HL Deb 24 July 1979 vol 401 cc1806-10

2.51 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 whether they aim to confer with representatives of employers, trade unions and other interested parties under conditions which might enable a better public understanding to be gained of the effects on the national economy of pay increases which are not matched by increases in productivity.

The MINISTER of STATE, TREASURY (Lord Cockfield)

My Lords, it is a major concern of the Government to improve public understanding of the general economic context of their policies and of the consequences of pay increases of different magnitudes. In particular I would draw the attention of noble Lords to the desire which we expressed in our Manifesto for … more open and informed discussion of the Government's economic objectives … so that there is wider understanding of the consequences of unrealistic bargaining and industrial action". More recently, my right honourable friend the Chancellor of the Exchequer referred in his Budget Statement to the Government's willingness to examine better methods of ensuring that the implications of higher pay without higher productivity were fully understood by all those concerned with wage negotiation. Noble Lords will not expect me to be able to comment in detail at this stage, but I can say that Ministers are giving careful consideration to all the issues that would be involved in setting up discussions of the kind to which the noble Lord, Lord Rochester, refers.


My Lords, I thank the noble Lord for those expressions of sympathy so far as they go. But is he aware that his inability to give a somewhat more positive reply will be a disappointment to many people who are seeking common ground on which to improve our economic and industrial performance? Is not the need for an educational process of this kind one of the few matters on which there is a consensus among elements in all political parties and between many employers and trade union leaders, on which we could build together?


My Lords, the Government entirely appreciate the importance and the value of the educational process, and we believe that everything possible should be done to improve the flow of information to those who take part in decisions affecting pay bargaining. Ministers have repeatedly made their views on this subject known both in another place and in your Lordships' House.


My Lords, may I ask one more supplementary question? Is it not essential for the Government to give a lead in this matter immediately if it is to have any effect on pay negotiations in the near future? Without such a process, how are we to avoid increased inflation, more bankruptcies and even higher unemployment?


My Lords, we are fully aware of the importance of improving public understanding of economic policy, but when it comes to embarking upon discussions of the kind to which the noble Lord refers it is very important that this should be got right. The issue is a difficult and complex one, and we are anxious to ensure that whatever measures are taken are effective and successful. My right honourable friend the Prime Minister, my right honourable friend the Chancellor of the Exchequer and other Ministers have already made clear how important it is that increased pay should be matched by increased productivity.


My Lords, is my noble friend aware that Mr. Alan Fisher, of the National Union of Public Employees, said on the radio this morning that Government action would lead to half a million more unemployed? Is this not rather an irresponsible statement coming from someone who is responsible for the public sector; and would my noble friend continue to repeat, as did Ministers in the previous Government—repeat and repeat, again and again—that irresponsible pay increases, whether in the public or the private sector, must lead to reduced employment?


My Lords, the Government are obviously not responsible for statements which are made by other people, but we have made it clear again and again that we are determined to stick to our monetary targets. As a result, if there are excessive pay increases they can result only in threatening jobs and in putting firms, on which jobs depend, out of business. This is a matter which we would expect responsible bargainers on both sides to take fully into account.


My Lords, bearing in mind the fact that the Tory Party fought the last election on free negotiations for trade unions, can the Minister object if they have fixed their guidelines in the same way as the Government have fixed theirs for the top people, like judges, doctors and dentists, at 20 per cent?


My Lords, we are not fixing guidelines, and we have taken great care not to do so. What we have done, and will continue to do, is to draw the attention of everybody concerned to the inevitable link which exists between excessive settlements and jobs and the prosperity of industry.


My Lords, would the noble Lord agree with me that, although he is quite right in saying that Ministers of this and the former Government have insisted on the connection between productivity and pay increases, it is very doubtful whether that connection has yet got home to the general public? Would it be improper for me to suggest that some short analysis of the material contained in, let us say, Professor Henry Phelps Brown's authoritative pamphlet on the subject, or of the most valuable information gathered together by the Diamond Commission, might help in this matter?


My Lords, I am always very happy to agree with the noble Lord. We have endeavoured, both in your Lordships' House and elsewhere, to impress these facts upon public opinion, and we shall go on doing so. The specific suggestions which the noble Lord makes are interesting, and we shall be very happy to look at them.

Baroness SEEAR

My Lords, would the noble Lord not agree that statements by the Government, however correct and however much reinforced by extracts from authoritative sources, do not carry the same conviction as would flow from discussions with the people who are involved—discussions of the kind proposed by my noble friend Lord Rochester?


My Lords, Ministers have held discussions with bodies representative of both employers and employees, and they will go on doing so. The Government's views in this matter carry great authority, and we very much appreciate any help or assistance which is given by other people in bringing these truths home to the mass of our people.


My Lords, is the noble Lord aware that past platitudes will not get us anywhere? Is he further aware that Government policy itself is adding to the possibilities of price increases and other charges, which will in turn add to the wages bill? If he wants an educational process, why not start at No. 10 Downing Street?


My Lords, there are no platitudes in the Government's policies. In fact, the Government's policy consists of actions specifically directed to curing the ills of the British economy which were created by five years of mis-management of our affairs by a Labour Administration.


My Lords, is the noble Lord aware that this 19th century concept of continuously increased production is a concept embracing the period of mountains of butter, seas and lakes of milk and wine and the overproduction of micro-chips? Is he not aware that increased production cannot be entered into modern economics with the automation which is now being introduced all over the world, and that we are getting the results of this situation more than ever in the history of mankind?


My Lords, I am grateful to the noble Lord for his reminiscences. I myself was not born in he 19th century. The policies we are following are directed to the problems of the last quarter of the 20th century.


My Lords, can the noble Lord tell us what increase of productivity is expected of the Members of the European Parliament whose salary is being increased from nil to some £8,000 per year, and whether this presupposes a change in Government policy which was to oppose any increase of productivity by that institution?


My Lords, I do not think it is incumbent upon Her Majesty's Government to express views about the level of productivity of Members of the European Parliament.


My Lords, when the noble Lord tries to assure us that the Government are acting as a doctor in order to cure our economic ills, would he be kind enough to try to assume the tone of a cheerful doctor instead of that of an undertaker?