HC Deb 06 March 1978 vol 945 cc966-7
24. Mr. Michael Marshall

asked the Secretary of State for Prices and Consumer Protection what estimate he has made of the effect on prices of the Government's voluntary incomes policy black list.

Mr. Hattersley

Recent improvements in the inflation rate are largely the result of moderate wage agreements made over the past two and a half years. It would clearly be damaging to the prospects of general acceptance of this policy if some wage increases, outside the guidelines, were subsidised out of public funds.

Mr. Marshall

Does the Secretary of State recognise that he has totally failed to answer the Question? He must recognise that if those who are potential tenderers—whether to local government, to central Government or to nationalised industries—were knocked out, that would be bound to have an effect in increasing prices? What does he intend to do to monitor the situation?

Mr. Hattersley

The hon. Gentleman misunderstands how what he calls the black list operates. It operates not as a punishment but as a deterrent. When the deterrent actually works and wage agreements are made within the guidelines, the company tenders and it and the Government live happily ever after.

Mr. Mike Thomas

What effect would it have on the morale of the trade union movement were it to be known that, through the financing of Government contracts, those employers which chose to break the wages policy were subsidised by the House, by the Government and by public funds, whereas those which kept to the policy gained no benefit?

Mr. Hattersley

That question is best left to the Opposition, but I put it to them in the hope of getting an answer. Do they or do they not, if they support the policy of moderate wage increases within the guidelines, want wage increases outside the guidelines to be paid for by the taxpayer and the ratepayer? I do not, but I do not know what the Opposition want.

Mr. Ridley

Are there not more firms on the white list which have broken the guidelines but not been disciplined than there are on the black list? Therefore, is it not the apotheosis of hypocrisy to pretend that the policy is keeping down prices?

Mr. Hattersley

No. According to the CBI—the figures we have confirm the CBI's judgment—96 per cent, of companies which have made settlements in the last pay round have made those settlements within the terms of the pay policy. Therefore, those 96 per cent, of all British companies are able to contract with the Govenment and the so-called black list has no effect on them.