§ Lord BESWICKMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government, when pursuing their declared policy of restricting pay increases in the public sector, including for example the BBC, what steps they propose to take to ensure comparable restrictions in the private sector, including for example the ITV.
§ The MINISTER of STATE, TREASURY (Lord Cockfield)My Lords, the Government are responsible for pay negotiations only in respect of their own employees. So far as the private sector and the rest of the public sector are concerned, this is a matter for the respective managements who are subject to the disciplines of the market place and, where appropriate, of cash limits and the like. But all negotiators, whether in the private or the public sector, need to remember that excessive settlements mean higher unemployment.
§ Lord BESWICKMy Lords, while thanking the noble Lord for answering the Question, and while recognising with him—as I think we all do—the need for restraint in the total national wage bill, may I ask him whether, if we have a situation where there is a 14 per cent. pay settlement for the BBC and a 45 per cent. settlement over two years for the ITV, this can really be justified on grounds of either fairness or economics?
§ Lord COCKFIELDMy Lords, I am grateful to the noble Lord for the comments he made in the first part of his 1016 supplementary question. So far as the second part is concerned, these are matters which are essentially for the management of the bodies concerned. It is true, of course, that the operation of the levy imposed on the programme contractors gives rise to certain anxieties. This was recognised by my right honourable friend the Home Secretary in the speech which he made on the Broadcasting Bill on 24th June. This is why he said that the operation of the levy was being reviewed by himself and his right honourable friend the Chancellor of the Exchequer.
§ Lord KALDORMy Lords, when the noble Lord said that higher pay settlements mean more unemployment, did he mean to imply that they do not mean higher inflation, or is it his view that they do both?
§ Lord COCKFIELDMy Lords, the noble Lord will find that I dealt with this matter at length in the speech that I made in the debate in your Lordships' House on 11th June, and I invite him to re-read that speech.
§ Lord DRUMALBYNMy Lords, can my noble friend confirm that, with a view to maintaining employment, some firms have actually accepted cuts in salaries?
§ Lord COCKFIELDYes, my Lords, this is true, and an increasing number of firms are realising that, in their own interests and the interests of their employees, they need to settle at reasonable levels.
§ Lord ROCHESTERMy Lords, does the noble Lord agree that it would be helpful, through consultation, to obtain a more widely accepted understanding of the overall increase in pay that the country can afford in the public and private sectors taken together?
§ Lord COCKFIELDMy Lords, these matters are, of course, the subject of debate and discussion in a number of places, not least of course in the National Economic Development Council. I believe that a general view that restraint in these matters is in the interests of everybody concerned is now becoming more accepted throughout the country as a whole.
§ Viscount MASSEREENE and FERRARDMy Lords, would not my noble friend the Minister agree that, as the public sector is usually, though not always, a drain on the Exchequer, one cannot therefore really compare salaries in the private sector with those in the public sector?
§ Lord COCKFIELDMy Lords, that is, of course, going very wide. While I very much appreciate what my noble friend says, we believe it is important that the public sector should set a good example in this matter, and this is what we are endeavouring to do.
§ Lord BESWICKMy Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government when pursuing their declared policy of restricting pay increases in the public sector, what steps they propose to take to ensure that wealth-producing, profit-making, foreign currency-earning enterprises in this sector are not disadvantaged in attracting and rewarding the necessary skilled labour.
§ Lord COCKFIELDMy Lords, companies in the private sector are subject to the disciplines of the market place. In the case of public sector corporations, external financing limits are set. The constraints which these impose are similar to those to which private sector companies are exposed. The public sector is not, therefore, at a disadvantage. In both public and private sector, pay increases must be related to the ability of the organisation to pay, but success and skill can still be properly rewarded.
§ Lord BESWICKMy Lords, having listened with great care to what the noble Lord was good enough to say, may I ask him whether he will therefore give an assurance that, if there is an organisation within the public sector which satisfies the criteria which I have set down in my second Question, there will be no artificial limitation on any wage settlement made there?
§ Lord COCKFIELDMy Lords, obviously, I cannot give any assurance 1018 of the specific kind for which the noble Lord is asking. In particular, I would make two points: first, that negotiations in these bodies are a matter for the management and not for the Government; and, secondly, that in setting the external financial limits the Government pay regard to the kind of factors to which the noble Lord draws attention.
§ Lord BOYD-CARPENTERMy Lords, is not the corollary to the noble Lord's Question that loss-making enterprises in the public sector should exercise the greatest restraint and perhaps should offer no increases at all?
§ Lord COCKFIELDMy Lords, I agree entirely with my noble friend that where a concern in the public sector is making losses there is a very heavy responsibility upon it to improve its performance and to endeavour to reduce its unit costs with a view to returning to profitability.
§ Lord KALDORMy Lords, would not the noble Lord agree that in their recent appointment of the chairman of BSC the Government have given evidence of being prepared to go to quite extraordinary lengths in order to reward the necessary skilled labour?
§ Lord COCKFIELDMy Lords, I note the point which the noble Lord makes. I think that there is universal agreement that the plight of British Steel was such that it was absolutely essential to find the best management available anywhere in the world.
§ Lord MONSONMy Lords, in view of the phrasing of the Question asked by the noble Lord, Lord Beswick, would not the noble Viscount join me in congratulating the Labour Party upon at last recognising the significance of the law of supply and demand in determining wage and salary levels?
§ Lord COCKFIELDMy Lords, I do not think that I can follow the noble Lord very far down that path, except to say that I believe that there is universal agreement that in these matters the laws of supply and demand are of importance.
§ Lord BALOGHMy Lords, does the Minister realise that in an economy which 1019 is dominated by oligopoly his words are rather meaningless?
§ Lord COCKFIELDNo, my Lords, I would not accept any conclusion of that kind.
§ Lord BESWICKMy Lords, while accepting what has been said by noble Lords in different parts of the House, that there are different settlements in different parts of the economy, would not the noble Lord agree that if we are to have a genuinely stable society there must be a prevailing sense of fairness? If double standards are applied to the public sector as against the private sector, no matter what Employment Bills we get there is bound to be industrial conflict.
§ Lord COCKFIELDMy Lords, I do not agree with the conclusions which the noble Lord expresses. I accept entirely that there needs to be a sense of fairness, but the whole objective of the Government's policy is to be even handed between the public and the private sector and thereby to create a sense of fairness.