§ But those changes will not themselves be enough unless we also squeeze inflation out of the system. It is crucially important to reestablish sound money. We intend to achieve this through firm monetary discipline and fiscal policies consistent with that, including strict control over public expenditure.
§ Financial responsibility on the part of Government must be supported by responsibility elsewhere. People must understand and accept that the only basis for real increases in wages and salaries is an increase in national production. Higher pay without higher productivity can lead only to higher inflation and unemployment. It is important for that to be fully understood by all those concerned with wage negotiation. We shall be more than willing to consider better methods of ensuring that it is.
§ Given the monetary and fiscal policies to which we are firmly committed, irresponsibility is bound, as I have said, to threaten jobs. This indeed is the clear evidence of recent history, most plainly in the private sector.
§ Responsible bargaining necessarily means different things to different people and in different kinds of firms and industry. But on both sides of the table, and on both sides of the House, certain limitations must be recognised: in the public sector, what the ratepayer and taxpayer can afford; in industry, what the customer is prepared to pay, what the firm needs to invest, and what the pressure of competition demands; and, throughout the economy, the limits imposed by the need to control the money supply.