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Social Contract

Volume 884: debated on Wednesday 22 January 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.


asked the Secretary or State for Employment if he remains satisfied with the operation of his policy on wage levels; and if he will make a statement.


asked the Secretary of State for Employment whether he is satisfied with the working of the social contract.


asked the Secretary of State for Employment what progress he has made in ensuring the success of the social contract.


asked the Secretary of State for Employment whether he is still satisfied with the working of the social contract.


asked the Secretary of State for Employment whether he is satisfied with the operation of the social contract.

, pursuant to his reply to a supplementary question by Mr. Tebbit [Official Report, 27th January 1975; Vol. 884, c. 1207], circulated the following letters:17th January 1975.Dear Michael,Yesterday, the Prime Minister told the Commons that Ministers had emphasised in their speeches "the need for the maximum possible compliance with the guidelines of the social contract". And your colleague, The Chancellor of the Exchequer, warned that if there were not more effective pay restraint, unemployment would escalate—he spoke of "millions on the dole".I recognise that you are strongly committed against a statutory pay policy, and also that you would deplore—as would the Conservative Party—unnecessary increases in unemployment. So it is important that MPs of all parties should be able to assess the working of the social contract to see for themselves how far it has been succeeding or failing. To do this properly, MPs need the facts.The most important facts concern the current level of pay settlements and, in particular, whether they fall inside or outside the terms of the social contract.This detailed information is available to you and your Department, as you admitted in

Hansard on 7th November, but you have consistently refused to make this information available to Members of Parliament.

After I had drawn attention to this in a letter to The Times, you said in the House of Commons on 3rd December that if I were to put questions in the House, I would then get the answers.

Since then, you have been asked numerous questions of major importance relating to the social contract which you or one of your junior Ministers have simply refused to answer (a list of which I attach). This is in flat contradiction to the promise you recently made to answer questions.

This amounts to a form of Government censorship. By your action you are denying MPs the information they need to exercise their basic right to examine and evaluate Government policies. This is doubly serious when the information concerns the Government's sole policy for tackling the worst economic crisis for 40 years. MPs want to make their contribution to solving this crisis but are being prevented from doing so.

Similarly, you are deny the press, television and radio the information they need to exercise their basic right of free comment on Government policy.

This is a deeply unhappy situation which must concern MPs of all parties. I hope therefore that you will agree, as a matter of urgency, to publish all the information on the social contract and so honour your promise to me of 3rd December.

Yours etc.


The Rt. Hon. Michael Foot, MP,

Secretary of State for Employment,

St. James's Square,

London S.W.1.

Below are just some of the questions that Ministers from the Department of Employment have refused to answer from 3rd December. This list does not include earlier questions that Ministers have refused to answer.

if those who are not parties to the social contract should regard themselves bound by its provisions (13th December 1974, Hansard, c. 1328);

if all members of trade unions affiliated to the TUC are a party to the social contract (16th December 1974, Written Answers, c. 322);

if members of trade unions which are not affiliated to the TUC are a party to the social contract (16th December 1974, Written Answers, c. 322);

a list of all Government publications since March 1974 which contain in full the terms of the social contract (17th December 1974, Written Answers, c. 381);

to list all Government publications since March 1974 which make clear who are the partners to the social contract (17th December 1974, Written Answers, c. 381);

to list major pay settlements, and the percentage increase in each case, since the abolition of statutory pay controls (17th December 1974, Written Answers, c. 382–3);

to list those wage settlements in which the Conciliation and Arbitration Service played a part, indicating for each the percentage increase (17th December 1974, Written Answers, c. 383);

20th January 1975.

The Rt. Hon. James Prior, MP.,

House of Commons,

London, SW1.

Dear Jim,

I am glad to reply to the important question in your letter of 17th January about the relationship between the Social Contract guidelines and Department of Employment figures, although you should not be surprised when I repudiate at once all accusations that I have dishonoured any promise about giving information to the House of Commons or that I have engaged in what you call "a form of Government censorship". That is nonsense, and I suppose you must know as much. Because you do not like the answers which and other Ministers have given, you should not pretend that answers have not been forthcoming.

May I now explain, as I have already indicated in some of those answers, why it would not be desirable for the Department to publish all the detailed information about individual wage settlements and that it would not be necessary or appropriate for myself or other Ministers to attempt to adjudicate on every one of them and to decide which fell within or outside the guidelines? It was made clear that the Department would seek to assemble information about major settlements and of course we use this in judging generally how the guidelines are being observed. But it would be a different matter altogether to publish the details of every individual settlement and to attempt to place upon each one the stamp of official approval or disapproval. Occasions arise when it may be desirable for Ministers to stress how departures have developed—particularly, for example, when breaches are made in the 12-month rule. But to erect, as you appear to recommend, the elaborate and intricate system of public surveillance and adjudication over all wage settlements might lead people to suppose that we were seeking a return to the old statutory system which collapsed. We have no intention of doing so. We have re-established voluntary and flexible collective bargaining under which negotiators resume their proper responsibilities; that is also an essential part of the Social Contract.

Of course, we attach the highest importance to securing the most faithful allegiance to the spirit and letter of the guidelines. So far from concealing our view on this subject, we have referred to it constantly in every answer and every speech, indicating how generally the guidelines have been followed and also when there have been significant departures from them. We do not seek to hide the failures or the succcesses. In all public statements I have tried to keep both in proportion. This is all the more necessary when others use figures about the level of settlements reached which absurdly distort or exaggerate what has occurred. If believed, these wild figures could only have the effect of vastly increasing the difficulties of wage negotiators, whether employers or trade unionists. For example, the quite false figure of 40 per cent. to indicate the level of settlement running at that time used so intensively by Mr. Heath in the period after the abolition of the statutory controls could do nothing but damage; and perhaps this correspondence may at least perform the service of ensuring that he, with others, will not repeat the mischief.

May I conclude by insisting that the best available information on which an informed judgment about wage movements may be based lies in the indices of wage rates and earnings produced by my Department, and published by us in the same form adopted by previous Governments? In the face of this simple fact known to every Member of Parliament interested in industrial affairs, I trust you will not repeat the fatuity of accusing me of withholding information from MPs.

I suggest this correspondence should be published in the Official Report and I thought I should mention this point tomorrow.

(Sgd.) Michael Foot