HC Deb 04 May 1976 vol 910 cc1058-60
Q2. Mr. Peter Morrison

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

The Prime Minister

I did so yesterday. Further meetings will be arranged as necessary.

Mr. Morrison

When the Prime Minister does meet the TUC again will he remind its members that it was he who supported them against his own Cabinet colleagues in their fight against "In Place of Strife". How does he reconcile that with his public rebuke, last week, of the Secretary of State for Energy?

The Prime Minister

That did not arise when I met the TUC and I have nothing to add to it now.

Mr. Molloy

Is my right hon. Friend satisfied with the degree of co-operation that he is receiving from the TUC in the Government's light against inflation? Will he say whether he has any intentions to have further discussions and to cement that co-operation which has been achieved in taking a very rigid control of prices?

The Prime Minister

The co-operation between the Government and the TUC is good at the present time. There are different approaches to the problems that are being discussed, but that is inevitable because, to some extent, the interests are different. But there is a common objective in mind, which is to ensure that inflation will be reduced substantially during the year beginning next August and finishing in August 1977. From the way in which the discussions have gone so far, I have no doubt that whatever settlement is reached it will have the impact of substantially reducing the level of inflation.

Regarding the other part of my hon. Friend's question, since we first began on the social contract discussions in 1972, when I happened to be Chairman of the Home Policy Committee, we have always said that the pay element in our negotiations and discussions is only one part, and it is for that reason that there will be very important discussions, at a later date, on the question of prices. This will take place when the present discussions are over. Of course, the CBI and others will be interested in the matter of price controls, but I should say now that there is no doubt that the Government intend to keep a substantial measure of price control during the ensuing 12 months, which will run parallel with any voluntary wage agreement entered into.

Mrs. Thatcher

May I take the Prime Minister up on what he has just said, in view of the uncertain position of the pound yesterday and today? Can he give any more information about the form of the proposed wages agreement? He has already indicated that it will include some arrangement about prices. Has he made any further promise about the level of public expenditure, or has he fettered the Government's freedom of action to introduce further budgetary measures later in the year, after an agreement?

The Prime Minister

The right hon. Lady is right to ask these questions because they are an essential part of the Government's economic strategy. Because details are not yet worked out, we have not indicated to the TUC, except in the most general terms—as I am now indicating in general terms to the House —the nature of the price control that will follow on from the existing price controls when they run out on 31st July this year and will need to be renewed. There can be no doubt that the level of public expenditure is such that it would be very difficult to take on further items at the present time.

Mr. Kilroy-Silk

When my right hon. Friend next meets the TUC will he take the opportunity of explaining when the Government proposes to move on from its present industrial priority of helping firms in trouble to a policy of taking a public stake in profitable companies and industries that are not serving the public interest, particularly in terms of investment?

The Prime Minister

The first thing to concentrate on is to ensure that there is sufficient incentive to provide a proper level of investment for those firms, so that productive jobs can be created. That is what I would like to see us focus on. As for taking a stake in firms, the National Enterprise Board is available, with its powers and with such resources as may be given to it, as my hon. Friend knows.