who are shouting were not. What my right hon. Friend said was that in certain circumstances he might be forced back to a second-best policy. I suggest to Opposition Members that that is better than getting boxed in, as did the former Leader of the Conservative Party some two years ago, to the destruction of his Government. Nothing is negotiable in this sense. The Chancellor of the Exchequer has to understand what the trade union movement, in so far as it can speak with a united voice, intends to do, on incomes and wages claims this year, so that he may adjust his Budget accordingly. That will require a period of detailed study, and I hope that will be done without too much publicity.

Mrs. Thatcher

In that case, to use the Prime Minister's words, what does "adjusting his Budget accordingly" include?

The Prime Minister

"Adjusting his Budget accordingly" means that he will make due allowances for any alterations he has to make.

Mr. Thorpe

As one who hopes that the Chancellor's initiative will succeed, may I ask the Prime Minister whether the fact that the Leader of the House yesterday ruled out any policy backed by statute and the Chancellor indicated, within one week, that he would probably have to fall back on a second-best policy, means that the Government's options have been dramatically narrowed?

The Prime Minister

No, I do not think that is so. Some trade union leaders reacted immediately to the situation as they saw it, and some of their members are also reacting. But if we are to overcome inflation in this country we shall have to do it by the voluntary co-operation of everyone. The Government cannot paddle this canoe by themselves. Everyone must lend a hand if we are to succeed.