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Social Contract (Minister'sspeech)

Volume 888: debated on Tuesday 11 March 1975

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asked the Prime Minister if the public speech by the Secretary of State for the Environment on 21st February on the social contract and the railwaymen at Grimsby represents Government policy.


asked the Prime Minister whether the public speech by the Secretary of State for the Environment on 21st February in Grimsby on breaches of the social contract represents Government policy.


asked the Prime Minister if the public speech by the Secretary of State for the Environment to the North Lincolnshire Society of Quantity Surveyors in Grimsby on 21st February on inflation and the social contract represents the policy of Her Majesty's Government.

The Lord President of the Council and Leader of the House of Commons
(Mr. Edward Short)

In the absence of my right hon. Friend in Dublin for the meeting of the EEC Heads of Government, I have been asked to reply.

Yes, Sir.

If the Secretary of State for the Environment's remarks are in line with Government thinking, does not the Leader of the House agree that as British Rail made a loss of £51·6 million last year, any extra money needed for wages will have to come from a further injection of public money? If the social contract is to have any respectability in any quarter, does not the right hon. Gentleman agree that to ask taxpayers to pay more taxes to meet a wage claim and then to charge them higher rail fares will be intolerable?

My right hon. Friend the Secretary of State for the Environment made an excellent speech, and my right hon. Friend the Prime Minister carried it a stage further this weekend. My right hon. Friend the Secretary of State was saying that to price the burden of costs of the railways beyond what the traffic can stand will inevitably lead to cuts in services, and that would lead to whole areas being deprived of a rail network, with all that that means in terms of unemployment in the industry and in social and regional terms. In 1975 we are providing £490 million to maintain passenger lines which are uneconomic.

In that speech the Secretary of State for the Environment also referred to the control of public expenditure and one or two other budgetary matters. Will the Lord President tell us whether the Budget Statement to be presented to the House on 15th April will be the product solely of the Chancellor of the Exchequer's economic judgment or will owe something to the proposals for clobbering the self-employed and small business men now being put to the national executive by the Labour Party?

Will my right hon. Friend take into account the fact that there is an agreed trade union/employer negotiating machinery to deal with these matters and that it is not for Members of Parliament or Ministers to interfere with that agreed machinery?

Yes, indeed, there is agreed machinery, and we have set the unions and employers free to negotiate their own wage rates. At the same time, we are in a difficult stage of changeover from a statutory system— which brought the country to the verge of ruin a year ago— to a free system. Of course there are problems. All that my right hon. Friend was doing was to urge negotiators to stay within the TUC guidelines.

Have the Government any contingency plans if the railways reject the advice of the Secretary of State and settle outside the social contract?

That is an entirely hypothetical question which I would not venture to answer.

I welcome the speech made by the Secretary of State for the Environment, but may we know why he was not the subject of a subsequent attack by the Secretary of State for Employment?

Because he was saying precisely the things which the Secretary of State for Employment has been saying for a long time.

Does my right hon. Friend agree that there is great resentment among trade unions about the social contract that exists? Does he further agree that the Opposition have devoted most of their time during the past week to defending excessive wealth, property and privilege?

I certainly agree with the second of my hon. Friend's propositions, but not with the first. The social contract was negotiated over a two-year period— [HON. MEMBERS: "Social contrast."] In that case, I fully share my hon. Friend's view.