§ Mr. Austin MitchellTo ask the Secretary of State for Employment what is the Government's policy on increases in productivity being rewarded by increases in pay; and what evidence he has of the extent to which that principle has been followed in the(a) manufacturing and (b) service industries.
§ Mr. OppenheimThe extent to which increases in productivity are rewarded by increases in pay is a matter for organisations to decide in the light of their particular circumstances. However, productivity is one of many factors which need to be taken into account when making such decisions. The Employment Department does not collect data on how far productivity influences such decisions, but whereas both productivity and pay stagnated from 1974–1979, both productivity and real pay at all levels have risen sharply since 1979.
The Government, however, also believe that increases in pay need to be more than matched by improvements in productivity in order to free resources for investment, which in turn will feed through to greater competitiveness.