Speeches, etc.

Margaret Thatcher

House of Commons PQs

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [910/1056-63]
Editorial comments: 1515-30.
Importance ranking: Major
Word count: 2551
Themes: Monetary policy, Pay, Public spending & borrowing
[column 1056]

COMMONWEALTH COUNTRIES

Q1. Mr. Marten

asked the Prime Minister whether he has any plans to visit Commonwealth countries in the current year.

The Prime Minister (Mr. James Callaghan)

I hope to visit Canada later this year in response to an invitation from Mr. Trudeau. Firm dates have not yet been arranged. I have at present no plans for visits to other Commonwealth countries.

Mr. Marten

In addition to his visit to Canada, will the Prime Minister—if he is still in office—take the opportunity of the Queen's Silver Jubilee next year to stress the importance of the Commonwealth, and will he consider designating one of the many Ministers in the Foreign Office to oversee Commonwealth affairs next year?

The Prime Minister

It was in my predecessor's mind that it would be appropriate to hold the Commonwealth Prime Ministers' Conference here during the year in which the Queen celebrates her Silver Jubilee. There is not a link between the two in respect of all the Commonwealth countries. As to the sentiment of the Commonwealth and the way in which matters are organised in the Foreign and Commonwealth Office, that is for my right hon. Friend the Foreign and Commonwealth Secretary, but I believe that [column 1057]he intends to play an important part himself.

Mr. MacFarquhar

Will my right hon. Friend consider becoming the first Labour Prime Minister to visit India since independence? Does he agree that whatever view is taken of recent developments in India, the link between the United Kingdom and India is still great and deserves to be strengthened by the Government?

The Prime Minister

Yes, Sir. I would welcome the opportunity of visiting India and many other countries if I could get a pair, but I shall have to ration myself during the next 12 months or so.

Mr. Tebbit

When the Prime Minister goes to Commonwealth countries, particularly those whose citizens come here as immigrants, will he take the opportunity to clear up the question whether he is racially prejudiced or whether the attack made on him by the hon. Member for York (Mr. Lyon) was just a piece of spiteful vindictiveness after he had been sacked?

The Prime Minister

I do not look to the hon. Gentleman for help in any of these matters, and I am not getting it. The Government's attitude and policy on race relations are well known. They have been well established in the Home Office and will not be changed under this Administration.

Mr. Christopher Price

Will my right hon. Friend consider visiting Singapore? If he does, will he convey to the Prime Minister of Singapore—as his predecessor mentioned in the House about a year ago—that it would enormously raise the status of that country if the detainees whom we put in prison 13 years ago and who are still there were released? Will he also convey to the Prime Minister of Singapore that if he does not do this his party is in danger of being expelled from the Socialist International?

The Prime Minister

Almost any question is in order arising out of the question whether I have plans to visit Commonwealth countries, but it would not be helpful for me to comment in detail upon the internal policies of those Commonwealth countries with which we are in temporary disagreement. Lee Kuan Yew is well aware of our views on these matters. At the last Commonwealth Prime Ministers' Conference he indicated [column 1058]to us his approach to the question how to deal with these prisoners, who have been imprisoned without trial for some years. We must have some tolerance for another Commonwealth Government.

TRADES UNION CONGRESS

Q2. Mr. Peter Morrison

asked the Prime Minister when he next intends to meet the TUC.

The Prime Minister

I did so yesterday. Further meetings will be arranged as necessary.

Mr. Morrison

When the Prime Minister does meet the TUC again will he remind its members that it was he who supported them against his own Cabinet colleagues in their fight against “In Place of Strife” . How does he reconcile that with his public rebuke, last week, of the Secretary of State for Energy?

The Prime Minister

That did not arise when I met the TUC and I have nothing to add to it now.

Mr. Molloy

Is my right hon. Friend satisfied with the degree of co-operation that he is receiving from the TUC in the Government's fight against inflation? Will he say whether he has any intentions to have further discussions and to cement that co-operation which has been achieved in taking a very rigid control of prices?

The Prime Minister

The co-operation between the Government and the TUC is good at the present time. There are different approaches to the problems that are being discussed, but that is inevitable because, to some extent, the interests are different. But there is a common objective in mind, which is to ensure that inflation will be reduced substantially during the year beginning next August and finishing in August 1977. From the way in which the discussions have gone so far, I have no doubt that whatever settlement is reached it will have the impact of substantially reducing the level of inflation.

Regarding the other part of my hon. Friend's question, since we first began on the social contract discussions in 1972, when I happened to be Chairman of the Home Policy Committee, we have always [column 1059]said that the pay element in our negotiations and discussions is only one part, and it is for that reason that there will be very important discussions, at a later date, on the question of prices. This will take place when the present discussions are over. Of course, the CBI and others will be interested in the matter of price controls, but I should say now that there is no doubt that the Government intend to keep a substantial measure of price control during the ensuing 12 months, which will run parallel with any voluntary wage agreement entered into.

Mrs. Thatcher

May I take James Callaghanthe Prime Minister up on what he has just said, in view of the uncertain position of the pound yesterday and today? Can he give any more information about the form of the proposed wages agreement? He has already indicated that it will include some arrangement about prices. Has he made any further promise about the level of public expenditure, or has he fettered the Government's freedom of action to introduce further budgetary measures later in the year, after an agreement?

The Prime Minister

The right hon. Lady is right to ask these questions because they are an essential part of the Government's economic strategy. Because details are not yet worked out, we have not indicated to the TUC, except in the most general terms—as I am now indicating in general terms to the House—the nature of the price control that will follow on from the existing price controls when they run out on 31st July this year and will need to be renewed. There can be no doubt that the level of public expenditure is such that it would be very difficult to take on further items at the present time.

Mr. Kilroy-Silk

When my right hon. Friend next meets the TUC will he take the opportunity of explaining when the Government proposes to move on from its present industrial priority of helping firms in trouble to a policy of taking a public stake in profitable companies and industries that are not serving the public interest, particularly in terms of investment?

The Prime Minister

The first thing to concentrate on is to ensure that there is sufficient incentive to provide a proper [column 1060]level of investment for those firms, so that productive jobs can be created. That is what I would like to see us focus on. As for taking a stake in firms, the National Enterprise Board is available, with its powers and with such resources as may be given to it, as my hon. Friend knows.

BUDGET (CHANCELLORS BROADCAST)

Q3. Mr. Lawson

asked the Prime Minister if the ministerial broadcast on the Budget by the Chancellor of the Exchequer on 6th April represents Government policy.

Q6. Mr. Wyn Roberts

asked the Prime Minister if the Chancellor of the Exchequer's television broadcast on the Budget on 6th April represents Government policy.

Q8. Mr. Tebbit

asked the Prime Minister if the television broadcast made by the Chancellor of the Exchequer on 6th April, which concerned economic policy, represents Government policy.

Q9. Mr. MacGregor

asked the Prime Minister, whether the Chancellor of the Exchequer's television broadcast on the Budget on 6th April represents the policy of Her Majesty's Government.

The Prime Minister

Yes.

Mr. Lawson

The Chancellor, in that broadcast, stressed the importance of investment and the Prime Minister has just reiterated it. Will he therefore help encourage investment further by repudiating firmly and categorically the National Executive Committee's industrial proposals and by repeating his own wise words at the Adam Smith festivities in Kirkcaldy three years ago, when he said that the Labour Party's big mistake was to think it knew how to run a company's business better than the company itself.

The Prime Minister

I had better look at what I said before I take it exactly in that form. Whatever I said on the Adam Smith Memorial occasion, I must confess I do not exactly recall at this moment. On the general question, it is of course, clear that this country still [column 1061]has a very large private sector, which must be enabled to make adequate returns on the capital invested. That has always been the policy of this Government and it will continue to be the policy of this Government. As for any proposals that may emanate from the National Executive Committee, I have no ministerial responsibility for them.

Mr. Skinner

Is my right hon. Friend aware that, currently, he has no instruments to force investors to put their investment into those areas of the economy—mainly the manufacturing base—where it is needed? Does he recall that when we had the argument on the £6 pay policy last year it was suggested that the reduction that would occur would allow more investment to take place? This has not taken place. What discussions have been entered into this time to ensure that wage restraint will lead to a situation that has not occurred for many years past?

The Prime Minister

There is a difference between my hon. Friend and myself on this point. I do not believe that one can force a large private sector to invest. Therefore, one has a choice between a wholly controlled economy and a mixed economy. As for that part of the sector in the mixed economy which is private, one can lead a horse to water but one cannot make it drink. Therefore, one has to apply the necessary incentives to compel it to drink. As this party has always stood for a mixed economy and not for a totally controlled economy, that must be the basis upon which our economic policy proceeds.

Mr. Wyn Roberts

Will the Prime Minister give a firm assurance that the pay deal with the TUC will not contain hidden concessions, to be revealed at a later date, which will add substantially to public expenditure? Does he agree that industry is currently being discouraged from investing in job creation by the Price Code?

The Prime Minister

From the analysis that I have been able to make so far, I think the answer to the second part of the question is “No” . But there will be discussions with the CBI as well as the TUC on this matter. Indeed, many firms' profits are at the moment well below the reference level to which they [column 1062]are entitled, and that is not a factor that should cheer any one of us. It is a very serious factor in this matter. Regarding hidden commitments, of course I give the assurance that if an agreement is reached this week, or within a few days, it will, perhaps, be for the Chancellor to indicate to the House the full nature of the agreement that is reached, so that the House will know what it is.

Mr. Dalyell

Is the Prime Minister aware that people who pronounce Kirkcaldy as “Kirkcauldy” instead of “Kirkcuddy” do far more for the Scottish National Party than many who talk about devolution?

The Prime Minister

I have simply no answer to that.

Mr. Tebbit

Does the Prime Minister agree that if any company in the drugs industry looked at the nature of the compensation that is being offered to companies in the aerospace industry under the Government's nationalisation proposals it would have no cause whatsoever to make any further investment until the threat of nationalisation of the drugs industry is lifted? Would the Prime Minister is lifted? Would the Prime Minister care to do that here and now, before he prejudices more jobs?

The Prime Minister

At a quick glance I cannot see that in his Budget Broadcast on 6th April the Chancellor referred to that industry at all.

Mrs. Millie Miller

Is my right hon. Friend aware that the corollary of what he has said about the mixed economy is that we should then not be giving massive grants to those companies that proclaim private enterprise freedom, on which they say the future of their industries depends? In other words, if we have a mixed economy, should we not let the State industries receive grants and let the others make their own way by competition?

The Prime Minister

There is, of course, a substantial case for selective aid in these fields, and it is along the lines of that policy that the Government have been moving. However, basically, of course, any industry, whether privately-or publicly-owned, must be able to make an adequate return on the capital employed if the workers in that industry [column 1063]are to get decent wages and if the investment in it is to be replaced. There is no dodging that fact, under whatever system one lives.

Mr. MacGregor

In view of uncertainties that have arisen since the Chancellor's broadcast, about the precise pay targets that the Government are aiming at, will the Prime Minister confirm that the recent statement by the Secretary of State for Trade that anything above the 3 per cent. norm will mean that the Government will not achieve their inflation targets represents Government policy? If the limit is above 3 per cent., will the Government compensate by reductions in tax concessions or reductions in public spending?

The Prime Minister

I suggest that the hon. Member waits and sees.