HC Deb 23 November 1978 vol 958 cc1467-8
13. Mr. Gow

asked the Chancellor of the Exchequer whether he will make a statement about the operation of the Government's black list as it applies to withholding Government contracts from companies deemed to be in breach of the Government's pay guidelines.

15. Mr. Michael Latham

asked the Chancellor of the Exchequer what is the current number of firms on the Government's black list for paying their work people a legal wage increase in excess of the voluntary pay guidelines; and what is the total number of firms which have been on the black list at any stage, including those since removed from it.

Mr. Joel Barnett

There are currently 65 firms subject to discretionary action for reaching pay settlements outside Government pay guidelines. Such action may include the withholding of Government contracts. Ninety-four firms have at one time or another been subject to discretionary action, including 29 which are no longer subject to such action.

Mr. Gow

Does not the Chief Secretary understand that there is an overriding need for a full statement by the Chancellor of the Exchequer or himself about the way in which the black list will operate and that that statement also requires the approval of this House? Will he understand that the basis on which the Government are seeking to operate is unlawful—[Interruption]—in the sense that it does not have the specific approval of Parliament?

Mr. Barnett

I simply do not agree with the hon. Gentleman, and I find the cheers of Opposition Members somewhat surprising. It would be an abuse of the responsibility of Government to allow increases in the private sector of the kind now being claimed and do only what the Opposition want us to do—have strict cash limits on the public sector.

Mr. Michael Latham

If a firm on the black list, as Ford is likely to be next week, still submits the most advantageous tender to the Government but it is re- jected to the disadvantage of the taxpayer, is it then the Government's intention to invite Toyota and Datsun to fill the gap?

Mr. Barnett

It is the Government's intention to defeat the problem of inflation. As this is the overriding national interest, I had hoped to have the support of the Opposition instead of the carping criticism that we receive constantly.

Mr. Ashley

Let us suppose that the Government stand by idly and allow wage increases of 16½ per cent. or more to those with high salaries and relatively high wages. What is the Government's estimate of the effect of that lack of action, first, on unemployment and, secondly, on the level of wages of low paid workers?

Mr. Barnett

I am obliged to my hon. Friend. The fact is that we do not intend to stand by idly. We intend to make our counter-inflation policy work. I hope that we shall have the support of everyone who has the national interest at heart.

Sir Geoffrey Howe

Will the Chief Secretary return to the supplementary question put to him by my hon. Friend the Member for Eastbourne (Mr. Gow)? Instead of using general phrases such as not intending "to stand by idly", will he say whether there is any authority in law whereby the Government can require local authorities to refrain from making their purchases at the best prices in the interests of their ratepayers? Is there any legal authority for that?

Mr. Barnett

I can tell the right hon. and learned Gentleman that there is no abuse of the law if the Government use discretionary action—[Interruption.] The Government are using discretionary action where it is specifically provided by Parliament. It would be an abuse of our responsibilities if we failed to do that.

Mr. Speaker

Order. I shall allow Prime Minister's Questions to run one minute longer, because we are a little late starting them.