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Prime Minister (Speech)

Volume 933: debated on Thursday 16 June 1977

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Q2.

asked the Prime Minister whether he will place in the Library a copy of his speech to the Transport Salaried Staffs Association annual conference in Great Yarmouth on 18th May regarding pay policy.

Would it not be worse than useless for phase 3 to be—and be seen to be—so farcically wide that its only effect would be to prop up this decayed Administration for another couple of months?

I said at the Transport Salaried Staffs Association conference that I did not want to see a fig leaf in disguise for a pay policy, and that is still my view. I said that we should not have productivity agreements that would be just cosmetic and that would merely disguise the true increase. I am sure that that is right, and I am certain that another understanding with the trade union movement about the increase in salaries and wages next year will be of great value, not only to the Government in dealing with public services, but in getting inflation down further—as it will be going down during the second half of this year.

Does the Prime Minister recall that at that conference his speech was received most enthusiastically, with a standing ovation, because the delegates realised that the trade union movement and the Government are working together in the national interest to bring down the level of inflation by a sensible strategy?

My hon. Friend was in the Chair at that conference, so he was in a good position to see what happened. The serious point that he made is true. There is a great deal of evidence that the trade union movement recognises the seriousness of the situation in relation to the movement of wages and salaries, and that is why I have considerable confidence that an understanding will be reached about next year. I am sure that my hon. Friend would agree that I spoke frankly and openly to the delegates and that they accepted my argument. We must rely upon the good sense of the trade union movement, and I believe that it will come through.

Does the Prime Minister recall the lines of the D. H. Lawrence poem that say:

"Isn't it a pity, oh don't you agree,
That fig trees aren't found in the land of the free
And there is never a fig leaf near at hand when you want it? "

In order to give phase 3 a possibility of working, will the Prime Minister join his colleagues of the Government Benches in congratulating the Secretary of State for Prices and Consumer Protection on his speech yesterday or the day before, when he seemed to be calling for price restraint in the public sector— and particularly restraint in the cost of energy such as gas and electricity, and in the cost of transport—and for restraint in other prices that have contributed to the increase that has taken place in the cost of living during the last 12 months? Will he also congratulate his right hon. Friend on his statement that the pound sterling is now grotesquely undervalued? Will he now give some encouragement by saying that it is the intention of the Cabinet to look at the whole possibility of price restraint and the introduction of some price control?

We have now overtaken the irresponsibilty of the late Government in their subsidising the prices of nationalised industries so heavily that there was no adequate return on capital. That is a point upon which the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) had stinging comments to make about his own Front Bench. I now see no reason why the increase in the prices of the nationalised industries should exceed what is necessary to give a proper return on capital and enable new investment to take place.

I have nothing to say now about sterling.

When the Prime Minister speaks at such conferences and seeks to make agreements, what guarantee can he give that he can make his side of the bargain stick when he cannot even persuade his Cabinet colleagues or the Deputy Leader of the Labour Party to back policies that were enunciated in the Queen's Speech, and to which the whole of the Cabinet gave approval when it voted for the Queen's Speech?

I often find that the best way of convincing trade union conferences is to read out the questions that I am asked in the House by the hon. Member for Chingford (Mr. Tebbit).