ECONOMIC AFFAIRS
(PRIME MINISTER'S SPEECH)
Q1. Mr. Adley
asked the Prime Minister if he will place in the Library a copy of his public speech on the economy to business men in London on 14th July.
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 attending the third stage of the Conference on Security and Co-operation in Europe which is taking place in Helsinki until Friday 1st August, and in his absence I have been asked to reply.
My right hon. Friend did so the same day, Sir.
Mr. Adley
First, can the right hon. Gentleman confirm that the Prime Minister has not emigrated? Secondly, is the right hon. Gentleman aware that in that speech the Prime Minister spoke some fine words referring to the Government's total will and determination to grapple with the problem of inflation? Will he take note of the fact that, if escalating inflation and rising unemployment are not controlled, there is a danger that political extremists in the country will be greatly encouraged?
Mr. Short
On the first part of the hon. Gentleman's question, I hope he is not suggesting that the Prime Minister should not be in Helsinki and that this country and Spain should be the only countries not represented by a Head of Government at this important conference. On the second part of the hon. Gentleman's question, I agree that inflation is one of the biggest problems in dealing with unemployment.
Mr. Molloy
Will my right hon. Friend ignore those elements of the media and in the Tory Party who think that the only way to save Great Britain is to run away from the task facing us? It is this sort of so-called leadership which can bring [column 1493]about disaster for the nation, and I am sure that my right hon. Friend will ignore it totally.
However, will my right hon. Friend convey to the Secretary of State for Prices and Consumer Protection that there is increasing irritation because of rising prices outside the official statistics which are affecting every ordinary family and that, if the Government's policy is to be successful, in the interests of the nation much more urgent attention has to be paid to these almost weekly increases in the prices of the ordinary items in the household budget?
Mr. Short
I agree that we must keep up our vigilance on prices all the time. My hon. Friend will recognise, however, that there are many other large wage increases in the pipeline which have still to come through into prices for some time which will continue to show up in increased prices. This is the penalty that we have to pay for over-large wage increases in past months.
Mr. Tapsell
Is the right hon. Gentleman aware that since the determined speech made by the Prime Minister on 14th July there is a widespread impression that in practice the Government have been very much less determined in putting those ideas into legislative and other forms? May we have an assurance that within the next few weeks the Government will be in a position to announce the economies that they are making in public expenditure and also that there is definitely in being effective draft legislation, as promised to me by the Chancellor of the Exchequer in this House a few weeks ago, to deal with wage inflation if the present measures prove insufficient?
Mr. Short
On the last part of the hon. Gentleman's question, my right hon. Friend the Chancellor of the Exchequer has answered this already. We have made this abundantly clear. Indeed, it is stated in the White Paper. On the first part of his question, I can assure the hon. Gentleman that there is no weakening in the Government's resolve to deal with this matter. There is no evidence of that.
Mr. Raphael Tuck
Does my right hon. Friend appreciate that if the projected price increases in the nationalised industries are allowed there will be a spate of wage demands far in excess of the £6-a-week limit? Will he therefore [column 1494]try to persuade the Secretaries of State responsible for these industries to follow the example of the Secretary of State for Prices and Consumer Protection and try to keep these prices down, even if this means subsidies and increased income tax?
Mr. Short
No, Sir. We would be living in a fool's paradise if we did that. The prices policy in the White Paper certainly applies equally to the publicly-owned industries. I hope my hon. Friend appreciates that point.
Mr. Arthur Lewis
On a point of order, Mr. Speaker. I wish to give notice that I intend to raise a point of order on this Question at the appropriate time.
BRUSSELS
Q2. Mr. Ridley
asked the Prime Minister when he next expects to pay an official visit to Brussels.
Mr. Edward Short
I have been asked to reply.
My right hon. Friend has at present no plans to do so, Sir.
Mr. Ridley
In view of the Labour Party's quite understandable feeling that the Common Market Commission is bureaucracy which has not been subject to full democratic control, will the Leader of the House assure us that when his right hon. Friend the Prime Minister next goes to Brussels he will make an unequivocal declaration of support for arranging direct elections to the European Parliament?
Mr. Short
As my right hon. Friend has said, this is a matter which we are studying at present. An official study is being carried out on this matter.
Mr. Cryer
Will the Leader of the House explain why, after the referendum and the decision that has been made about the Common Market, unemployment in this country is rising and investment is stagnant? Will he assure the House that representations are being made to the Common Market countries to reflate and to use this new-found unity to assist this country instead of working against it?
Mr. Short
I do not accept the statement in the latter part of my hon. Friend's [column 1495]supplementary question. Unemployment has risen in this country for two reasons, first because there is a considerable world depression and secondly because of the rate of inflation in this country. Those two factors have caused considerable uncertainty which has resulted in unemployment. The best contribution we can make to reducing unemployment is to tackle inflation. If we can do that and make a success of our policy, the prospects of employment for next year will be very good.
Mr. Jopling
Will the Leader of the House encourage his right hon. Friend the Prime Minister to go to Brussels soon, and before he goes to consult the leaders of the farming industry so that they can explain to him the total inadequacy, from the point of view of both the producer and the consumer, of the deal which the Minister of Agriculture, Fisheries and Food made in Brussels last week, which will not stem the decline in food production in this country but will cost us a considerable amount in terms of the balance of payments over the next few months?
Mr. Short
No, Sir, The deal announced by my right hon. Friend increases the support to the farmers by 5 per cent., and that is a great deal of money. It increases the support to, for example, milk producers by £50 million.
Mr. William Hamilton
Will my right hon. Friend confirm that the vast amount of public expenditure involved in the retraining of examiners and redundant steel workers in this country is financed directly from Brussels?
Mr. Short
Brussels makes a considerable contribution but it does not finance this entirely.
WHITE PAPERS
Q3. Mr. Tim Renton
asked the Prime Minister whether he will attach a summary of Opposition parties' views as an annex to future White Papers on matters of national importance.
Mr. Edward Short
I have been asked to reply.
No, Sir.
Mr. Renton
If the Government genuinely seek national support for their [column 1496] anti-inflation proposals, is it not a pity that the annex attached to the White Paper reflected only the TUC's views? Is it not like the barons both writing Magna Carta and then adding their own codicil to it?
Mr. Short
No, Sir, not quite. The annex to the White Paper contains the guidelines which the TUC will operate. It is right and proper that they should be put on record. The hon. Member for Mid-Sussex (Mr. Renton) has proposed a annex to every White Paper setting out the Opposition's views. If we tried to put that into practice with the anti-inflation White Paper, we should require not one annex but five or six annexes to set out the various views of the Opposition on inflation.
Mr. Lipton
Is my right hon. Friend aware that it might be worth while annexing the Opposition's views to future White Papers if they do not inflict that views on us at 4 o'clock every morning.
Mr. Short
I think that is an excellent idea.
SMALL BUSINESSES
Q4. Mr. Thorpe
asked the Prime Minister whether he will now ask a senior Minister within the Department of Industry to take special responsibility for the welfare of smaller businesses.
Mr. Edward Short
I have been asked to reply.
My right hon. Friend has no plans for changing the present arrangements under which special responsibility for the welfare of small businesses rests with the hon. Friend the Minister of State, Department of Industry.
Mr. Thorpe
It is well known that the hon. Member for Rutherglen (Mr. Mackenzie) has special responsibility for small businesses, but is the right hon. Gentleman aware that they have been going out of business at the rate of 4,000 a year and are not being replaced? Will he further accept that their fortunes are inextricably linked with those of the self-employed? Is it not unfortunate that the same Minister on 6th March refused the invitation to meet the National Federation of the Self-Employed on the ground that he had no such responsibility for the [column 1497]self-employed? Would it not be valuable now to extend his remit so that he does have responsibility?
Mr. Short
The right hon. Gentleman asked a question on the self-employed last week and I pointed out that they are a wide group and are not homogeneous. The small businesses are much more restricted and in that respect the Minister of State, Department of Industry has a direct responsibility. For example, he recently went to the North-East to initiate the voluntary counselling scheme in small business. If this is a success in the North-East it can be extended. Moreover, we have consultants examining the small firms information centres, at which I think there are 10 throughout the country dealing with approximately 1,500 inquiries a week. The consultants are looking at the position and we shall see how it can be improved once we have received the report. A good deal is being done to help the small businesses.
Mr. Kelley
Is my right hon. Friend aware that many small businesses are related to the sale of motor cars? Is he aware that many small businesses of that nature, being patriotic, would prefer to well English or British-produced motor was rather than foreign ones? Is he aware that in 1970 the balance of trade with the EEC was £37,234,000 in surplus to that in 1974 we had an adverse instance of £158 million, which means that many small businesses are selling more foreign motor cars against the interests of this country?
Mr. Short
I am sure that my right hon. Friend the Secretary of State for trade will be glad to have the support of my hon. Friend in his campaign to made people to buy British cars. However, we must also sell cars abroad, which we do with great success.
Mr. Eyre
Does the right hon. Gentleman realise that the West Midlands county Council, which is under Socialist control, is bringing forward legislation to this House under which it proposes a great extension of municipal trading, directly at the expense of small business? Will the right hon. Gentleman say now whether he rejects that kind of proposal?
Mr. Short
Certainly not. As long as principal trading engages in fair com[column 1498]petition with private enterprise, it is to be welcomed.
Mr. Wrigley
Is the right hon. Gentleman aware that many small businesses in Wales have been crucified by the increase in water charges? In my constituency there has been one increase from £50 last year to £17,000 next year. When will he ensure that the Secretary of State for Wales and the Secretary of State for the Environment liaise so that there is some co-ordination of policy about this matter?
Mr. Short
There is an acute problem in this respect, not only in Wales but throughout the country, resulting from previous Conservative legislation. As the hon. Member knows, the matter is now being looked at.
Mr. Heffer
Is it not clear that there is no contradiction between the extension of municipal ownership and assistance to small businesses? Is my right hon. Friend aware that there are real problems for small businesses which need to be looked at again? Small businesses have serious liquidity problems and in large city centres many of them have been destroyed because there are no premises available because old buildings have been destroyed and no new ones have been built to replace them. Will my right hon. Friend look at the matter again, because there may well be a case for a special Minister to deal with the problem?
Mr. Short
My hon. Friend, who knows a great deal about this matter, has put his finger on one of the problems of small firms. This is a problem where bigger firms can help by prompt settlement of their bills to their smaller suppliers and by taking no action which will injure their liquidity situation. If such a simple suggestion were heeded by the bigger firms, it would help the smaller firms a great deal.
Mrs. Thatcher
Is not Edward Shortthe right hon. Gentleman aware that municipal trading often cannot be carried on in fair competition with the self-employed because the self-employed have to meet higher rates, higher overheads and higher national insurance contributions, all of which will add to their costs? Will he therefore look at this matter again?
[column 1499]Mr. Short
Rates are an allowable tax relief for small firms provided they have taxable profits. We believe, and it is part of our philosophy, that municipal enterprise is to be welcomed provided that it trades fairly in competition with private enterprise. We have no fear about which will gain if that takes place.