HC Deb 27 April 1978 vol 948 cc1619-20
3. Mr. Viggers

asked the Chancellor of the Exchequer what assumption he has made in his Budget judgment of the overall increase in earnings in the year from August 1978.

Mr. Joel Barnett

I refer the hon. Member to the Financial Statement and Budget Report.

Mr. Viggers

I am grateful to the right hon. Gentleman for that reply. Is he aware that the Financial Statement makes it clear that the Chancellor is assuming pay increases at an average of one-half the present pay round levels, which means not more than 7 per cent.? As this is less than the expected rate of inflation, is he telling us that the British people, under Socialism will again, next year, be worse off?

Mr. Barnett

No, but I tell the hon. Gentleman that he wholly misunderstands the purpose of what was said. It would mean not a fall but an increase in real living standards, as has been going on over the current pay round. What matters over the period after the current round is that there should be moderation in pay settlements. This is understood by the TUC, and I have no doubt that in co-operation with it, of the sort that we have had before, we shall achieve our objective.

Mr. George Rodgers

Does my right hon. Friend agree that the Opposition's advocacy of substantial increases in the pay of the Armed Forces and the police, at the same time as the Opposition indicate that they intend to cut public expenditure should they achieve office, would mean a cut in hospital and health services?

Mr. Barnett

I agree with my hon. Friend, but I am never surprised at the irresponsibility of the Conservative Front Bench. My hon. Friend is right, but the Conservatives will never spell out precisely what they would cut. Perhaps one day they will tell us.

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