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Pay Policy (Government Contracts)

Volume 959: debated on Friday 1 December 1978

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asked the Chancellor of the Exchequer whether firms which have, in their contracts with Government Departments, agreed to abide by the Government's incomes policy, are obliged to refrain from dealing with suppliers such as Ford Motor Company who may have failed to adhere to that policy.

Companies which are main contractors to the Government are obliged for the purposes of that contract to obtain undertakings of compliance with pay policy from suppliers where they are also major sub-contractors. Since the Ford Motor Company Ltd. is in breach of pay policy it will not be able to sign these undertakings. This will jeopardise its prospects of getting business as a subcontractor on Government contracts.This applies only to sub-contracts which are specifically placed to fulfil the contractors' requirements for the specific contract with the Government. It does not apply to the ordinary suppliers of contractors who provide their day-to-day requirements.