PRIME MINISTER
(ENGAGEMENTS)
Q1. Mr. McCrindle
asked the Prime Minister if he will list his official engagements for Thursday 6th May.
The Prime Minister (Mr. James Callaghan)
There was a Cabinet meeting this morning and I shall be holding further meetings during the day, including one with the Commonwealth Secretary-General. This evening I shall be attending a dinner given by President Geisel of Brazil.
Mr. McCrindle
Will the Prime Minister find time to tell middle managers, senior salesmen and some skilled workers why, having seen their standard of living fall substantially in 1975, their differentials are to be squeezed still further under the Government's new policy? Why has it not been possible to translate the words of sympathy in the Chancellor's Budget speech into practical action for these people? Why do the Government insist on clobbering sections of society upon whom our economic recovery substantially depends?
Mr. Russell Kerr
Send for Lord Barber. That is the answer.
The Prime Minister
I think that the middle management of this country, who have a great deal to do with ensuring our prosperity, understand rather better than the hon. Gentleman the needs of the present situation. No doubt they have taken into account, as the hon. Gentleman has not, that in the tax reliefs that are being given there is greater total relief for them than, naturally, there is for those with lower incomes. I am sure that Conservative Members will convey this in their weekend speeches, but they should point out to middle management, as the TUC leaders are pointing out to their followers, that a fall in our standard of life this year is an essential part of overcoming the inflationary problem. Or am I to understand that everybody is to be included except those whom the hon. Gentleman affects to represent?
Mr. Bidwell
Will my right hon. Friend have in mind that this week is the fiftieth anniversary of the General Strike of 1926, which grew out of a [column 1466]solidarity with the miners against wage cuts? Although this is not an exact historical parallel, will my right hon. Friend have in mind that workers, although having great sympathy with the difficulties of the Government, will be in no mood to take a lop-sided sacrificial position? They will expect to see a vigorous prosecution of Labour's Socialist policies.
The Prime Minister
Yes. The element of a voluntary wage agreement includes a concern by the TUC, and by most people in the country, that the social conditions which we expressed in the name of the social contract should be carried out. We accept our responsibilities under that.
I can remember 1926, and I well remember how different in every sense were the conditions then from what they are today. For example, no one is saying that the miners should work longer or have lower wages. Indeed, the wage will go up and tax reliefs will help to increase this effect.
Mr. Pardoe
Reverting to the Prime Minister's meeting with the Commonwealth Secretary-General, may I ask the right hon. Gentleman to say whether he discussed with him the effect that the IMF gold sales will have on poor countries, particularly in the Commonwealth? Is he aware, for instance, that this scheme to sell gold from the IMF gold hoard was to help poor countries? What are the Government doing about the very great delay which is taking place?
The Prime Minister
I have not yet discussed the matter, because the meeting is due to take place in about 40 minutes' time. I shall try to brief myself on this point before I see the Commonwealth Secretary-General.
ECONOMIC AFFAIRS (PRIME MINISTER'S SPEECH)
Q2. Mr. Norman Lamont
asked the Prime Minister whether he will place in the Library a copy of his public speech on economic policy at Cardiff on 9th April.
Q3. Mr. Wyn Roberts
asked the Prime Minister if he will place in the Library [column 1467]a copy of his public speech on economic policy at Cardiff on 9th April.
The Prime Minister
I did so on 9th April.
Mr. Lamont
Has the Prime Minister studied the article by his son-in-law in this morning's edition of The Times, in which he states that whatever the short-term advantages of the Government's package, in the longer term there is no hope of reconciling full employment with stable prices unless the Government cut public spending by £3,000 million this year? As the Prime Minister presumably would not accuse his own son-in-law of lack of patriotism, will he at least clearly understand why the rapture on the Opposition side of the House is so modified?
The Prime Minister
The Government's views on the question of public expenditure are well known. Clearly public expenditure must be kept within bounds—as we have done by our recent decisions. There is a question that appeals to all of us on the Government side of the House—and, I hope, to some on the Opposition side—namely, that there must be priorities in public expenditure. That is what we are actively endeavouring to ensure in the policies that we are following.
Mr. Atkinson
Will my right hon. Friend reconsider the statement that he has just made—that public expenditure must remain within bounds? What on earth does he mean by that, when the country is now faced with mounting unemployment and we all know that the only way in which the Government will get a quick return to a full employment strategy is by making much more of our public resources available for this purpose?
The Prime Minister
No, Sir; I do not know that, and I do not agree with that analysis.
Mr. Wyn Roberts
As the Prime Minister has referred to the trade unions' co-operative attitude over pay policy, does he agree that the current pay settlement is at risk while the Government are continuing to borrow £1 out of every £5 that they spend.
The Prime Minister
No, Sir. I do not think that that analysis is correct, either. I look to neither the extreme Right nor the extreme Left in order to [column 1468]get a fair appreciation of these matters. What is happening at present is that Government expenditure, which is, of course, to a large extent——
Mr. Nicholas Winterton
Inflationary.
The Prime Minister
That was not quite what I was about to say. I was about to say that it is based on the need to provide the necessary social infrastructure upon which our industrial system can depend. Because of that, I think it would be foolish to talk about large-scale cuts in public expenditure. What is much more important is that we should increase the rate of gross domestic production so that we can finance these needs out of the increase.
Mr. Hoyle
Does my right hon. Friend agree that when he is considering economic policy—and much has been said this week about the TUC and its responsibilities—he ought also to take into account the demands of the TUC for selective import controls, which would give a boost to employment in Britain?
The Prime Minister
I have discovered in about six weeks—or is it five weeks?—that there is no limit to the number of repetitive replies that a Prime Minister is expected to make.
Mr. Hoyle
I am talking about action.
The Prime Minister
I shall try once again. The Government have no ideological objection to selective import controls if they will rescue an industry from a situation in which it would be closed down, when in other circumstances if could be viable. However, in the case of general import controls, to which my hon. Friend did not refer, we do not believe that this is the best way to expand world trade, especially as Britain is such a large trader.
Mrs. Thatcher
Is James Callaghanthe Prime Minister aware that we welcome the fact that both he and the TUC have now recognised that the economic policies on which he fought the last two General Elections have proved disastrous for Britain? When will he learn the second lesson of the last two years—that borrowing must be cut and incentives must be restored if we are to stop getting poorer and start getting richer?
The Prime Minister
I find those remarks a little hard to take, when I [column 1469]remember that we came to power in the middle of a three-day working week, which was brought about by the total incapacity of the Conservative Party to understand how industrial relations in Britain should be run, although the Conservatives were warned time after time, both publicly and privately, of their folly and of the catastrophe to which their policies would lead them. We reversed that policy. That is why, for two years running, we have secured the strongest bastion of all against inflation—that is a voluntary pay policy. [Interruption.] The House has got very bad tempered since the days when I used to listen to replies. I do not complain, but I must say that I should have thought that on the whole it was better to listen to answers.
In conclusion, I want to say that the overcoming of inflation is a national interest, and that it is something in which, now and again, I look to the Leader of the Opposition to support me.
Mrs. Thatcher
If the Prime Minister is so complacent, will he take the advice of his right hon. Friend Michael Footthe Leader of the House and name the day for a General Election now? June is a very good month for the Tories, as doubtless he will recollect.
The Prime Minister
I can well understand that the Leader of the Opposition prefers to divert attention from the reality of the situation. This country has this week won a battle against inflation, but we have not yet won the war. I hope that the right hon. Lady will cease to think about General Elections until that war is won.
Later——
Mr. Buchan
On a point of order. Mr. Speaker. I seek your guidance. The hon. Member for Kingston-upon-Thames (Mr. Lamont), in his supplementary question, referred to my right hon. Friend's relative. I hope that that habit will be deplored. Most hon. Members have relatives who play independent rôles in public life. I suggest that it is an infringement of their liberty, as well as of ours, to refer to them. If this habit is not against the rules of the House, it is certainly to be deplored and, I hope, avoided.
[column 1470]Mr. Speaker
I am obliged to the hon. Gentleman for raising this matter. It is not the normal custom for us to refer to each other's families here—and it is just as well.
HATFIELD
Q6. Mrs. Hayman
asked the Prime Minister if he will pay an official visit to Hatfield.
The Prime Minister
I have at present no plans to do so.
Mrs. Hayman
Will the Prime Minister reconsider that reply and take the opportunity to meet some of my constituents who at present work at Hawker Siddeley Aviation in Hatfield and who will lose their jobs next month unless the Government choose to pledge their support for the HS146 project? Will he take this opportunity to reassure aircraft workers that the civil airframe industry has a future under the present Government and that the HS146, in particular, will go ahead?
The Prime Minister
I shall consider what my hon. Friend has said. I know that the company has recently proposed an increased programme of work on the HS146 project. I assure my hon. Friend that the Secretary of State for Industry is urgently seeking the further information needed in order to decide whether an increase in public expenditure can be justified. As soon as he has the relevant information, a final decision will be taken in the light of all the representations that my hon. Friend herself has made. She has been most energetic on behalf of this project, and on behalf of her constituents in the area.
Mr. Adley
As there are many aircraft workers in Hatfield, will the Prime Minister take an early opportunity to read a book that is being published today, called “Concorde—The Inside Story” , in which there are some extraordinary allegations about the cancellation of the TSR2 and the HS154, which will have affected the constituents of the hon. Lady, in that the allegations seem to suggest that the American Government put pressure on the British Government, who consequently cancelled those [column 1471]two aeroplanes? Is the right hon. Gentleman aware that many aircraft workers have remained concerned about the TSR2, and will he look into this matter?
The Prime Minister
I do not think that I shall read the book. I see so many sensational allegations every week that I really try to concentrate on the essentials. I have a recollection of the events of 1964 and 1965—which are pretty clear in my mind, although I have not checked the details—and my recollection is that there is absolutely no truth in this report. However, I shall be very glad to look into it further.
Mr. David Price
Is the right hon. Gentleman aware that if he were to abandon his attempt to nationalise the aircraft industry and were to use the public moneys to be allocated to that, he would have enough to support the HS146 without any increase in public expenditure?
The Prime Minister
I am sure that the hon. Gentleman is right in saying that there is a need for priorities in this matter. He will soon become a Socialist if he carries on in this way. As for priorities, it is a matter for the Government and the House to make the choice, and we shall do so.