HC Deb 15 July 1977 vol 935 c990

The Government propose to extend dividend controls for a further year with the same limit of 10 per cent as at present. The Government have already announced their intention to extend for one year the present control over the profit margins of manufacturers, service firms and distributors. In addition, it is necessary to continue the provisions in relation to employers in the Remuneration, Charges and Grants Act 1975 to the extent needed to support and enforce the TUC guidance on the 12-month rule. An order will be required under that Act to achieve all these purposes. Further orders will be needed in clue course for the details of the margin control.

Where a firm has reached a settlement which is quite clearly inconsistent with the policies set out in this statement, the Government will take this into account in public purchasing policy and the placing of contracts, and also in the consideration of industrial assistance.

The Government will, of course, continue discussions with the TUC over the whole field of the social contract. Meanwhile, the Government are responding to the TUC's request for action to create a climate favourable to an orderly return to normal collective bargaining. In particular, we are proposing measures which give working people confidence that their living standards can be generally maintained by moderate settlements at 12-month intervals. These measures are designed to give special help to the low-paid and to families with children.

The improvement in the economic prospects since the Budget—in particular the improvement in the balance of payments —makes it possible for me to make the following proposals in the field of tax relief, price reduction and employment.

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