§ Mr. Alfred Morris
asked the Secretary of State for Transport if he will publish in the Official Report the letter from Mrs. J. Bridgeman, an official of his Department, to the Director General of the Greater Manchester passenger transport executive of 30 November; and if he will make a statement.
§ Mr. Eyre
It is crucial to the battle against inflation that wage settlements in the public sector are realistic. This is particularly relevant in the bus industry, where revenues have been falling but costs in recent years have risen much faster than the cost of living generally. The passenger transport executives are currently at the initial stages of an important new pay round, the effects of which will be reflected in the level of services that can be afforded and the price the public will be asked to pay. Letters which I approved were therefore sent by my Department on my instructions to each of to Directors General drawing attention to the need to negotiate realistic and sensible settlements.
The text of the letter to Manchester was as follows:You are already well aware of the importance of containing costs when there are so many difficult problems for public transport; and above all, given the very large element of labour costs involved, the need to avoid excessive pay settlements that can only mean a reduction in services or pressure on fare levels. However, the Secretary of State has asked me to write to you now because he understands that the passenger transport industry is in the early stages of its pay round and he believes it would be highly damaging for the industry if excessive and unjustified pay awards were to harm the prospects of getting public transport on a more stable basis in the coming year.He has therefore asked me to remind you of the downward trend of other recent settlements, the fall in the inflation rate, and 235W the need for PTEs to negotiate sensible and realistic pay settlements in this context. The Government believes that within its own sector the increase in the pay bill ought not to exceed 3½ per cent. I should be interested to hear how you yourself see the pay prospects in the coming year. You will wish to bear in mind that the Secretary of State has already indicated the sort of protected levels of expenditure he has in mind, and these clearly cannot accommodate excessive wage increases without corresponding damaging effects on fare levels and service levels.It is therefore of special concern that your Executive appears to be negotiating about a level of settlement of the order of 7 per cent. which in no way reflects the falling trend elsewhere. Perhaps you could advise me of your reasons for doing so.