PRIME MINISTER (ENGAGEMENTS)
Q1. Mr. Michael Marshall
asked the Prime Minister if he will list his engagements for Thursday 27th April.
The Prime Minister (Mr. James Callaghan)
This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding meetings with ministerial colleagues and others, including one with a delegation from Liverpool. This evening I shall be host at a dinner for the Prime Minister of New Zealand.
[column 1635]Mr. Marshall
Has the Prime Minister read today's Press reports, which say that he failed to meet the Service Chiefs of Staff before announcing his decision on the pay review last week? How can he justify his failure to hold that meeting, in view of the fact that the pay increase is inadequate to prevent further drainage from the Services? What assurance will he give that he will meet the Chiefs of Staff to review these matters urgently?
The Prime Minister
I am grateful to the hon. Member for that question. I received a memorandum setting out the Chiefs of Staffs' view in full, which I read first thing last Thursday. I reported this in detail to the Cabinet, and I minuted on the memorandum that I would meet the Chiefs of Staff to convey the Government's views and listen to their views. I proposed a date and time for a meeting. Then, as the House knows, I set out for Plymouth the following morning to open a fleet maintenance base. While I was there I received a message that the Chiefs of Staff did not think it necessary to meet me. I would like to add that there is no criticism of the Chiefs of Staff here. In fact, Sir Neil Cameron came to see me privately on these matters, and we had a full discussion on 17th March. I knew the Chiefs of Staffs' view, and the Cabinet knew it, too. I was perfectly open for a further meeting to be arranged if this was convenient.
I think that there is a certain amount of mischief-making going on in the Ministry of Defence at present.
Mr. Alan Clark
Sack the Minister.
The Prime Minister
I have found it very difficult in the past to try to check the nature and origin of the leaks, but when these leaks are mischief-making they are especially dangerous. I very much regret that The Times should have fallen for this particular piece of mischief-making.
Mr. Hoyle
In between his engagements, will the Prime Minister look at the figures for imports of Japanese cars, which have risen 25 per cent. in the last year? The voluntary agreement reached with the Japanese Government should be reviewed at an early date in order to avert damage to the British car industry.
[column 1636]The Prime Minister
These matters are under continuous review. I shall draw my hon. Friend's remarks to the attention of my right hon. Friend the Secretary of State for Trade.
Mrs. Thatcher
Does James Callaghanthe Prime Minister recall saying before the Budget that what people wanted most was to pay less tax? How does he square that with figures published this week, which show that after this Budget 900,000 more people are paying income tax than before?
The Prime Minister
My recollection is that 340,000 were taken out of tax as a result of the Budget measures. Clearly, if as a result of increases in pay from collective bargaining, people have moved into the tax bracket, they will be required to pay tax. However, overall the answer is that £2.5 billion in tax cuts has been made or is proposed. I believe that the Leader of the Opposition wants to add to that figure.
Mrs. Thatcher
Will Denis Healeythe Chancellor [Hon. Members: “Oh.” ]—I am sorry, the Chancellor is not here—will James Callaghanthe First Lord of the Treasury not accept that what the Government have done is to impose more tax on people who have a lower standard of living than was the case when we left office?
The Prime Minister
Taxes have gone up in an effort to secure national recovery, and they have had an impact. Obviously Conservative policy is to relieve the richer taxpayers and to see that poorer people spend more.
Mr. Mike Thomas
Is my right hon. Friend aware that many Labour Members share his view that he cannot be the only one who is concerned about the growth in inflation as expressed on the television news last night, that the Service pay settlement is fair and reasonable, and that we cannot possibly allow the position to arise in which Service pay increases are used as a lever to break the pay policy that applies to everybody else?
The Prime Minister
I accept that the Services, because of the extent to which they have fallen behind, are generally acknowledged to be in a position where we should stretch the limit as far as we can. My correspondence and the reactions [column 1637]that I am getting show that that is accepted by a great many people. I always believe that the common sense of the country knows when the Government are behaving in a sensible way, even if it may not be strictly logical.
Mr. Churchill
Will the right hon. Gentleman explain how it is, as his Government's pay policy is supposed to be fair to all, that the Armed Forces over the past three years have fallen 32 per cent. behind? Why do they now have to make do with a miserable 13 per cent. when face-working miners under stage 3 have received an increase of no less than 46 per cent. under the guise of a productivity deal—three and a half times as much as the Armed Forces?
The Prime Minister
The answer to the first part of the hon. Gentleman's question is that the Armed Forces have fallen behind in 1978 for the same reasons that they fell behind in 1975—namely, because of the operation of the pay policy that was in force under a Conservative Government, as now under a Labour Government. The same reasons apply. As I have explained on previous occasions from the Dispatch Box, this is one of the difficulties of dealing with the pay of public servants. It is one to which I am quite ready to devote more attention. I hope that the hon. Gentleman, for all his brashness, will not try to set off the miners against the Armed Forces, or any other group of workers.
Later——
Mr. Baker
On a point of order, Mr. Speaker. In reply to Question No. Q1 the Prime Minister alleged that certain members of the Department of Defence were leaking information, the purpose of which was to undermine Government policy. Have you had any indication from the Prime Minister—if these allegations are correct, which he obviously believes—whether he intends to make a statement telling us what he will do about the matter?
The Prime Minister
Further to that point of order, Mr. Speaker. If I found out the source of this leak—it clearly must come from the Department of Defence—I should invite the Secretary of State for Defence to take appropriate action.
[column 1638]EUROPEAN PARLIAMENT (ELECTIONS)
Q2. Mr. R. C. Mitchell
asked the Prime Minister whether he regards the date for direct elections which he agreed at the recent European Council as a binding commitment.
The Prime Minister
The agreement of all the Members of the European Council to hold direct elections in the period 7th to 10th June 1979 was a political decision. The legal form is that under article 10 of the Council Act of 20th September 1976 the final decision will be taken by the Council of Ministers after consulting the Assembly. This will be after the Act of September 1976 enters into force following ratification by all member States.
Mr. Mitchell
Now that the date has been fixed, does my right hon. Friend agree that in the run-up to direct elections it is important that information concerning the Community should be presented as accurately as possible? Will my right hon. Friend confirm that the European Commission has not proposed the abolition of the Milk Marketing Board? Will he care to comment on Press stories about the daily doorstep delivery of milk?
The Prime Minister
I understand that certain proposals have been put forward by the Commission that my right hon. Friend the Minister of Agriculture, Fisheries and Food is considering. However, I think that my hon. Friend and the House may take it as absolutely certain that we do not propose to be dictated to about the future of milk deliveries or the future of the Milk Marketing Board.
Mr. David Steel
Has the right hon. Gentleman noticed the statement from the Labour Party yesterday that it proposes to contest the elections so that its hostility to the Community can be represented? Although the right hon. Gentleman does not have responsibility in the House for statements from the Labour Party, will he make it clear that that is not the attitude that the Government are bringing to the elections?
The Prime Minister
Candidates for the Labour Party will in due course fight according to their convictions. I have nothing to say about that at the moment.
[column 1639]Mr. George Cunningham
Is it still my right hon. Friend's view that swift advance to economic and monetary union would be quite contrary to the interests of this country, and does he accept that the directly elected Parliament will be an immediate and major ally of the Commission in going for economic and monetary union as quickly as possible?
The Prime Minister
That seems to be a long way away, and even further removed from the original Question than the earlier supplementary questions. I am not ready to go into details on that matter this afternoon.
Mr. Marten
Is the right hon. Gentleman ready to go into other details? Will he give the House an assurance that we shall not take the final act of ratification of the elections, which we still have to take, until the pay has been settled for the Members of the directly elected Assembly? Will he confirm that whatever the pay is, it will be taxable at United Kingdom rates?
Mr. Joel Barnett
Yes.
The Prime Minister
My right hon. Friend the Chief Secretary says that the answer is “Yes” . Is my right hon. Friend sure?
Mr. Joel Barnett
indicated assent.
The Prime Minister
That means that there is collective responsibility and open government at the same time. I am ready to assure the hon. Gentleman—woe betide my right hon. Friend if he is wrong—that these emoluments will be taxable. As for the relationship between——
Mr. Marten
At United Kingdom rates?
The Prime Minister
I understand that the pay will be taxable at United Kingdom rates. If everybody else knows the answer, I do not know why I am asked. I cannot give the hon. Gentleman an answer on the relationship between the act of ratification and pay. However, if he tables a Question I shall ensure that the answer is given to him.
WORLD ECONOMY
Q3. Mr. Norman Atkinson
asked the Prime Minister if he will make available [column 1640]in the Library a copy of the submissions he is to put to the Bonn Summit concerning the world economy.
The Prime Minister
I have no plans at present to put any written document to the Bonn Summit. I am, however, already in touch with the other participants about ways to boost the world economy and increase international confidence. I will, of course, report to the House at the appropriate time.
Mr. Atkinson
Does my right hon. Friend agree that there is now an international tendency to drift into diplomatic secrecy in economic affairs in the same way that foreign affairs and defence matters are shrouded in secrecy throughout the world? If it is the fact that we can no longer stimulate the rate of economic growth in Britain because of increasing our external trade deficit, would it not be wise to widen the discussion that is to take place so that there may be a representation of all views about the necessity for the international regulation of trade and the introduction of import controls?
The Prime Minister
I do not agree with the first part of my hon. Friend's question. There is less secrecy in the discussion of public affairs than I have known in the 33 years that I have been in the House. There is more open government and open discussion than I ever recall on economic matters, defence matters and international affairs.
As for the limitation imposed on our national growth, the major limitation that is imposed is our failure, over many years, to secure a level of productivity to enable us to compete with a number of imported goods in a number of sectors. That is the major weakness that I have constantly emphasised. I believe that that view is shared by some on the Opposition Benches.
How is that to be remedied? There are discussions and decisions about limiting imports in these circumstances. If every country in the world follows that course—a great many countries are under increasing pressure to do so—the result will be less world trade rather than more world trade, and perhaps more unemployment. It could happen, but I do not think that we should encourage it. I think that we should try to secure a greater increase in the level of world trade.
[column 1641]Mr. Rost
What is it about the Government's appalling record that entitles the Prime Minister to go lecturing to the Heads of other more successful States urging them to abandon their successful economic management and replace it with the policies of failed Socialism? Would not he be better employed taking some lessons from them instead of whining at them?
The Prime Minister
I am willing to accept lessons from anybody including the hon. Gentleman, if he ever has anything sensible to say. What we are trying to do, in the face of 16 million unemployed in the Western world, is to pool our ideas to try to secure some progress in a number of areas that will enable the recession in the Western world to be overcome and growth to be resumed. I hope to have the hon. Gentleman's support in doing that.
Mr. Whitehead
Disregarding the ridiculous comment that we have just heard from the hon. Member for Derbyshire, South-East (Mr. Rost), will my right hon. Friend use his undoubtedly close relations with Chancellor Schmidt to impress upon him once again, that, because of Germany's position in the world at the moment and her vital zero rate of inflation at this time, there is a special responsibility on the Germans to bring about an expansion of world trade?
The Prime Minister
Chancellor Schmidt would accept that responsibility. He is much in favour of a growth of world trade. The question that he is asking is how best to secure it. That is the problem to which we shall be devoting our attention between now and July.