HL Deb 01 November 1976 vol 376 cc877-9

2.46 p.m.

Lord ORR-EWING

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they accept the figures published in the Digest of Statistics (Table 170) showing that the average basic weekly wage rate in manufacturing industry increased by 18.1 per cent. in the year ending July 1976 when the cost of living increased by 13 per cent.: and why Ministers claim that under the Social Contract it is wage earners and not salary earners who have made the greatest sacrifices.

Lord JACQUES

My Lords, the figures are correct, but the 18.1 per cent. represents the increase in minimum entitlement, not the increase in earnings. The best available indicator is the index of average earnings, which showed a rise of 13.9 per cent. for all industries covered for the year to July 1976. The £6 pay policy protected the lower paid. It sought to ensure that sacrifices were made according to ability to bear them.

Lord ORR-EWING

My Lords, is there not an increasing case for restoring the differentials in British industry, particularly in British manufacturing industry and among those who bear more responsibility and wish to work a little harder than others? At the moment they have not been able to increase their wages, and inflation has etched away at the real take-home pay. They are much more handicapped than those who have been able to bargain and have achieved the results that their earnings have rather more kept in line with the rise in the cost or living, whereas the managers at all levels have not been so placed.

Lord JACQUES

My Lords, the Government have made clear their recognition of a number of pay problems, but in the present circumstances there have to be priorities and things, which, however desirable, have often to be deferred.

Lord ORR-EWING

My Lords, will the noble Lord bear in mind that the Minister for Industry, in a speech to the Society of Motor Manufacturers and Traders on 19th October, said: It is the trade unions and their members who have made a disproportionate and lopsided sacrifice of income they could have gained. Would he bear in mind when considering the future that we need differentials, and strong differentials, at all levels if people are to be encouraged to use their skills to the maximum? Is it not a sad fact that British industry today is producing less than it was even during the three-day week at the beginning of 1974? Is this not a reflection of a lack of incentive which exists at so many levels?

Lord JACQUES

That calls for two answers, my Lords. First, what Ministers have claimed in general is that the TUC showed courageous leadership when it recommended its members to accept a pay increase, which at that time was about one-half of the inflation rate for the preceding 12 months, and I doubt whether anybody could deny that. Secondly, whenever there is an attempt to get some measure of equity, or equality, by protecting the lower paid, the margins of difference are inevitably affected. I think that the situation portrays what has been obvious for some time: that the better paid do not mind talking about protection of the lower paid, but do not like to do it.

Lord MURRAY of GRAVESEND

My Lords, is my noble friend aware that it was the Society of Motor Manufacturers and Traders which gave a rather ill-mannered reception to one of our Ministers at the opening of the Motor Show? Is it not a fact that the TUC ought to be congratulated on its efforts within the Social Contract: and is it not time that we heard from the Conservatives their alternative to the Social Contract?

Lord JACQUES

My Lords, I cannot answer for the Conservatives. I am aware, of course, of opinion on the reception which the Minister for Industry got at the Motor Show, but I think this is far from the Question which is under consideration at the moment, and I do not care to comment.