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Pay Settlements

Volume 961: debated on Monday 22 January 1979

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asked the Secretary of State for Prices and Consumer Protection what guidance he has given the Price Commission on the use of criteria for investigating pay settlements.

Will the Secretary of State confirm that his attempts to use the Price Commission as a way of exercising pay restraint are really very hard to bear when we find that the salaries and wages of Price Commission part-time members have doubled from £1,716 in 1976 to £3,600 today?

I do not know whether the hon. Gentleman heard, but during supplementary questions on an earlier Question I was blamed for using—or was it not using?—the Price Commission as an instrument of wage restraint. The Price Commission is not, and cannot be, an instrument of wage restraint. The measure which incorporated it does not allow it and the present membership of the Price Commission would not be prepared to act in that way.

Will my right hon. Friend expand on the answer that he gave earlier to show why he did not use his existing powers in the road haulage dispute? Will he explain why he did not use them, because this is widely taken to mean that the Government are giving the green light to a large settlement?

The report on the road haulage industry was prepared and submitted to me long before the present dispute—indeed before the present claim—and was unrelated to it. There were two things that convinced me that the report could not be implemented. One was that it could concern only a small sector of the industry—about 10 per cent. The second was that a substantial number of companies, even within that 10 per cent., would not have been affected by the order because they were protected by safeguards. Therefore I decided on Thursday not to make the order. My intention was to announce that this morning. When ACAS announced that it was calling the parties to the dispute together on Sunday morning I thought it right to give them that information before the meeting.

Further to the Minister's recent answer, surely he is aware that that report had been published for some time. Why did he allow the road haulage employers to have their hands tied behind their backs for so many weeks, with a threat of a freeze in prices, thus causing the present dispute? They could not fairly negotiate, or open negotiations. Why did he wait until the strike had started before he made his declaration?

There are some Opposition Members who say that I gave in too early and some who say that I should have given in earlier. The Government did not give in at all. The Government have a statutory duty to consult the parties which a report of that sort covers. Those consultations were going on into last week. Had I made a decision on the order without consulting the Transport and General Workers' Union, or the Road Haulage Association, the House would have complained that I had rushed into it, and it would have been right to complain. As it is, I acted towards that report as I act towards every other, and my decision was based on the same sort of criteria as influence me on other occasions.

Will the Secretary of State confirm that both he and the Government had every kind of power that they required over the prices of the BBC and of the road haulage industry, and that they did not lack any powers to use price controls in those two instances? Why have the Government failed to control the wage settlement in both those cases? Why does the Secretary of State think that further powers for the Price Commission, and for the Government in the matter of price controls, will have any more effect than those powers have had?

Before the road haulage dispute began I was advised that any order I made limiting prices in the road haulage industry could apply to only 10 per cent. of the industry because of the industry's nature. Most of the companies were too small and too diverse for an order to be appropriate. Therefore, to say that we have power to influence prices in the industry, let alone wages, is, I think, a travesty.

With regard to the BBC, I think that, technically, having put down an order to increase the licence fee, the Government could have reversed or revoked that order. But I have no doubt that the House would rightly have complained that this was a case of politicans trying to control the policies of the BBC—some-thing that we have tried to avoid since the BBC was incorporated.

The hon. Gentleman has to do better than that to explain why he signed an early-day motion calling for the abolition of safeguards and now announces that he will vote in the other direction.

Is my right hon. Friend aware that ad hoc decisions of this kind in individual cases have a damaging effect in the pay round? If it were thought that the implementation of any new prices legislation would be subject to ad hoc pressure, would not that be profoundly damaging to the net result? Is that not itself a case for the establishment of a relativities board?

My hon. Friend's question goes very wide in several directions. I say to him at once that I see some virtues—and I tried to describe them last Friday—in some sort of body which makes judgments, at least about public sector pay, because I find it difficult to know how else public sector pay can be determined.

On the new Price Commission powers, the position is that the Commission will continue to be governed by the criteria laid down in the Act. The only change in that procedure is that the Government can behave in a way which is less directly against the wishes of companies which intend to put up prices than is the Price Commission recommendation. The Government can be more tender towards companies than the Price Commission proposes. I believe, therefore, that the charge of ad hoc-ery with regard to industry is totally misconceived. The criteria still apply, and those criteria support and protect the industrial interests.