HC Deb 26 January 1978 vol 942 cc1574-7
4. Mr. Kilroy-Silk

asked the Chancellor of the Exchequer with whom he has so far had discussions on the possibility of a stage four pay policy.

Mr. Healey

This subject seems to crop up in many conversations I have.

Mr. Kilroy-Silk

Will my right hon. Friend give a categorical assurance that he will not continue with the present type of pay policy into a fourth stage? Does he realise and accept that, if he were to pursue a Socialist incomes policy covering all forms of incomes and wealth, he would be likely to get far more support, certainly from this side of the House, than if he were to continue with the anomalous and unfair present policy of pay restraint?

Mr. Healey

There are rigidities in the policy that is being pursued this year, although it is a great deal more flexible than last year's policy, and last year's policy was more flexible than that of the year before. I would certainly wish to see any future arrangements make it possible to go further towards correcting the distortions and inconveniences which have been developing over the last three years.

When my hon. Friend talks about a Socialist incomes policy, I think it has been shown by the historical experience of Europe in recent years that only social democratic Governments can rely on the degree of support from trade union movements which is necessary to produce the sort of moderation in pay settlements that we have seen in this country, Scandinavia, Austria and West Germany.

Mr. Ridley

Is the Chancellor aware that the patriotism and common sense of the trade union movement have been met with threats of a further stage 4 from him? The whole subject is clouded in mystery and double talk, and the obfuscation is similar to certain hon. Members who seem to have spent the night in the "No" Lobby. Will he come clean and tell the House whether there will be a statutory incomes policy in stage 4 or not?

Mr. Healey

There certainly will not be a statutory incomes policy next year. That has repeatedly been made clear by myself and my right hon. and hon. Friends. It is too early to say what sort of arrangement is likely to be reached, but it does not lie in the mouth of the hon. Gentleman to talk about mystery and double talk with regard to incomes policy from this side of the House.

I suggest that the hon. Gentleman studies what has been said in recent weeks by his right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), by his right hon. Friend the Member for Lowestoft (Mr. Prior) and by his right hon. Friend the Leader of the Opposition. If he can make any sense of the totally contradictory statements which they have made in public on this matter in recent times I should be grateful if he would send me the answer on a postcard.

Mr. Radice

Is my right hon. Friend aware that many Labour Members think that it is a good thing that he is discussing the future of pay policy now rather than waiting until later?

Mr. Healey

I am aware of that factor. Nobody who has lived through the last three and a half years—or, indeed, the last 15 or 20 years—can doubt that the maintenance of a level of earnings increases which is close to the level of increase in productivity is a precondition of keeping inflation at levels that will allow us to maintain high employment. Nobody with whom I have discussed the subject denies that; certainly nobody in the trade union movement denies it. How one seeks to create a framework of collective bargaining to ensure this outcome is a question on which this Government have made some progress in the last three years. I hope that we can make further progress in the coming months.

Mr. Lawson

The right hon. Gentleman has spoken of contradictions. Is not the greatest contradiction of all that which lies between the right hon Gentleman's writings in the Socialist Commentary saying that there will be a stage 4 and a formal incomes policy for ever and the comments of the Prime Minister last week to the effect that we were now to have free collective bargaining? Should not the two right hon. Gentlemen get together, and will the Chancellor of the Exchequer, having spoken to the Prime Minister, please tell the House what his policy is to be?

Mr. Healey

The Prime Minister and I are in continuous and intimate contact on this matter. As for the contradiction which the hon. Gentleman appears to detect between the interview I gave to the Socialist Commentary and the Prime Minister's interview on television, I detect no contradiction whatever in that respect. Possibly, if the hon. Gentleman were to borrow my spectacles or the Prime Minister's, he would see the matter more clearly.