Speeches, etc.

Margaret Thatcher

House of Commons PQs

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [933/551-57]
Editorial comments: 1515-1530.
Importance ranking: Major
Word count: 2252
Themes: Executive, European elections, European Union (general)
[column 551]

GOVERNMENT POLICIES

Q1. Mr. Mike Thomas

asked the Prime Minister if he is satisfied with the progress of the Government in the implementation of the policies contained in the Queen's Speech.

The Prime Minister (Mr. James Callaghan)

Yes, with some qualifications.

Mr. Mike Thomas

With regard to the progress of industrial strategy on the Finance Bill, is my right hon. Friend aware that the cost of Drax B power [column 552]station will turn out to be as nothing as compared with the cost of the hon. Members for Coventry, South-West (Mrs. Wise) and Birmingham, Perry Barr (Mr. Rooker)? Is he further aware that the restructuring of the turbo-generating industry at any price is neither essential to the industry nor acceptable to this side of the House?

The Prime Minister

I am not sure whether it is acceptable to the industry, but I know that there is a strong expert view that restructuring of the industry is necessary. On the question whether it is acceptable to this side of the House, I am sure that my hon. Friend can speak for those hon. Members, even if I cannot.

Mrs. Thatcher

James CallaghanThe Prime Minister will be aware that in connection with a direct elections Bill there have been reports that the doctrine of collective Cabinet responsibility will be suspended. May I ask whether he stands by his reply given from the Dispatch Box in this House on 29th April last year, on the subject of collective responsibility? May I remind him that that reply was to the effect that collective responsibility includes all Ministers, who must be prepared to defend Government policy at all times? Does he still stand by that?

The Prime Minister

Yes, Sir, I certainly think that the doctrine should apply, except in cases where I announce that it does not.

Mrs. Thatcher

Is the Prime Minister aware that he is making a farce of Cabinet Government, and that if he has lost control of his Cabinet he has likewise lost all authority to govern?

The Prime Minister

The right hon. Lady is expected to say that. I know that she believes that the doctrine of all Members of Parliament is to obey, as she announced at Ebbw Vale, but in quoting from Kipling I do not know why she should pay so much attention to the law of the jungle, which, as we all know, has always been the policy of the Conservative Party.

Mr. Donald Stewart

Is the right hon. Gentleman aware that in view of the number of policies in the Queen's Speech which have not surfaced, and policies such as devolution which have had to be put down, we ought now to [column 553]test public opinion in Scotland by ennobling one of his hon. Friends from a Scottish constituency so that the message could get through to the Government and the Conservative Front Bench?

The Prime Minister

I shall bear that proposal seriously in mind. If the right hon. Gentleman has any nominations to make, perhaps he will let me know.

Mr. Faulds

How can my right hon. Friend convince some of our less enlightened brethren that we are committed, not only by our party manifesto and the Queen's Speech but also by the outcome of the referendum and by international treaty, to the introduction of direct elections to Europe, where we could play a part—and this is what some of our colleagues seem to have forgotten—in the furtherence of the introduction of international Socialism?

The Prime Minister

I broadly agree. That is why a Bill will be introduced next week.

PRIME MINISTER

(SPEECH)

Q2. Mr. Michael Latham

asked the Prime Minister whether he will place in the Library a copy of his speech to the Transport Salaried Staffs Association annual conference in Great Yarmouth on 18th May regarding pay policy.

The Prime Minister

I did so on 19th May.

Mr. Latham

Would it not be worse than useless for phase 3 to be—and be seen to be—so farcically wide that its only effect would be to prop up this decayed Administration for another couple of months?

The Prime Minister

I said at the Transport Salaried Staffs Association conference that I did not want to see a fig leaf in disguise for a pay policy, and that is still my view. I said that we should not have productivity agreements that would be just cosmetic and that would merely disguise the true increase. I am sure that that is right, and I am certain that another understanding with the trade union movement about the increase in salaries and wages next year will be of great value, not only to the Government in dealing with public services, but in [column 554]getting inflation down further—as it will be going down during the second half of this year.

Mr. Walter Johnson

Does the Prime Minister recall that at that conference his speech was received most enthusiastically, with a standing ovation, because the delegates realised that the trade union movement and the Government are working together in the national interest to bring down the level of inflation by a sensible strategy?

The Prime Minister

My hon. Friend was in the Chair at that conference, so he was in a good position to see what happened. The serious point that he made is true. There is a great deal of evidence that the trade union movement recognises the seriousness of the situation in relation to the movement of wages and salaries, and that is why I have considerable confidence that an understanding will be reached about next year. I am sure that my hon. Friend would agree that I spoke frankly and openly to the delegates and that they accepted my argument. We must rely upon the good sense of the trade union movement, and I believe that it will come through.

Sir John Rodgers

Does the Prime Minister recall the lines of the D. H. Lawrence poem that say:

“Isn't it a pity, oh don't you agree,
That fig trees aren't found in the land of the free
And there is never a fig leaf near at hand when you want it?”

Mr. Atkinson

In order to give phase 3 a possibility of working, will the Prime Minister join his colleagues of the Government Benches in congratulating the Secretary of State for Prices and Consumer Protection on his speech yesterday or the day before, when he seemed to be calling for price restraint in the public sector—and particularly restraint in the cost of energy such as gas and electricity, and in the cost of transport—and for restraint in other prices that have contributed to the increase that has taken place in the cost of living during the last 12 months? Will he also congratulate his right hon. Friend on his statement that the pound sterling is now grotesquely undervalued? Will he now give some encouragement by saying that it is the intention of the Cabinet to look at the whole possibility [column 555]of price restraint and the introduction of some price control?

The Prime Minister

We have now overtaken the irresponsibility of the late Government in their subsidising the prices of nationalised industries so heavily that there was no adequate return on capital. That is a point upon which the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) had stinging comments to make about his own Front Bench. I now see no reason why the increase in the prices of the nationalised industries should exceed what is necessary to give a proper return on capital and enable new investment to take place.

I have nothing to say now about sterling.

Mr. Tebbit

When the Prime Minister speaks at such conferences and seeks to make agreements, what guarantee can he give that he can make his side of the bargain stick when he cannot even persuade his Cabinet colleagues or the Deputy Leader of the Labour Party to back policies that were enunciated in the Queen's Speech, and to which the whole of the Cabinet gave approval when it voted for the Queen's Speech?

The Prime Minister

I often find that the best way of convincing trade union conferences is to read out the questions that I am asked in the House by the hon. Member for Chingford (Mr. Tebbit).

CBI

Q3. Mr. Wrigglesworth

asked the Prime Minister when he next plans to meet the CBI.

The Prime Minister

I refer my hon. Friend to the reply that I gave him on 17th February.

Mr. Wrigglesworth

When my right hon. Friend meets the CBI will he remind it that employers have a responsibility to ensure that phase 2 is maintained and that companies should not aid and abet those who wish to break it? Will the Prime Minister also ask the CBI to do its best to co-operate with the Secretary of State for Prices and Consumer Protection in bringing in a firm policy for prices that will help to obtain the wage restraint that we want in the forthcoming year?

[column 556]

The Prime Minister

It is necessary that phase 2 should be observed. I know that there have been allegations that some seek to evade it, but I must remind the House and all those concerned with wage negotiations—whether employers or others—that phase 2 will not finally run out until the middle of next year, 1978, and that it is therefore important that everybody should co-operate in securing that.

As for price levels, I am glad to see that the level of wholesale input prices has shown a substantial reduction in the last month, and that will work through. In due course it should enable manufacturers and others to resist increases in prices beyond that limit.

Mr. McCrindle

As the CBI still maintains that any increase over 6 per cent. in phase 3 would be inflationary, while the TUC says that it is its objective to restore living standards, how real is the likelihood of obtaining an agreement on phase 3?

The Prime Minister

The discussions are going on but I am not yet able to say what will emerge from them. I do not know that the TUC has finally defined its attitude on this matter, but the Government see no reason why living standards should fall this year. What is in question is what, if any, can be the level of improvement. Living standards fell last year, but this year they ought to remain fairly stable and next year, if we obtain another phase of incomes agreement, they can begin to go up in real terms.

Mr. Torney

When the Prime Minister next meets the CBI will he remind that body that its policy of support for the Common Market has been a complete failure to the agriculture industry? That is evidenced by the situation in the pig industry. Will my right hon. Friend therefore advise his Cabinet to restore the direct subsidy to the pig industry—because the Common Market action has proved completely inadequate and will ensure that our pig industry will disappear?

The Prime Minister

I do not normally discuss the pig industry with the CBI, but I shall certainly ask my right hon. Friend the Minister of Agriculture to look into [column 557]this matter and let my hon. Friend have a reply on it.

Mr. Townsend

Can the Prime Minister give comfort to the CBI by telling that body about the reality of the hour—that the majority Bullock Report is now dead?

The Prime Minister

Discussions on this matter are continuing. I should like, if possible, to obtain an agreed decision on what should be done in order to forward the cause of industrial democracy. There would be a great improvement in labour relations if workers in industry had much more say in the decisions upon which their whole future rests. For that reason we have been pressing ahead with discussions. I should like to obtain agreement if it is possible.

Mr. Molloy

When the Prime Minister meets the Chairman of the CBI, will he point out that his constant calls upon the trade union movement to show restraint would go over better if he added that he, too, was prepared to play his part and to get the CBI to back the other half of the agreement, that is, proper price control? The two go together, and the CBI has a heavy responsibility. Its chairman has a right to encourage the trade union movement to show restraint, but does not my right hon. Friend agree that the chairman should give an example and offer co-operation in the form of price control?

The Prime Minister

I think that Lord Watkinson would accept that there is a great responsibility on the members of the CBI to show restraint in price increases. Like everybody else, they have been affected by the level of inflation, with its consequent increases in costs. That is why it remains the Government's central purpose to reduce the rate of inflation. I am glad to say that I see no reason to depart from my expressed view that the rate of inflation will start to come down in the second half of this year. That will benefit industry, prices, wage earners, housewives and everybody in this country.