HC Deb 26 June 1980 vol 987 cc731-2
11. Mr. Butcher

asked the Chancellor of the Exchequer if he will make a statement on the latest projection for public sector pay increases over the next 12 months.

Mr. Biffen

Public sector pay settlements will need to be determined in the light of what the taxpayer and the ratepayer can afford. It is too early to reach firm views on figures.

Mr. Butcher

I thank my right hon. Friend for that reply. Does he agree that future public sector pay settlements should be at rates that are considerably less than the rate of inflation, which should assist in further reducing Government borrowing?

Mr. Biffen

Doubtless that consideration will weigh with the Government when fixing cash limits.

Mr. Winnick

Is the Minister aware that the Government have lost any authority to ask for income or wage restraints of any sort? Is he also aware that public sector workers will be determined to make a hard fight to stop themselves from being bullied and intimidated by the Government?

Mr. Biffen

It is not the Government's purpose to bully or intimidate, but to operate by the rule of law, especially in respect of wages.

Mr. McCrindle

On the question of the private sector, is my right hon. Friend convinced that falling profitability and reducing demand alone will induce private employers to follow the example of the Government in the public sector, or does he have any additional inducement in mind to stiffen that resolve?

Mr. Biffen

The fall in profitability will be a major determinant in the level of earnings. That was evidenced in the May report of the CBI pay data bank.

Mr. Horam

Have the Government now abandoned the nonsense that public sector pay settlements of about 20 per cent. are compatible with cash limits of 14 per cent.?

Mr. Biffen

That view was never entertained.