Economic Affairs
(Chancellor's Speech)
Q1. Mr. Lawson
asked the Prime Minister if the public speech on economic affairs by the Chancellor of the Exchequer at Leicester on 21st June represents Government policy.
Q4. Mr. Peter Morrison
asked the Prime Minister whether the Chancellor of the Exchequer's public speech on the economy in Leicester on 21st June 1975 represents Government policy.
[column 327]Q6. Mr. Rathbone
asked the Prime Minister whether the public speech of the Chancellor of the Exchequer on economic policy at Leicester on 21st June 1975 represents Government policy.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short)
As the House knows, my right hon. Friend is in Edinburgh today in connection with the State visit of the King of Sweden, and in his absence I have been asked to reply.
I refer the hon. Members to the reply which my right hon. Friend gave to the hon. Member for Mid-Oxon (Mr. Hurd) on 27th June.
Mr. Lawson
Is the Lord President aware that that speech was all about wage inflation? Is he further aware that only eight weeks ago the Prime Minister appeared on television and told the nation that in no circumstances short of war would he contemplate introducing statutory wage controls of any kind—I repeat, of any kind? On what date did war break out?
Mr. Short
This party also said during the election that the beating of inflation was its top priority. We very much hope to reach agreement on a voluntary policy with the unions and with the CBI over the next few days.
Mr. Noble
Does my right hon. Friend recall that another statement on a particular sector of the economy was made by my right hon. Friend in this Chamber on 23rd May—namely, a statement on the textile and footwear industries? Does he recall that during that statement and in subsequent questioning the Prime Minister justified the action that he was going to take on the grounds that it would be immediate and relevant? Would my right hon. Friend care to tell the House what is his definition of “immediate and relevant” in view of the fact that there has been no action yet?
Mr. Short
I can promise my hon. Friend and the House that there will be a statement, of which I think my hon. Friend will approve, that will contain a package of useful measures for the textile industry in the next few days.
Mr. Morrison
As regards the forthcoming economic package, will the right hon. Gentleman tell the House what [column 328]further items from the Socialist programme the Government are prepared to drop in order to achieve the Chancellor's expressed wish that all men of good will in all parties should support the Government?
Mr. Short
I very much hope that all men and women of good will will support the Government in the measures that they propose.
Mr. Heffer
I do not accept the argument put forward by Conservative Members, who themselves did a remarkable U-turn in the last period of the Conservative Government, but is my right hon. Friend aware that on this side of the House and in the Labour movement in the country it is not expected that we should carry out a programme for statutory legislation on wages? Does he not accept that other important ideas for combating inflation must be adopted by the Government rather than a policy which, if put into operation, could tear this movement of ours to pieces? I ask my right hon. Friend at this late stage to say to the Prime Minister that he and the Government must think again.
Mr. Short
I agree that there must be a battery of measures to combat inflation. We must put across to the people that their employment prospects are threatened by inflation. That must be tackled without delay.
Mr. Rathbone
How do the Government intend to make people aware of the need for a little self-discipline now rather than a lot of harsh, imposed discipline later?
Mr. Short
Every hon. Member in the House should seek to bring home to people in the country the economic crisis and the problem of inflation. Inflation is a problem for every individual in the country and not merely for the Government.
Mr. Thorpe
Is the right hon. Gentleman aware that the sense of urgency recently expressed by the Chancellor of the Exchequer has been underlined by the OECD figures published today showing that our rate of inflation is second only to that of Iceland. If under the Government's proposals employers are to be enforcement officers for the Government's pay policy, it would surely be as fruitless [column 329]and unfair to expect the trade unions to be enforcement officers for the Government's pay policy. Does the right hon. Gentleman accept that the Government will be judged on whether they are prepared to take the initiative and are prepared to govern rather than to shuffle it off on to others?
Mr. Short
The Government are prepared to govern. We have put forward proposals and we shall see that they are carried out. The Government are resolutely opposed to imposing criminal sanctions against workpeople. The Conservative Government tried that idea and had to call on the Official Solicitor to save them. We do not want a repetition of that fiasco.
TUC Meeting
Q2. Mr. Skinner
asked the Prime Minister if he will make a statement on his most recent meeting with the TUC.
Mr. Edward Short
I have been asked to reply.
I refer my hon. Friend to the reply which my right hon. Friend gave him on 26th June.
Mr. Skinner
At the recent meetings with the TUC, did the Government spokesmen react to submissions made by the TUC on rent control, food price control, the question of import surcharges and also action on foreign exchanges in respect of capital movements? Does my right hon. Friend appreciate that there are many in the Parliamentary Labour Party who to some extent are responding to the mood of the Labour Party outside in the country and who will in no circumstances repeat the ill-fated exercise undertaken in 1966–70 and march through the Lobby to endorse interference with free collective bargaining, which we received a mandate to uphold in the last two elections?
Mr. Short
The Government will take account of any point put to them by the TUC—indeed we always do so—and we shall discuss such matters at length with the TUC. I hope that my hon. Friend will wait for the White Paper which will be published within a few days. He will then see to what extent we have been able to reach agreement with both sides of industry.
[column 330]Mr. Crawford
Will the Lord President inform the Prime Minister that the people of Scotland are not prepared to accept a statutory wage policy, because we believe that the gap between the average wage in Scotland compared with England must be closed? Is he aware of the recent statement by the Chancellor of the Exchequer that we need more restraint, and will this not give added impetus to the self-government movement in Scotland? We in Scotland have suffered far too long from low wages.
Mr. Short
I am sure that my right hon. Friend the Prime Minister will take account of what the hon. Gentleman says.
Mrs. Thatcher
Since we in Parliament find it difficult to get any information about what is happening other than what we read in the Press, will Edward Shortthe right hon. Gentleman confirm that every commitment in the statement by Denis Healeythe Chancellor last Tuesday still stands, particularly that which relates to a 10 per cent. pay increase limit and also cash limits as a means of controlling public expenditure? Will the right hon. Gentleman please say when we may expect the White Paper on this subject?
Mr. Short
I cannot give the House the publication date of the White Paper, but we hope that it will be published within a few days. I can confirm that both the 10 per cent. limit and the cash limit proposals remain. It is a pity that the Conservative Government did not impose cash limits when they were in office.
Mr. Adley
It has taken Labour 16 months to do it.
Mr. Edwin Wainwright
Will my right hon. Friend stress to the Prime Minister as well as to the Cabinet, the NEDC and the TUC that, unless some better understanding is forthcoming to make sure that the country becomes more viable and productive, the only solution will probably be to see to it that we do not bring back to power the unworthwhile people in the Conservative Party who have failed the nation so often in the past?
Mr. Short
Everybody must agree with my hon. Friend that in the last resort we shall solve our problems only by co-operation between the two sides of industry and also the Government.
[column 331]Prime Minister (Engagements)
Q3. Mr. Freud
asked the Prime Minister if he will list his engagements for the rest of 8th July.
Q10. Mr. Radice
asked the Prime Minister if he will list his engagements for 8th July.
Mr. Edward Short
I have been asked to reply.
As the House knows, my right hon. Friend is visiting Edinburgh today in connection with the State visit of the King of Sweden.
Mr. Freud
As the Prime Minister spent yesterday teaching the economic facts of life to the miners, will the Leader of the House try to persuade him to conduct a similar exercise with the Tribune Group tomorrow?
Mr. Short
The hon. Gentleman mentioned yesterday and tomorrow, but his Question is about today.
Mr. Radice
Will my right hon. Friend tell the Prime Minister that the over-whelming majority of Labour supporters are behind the Government's efforts to create an effective prices and incomes policy based on consent? Will he further inform my right hon. Friend that they would prefer decisive action this week rather than for the Government to be in a situation where they have to come back to the House for tougher policies in a few months' time?
Mr. Short
I am sure my hon. Friend is right, and I know that his remarks will commend themselves not only to the Labour Party but to people of good will throughout the whole country.
Mrs. Bain
Since the Prime Minister is visiting the capital of Scotland, will he use the opportunity to explain to the Scottish people the Government's backsliding in the establishment of a Scottish Assembly? Will he say whether this sliding away from that commitment by the Labour Government flows from the recent report of the Labour Party Research Department to the effect that the Labour Party can expect to lose a substantial number of seats to the SNP?
[column 332]Mr. Short
I am sorry to say this to the hon. Lady, but she and her colleagues in the SNP talk the most awful nonsense. Every time anybody on the Labour benches mentions devolution, we are accused of backsliding. On the question of the Assembly, my hon. Friend the Minister of State, Privy Council Office yesterday gave a most categorical assurance. What more can we tell the hon. Lady? If she does not understand English words, I cannot do any more to help her. There is no backsliding.
Mr. Whitelaw
While the Prime Minister is in Scotland, will he explain to the Scottish people that any proposals which may come in a White Paper will represent a major constitutional change and will have to be carefully considered? I hope he will also explain to the Scottish people the cost of the proposals. Is it not a fact that estimates of cost are very considerable indeed?
Mr. Short
No, Sir, the cost will not be considerable. [Interruption.] I am referring to the cost of devolving to the Scottish Assembly some of the decisions taken here. The right hon. Gentleman is absolutely correct to say that this is a major change in constitutional practice. I agree that the matter must be discussed at great length. There will be a White Paper in the autumn which we shall debate, and the Bill will appear later. I hope that there will be an opportunity for an extended debate in the House and outside. I share the right hon. Gentleman's view that there must be the widest discussion of these matters.
Government Ministers
Q5. Mr. Teddy Taylor
asked the Prime Minister if he will appoint an additional Minister to the Department of Employment.
Mr. Edward Short
I have been asked to reply.
I refer the hon. Member to the reply which my right hon. Friend gave to the hon. Member for Derbyshire, South-East (Mr. Rost) on 26th June.
Mr. Taylor
Obviously the Secretary of State for Employment will need some help if he is to take personal authority for the administration of a statutory [column 333]incomes policy. Does the right hon. Gentleman believe that the Department of Employment is fully geared to deal with the massive unemployment which lies ahead because of the Government's failure to act promptly?
Mr. Short
On the first point, I do not know what is wrong with the Scottish Members on the other side of the House, but I said earlier that we hope to have a voluntary agreement on incomes. Therefore, the hon. Gentleman is premature in talking about operating a statutory policy. As to his second point, I agree that unemployment is far too high, but it has risen much less steeply in this country than in any competitor country.
With regard to Scotland, the hon. Member will be delighted to know that the differential between Scottish unemployment and employment in the rest of the United Kingdom has been narrowed.
Mr. Crawford
We are not happy.
Mr. Short
The hon. Member says he is not happy about that. I am extremely happy about it. The unemployment figure is far too high, but the differential between regions like Scotland and North-East England has been considerably reduced over the past year.
Mr. Molloy
Is my right hon. Friend aware, and does he not agree, that the principle of consultation in industrial relations is to be preferred to the fool-hardiness of confrontation? Will he not further agree that the statements made yesterday by my right hon. Friend the Prime Minister and by Mr. Joe Gormley, the miners' leader, and the great debate that the miners are having must show that “jaw jaw” in industrial relations today is better than “war war” ? Is not that the sort of way in which we ought to proceed rather than end up in an industrial war which would damage not only any particular industry but also the entire nation, as happened under the last Tory administration?
Mr. Short
Of course, and my hon. Friend is absolutely correct. There is no way out of our problems in this country except by consent and consensus, and I too would pay tribute to the leadership being shown by so many trade union and CBI leaders at the present time. I refuse to believe that in this great country the [column 334]two sides of industry and the Government cannot come together to work out a voluntary agreement to get us out of our present difficulties and to reduce our inflation to the level of that of our major competitors.
Mr. Prior
Is the right hon. Gentleman aware that his answer to my hon. Friend was complacent in the extreme and that it is not good enough for the Government to say that our present unemployment levels are lower than those of other countries, when all of us can clearly see that our unemployment figures are going up and those of other countries are going down? In particular, what is he going to do to bring extra help to the thousands of school leavers who will be out of a job this summer and who will be bitterly resenting that they or their parents ever had anything to do with a Labour Government?
Mr. Short
My reply to a member of the Front Bench who was a member of a Government who allowed unemployment to rise to 2 million during the three-day working week, and to 1 million before that, is that I am not at all complacent. I said in reply to a question that unemployment is far too high—tragically high—but that the increase has been lower than the increase in most Western industrialised countries. I also said, and I take some pride in the fact, that the differential between the unemployment figure in industrial Scotland and in the North-East of England and some of the other older industrial regions in the United Kingdom has been reduced. I should have thought the right hon. Gentleman would want to pay tribute to that.
Mr. Cyril Smith
Has the Lord President of the Council read a report in the Daily Express this week about a large number of people allegedly drawing money to which they were not entitled and then transferring the money to IRA funds? Has he any evidence as to the truthfulness of that report? If there is any truth in it, might it not be a good idea to appoint an additional Minister to the Department of Employment, as suggested in the Question, in order to prevent this practice?
Mr. Short
I understand that the Department of Health and Social Security has stated that there is no evidence for [column 335]this at all but that it is inquiring into the facts alleged in the Daily Express. That is all I can say about it at the moment.
Mr. Leslie Huckfield
Would not my right hon. Friend agree that the Chancellor of the Exchequer's statement last Tuesday was infinitely preferable to the massive cuts in public expenditure which have been called for quite prominently by the Opposition? If the country really wants to see a voluntary policy accepted by large sections of the trade union movement, does my right hon. Friend accept that the Government have to show much more determination on prices and investment, which are equally part of the economic crisis affecting the country?
Mr. Short
Yes, Sir, I agree. Certainly the call for massive public expenditure cuts by the Conservative Party is a call for unemployment to solve our inflationary problems. This Government reject unemployment as a weapon to solve inflationary problems, and undoubtedly we shall not use unemployment to solve our inflationary difficulties.
Mr. Evelyn King
Does the Lord President of the Council agree that a primary function of the trade union movement is to increase wages, and is he not living in cloud-cuckoo-land if he suggests that over any prolonged period the trade union movement will co-operate in reducing wages? Have not we reached the point at which consultation with the trade unions, the CBI or anybody else is now seen as an effort by the Government simply to shovel responsibility on to somebody else, and is it not time that the Government faced their own responsibilities and showed more political courage than they have so far shown?
Mr. Short
The Government will certainly show political courage, as they have always shown and as Labour Governments always do, but the hon. Gentleman is living in a world which no longer exists. Today we can function only by consent, and it is that consent that we shall be trying to achieve over the next few days.
Mr. Henderson
Does the right hon. Gentleman recall that his right hon. Friend the Secretary of State for Scotland once said that he would resign if Scottish [column 336]unemployment went over 100,000? Will he confirm to the House that he has received that resignation?
Mr. Short
The receiving of resignations is a matter for the Prime Minister.
Mr. Cryer
Will my right hon. Friend accept that a voluntary arrangement is in line with the promises that the Labour Party made in February and October 1974? Will he also accept that there is far too much emphasis on wages as a primary cause of inflation and that the recent devaluation of sterling was a very large cause of the increase in costs that working people have had to bear? Will he urge upon his colleagues in the Cabinet that action is needed to control speculators, as we on the Government benches are a bit tired of Labour Governments being at the mercy of international speculators and unable to carry out the policy on which they are elected?
Mr. Short
But the recent Price Commission report stated that 50 to 60 per cent. of recent price increases was due to labour costs. We cannot get over that fact, and this has to be borne in mind.
Mr. Baker
If local authorities do not follow the guidelines laid down by the Government in their pay policy, will the Lord President tell us, from his considerable experience of local government, whether the sanctions will bear upon councillors?
Mr. Short
That is a matter at which my right hon. Friend the Secretary of State for Employment would be looking.
Mrs. Thatcher
If what Edward Shortthe Lord President said in one of his early replies today about public expenditure is right, does he agree that what Denis Healeythe Chancellor of the Exchequer said last Tuesday about using cash limits to control public expenditure in the short term is wrong? Which is correct?
Mr. Short
The right hon. Lady, as I understand it, wants to make massive cuts in public expenditure. Perhaps in one of her weekend speeches at some country house or other she will tell us which public expenditure cuts she would propose to make and what would be the employment consequences of the cuts she has in mind.