asked the Prime Minister what political and economic conditions would need to be satisfied before an early return to free collective bargaining.

The Government's discussions about the arrangements for the 1977–78 pay round start from the practical basis that general arrangements with the TUC succeed only when they are voluntarily accepted. The composite resolution on pay passed at the TUC Annual Congress in September 1976 referred to beginning an orderly return to free collective bargaining and the need to maintain the attack on inflation. The two rounds of voluntary pay policy we have had so far have helped to create the right conditions for a renewed fall in the rate of inflation once the effects of last year's sterling depreciation have worked through, which should be some time this summer. We shall then be in a more favourable position to embark on the orderly return to free collective bargaining.