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Pay Policy (Tuc Talks)

Volume 958: debated on Tuesday 21 November 1978

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asked the Prime Minister if he can now make a statement on the discussions that have taken place with the Trades Union Congress representatives about wage guidelines and inflation.

I refer my hon. Friend to the statement made by my right hon. Friend the Chancellor of the Exchequer on 15th November.

Does my right hon. Friend agree that many trade unionists are prepared to accept that an incomes policy is an important ingredient in the control of inflation but that they are not prepared to tolerate wage restraint in isolation? Does my right hon. Friend further agree that the control of wages, prices, profits and investments are all part of the mix and that attention should be focused on elements other than income if we are to reach an understanding with the trade union movement?

Yes, Sir, I would certainly accept that. As my hon. Friend knows, it has never been part of my approach to this matter that incomes or earnings are the sole cause of inflation— many other elements enter into it—or that we should neglect the factors to which he referred. But he will allow me to remind, not him perhaps, but others, that inflation is now half of what it was a year ago when the Government called for a 10 per cent. increase in national earnings. That was one of the reasons why it seemed appropriate that we should ask for this ambitious objective on this occasion.

Secondly, although there can be individual instances, in general I do not think that profits are too high at the moment if we are to get an appropriate level of investment. I am glad to say that investment is being maintained at a high level.

Does the Prime Minister agree that trade unionists living in rural areas in particular are very concerned about the price of petrol? Will he confirm or deny the stories circulating today that the Government intend to abolish the road fund licence?

I believe that there is a Written Answer on this matter. [Interruption.] Perhaps hon. Gentlemen might care to hear the end of my sentence. It is not unusual to have Written Answers on this matter.

I am delighted to hear the new Leader of the House in good voice. We look forward to the touch of elegance which he will add to our proceedings from now on. Perhaps I can break the veil of secrecy by saying that the proposal will be spread over a period from now until 1983, and I have a feeling that there will be a substantial number of opportunities to ask questions of this Government between now and then.

I recognise that in the past three or four years the trade union movement and the Government have produced between themselves and employers a result which has been greatly to the benefit of this country; and I understand the Government's present attitude. But does my right hon. Friend appreciate that it is difficult for many strong supporters of the Goverment to talk in terms of restraint on wages when, by direct Government policy mortgages are allowed to rise to their present level thereby creating problems outside the control of ordinary people? People are prepared to co-operate, but they want to see some action taken the other way.

If there had not been a certain amount of uncertainty about the prospects for this winter, mortgage interest rates would not have had to go up. All these things interact on each other. As my right hon. Friend said, it may be difficult to understand, but the general understanding is that if we do not succeed in one part of the economy, we have to take countervailing action in another part. I believe that is being understood more by the public generally. The best possible way during this winter is to have a substantial moderation in the level of wage settlements. If we do that, our present success in economic growth, in employment, with unemployment going down again this month, in the retail price index, in exports and in investment— that is the result of what has happened during the past 12 months—will continue.

May I thank the Prime Minister for having, no doubt inadvertently, appointed me as a member of his Government, but let me assure him that I would rather be a shadow in the house of the Lord than a leader in "the tents of ungodliness".

I should like to say with what delight we welcome the hon. Gentleman to his new post. I have a feeling that there will be a great deal of sport in the House over the next few months, or as long as he lasts. His ambition is likely to remain fulfilled for a very long time.

Order. Unless points of order arise out of Question Time, I normally take them after statements.

My point of order arises out of a reply given by my right hon. Friend the Prime Minister, who confirmed that the Government have decided to announce, by means of a Written Answer, their decision to phase out the vehicle excise duty. That subject is clearly of major importance, not only to West Wales and rural areas but nationally. It seems wrong that there is no immediate opportunity for the House to question the appropriate Minister on the proposal.

That is not a point of order. The Government of the day are always free to choose their own way of giving information to the House. Obviously we cannot discuss it now, but there will, no doubt, be plenty of opportunities later.

Order. I have already said that it is not a point of order. I have ruled, I hope quite clearly, that it is not a point of order for me.