HL Deb 22 July 1982 vol 433 cc976-8

3.31 p.m.

Lord Beswick

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 will indicate the extent to which the statement made by the Chancellor of the Exchequer on 6th July that "the Government's approach means substantially lower pay rises than last year" applies to the private sector and whether the salary increase of the chairman of the Heron Corporation, also reported on 6th July, of £81,000 p.a. to £228,000 p.a., is considered to be in accordance with the Government's approach.

Lord Cockfield

My Lords, my right honourable friend the Chancellor of the Exchequer made clear in his speech on 6th July that low pay settlements are essential in both the public and private sectors in order to maintain economic recovery and improve employment prospects. Whether firms need to pay higher or lower than average increases in individual cases is for them to judge in the light of the particular financial and market considerations.

Lord Beswick

My Lords, I thank the noble Lord for that Answer. Is he aware that I make no personal criticism of the Heron chairman? Indeed, in the present régime of the free-for-all I accept what the company said—namely, that the payment was not unusually large". But do the Government really believe that we will build a stable society if pay and perks go up in that way at the same time as we ask the student nurses to accept no more than 69p a week, when we say that we cannot afford to honour our pledge on unemployment benefit of 5 per cent. extra, and when the Chancellor makes the sort of statement he did about lower pay settlements being absolutely inevitable?

Lord Cockfield

My Lords, the Government have no responsibility for the pay of the chairman of the Heron Corporation, which is entirely a matter for that body. The general point made by my right honourable friend the Chancellor of the Exchequer is entirely valid; namely, that excessive pay settlements lead to a higher level of unemployment. I am sure that that is something which the noble Lord would deplore just as much as I do.

Lord Shinwell

My Lords, how does the noble Lord the Minister relate phenomenal salaries on the one hand and low wages on the other—which was admitted by one of his colleagues this afternoon in reply to a Question—not to Government policy, but to the Conservative concept of one nation?

Lord Cockfield

My Lords, in the public sector the Government are responsible for finding the money, and therefore the level of pay settlements must be determined in the end by that factor. As regards the private sector, it is of value to everybody to ensure that we have a vigorous private sector which will provide employment for all our people. I am not in any way saying that the Government are defending or attacking the particular increase to which the noble Lord draws attention. I have been dealing with the general issue of policy raised by my right honourable friend the Chancellor in his speech.

Viscount Massereene and Ferrard

My Lords, would not my noble friend the Minister agree that the majority of that pay increase will be returned to the state through taxation and will, therefore, benefit the health service and all the other state social security funds?

Lord Cockfield

My Lords, my noble friend is entirely right in drawing attention to the fact that a substantial proportion of high incomes does, in fact, go in taxation. But it would be entirely wrong for me to be drawn into a discussion as to the merits or otherwise of a particular pay increase for an individual.

Lord Harris of High Cross

My Lords, although I congratulate the noble Lord on his formally correct reply to the Question asked by the noble Lord, Lord Beswick, may I ask him quite explicitly whether or not he would agree that the victim of this unhealthy interest by the noble Lord, Lord Beswick—the chairman of the company—is the kind of entrepreneur whom the Government ought to welcome, bearing in mind that since 1957 he has built up from scratch, without a penny of Government subsidy, a business with a turnover of £400 million, employing 5,000 staff, of whom 3,000 are in this country? Ought that not to be welcomed by the Government?

Lord Cockfield

My Lords, I find myself in some difficulty in responding to the noble Lord, because I would not share his strictures on the noble Lord, Lord Beswick. On the other hand, I would agree with what he says in the remainder of his question.

Lord Bruce of Donington

My Lords, is the noble Lord aware that his Government's approach to this whole matter is rather less than even-handed? Is the noble Lord aware that, whenever it comes to a question of wages as distinct from salaries, the Chancellor of the Exchequer, is most precise in what he says and in the pressure which his Government try to exert in keeping wages down? Is the noble Lord aware that it appears dubious to most of us that this gentleman, however talented he may be, would find it easy to justify a rise of 255 per cent. on the basis of increased productivity, about which the Government are so much concerned?

Lord Cockfield

My Lords, I have made it clear that I do not propose to enter into a debate about the merits or otherwise of this particular pay figure. On the general point that the noble Lord raises, what my right honourable friend has said and what, in fact, I myself have said applies to pay generally, and not to wages as distinct from pay. In fact, the difference so commonly drawn between wages and salaries is not entirely a justified one.

Lord Elwyn-Jones

My Lords, does the noble Lord think that the observation of the noble Lord, Lord Harris, in regard to the Question of my noble friend Lord Beswick, that it displayed an unhealthy interest, is appropriate language to be used in this Chamber?

Lord Cockfield

My Lords, with respect, that is not a matter for me, but had the noble and learned Lord been listening with care, he would have heard that I dissociated myself from the comment made about the noble Lord, Lord Beswick.

Lord Beswick

My Lords, is the noble Lord aware that my admiration for the chairman of the Heron Corporation is equally as great as that of the noble Lord, Lord Harris of High Cross? That consideration does not come into it at all. What we are considering here is what sort of a society we are trying to build. When he asked for a reduction in pay increases, the Chancellor said that sanity and realism in the face of the present high level of unemployment might well mean no pay increases at all. In addition to sanity and realism, could not we also think in terms of social justice?

Lord Cockfield

My Lords, I am very glad that the noble Lord has picked out the phrase "sanity and realism", because this is what is really required in our economic affairs. The greatest of all social injustice is the unemployment which flows from excessive wage increases and pay increases secured by other people in the economy.

Lord Derwent

My Lords, is it not remarkable that in 37 minutes we have been able to get through three full-scale debates?

Lord Jenkins of Putney

My Lords—

Earl Ferrers

My Lords, on that very appropriate note, I think that we should move on. Possibly unusually bright lights in the Chamber at the moment have a stimulating effect on your Lordships in asking so many questions, but I think it would be proper to move on.