HL Deb 28 November 1978 vol 396 cc1127-31

2.47 p.m.


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 how many companies are now on their blacklist by reason of granting pay increases to their workers which were alleged to be in conflict with the guidelines laid down at the material time; whether the number on the list has increased or decreased in the last six months, and by how much; and how long they now intend to maintain and operate this list.


My Lords, 70 companies are currently subject to discretionary action for breaches of the Government's pay guidelines. Thirty-two companies were subject to such action six months ago. As I made clear in your Lordships' House on 15th November of this year, the Government consider that their pay policy is a vital element in the control of inflation and will continue to take discretionary action, where necessary, to support it.


My Lords, if the Government intend to use powers given to them by Parliament for other purposes in order to impose penalties on companies who do nothing unlawful but whose actions displease the Government, would it not be more appropriate for the Government to come to Parliament and seek Parliamentary authority for this creation of a new kind of criminal offence?

Baroness BIRK

My Lords, it is not a new kind of criminal offence. It is something for which the Government have authority. Governments have the right to purchase or not to purchase goods from any company they desire, in the same way as has the noble Lord. So far as the other discretionary powers are concerned, they are in fact discretionary and they would only be used in circumstances in which the original Act of Parliament gives discretionary powers. So I am afraid that the noble Lord is quite wrong in his implication that the use of any of these sanctions would be illegal.


My Lords, would the noble Baroness say where there is the authority for the discretionary powers which are being used?

Baroness BIRK

My Lords, if the noble Lord is speaking about the legal authority, it depends upon whether he is talking about export credit, industrial assistance, grants, and so on; these are all in the legislation which enables the Government to give these grants. It is within the discretion of the Government. It is all part of Government policy and it has all been stated in the White Paper and in other Government papers.


My Lords, reverting to the answer given by the noble Baroness to my supplementary question, is it not the fact that the Government are committed to using their powers of contracting and placing purchasing orders in accordance with rules agreed with the Public Accounts Committee in another place, including accepting the lowest tender where the goods to be supplied are satisfactory? Is it not, therefore, a departure from that longstanding and salutary practice when the Government introduce a totally different consideration, that the company concerned is acting lawfully but contrary to Government policy?

Baroness BIRK

No, my Lords. The Government even when using sanctions can still decide, and must still decide, whether in any special circumstances they will make a particular decision. It is up to the Government to decide. I think I should say to noble Lords that this is not something the Government contemplate with relish. It is a very unhappy, unfortunate situation. It is not something that any Government want to do, but it is absolutely essential that in order to keep inflation down the Government stand by their pay policy stated many times and laid down in the White Paper. If this breaks down, then the end result for the country, and not just for the individual companies, will be a much higher rate of inflation and all the terrible things which go with that.


My Lords, is it not a fact that the Government are applying a statutory wage policy by the back door, and is it not time that they admitted that we need a statutory wages policy?

Baroness BIRK

No, my Lords, that is not true at all. It is a voluntary incomes policy with fairly specific guidelines. Tied to that there are the self-financing productivity deals. So it is very much more flexible than the noble Lord suggests; it is not a statutory wages policy.

The Earl of GOWRIE

My Lords, returning to the question of legality, since when has a White Paper been a legislative authority? And, since I acknowledge, as the noble Baroness says, that the Government do have discretionary powers, if this policy is as important as the Government are making out, why do they not bring the discretionary powers before Parliament and make them statutory?

Baroness BIRK

My Lords, there is no point in that. Why should one make discretionary powers statutory? The noble Earl and his colleagues are always arguing for greater free enterprise and flexibility, but they want to make this situation more rigid. The powers are there and one uses them, reluctantly, if one has to. I cannot add anything to what I have said two or three times: that the question of whether you buy from a certain person or company is a matter of choice for a Government just as it is for any individual.


My Lords, is it not a fact that for many years past the Government, in the opposite situation so to speak, have refrained from placing contracts with companies which do not observe the fair wages clause? Is not that a precedent the other way round for what is happening now?

Baroness BIRK

My Lords, my noble friend has there an extremely good point.


My Lords, does the Minister think it is right—I am not asking whether she thinks it is lawful or whether she thinks it is expedient, but does she think it right—that the Ford Motor Company, who have suffered losses of £450 million of revenue in attempting to keep within the guidelines of the Government's pay policy—and have been hindered in doing so by some millions of pounds paid out by the unions in supporting and prolonging the strike—should now be penalised for doing so?

Baroness BIRK

My Lords, there is a Private Notice Question following the Starred Questions, I think put down by the noble Lord, Lord Carr of Hadley. I hope the noble Lord, Lord Cottesloe, will wait for that to be dealt with because that specifically concerns Fords.


My Lords, will the Government ensure that any sanctions that are imposed bite not only on the management but also on the unions concerned?

Baroness BIRK

My Lords, they must do, must they not?

Noble Lords


Baroness BIRK

They do, my Lords, because any sanctions imposed which place particular demands and restrictions on a company, on the management, affect the whole company. As the workers are part of the company it eventually must affect the workers, unless of course productivity increases and then the sanctions are withdrawn, in which case everybody benefits, management and workers.


My Lords, while we are on this question of pay increases, may I ask my noble friend whether a pay increase has recently been granted to Members of the House of Commons, and can she assure us that that was within the guidelines?

Baroness BIRK

My Lords, I do not know whether it is or is not, but so far as I am concerned, that is a different question.