§ Q4. Mr. Arnold Shawasked the Prime Minister when he next plans to meet the CBI.
§ The Prime MinisterI refer my hon. Friend to the reply that I gave to the hon. Member for Blackpool, South (Mr. Blaker) on 27th May.
§ Mr. ShawIn view of yesterday's magnificent response by the TUC to the needs of the nation, will my right hon. Friend, when he meets the CBI, press upon industry the need for an equal response, particularly on investment and prices?
§ The Prime MinisterYes, Sir. I agree with my hon. Friend that the trade unions' response yesterday by such an overwhelming figure is illustrative of the fact that by this policy they are trying to place first not only the national interest, but, as I have constantly pointed out, their own interest.
I have discussed this matter with the leaders of the CBI and impressed upon them—I think they accept it—that there is now a need for new investment. As the level of wage costs is pretty well known, if this agreement is adhered to until the spring of 1978—because a lot of wage agreements are not negotiated until the spring—they have a considerable period ahead in which to plan new investment with confidence. I believe that 736 Lord Watkinson and his colleagues accept this, and discussions are going on to see how it can be achieved.
I should like to re-emphasise that studies have shown that, apart from shortages of orders, which means that machinery and plant stand idle, still not enough use is made of the plant and machinery that we have. Perhaps we could get a lot more out of our existing investment if we were to plan and use it properly.
§ Mr. Paul DeanWhen the Prime Minister meets the CBI, will he admit to it that the cost of the Government's expensive nationalisation programme means that they are abandoning their social programmes?
§ The Prime MinisterNo, Sir.
§ Mr. KinnockDoes my right hon. Friend agree that, unlike the TUC, there is no discipline of solidarity among employers or members of the CBI to ensure that they deliver the undertakings that they give in respect of price restraint and other matters? Does he further agree that that indicates an elementary necessity not for the relaxation of Government control in these matters but for the extension of that control, including major controls over the export of capital, which we need for a reinvestment programme?
§ The Prime MinisterThe export of capital has been dealt with by the Chancellor of the Exchequer. I have nothing to add to what he said.
I agree that the CBI does not have the same influence over individual firms and companies as the TUC has over its members. That is inevitable, as individual firms and companies take decisions based on their expectations for the future. It is for us to let them see that in the Government's strategy there is a real prospect of reducing inflation by the end of 1977 to a level that will be no greater than that of our major competitors and that we want to see them prosper in order that manufacturing industry can produce the goods out of which the social dividend will be paid. That is the policy that the Government will follow.
§ Mr. TapsellAs today's issue of the Bank of England Quarterly Bulletin clearly states that this Government must either cut public expenditure or raise 737 taxes, which of those alternatives will the Prime Minister suggest to the CBI?
§ The Prime MinisterI have nothing to add to the replies that I have given on numerous occasions on this matter. I do not intend to gild the lily. My position on this matter is quite clear.