TUC AND CBI (Hansard, 19 January 1978)

§ Q3. Mr. Skinner
asked the Prime Minister what recent meetings he has had with the TUC and CBI; and if he will make a statement.

§ The Prime Minister
I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) on 10th November.

§ Mr. Skinner
Has my right hon. Friend seen the remarks made yesterday by the 659 friend of the CBI, the Governor of the Bank of England, when he talked about the bailing out of the secondary and third-rate banks and the multi-million pound cost that ensued, some of it for the British taxpayer? Why can these so-called entrepreneurs take risks in a so-called private enterprise system and then, when they run into trouble, be bailed out by the Bank of England and the taxpayer? Can we be assured that these albatrosses will not be allowed to spread their wings in the future and that we can manage quite well without them?

§ The Prime Minister
The actions that the Bank of England took at that time were, as the Governor of the Bank of England put to the Select Committee yesterday—I do not know how far I am in order in referring to proceedings of that sort—taken in the interests of preventing a collapse throughout the monetary and financial system, which would have had grave dangers for the employment of millions of people.

§ Mr. Skinner
I do not believe that.

§ The Prime Minister
My hon. Friend may not believe it, but that is the view of the Governor of the Bank of England and I accept that view. We have seen what can happen when currencies gyrate wildly. As to whether losses are incurred, I have inquired about this and I know that my hon. Friend will be happy to hear that so far the losses incurred are being more than made up by the interest payments that the Bank of England is now receiving in respect of some of the institutions that were taken over. So—who knows?—the Bank may even make a profit out of the matter. I do not know. I am told that it will take some years for this to work itself out. We shall have to see at the end of the day.
I would say one other thing, if my hon. Friend will allow me. He refers to the Governor of the Bank of England as being the friend of the CBI. The Governor of the Bank of England is a public servant who works very closely with all Governments, including this Government.

§ Mr. Molyneaux
Are the Prime Minister and his right hon. Friends aware of the importance of GEC's maintaining the level of activity at its Larne factory in the interval before work commences 660 on the new Hong Kong contract announced today?

§ The Prime Minister
Yes, Sir. I am very happy indeed that we have secured this contract with the Hong Kong Gas and Light Company. Securing this order was due to excellent co-operation between industry in this country and the Department of Industry. The order will be of great benefit not only to Larne but to many workers in other parts of the country.

§ Mr. Henderson
When the Prime Minister meets the leaders of the CBI, will he make it clear that he will view with disfavour any attempt to flood Scotland with money during the forthcoming referendum in order to make reality of their reactionary views? Will he remind them that in this day and age the Scots will not be bought and sold for English gold?

§ The Prime Minister
I shall, of course, take any suitable opportunity of conveying those views to any appropriate authority, but perhaps the hon. Gentleman might care to do it himself.

§ Mr. Buchan
While we are having a question and answer session, may I also take this opportunity to thank my right hon. Friend for the work that has been done by his own departments in relation to the jobs that have come through the Hong Kong order? In my area, a very troubled area, this will give security to 300 to 400 workers for the next three years.

§ The Prime Minister
I am much obliged. I can only repeat that this was an operation that started last March and has been very successful. It has shown that our power plant industries can compete in the world and are able to make a very good bid for a project which could have widespread repercussions, including repercussions on trading relations with China.

§ Mr. Adley
The Prime Minister tried to dodge the question about free collective bargaining on Question No. Q1 on the basis that it was not relevant. Does he agree that the question is extremely relevant to his discussions with the TUC and CBI, and will he finish Question Time by answering the question which he has so far refused to answer—namely, is it his 661 Government's policy to return to free collective bargaining at the earliest opportunity?

§ The Prime Minister
There is free collective bargaining now.

§ Mr. Ashley
On the general question of talks with the TUC, does my right hon. Friend support or reject the public speeches of Ministers who have said that a voluntary pay policy is vital? Has not the time come when every Minister should be advocating a voluntary pay policy?

§ The Prime Minister
I am not aware that anybody is not advocating a voluntary pay policy or, indeed, free collective bargaining, or something between the two, which, I gather, was rather the position taken up by "The Right Approach" until modified by the right hon. Lady's speeches in Scotland. "The Right Approach" indicates that the Government must take a view, as I remember it—and it has very distinguished authors—on the level of wages in any year and that level cannot remain secret from those who are concerned with bargaining. Therefore, "The Right Approach" wisely concluded that the Government would be drawn into these issues. I do not know whether the right hon. Lady will ever have any more than a theoretical experience of this, but I am bound to tell her that "The Right Approach" is right.