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Labour Party—Tuc Liaison Committee

Volume 885: debated on Tuesday 4 February 1975

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asked the Prime Minister if he will make a statement on his meeting with the TUC Liaison Committee on 20th January 1975.

The Labour Party-TUC Liaison Committee meets at regular intervals to discuss matters of common concern. At the meeting on 20th January the Government representatives reaffirmed the central importance of the social contract in present circumstances. For its part the TUC underlined the need for firm adherence to the TUC guidelines.

Did the TUC also fully appreciate my right hon. Friend's anxiety about the dangers of the economic outlook and acknowledge that anything less than the strictest observance of the social contract guidelines would aggravate inflation, thus undermining the living standards of pensioners and those who cannot negotiate, and, inevitably make for other Government measures?

Yes, Sir. At no other such meeting have I been clearer. The TUC understands and very much agrees with my hon. Friend's analysis. It is very concerned, as we are in all parts of the House, about the dangers in this country and abroad of the spread of depression and unemployment. This was very much part of our discussions. I found the same awareness of—indeed, even great anxiety about—the problem of unemployment at a time of world inflation when my right hon. Friend the Foreign and Commonwealth Secretary and I met the leaders of the American Government last week. It is a world problem which must be tackled by world action and by the utmost domestic action within our several countries.

Was it a matter of general agreement at the meeting that the social contract still meant that the Government would maintain living standards? Was that agreed by both the TUC and the Prime Minister? Now that the White Paper on Public Expenditure has shown that the Government no longer believe that that is possible, when will the right hon. Gentleman be meeting the TUC leaders to tell them?

I answered the first part of that question, in relation to living standards, the week before last. The hon. Gentleman will be aware that in planning the Public Expenditure White Paper we began from the expected increase in production in this country, but because of the need to deploy more resources to the foreign trade balance and to increasing investment we said that national expenditure must rise less than the expected increase in gross national production, and also that there would not be as much available for increased wage payments.

Has the Prime Minister had an opportunity since he returned from Washington to look at the latest CBI trends survey, which is obviously of great concern to the TUC as well as the CBI? What the trends now show is that the number of firms expecting to invest less in plant and machinery in the coming year has increased twelvefold since the present Government came to power almost a year ago and that the number expecting to shed labour during the coming year is the greatest since the survey was started in 1958, in the same way as the plant and machinery outlook is the worst since 1958. Is not the right hon. Gentleman appalled at this? Does it not show that in the past year the expectations for the future in investment and employment have become the worst ever?

I have studied these figures, which the whole House will agree are extremely serious. Investment has never got back to the now halcyon figures of 1970. They never did under the right hon. Gentleman's Government, despite his hubris at the Guildhall, where he said that our entry into Europe would lead to a great increase in investment. Investment fell after that speech. I agree with the right hon. Gentleman that these are matters for great concern.

As for unemployment, we warned a year ago—we did it in the election—what the prognosis was. All of this Government's policies are designed to restrain the then inevitable increase in unemployment and to get investment up.


asked the Prime Minister if he will place in the Library a copy of his public speech on the current economic situation on Monday 20th January in London at the meeting of the TUC—Labour Party Liaison Committee.

That accounts for the fact that it is not in the Library. Is the Prime Minister aware that he has deprived me of a marvellous opportunity of hoping that he would answer "Yes" to the Question? He did, however, make a speech on that date, reported in the national Press, in which he discussed at length the social contract. Is he aware that a former adviser to his Government, Mr. Wilfred Beckerman, has said that the social contract is now about as effective in combating inflation as appeasement is in containing dictators? Is the right hon. Gentleman aware—[HON. MEMBERS: "Too long."]—that we should all like to see the social contract work—

Order. We have had two supplementary questions from the hon. Gentleman already.

I congratulate the hon. Gentleman on his marvellous recovery, with that supplementary question on the speech which was not made and which, as he has now discovered, is not in the Library. I made a speech on that day. It is possible to go from one engagement to another, and at lunchtime I made a speech to the provincial Press, a copy of which I think is in the Library. But that did not refer to the questions the hon. Gentleman is now trying to raise. If he had been to the right library and had got the right speech, he would have seen that it referred to certain aspects of the test of public opinion in relation to the Common Market. It was in fact a trailer for the statement I made in the House three days later. That statement is on the record not only in the Library but in Hansard.