HL Deb 28 February 1978 vol 389 cc363-6

2.48 p.m.

Lord BOYD-CARPENTER

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 the recent agreement by the Ford Motor Company for wage increases to their employees was in the Government view within the Government guidelines.

The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey)

My Lords, the Ford settlement was reached in October 1977. It was within the guidelines in so far as it observed the 12-month rule. As to the amounts paid, it was a complicated settlement; and while it included increases for some groups within the company of just over 8 per cent. there were in other cases higher increases. Its overall effect was to increase earnings by more than the 10 per cent. guideline. In so far as that settlement exceeded the 10 per cent. guideline, the Government regret it.

Lord BOYD-CARPENTER

My Lords, while thanking the noble and learned Lord for that Answer, may I ask him this: How does he reconcile the substantial grant of assistance to this company in respect of their new engine factory in South Wales with the very firm assertion made by the noble Baroness, Lady Birk, in this House on 8th February, that those who broke the guidelines would not receive Government money?

Lord McCLUSKEY

My Lords, the House will realise, as the country certainly does, that the Government have to look at each individual case on its merits. The grant of assistance in relation to the Welsh project is one thing; pay policy is another. The House will surely appreciate, as I am certain the country does as well, that the Ford settlement was one of the first to be made. The Government had to look at it very carefully indeed, and at that time it was conceived that, although the aim was to have a 10 per cent. increase, and no more, in the national earnings, it was possible that some wage settlements might exceed that 10 per cent. provided that others fell below it. Of course, that has not turned out to be the case and the Government are now determined to ensure that cases, whether in the public or private sector, will not exceed the 10 per cent. guidelines.

Lord BOYD-CARPENTER

My Lords, does not the noble and learned Lord appreciate that smaller companies which have granted no larger increases than Ford, but which have been blacklisted, will be left with the unhappy suspicion that the real reason for the discrimination in favour of Ford is that they are big and formidable and that it is easier to trample on a small company?

Several noble Lords: Hear, hear!

Lord McCLUSKEY

My Lords, that suspicion is wholly preposterous. The Sun Alliance, which is a kind of offshoot of the Conservative Party, is certainly a big enough company and the Government have challenged the company's settlement and challenged it so far successfully. It is not size that matters. What matters, and what I think the country realises—as noble Lords opposite, with their "Hear, hear!", do not seem to realise—is that this policy is being successful. That is what matters.

Several noble Lords: Hear, hear!

Lord LEE of NEWTON

My Lords, is the noble and learned Lord aware that there is nothing new about Governments who have sanctions of this type using them in a flexible way? For example, a succession of Tory Governments used the sanctions of the fair wages clause—

A noble Lord: That is the other way!

Lord LEE of NEWTON

—against certain companies and not against others. Is the noble and learned Lord aware also that, in the other place last Thursday, the Tory spokesmen were saying that the present level of increases is running at 14 to 15 per cent? Ought not the Government to be congratulated in having made this very good agreement at 12 per cent?

Lord McCLUSKEY

My Lords, I certainly would not want to go along wholeheartedly with the last few words of my noble friend; but Ministers in this instance, as in all instances, have to take into account not just the overriding priority of combating inflation but also other factors, including employment, particularly in areas which are hard-hit by unemployment. These are matters which Ministers take into account: they apply their very limited discretion with as much care as they can, in the light of the facts of each individual case.

Lord PARGITER

My Lords, is my noble and learned friend aware that the Ford Motor Company have always operated on a day-wage basis and never on any productivity bonus scheme of any kind in the whole of their history? Is he aware that whereas other firms have paid in excess of 10 per cent. because of a productivity bonus, it would have been very difficult indeed to do this in the case of the Ford Motor Company?

Lord McCLUSKEY

My Lords, I am indebted to my noble friend. That is really what I was trying to encapsulate when I used the word "complicated" to describe the settlement. It may take some time to see precisely what the effect of this settlement is in relation to total earnings.

Lord THORNEYCROFT

My Lords, does the noble and learned Lord recall the rhyme that circulated in Whitehall at the time of the Geddes axe "?

But most of all they smote the weak Because they knew they would not squeak So loudly when they died".—

Several noble Lords: Hear, hear!

A noble Lord: That was a Tory Government!

Lord McCLUSKEY

My Lords, I do not think I need add to the cries of "Tories" coming from behind me, but I would ask the noble Lord this: Does he think that the Sun Alliance is to be described as "the weak"? Perhaps that is why it deserves and gets so much support from his noble friends.

Lord LEATHERLAND

My Lords, I have no poetry to recite. I merely want to ask my noble friend this question: Is it not a fact that 96 per cent. of the major wage claims settled in the last six months have been within the guidelines?

Lord McCLUSKEY

My Lords, that is correct, and if in their criticisms noble Lords opposite would be less grudging they would acknowledge the broad success of the counter-inflation policy and would offer us not their sneers but their congratulations.

Viscount BARRINGTON

My Lords, could the noble and learned Lord explain or give a brief definition of what he means by "preposterous" as applied to the proposition, which may be right or wrong, that it is easier to attack the weak than to attack the strong?

Lord McCLUSKEY

My Lords, the noble Viscount has been in this House longer than 1 have and therefore has much greater experience of what is preposterous.