SECRETARY OF STATE FOR THE HOME DEPARTMENT
(SPEECH)
Q1. Mr. Michael Morris
asked the Prime Minister if the speech by the Secretary of State for the Home Department on 6th May 1977 in South Leeds on local government election results represents Government policy.
[column 1540]The Prime Minister (Mr. James Callaghan)
Yes.
Mr. Morris
As the local election results reflected democracy at work, will the Prime Minister tell the House in what way democracy is furthered by adding Trotskyites to the Government party? Will he also tell us in what way the Lib-Lab pact to contain Socialism is still in existence?
The Prime Minister
No, not in reply to that Question.
Mr. Sims
Is the Prime Minister aware that the Home Secretary likened his reception by the police to demonstrations by the IRA and the National Front? Does the Prime Minister agree that the right hon. Gentleman's comparison is quite disgraceful, and will he confirm that it does not represent Government policy?
The Prime Minister
The demonstrations outside the hall, if they were correctly reported, were not a credit to the police service. I know enough about the police service to know that the majority of policemen would agree with my view, that they do not believe that is the best way to express their genuinely felt grievances.
Mr. R. C. Mitchell
Does my right hon. Friend agree that whatever the local government election results, local government reform introduced by the Conservative Government has proved to be a complete and utter disaster and that those county boroughs that were merged into counties are now getting far worse services and paying a lot more for them?
The Prime Minister
As I go around the country I find that local government reform is not generally regarded as a jewel in the crown of the last Conservative Administration. However, we have to reflect carefully before we decide to take any particular action to alter this at present or, indeed, in the immediate future, because local government must be given an opportunity to adjust itself. I am bound to say that the more I hear about it the less I feel that Parliament was well advised to accept the proposal that the Conservative Government then put forward.
Mrs. Thatcher
I refer to the speech of Merlyn Reesthe Home Secretary, which is the subject [column 1541]of the Question. Does James Callaghanthe Prime Minister recall that towards the end of that speech the Home Secretary talked about the Government's economic programme and about the benefits that we should all share? Is the Prime Minister aware that since the last election the take-home pay of the average worker has fallen by £8 a week? Does he expect there to be any improvement in the current financial year?
The Prime Minister
Yes. The right hon. Lady knows the reasons for this. We have been attempting to live within our means after the profligate extravagance of the Conservative Government. With regard to the future, our assessment is that from now on, if we can maintain a reasonable approach on these matters the standard of life should certainly begin to improve. [Hon. Members: “When?” ] Well, at present—if I may take just four factors—exports are going up, pensions are going up, unemployment is going down, and interest rates are going down. That is not a bad start.
Mrs. Thatcher
The Prime Minister has said something similar to what he said last Tuesday, and it was partly for that reason that I asked him. If he expects that the standard of living will indeed improve, what kind of increase in pay is he expecting, bearing in mind the current rate of inflation and the current rate of tax? If the standard of living is to improve, does that not postulate a very large increase in pay?
The Prime Minister
Not necessarily. As I am sure the right hon. Lady will agree if she reflects on it, it would also be determined to some extent by an increase in productivity. It is to that that the Government are constantly addressing their mind, through the industrial strategy and in other ways.
COMMONWEALTH HEADS OF GOVERNMENT CONFERENCE
Q2. Mr. Marten
asked the Prime Minister how many Heads of Government will be attending the Commonwealth Prime Minister's Conference.
The Prime Minister
I refer the hon. Member to the reply that I gave to the hon. Member for Tynemouth (Mr. Trotter) on 24th May.
[column 1542]Mr. Marten
In the light of President Kaunda 's remarks about President Amin, has any decision yet been taken about President Amin 's entry to this country? On the Commonwealth Prime Ministers' Conference, will the Prime Minister take a lead in pressing ahead with the report of the Expert Committee set up in Jamaica at the last conference, and will he try to get the Commonwealth to take a rather greater collective lead in world affairs?
The Prime Minister
I recognise the strong feelings in the House and the natural desire to know the Government's opinion on the first matter. I only ask that in all our interests I am not pressed to give an answer on this matter at this moment. We have to take the decision ourselves. I can assure the House that we shall take the appropriate decision and that we shall have to be held responsible by the House for it in due course.
As for the Commonwealth giving a lead in world affairs, I shall certainly do my best to encourage that when the conference meets. I know that this view is held by a number of Commonwealth Prime Ministers, and I know that we do and can exercise a considerable influence. I always thought that it was valuable that about two years ago we began meeting at the United Nations as a Commonwealth group in order that we could express our views accordingly.
There are other ways. For example, the Commonwealth can provide a very useful means of entry into the EEC on a number of matters, and the Commonwealth values the fact that we are in the EEC in order to help in this direction.
Mr. Lipton
Have we not already come to a decision to spend £125 on Ugandan flags for the purposes of this conference? Does that commit us to anything?
The Prime Minister
The £125 might turn out to be very cheap at the price.
Mr. David Steel
Is the Prime Minister aware that the attendance of President Amin at this conference would be universally objectionable to public opinion in this country and almost certainly unanimously unacceptable to this House? Speaking for myself and my colleagues, however, I can say that we [column 1543]recognise that this is a delicate matter and the precise method of giving effect to it is best left in the Prime Minister's hands.
The Prime Minister
I am obliged to the right hon. Gentleman for what he said. I believe that that is the view of all those who do not wish to see the Commonwealth unnecessarily damaged by the present position. I hope that is what we all wish to see.
PRIME MINISTER'S OFFICE (POLICY UNIT)
Q3. Mr. Mike Thomas
asked the Prime Minister if he will appoint someone with experience of industrial reorganisation and mergers to his policy unit at No. 10.
The Prime Minister
No.
Mr. Thomas
Is my right hon. Friend aware that there is a welcome on the Labour side of the House for his commitment and that of my other right hon. Friends to involve the NEB, on a permanent and long-term basis, in the restructuring of the turbo-generator industry? Will he confirm that the hold-up in the announcement of the decision to order Drax B has arisen because Sir Arnold Weinstock still refuses to co-operate in creating a national turbo-generator company and is insisting on GEC control of whatever emerges rather than agreeing to a company which preserves the interests of all those who work in it?
The Prime Minister
I can certainly say that we intend that the Drax B power station should be ordered. But I very much regret that a battle is being fought out on the Order Paper and by publicity firms on the question how that order should be disposed of. We are here dealing with the livelihoods of thousands of men and with the future of the industry as a whole. It will be for the Government to take the decision. I deprecate references to anybody in this matter when these difficult negotiations are going on. The Government do not have the power to force any restructuring of this industry. The restructuring can be done only by consent. If that consent is not forthcoming, there will be no restructuring. The Government will [column 1544]have to take their own decision and discuss with the CEGB how this order is to be placed. I hope that everybody concerned, including my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas), will understand the implications of what I am saying.
Mr. Tom King
Will the Prime Minister confirm the statement by his own colleague, the Under-Secretary of State for Energy, that if the order is placed it will be put out to competitive tender?
The Prime Minister
Not at the moment. I do not wish to give cards to any particular group in this matter. We are here dealing with a national interest. There are delicate commercial negotiations going on. I repeat what I said. I do not believe that it is in the best interests of the future of this industry that we should try to—[Interruption.] I ask the hon. Gentleman not to press this issue on the Floor of the House at present.
Mr. Joseph Dean
Will the Prime Minister reconsider part of his answer concerning Drax B? I speak as one who has only lately become involved in the battle on the Order Paper. May I ask my right hon. Friend, in fairness to both sides and to workers in the power industry and both companies—workers whose jobs are threatened—to see that if Drax B is ordered the order should be seen to be fair to both sides and should go out to open tender, and not be handed on a plate to one company and its workers?
The Prime Minister
I note what my hon. Friend says. I am trying to keep the position as it is. We are at the last stage of negotiations. Whether those negotiations will break down or go through I do not yet know, but I would prefer at this stage just to note what my hon. Friend says and not to give any further information.
Mr. Ridley
There is a growing body of opinion that believes that further industrial concentration into larger and larger units, particularly the nationalised public sector units, is the root cause of many of our industrial problems. Will the Prime Minister seek to promote instead a policy of encouraging small firms and preventing industrial concentration in larger industries, which is exactly [column 1545]the reverse of what he has been doing hitherto?
The Prime Minister
That is a more generalised question. If I am asked whether I believe that a great many bigger firms can grow out of small firms, the answer is “Yes” . We should do our best to encourage that. As for the matter to which this question is related, there is general agreement among the trade unions and the industry itself that rationalisation demands one technology for future power stations, especially if we are to able to compete internationally. We need a level of production that cannot be sustained if the industry is divided. There is no general answer. We must take each case on its merits.
EUROPEAN COMMUNITY
Q4. Mr. Gwilym Roberts
asked the Prime Minister what study he is making of the effects of United Kingdom membership of the EEC.
The Prime Minister
The effects of EEC policies in different fields are kept under continuing review.
Mr. Roberts
Does my right hon. Friend agree that the Common Market is now regarded as a disaster by the British people in general and by the vast majority of the Labour movement in particular? Does he not feel that it is now time for another referendum, with the Labour Government leading the campaign to come out?
The Prime Minister
I know that my hon. Friend is very concerned to uphold conference decisions on all these matters. I must remind him that at the special Labour Party conference that was called to consider the referendum, the decision was taken that the Government would accept the result of the referendum as binding. I am sure that my hon. Friend would not want me to go back on that.
Mr. McCrindle
Is the Prime Minister proud of the fact that as we reach the end of the period of British presidency of the Commission, the Tribune Group should be trying to lead us out of the EEC while others of his colleagues are preventing us from carrying out our obligations on direct elections?
[column 1546]The Prime Minister
I do not think that any of us should try to silence or stifle the legitimate criticisms of weakness in the EEC structure, some of which are exemplified by some of the hon. Gentleman's hon. Friends. But that does not alter the basic fact that our presidency has certainly been at least as successful as those of our predecessors—[An Hon. Member: “Oh, yes?” ] Oh, yes! I have been there and seen. For the future, it is our job to play our full part in developing a new and wider Europe. That is what we said we would do when we had our special conference.
Mr. William Hamilton
Does my hon. Friend agree that the only realistic view at the moment is to stay in the EEC and make it work much better? Can he confirm or deny authoritative reports that our inflation problem is not even primarily due to the EEC, and will he ensure that the Ministry of Agriculture is honest with the House and gives the figures that will bear that out?
The Prime Minister
Answers have been given in this House that show the influence of the common agricultural policy on price rises in this country. The CAP has had an impact on certain food prices but certainly not on the general level of inflation, which is due to many other causes. The Minister of Agriculture has played a most notable part in recent negotiations, in that for the first time the increase in rewards given to the agricultural community was less than the increase in their costs. This is the kind of restructuring that we must continue to work for.
Mr. Pardoe
Does the Prime Minister agree that the view that we take on the CAP is dictated largely by the view that we take on the balance between the world supply of and demand for food in future? In future, people will be very grateful for having paid a high price to be part of a self-sufficient food community if there is a drastic world food shortage in the 1980s and 1990s. What studies have the Government made of the world supply and demand for food in the 1980s and 1990s?
The Prime Minister
Studies that have been done have led to the conclusion that the hon. Member has just given—that there will be a growing world demand [column 1547]for food and a possible world shortage as standards improve. That is why, in the case of our own agriculture—although we have not succeeded as much as we would like—we have proceeded with expansion. [Interruption.] There will be expansion of agricultural production this year if we do not have another drought. On world food production—there are some surpluses in North America, and that country would like a greater access to the European market. We should try, temporarily, to adjust ourselves to that, but, at the same time, there is every reason why Europe should become as self-supporting as possible.
Mr. Baker
On a point of order, Mr. Speaker. The Prime Minister said that he did not want to be pressed about President Amin, Drax B, or direct elections. Is it possible to elicit from him, through you, any area of Government activity in which he would like to be pressed?
Mr. Speaker
The hon. Member knows better than that.