HC Deb 28 February 1978 vol 945 cc222-5
9. Mr. Adley

asked the Secretary of State for Employment what he estimates will be the effect on employment of the enhancement of the Government's activities concerning the blacklisting of companies considered to be in breach of the pay guidelines; and if he will make a statement.

10. Mr. Michael Marshall

asked the Secretary of State for Employment what is the estimated effect on unemployment of the operation of the revised arrangements for the Government's voluntary incomes policy black list.

Mr. Booth

The current pay policy and the steps that we are taking in support of it are essential if we are to beat inflation and beating inflation is essential if we are to maintain and increase employment.

Mr. Adley

Do not jobs depend heavily upon investment? Does the Secretary of State think that the black list will contribute or will not contribute towards the creation of that climate of investment which has been clearly identified by the Wilson Committee as having a great deal to do with certainty, which is hardly likely to be assisted by the Government's black list?

Mr. Booth

I certainly accept that jobs are dependent to a considerable extent upon investment, but the advice that I and other Ministers are receiving as to the private sector's intentions with regard to investment suggests to me that it will be more prepared to invest if we have a lower inflation rate than if we have a higher one.

Mr. Marshall

Does not the Secretary of State's answer this afternoon suggest that he is not monitoring at all the effects of blacklisting on employment? From recent exchanges in the House, the right hon. Gentleman must be aware of the problems of the electrical and road haulage contracting industries, and of the John Lewis Partnership and the impact on it of reduced tendering opportunities for health authorities and local government. What is his estimate of the lost opportunities and what is his Department doing about it?

Mr. Booth

I do not have to institute a special monitoring procedure. Since the House passed the Employment Protection Act, every firm that declares 10 or more redundancies has to notify my Department. On the basis of that information, I know that no redundancies have been brought about as a result of the Government's having applied discretionary measures in terms of their pay policy.

Mr. R. C. Mitchell

In a recent court case, the Attorney-General was quoted as saying that it is not the Government's intention to interfere in any way with a legally binding agreement. What is the definition of a legally binding agreement?

Mr. Booth

I think that I had better call upon my right hon. and learned Friend the Attorney-General to answer that question. However, I have looked at the court case to which I believe my hon. Friend refers, and for that purpose any contract entered into between the employer and a union or between employer and employee is a binding agreement upon them. What we had to consider was whether it would be proper to apply a discretion for any purpose other than persuading people in this situation to renegotiate agreements. We decided that it would not be proper. Therefore, we do not use discretionary powers to seek to bring about a breach of such an agreement.

Mr. Viggers

Will the right hon. Gentleman confirm that under the blacklist provisions a main contractor is responsible for the conduct of his subcontractors and that in a fiercely competitive industry, such as the electronics industry, where one can buy from this country or abroad, the safest action for any main contractor is to buy from a foreign supplier?

Mr. Booth

It is certainly the case that under the discretionary procedure following from paragraph 16 of the White Paper, a major contractor has to pass on similar conditions to sub-contractors, but there is nothing unique in that. The provisions of the fair wages clause also pass an obligation from main contractors to sub-contractors. I have not heard of that being used as an argument for buying supplies from abroad rather than in this country.

Mr. Ron Thomas

Does my right hon. Friend agree that the "model" capitalist economy of West Germany has had a low level of inflation but that the unemployment rate there is now well above 1 million and is rising steadily? Is that not a clear indication that what we require are socialist policies to deal with our unemployment problem?

Mr. Booth

I certainly accept that the experience of West Germany shows that a low rate of inflation in itself is not enough to solve problems of unemployment. However, whenever the opportunity has arisen, my right hon. and hon. Friend and I have urged West Germany to use certain other advantages that it has had as a result of a low rate of inflation to expand its economy to the advantage not only of its own unemployed but of world trade generally.