Speeches, etc.

Margaret Thatcher

House of Commons PQs

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [952/207-14]
Editorial comments: 1515-1530.
Importance ranking: Major
Word count: 2738
Themes: Monetary policy, Pay
[column 207]

NORTHFLEET

Q1. Mr. Ovenden

asked the Prime Minister if he will pay an official visit to Northfleet.

The Prime Minister (Mr. James Callaghan)

I have at present no plans to visit Northfleet.

Mr. Ovenden

Is my right hon. Friend aware that if he could find time to visit my constituents in the coming months he would soon find how much they welcome the Government's success in bringing down inflation to the lowest level for five years? Would he not find it refreshing if, just for once, the Leader of the Opposition would stop carping and would give a similar welcome to the country's success in overcoming its economic problems?

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The Prime Minister

It is the case that, thanks to some moderation in wage settlements during the last 12 months and to other factors, the inflation rate has gone down, with benefit to our exports and our living standards. I hope that we can maintain that. Our rate of inflation is now lower than that of a number of our major competitors. On the other hand, it is still higher than the rate in Japan, West Germany and the United States. I should like to see it comparable with those countries as well.

Mrs. Thatcher

TheJames CallaghanPrime Minister and Denis Healeythe Chancellor of the Exchequer have repeatedly said that if wage rises were 10 per cent. or more inflation would soon be back into double figures. Now that the figures are showing that wages are rising at the rate of 15 per cent. or more, what is the Prime Minister's forecast of the annual rate of inflation?

The Prime Minister

I am too wary about the inaccuracy of forecasts to start a competition of that sort, but I have no reason to withdraw from my consistent position on this, which I uttered as recently as a fortnight ago to the hon. Member for Romford (Mr. Neubert) when I said to him that we need a substantially lower rate of increase in earnings next year if we are to maintain inflation at its present level. It is far better to get the major basic lesson home than to indulge in battles of forecasting statistics.

Mrs. Thatcher

In that case, why did the Prime Minister say a fortnight ago that he did not see why inflation should ever rise above single figures again?

The Prime Minister

I hope that some time I will get the right hon. Lady to understand the simple point——

Mr. Geoffrey Johnson Smith

Do not be so patronising.

The Prime Minister

I would not need to be patronising if the right hon. Lady were not artificially slow. I know that really she is intelligent, but she tries to misunderstand this point.

Mr. Fairbairn

Be your age.

The Prime Minister

There is no reason for inflation to rise into double figures if we adhere to our policies and keep increases in incomes in single figures. If I have said that once, I have [column 209]said it 20 times, and perhaps some day it will dawn into the heads of the Opposition.

Mr. Fernyhough

Does not my right hon. Friend agree that it is an admirable situation, according to what the Leader of the Opposition has said, when inflation is coming down and wages are going up? That is a wonderful society.

The Prime Minister

Yes, but we must ensure that productivity and increased production keep level with the wages that are being paid. As my right hon. Friend knows, that is the major point. Certainly, when I reflect on all the questions that I have been asked about special cases and all the people who should be allowed to escape, I must say that we have not had very much help from the Opposition in trying to keep earnings at a reasonable level.

Sir G. Howe

As earnings are rising at an annual rate of 15 per cent., and in view of the Prime Minister's misleading attempts to grapple with that fact a moment ago, does it not show that his answer of a fortnight ago was as complacent as it was characteristic?

The Prime Minister

What I think it shows, and what I hope everyone on the Opposition side will grasp, is that it is necessary to carry the consent of the people of this country. I do not believe that either side of the House stands for a statutory incomes policy. Therefore, the people of the country can decide to take decisions out of the Government's hands where the Government are not the direct controller. Where we are, as in the case of public servants, we have stood firm, without any help from the Opposition. I was pressed by the CBI and others to do that. We have played our part as a Government in trying to keep inflation down. I hope some day to have some help from the Opposition.

PRIME MINISTER

(ENGAGEMENTS)

Q2. Mr. Brotherton

asked the Prime Minister if he will list his official engagements for Tuesday 20th June.

The Prime Minister

In addition to my duties in this House, I shall be holding meetings with ministerial colleagues and others.

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Mr. Brotherton

Will the Prime Minister find time today to think about the problem of Rhodesia? Does he not think that it is time to heed the views of people of such divergent opinions as Mr. Smith and Mr. Sithole and start to support the internal settlement? Does he not agree that the pursuit of a vendetta against Mr. Ian Smith is no substitute for a positive policy by a Government who ought to be but are not seeking peace in Central Africa?

The Prime Minister

The answer to those questions is “No, Sir” .

Mr. David Steel

Will the Prime Minister, on the contrary, make it absolutely clear that the House of Commons has always stood by the principle that sanctions will be lifted only when majority rule acceptable to the people as a whole has been achieved? Does he agree that the fact that some Members of the House have reneged on the commitments of their own previous Government is no reason for changing the view of the House of Commons?

The Prime Minister

I understand that that has been the view of both sides of the House, and, therefore, I assume that the hon. Member for Louth (Mr. Brotherton) is not speaking for the Opposition on this matter.

Mr. Loyden

Will my right hon. Friend consider the still unacceptable level of unemployment? What plans are there, in view of the present rate of inflation, to begin to expand the economy in order to provide employment in the areas which at the moment have high levels of unemployment?

The Prime Minister

The figures for unemployment, as my hon. Friend may have seen, although in gross total they are higher, reflect the number of school leavers last month. Excluding school leavers, the level is down. More important, perhaps, the number of vacancies in employment exchanges has risen, and I always regard that as a good sign. The unemployment level is still too high, but my hon. Friend will know of the steps taken by the Government through the temporary employment subsidy and of the international measures that we are trying to secure in co-operation with other major industrial countries. That is the best way, as well as keeping inflation down, to overcome unemployment.

[column 211]

Mr. John Davies

May I ask the Prime Minister to come back to the question of Rhodesia? Is he not aware that the issue of a solution in Rhodesia transcends the whole question of party relationships? Is he aware that at the moment we are in the course of losing perhaps the single greatest opportunity of achieving a solution to this problem? Can he not, please, bring his influence to bear to try to ensure that the grave suspicion which is harboured against his Government by those who have signed the internal settlement is removed, to enable a proper peaceful solution to take place?

The Prime Minister

I am grateful to the right hon. Gentleman for what he said about the significance of this issue transcending the parties. He is quite right. I can assure him in return that hardly a day goes by without the Foreign Secretary or myself being involved in some exchange or other in an attempt to get all the parties to this dispute together. There is no doubt that the attitude of some of the parties—I shall not particularise this afternoon—is making it difficult for them to co-operate. As far as I can see, there is no prospect of this Government or the American Government being able to enforce a settlement. However, we are constantly making moves with all the individual parties concerned to try to get them to discuss this issue and secure a settlement as quickly as possible.

Mr. Kilroy -Silk

Will my right hon. Friend say how many jobs would be lost if the Opposition's proposals to cut public expenditure were introduced, and how many kidney patients would suffer if the suggestion by the Leader of the Opposition when she was in the United States that we should not spend any more money on kidney machines were carried out?

Mrs. Thatcher

indicated dissent.

The Prime Minister

I am unable to give such figures, but it is time that we had a clear statement from the Opposition about whether they wish to decrease or increase public expenditure. I have here a clear list of additional expenditure that the Opposition want to undertake, but they go on pretending to the country that they wish to cut public expenditure. Which is it?

[column 212]

Q3. Mr. Temple-Morris

asked the Prime Minister if he will list his official engagements for Tuesday 20th June.

The Prime Minister

I refer the hon. Member to the reply which I have just given to the hon. Member for Louth (Mr. Brotherton).

Mr. Temple -Morris

May I return the Prime Minister to the subject of inflation, because two weeks ago he clearly informed the House that there was no reason why single-figure inflation could not continue indefinitely if he were able to continue his policies? Does he now agree, since he now knows the facts, that wage rates are running at 15 rather than 10 per cent., that unemployment is up and that the matter is far more complicated? Will he tell the whole truth to the House and to the country as to the prospects of phase 4 when phase 3 has already failed?

The Prime Minister

I understand the hon. Gentleman's gleeful gloom when he thinks that phase 3 has failed. It is understandable that he should want it to fail. If it fails, he, with others, will have helped to make it fail. But I do not think that we should accept one month's figures annualised as being necessarily the true reflection of the situation. For example, 800,000 building workers have today settled for 9.75 per cent. That is a most significant addition to the present statistics. Although, as I have said on a number of occasions, I believe, with regret, that the figure will be above 10 per cent., it may well not reach the annualised total suggested by the hon. Gentleman. I still have considerable hopes for phase 4, but whether or not my hopes are justified makes no difference to the need for the Government to state their position. I promise the hon. Gentleman that that will be done clearly, truthfully and without regard to any of the consequences.

Mr. Edwin Wainwright

Will my right hon. Friend try to find time today to contact President Carter? If he finds that most inconvenient, will he endeavour to do so at least before 13th and 14th July, when President Carter is to visit Germany? Will he impress upon the President that it is time that the United States, Germany and France helped this country by reflating their economies so that there could be an improvement in the standards of the Western world?

[column 213]

The Prime Minister

I shall not be contacting President Carter today, but I shall be visiting New York, with the permission of my colleagues, next Monday in order to receive the Hubert Humphrey Memorial Award. I hope to have conversations with President Carter then. I trust that we shall be able before 13th and 14th July to work out a mutually agreeable package on growth and the other issues that are now facing us.

NATIONAL HEALTH SERVICE

(SECRETARY OF STATE'S SPEECH)

Q4. Mr. Michael Latham

asked the Prime Minister whether the public speech by the Secretary of State for Social Services in Harrogate on 5th June 1978 about the Health Service represents the policy of Her Majesty's Government.

The Prime Minister

Yes.

Mr. Latham

Is the Prime Minister aware that the whole House will regret that the Secretary of State is in hospital and wishes him a speedy recovery? Was it not extraordinary that the Secretary of State made such a complacent and inadequate speech to the nurses on that occasion that he had to send a telegram of apology three days later?

The Prime Minister

That is not my understanding. I have read the speech and the telegram. I do not know whether the hon. Gentleman has done both or either. My right hon. Friend said that he wished that there had been more time for questioning and that his speech therefore should have been cut a little shorter. That is a very different matter from what the hon. Gentleman suggested. I dare say there is none of us in the House who has not at times regretted that one's speech was overlong. Certainly I have.

Mrs. Castle

Is my right hon. Friend aware that, far from a Conservative Government increasing their expenditure on the National Health Service, thus strengthening the Service, they would actually reduce such expenditure by, according to the right hon. Member for Leeds, North-East (Sir K. Joseph), setting up two Health Services, one privately financed for those who could afford it and with a residual and inferior State service for the rest? Is not this question another example of Tory hypocrisy?

[column 214]

The Prime Minister

Yes. My right hon. Friend would not expect me to agree with that extreme language. It is true that the Opposition were given the chance to spell out their policy on 20th April. However, the questions were never answered. Perhaps we shall get an answer now. Does the Conservative Party, if it is ever elected to govern, propose to bring in new charges for those who go to see a doctor? Does it propose to bring in new charges for being in hospital? Does the right hon. Member for Wanstead and Woodford (Mr. Jenkin)—[Hon. Members: “Reading.” ]—stand by his exact words, which naturally I read when I quote:

“We have to live within”

the amount that is already being given on the National Health Service

“and there is no possibility of extra money” ?

Which is it?

Mr. Patrick Jenkin

As Prime Minister's Question Time is the time for the Prime Minister to answer questions, is he able to answer the question whether the National Health Service cash limits will have to bear the employers' national insurance surcharge of £100 million? If that is so, is not that £50 million up last month and £100 million down this month? If that is not so, why on earth cannot the Government answer the question and make that clear?

The Prime Minister

I recognise the right hon. Gentleman's embarrassment about these matters. The cost to the National Health Service this year will be about £44 million. The increase will not affect the finances of health authorities until mid-November. Therefore, there is no need at this stage to inject any additional money or to amend the cash limits.