§ Mr. Grylls
asked the Secretary of State for Industry whether it is his intention to cancel any contracts to grant-aid companies under section 8 of the Industry Act 1972 as a result of the application of Government pay sanctions.
§ Mr. Les Huckfield:
The Government's policy is set out in paragraph 25 of the White Paper"Winning the Battle Against Inflation "—Cmnd. 7293—which says:the Government will, if necessary, take account of any failure to observe the guidelines in exercising its discretion in the fields of statutory assistance and other appropriate discretionary powers".
The question of cancellation of contracts does not arise since offers of selective financial assistance under section 8 of the Industry Act include provisions specifying that my right hon. Friend will be under no obligation to make payments if the company concerned enters into any pay settlement with its employees which does not comply with the guidance in respect of remuneration set out in any Command Paper presented to Parliament having effect after 12th July 1975. In cases where offers do not include an effective provision of this kind, the Government are contractually obliged to make payments and will honour their obligations.