HC Deb 14 July 1977 vol 935 cc777-80
Q2. Mr. Blaker

asked the Prime Minister if the public speech by the Chief Secretary of the Treasury concerning pay policy delivered to the Industrial Society on 27th June represents Government policy.

The Prime Minister

Yes.

Mr. Blaker

Is it not surprising that the Chief Secretary did not mention one of the factors that contribute heavily to high pay claims—namely, the burden of direct taxation? Is the Prime Minister aware that four years ago the average payment of income tax by wage and salary earners was£350 a year, whereas this year it is estimated at£810? Is that not an intolerable situation?

The Prime Minister

I suppose that, as the hon. Gentleman is trying to blind me with figures, the answer is that it depends naturally on the extent to which the salaries of those concerned have gone up. Perhaps the hon. Gentleman would care to tell us, in the form of a Question, what the increase in salaries has been.

Mr. Kinnock

On the basis of his discussions this week, will my right hon. Friend assure us that in the pay policy for the forthcoming year workers in the public sector will be at no disadvantage compared with those in the private sector?

The Prime Minister

I do not wish to anticipate the statement that my right hon. Friend the Chancellor of the Exchequer will make tomorrow. I ask my hon. Friend and the House to await that statement.

Mrs. Thatcher

What is the position about the White Paper? There is a note on the tape that there will be no White Paper tomorrow but that there will be a statement by the Chancellor of the Exchequer. Does it mean no White Paper tomorrow or no White Paper at all?

The Prime Minister

It means no White Paper at this moment. That is to say— [Interruption.] I do not know what is so funny about that. It means that, haying gone through the statement that the Chancellor of the Exchequer will make tomorrow, we think that it will be perfectly adequate if that is reproduced in Hansard the next day. That is why.

Mrs. Thatcher

With respect, this is a major change and not what we had been led to expect, which was that there would be a White Paper on pay policy. It looks as if we shall now be having a minor Budget Statement. Is the answer to my first question that the Prime Minister has abandoned the idea of having the White Paper before any economic debate?

The Prime Minister

That is not so. The statement tomorrow will contain a statement on pay and the proposals that the Chancellor will put before the House in the Finance Bill next week. It is being done in this way for convenience. Whether there should be a White Paper in due course is something that the Cabinet can consider later, perhaps in the autumn. Why not? [Interruption.] I must say that this is an awful lot of fuss about very little. If I had not known the Opposition's capacity for nit-picking, I should have expected congratulations on having saved money tomorrow on printing.

Mr. Bidwell

However understandably reticent the Prime Minister might be about commenting on pay policy now, is he aware that many of us recall that he was once the odd man out on this matter in a previous Administration?

Mr. Tebbit

He might be now.

Mr. Bidwell

Has not my right hon. Friend previously said that if the State intervenes too vigorously in pay matters it is the public sector workers who inevitably get clobbered?

The Prime Minister

That is why I am in favour of obtaining agreement on pay policy whenever we can get it. That is the fairest way of trying to share the rewards in any modern industrial and complex society, otherwise the public sector workers tend to get left out. However, this happens to be a democracy, and the Government must operate within the confines of the argreement that they can secure.

Mr. Arthur Lewis

What about the price of beer going up every three months?

The Prime Minister

My right hon. Friend looks well on it anyway.

Q3. Mr. Tebbit

asked the Prime Minister if the public speech of the Chief Secretary to the Treasury concerning wages policy made on 27th June to the Industrial Society represents Government policy.

The Prime Minister

I refer the hon. Member to the reply which I gave earlier today to the hon. Member for Blackpool, South (Mr. Blaker).

Mr. Tebbit

Since the social contract is involved in wages policy, could the Prime Minister clear up the mystery about what has happened to it? Last Thursday he told me that it was not intact, and in a Written Answer yesterday he said that it was not broken. What has happened? Has it died or did somebody just quietly cut its throat?

The Prime Minister

Knowing the care with which the hon. Gentleman frames his questions, I was extremely cautious in replying to the exact words that he used. Hence the difference in the definitions that he has just quoted. I try never to give the hon. Gentleman an opening if I can possibly avoid it.

I have been refreshing my mind this lunch-time with the contents of the social contract. I am glad to say that it is still healthy and going strong, especially that part of the document which says that Government policies will continue to be worked out and priorities established in collaboration and after discussion with the trade unions.

Mr. Powell

Will the Prime Minister refuse to be dismayed by the course of the Government's discussions with the TUC and hold fast to the principle that, as long as the Government maintain their policies over the control and supply of money, free collective bargaining can be restored without any danger to the objective of reduced inflation?

The Prime Minister

I partially agree with the right hon. Gentleman. I agree with the part that says that free collective bargaining can be restored without undue damage. My objection to free collective bargaining in its raw state is that it makes for no sense of justice between the various groups of workers. That is why I should prefer—on every occasion that I could get it—an agreement with the trade unions in order to get a general approach. When the Chancellor makes his statement tomorrow, that will not be the end of the matter. Further discussions will have to take place with the trade unions—with their consent —in the autumn. In the present circumstances, the country will need all the help that it can get from the trade union movement in the months ahead.

Mr. William Hamilton

Knowing my right hon. Friend's high regard for the House, may we assume that the Chancellor's statement will be made to the House? Will the Prime Minister make that quite clear, because tomorrow would be a particularly appropriate day for the statement?

The Prime Minister

Yes. It is the Chancellor's intention to come here at 11 o'clock to try to catch your eye, Mr. Speaker. I am sorry that the statement could not be made today, but the House must accept that there are considerable problems that must be overcome. I note the jubilation of the Opposition at the thought that the country is now moving into a new phase. I am glad to say that the patriotism of the trade unions is much greaer than that of right hon. and hon. Members opposite.