WAGES AND INFLATION (PRIME MINISTER'S SPEECH)
Q1. Mr. Neubert
asked the Prime Minister whether he will place in the Library a copy of his speech to the Confederation of Shipbuilding and Engineering Unions at Eastbourne on 30th June concerning wages and inflation.
The Prime Minister (Mr. James Callaghan)
I did so on 6th July.
Mr. Neubert
Does the Prime Minister recall that in that speech he spoke of Socialism in action? Where does he rank the doubling of prices in the Government's achievements, and why does he resolutely refuse to forecast inflation beyond the end of this calendar year?
The Prime Minister
The hon. Gentleman is quite right. What I said I thought was Socialism in action was when the wage earners of this country voluntarily accepted restraint on their wages, in order that the pensioners of this country could have an increase that was far bigger than the increase in wages because it was related to price increases. That is my definition of Socialism in action—when the strong stand back to help the weak.
Mr. Ashley
Is the Prime Minister aware that any calls for wage moderation are bound to be unpopular but that the response that he has received from Sidney Weighell and other trade union leaders proves that his courageous and very brave stand demanding wage moderation will have a constructive response from the trade unions? The Opposition are bound to oppose it because they are constantly seeking popularity.
The Prime Minister
The Government's proposals as to what can best be afforded in the way of increased earnings in order to maintain our standards of life will, I hope, be published tomorrow, and, subject to the will of the House and the Lord President's announcement on business, I hope that we can have a full debate on the matter next week. Then, perhaps, we shall learn the attitude of the Opposition.
Mrs. Thatcher
Now that we know that Denis Healeythe Chancellor of the Exchequer is work[column 780]ing on the assumption that on his policies unemployment will rise to 1.7 million, will the Prime Minister say whether he is working on the same assumption or a different one?
The Prime Minister
That is not correct. The figures that are included in order to estimate what public expenditure is likely to be over the next three or four years are not forecasts of unemployment. [Interruption.] The hon. Gentleman is very swift this afternoon. They are assumptions that can be altered by policy changes. Indeed, since that figure was published last autumn and sent to the Government Actuary, it has already been twice revised downwards and the new figures have also been published. These variables are so great that they give a spurious precision to any idea that one can attempt to forecast unemployment two or three years ahead.
Mrs. Thatcher
Does not the Prime Minister recall what the Chancellor of the Exchequer said during the last election campaign, when all his speeches were euphoric—that any party which contemplated unemployment at a level of 1½ million was a party unfit to govern? Is it not time that he took his own medicine?
The Prime Minister
Yes, Sir, I think that it is true that a level of 1.5 million is unacceptable to everybody in this country. What I also know is that if the policies that have been put forward from the Opposition Dispatch Box were carried out, taking away grants and subsidies as well as other measures, there is no doubt that unemployment in this country would be very much higher than it is.
Mr. Whitehead
Will my right hon. Friend take heart from the opinion poll today showing that there is a three-to-one majority in support of his economic policies? Is this not a clear indication that the public can distinguish between a concerned approach, such as my right hon. Friend has, and the kind of callow carping that we get from the Opposition?
The Prime Minister
I do not know whether it is callow carping or an opportunistic attempt to take advantage of every grievance that exists. Whichever way it is, it contrasts with the steady policy that the Government are following in this matter. That is why there is continuing support for the Government.
[column 781]PRIME MINISTER
(ENGAGEMENTS)
Q2. Mr. Crawford
asked the Prime Minister if he will list his official engagements for Thursday 20th July.
The Prime Minister
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.
Mr. Crawford
Now that the Scotland Bill is going through its penultimate stages, may I ask the Prime Minister to take time off today to give us a precise date for the referendum on the Scottish Assembly? Is he aware that the SNP will press him all the way on this matter?
The Prime Minister
Was the hon. Gentleman saying that he would press the Government or support the Government? I did not quite catch it.
Mr. Crawford
Can I tell the Prime Minister, Mr. Speaker——
Mr. Speaker
Order. Will the hon. Gentleman quickly put his supplementary question again so that the Prime Minister can hear it?
Mr. Crawford
Will the Prime Minister give a precise date for the holding of a referendum on the Scottish Assembly?
The Prime Minister
I was hoping to hear from the hon. Gentleman that I was to get some support from the Scottish National Party, which would be a change considering the number of times that it has voted with the Conservatives with the aim of utterly destroying the Bill which would give Scotland an Assembly. Of course we shall give urgent consideration to fixing the date of a referendum as soon as the Bill is through. Orders will have to be laid, as I understand it, which will need the consent of both Houses before we can move to that stage.
Mr. Noble
Will my right hon. Friend discuss with the Secretary of State for Education and Science and with officials of the education authority in Kingston-upon-Thames the interesting referendum conducted among parents by that education authority about secondary education [column 782]which showed a desire for reorganisation to a non-selective system? Will he find ways and means of ensuring that these democratically expressed wishes are carried into effect as soon as possible?
The Prime Minister
I am interested to hear of that conclusion. It bears out the policy of the Government—namely, that the people of this country, and parents in particular, want a system of comprehensive education. I am glad to say that since we assumed office the number of children enjoying comprehensive education has increased from 60 to 80 per cent. At the same time, the number of pupils per class has declined and the number of school teachers has increased.
Mr. Maxwell-Hyslop
As it is the Government's policy to encourage early retirement, and as the Prime Minister has now passed retirement age by two years, may I ask whether his engagements for today include a visit to the Palace to inform Her Majesty when he intends to retire and whether he will suggest as his replacement his ageing Leader of the House or the electrifying Secretary of State for Energy?
Mr. Speaker
Order. Perhaps I ought to declare an interest here.
Mr. McNamara
In view of my right hon. Friend's well-known concern for the low-paid and his earlier statement about helping the weak, may I ask whether he will be having any discussions today with the Lord Privy Seal or the Minister of State, Civil Service Department about the industrial civil Service Department about the industrial civil servant, who is very lowly paid? Is he aware that a married man with two children—an employee of the Government on the lower band—can qualify for family income supplement? Is this not a matter which the Government should be considering?
The Prime Minister
The Lord Privy Seal is ready, through his officials or, indeed, directly, to meet the unions concerned on these matters, but there must be agreement this year to accept the guidelines that the Government laid down 12 months ago in relation to pay increases. Any rearrangement that can be made within that level can, of course, be agreed, but we cannot agree to exceptions. We have fought too hard a battle to give way at this stage.
[column 783]Q3. Mr. Gordon Wilson
asked the Prime Minister if he will list his official engagements for Thursday 20th July.
The Prime Minister
I refer the hon. Member to the reply which I have just given to the hon. Member for Perth and East Perthshire (Mr. Crawford).
Mr. Wilson
Will the Prime Minister take more time today to reconsider the answer he gave just now in relation to the referendum? It is quite obvious that the Government have not made up their minds and are backsliding. Will he kindly give the House the date of the referendum for which the Scottish people are waiting?
The Prime Minister
It is a very odd form of backsliding to have to introduce a guillotine and to keep the House sitting late at night in order to get the Bill so that the people of Scotland can take their own decision.
Mrs. Winifred Ewing
That is not an answer.
Hon. Members
It was not a question.
Mr. Buchan
In considering the referendum which the SNP is so keen about will the Prime Minister consider including a question asking whether the Scottish people would like the devaluation of the green pound on the lines suggested by the SNP this afternoon, which would mean another 75p on the cost of the family shopping basket by the end of the year?
The Prime Minister
I am sure that that question, if put, would get a resounding “No” from the canny and thrifty Scots. That is why the SNP is losing ground so fast nowadays.
Q4. Mr. Wyn Roberts
asked the Prime Minister if he will list his official engagements for 20th July.
The Prime Minister
I refer the hon. Member to the reply which I gave earlier today to the hon. Member for Perth and East Perthshire (Mr. Crawford).
Mr. Roberts
When the Prime Minister was talking about the estimated 1.7 million unemployed next year, he said that the figure had been revised downwards twice. Could he now say what, in the Government's opinion, is the latest expected unemployment figure for next [column 784]year? Could he give as free an assurance as he has given about the rate of inflation about the expected rate of unemployment, and could he say how dependent that unemployment figure is on a 5 per cent. rate of wage increases in phase 4?
The Prime Minister
I cannot give the answers to all those questions, but I can tell the hon. Gentleman that the revised assumptions, which are, I understand, technically different from forecasts, were published in May of this year, so I suppose the Opposition will have seen them by now. As to whether the assumptions are dependable, that is a fact on which no one can comment, because——
Mr. Tebbit
Give us the numbers.
The Prime Minister
The hon. Gentleman did not ask the supplementary question—a number of differing factors make up the level of unemployment, as the hon. Member for Conway (Mr. Roberts) knows. If, for example, world trade improves—as I trust it will, following our discussions at Bonn last weekend—that in itself will have a favourable influence, and there are other matters of this sort.
Mr. Newens
Has my right hon. Friend given any further thought to the deplorable sentences imposed on Soviet dissidents? Does he not agree that it would, even in these circumstances, be totally wrong for us to lessen our efforts to achieve detente? Would it not also be desirable that we should be far more consistent in our denunciation of the abuses of human rights in places like Iran, Indonesia and Saudi Arabia, about which so many right hon. and hon. Gentlemen are silent?
The Prime Minister
The Government and the Foreign and Commonwealth Secretary made their views known to the Soviet Government about the sentences that have been passed. I agree with my hon. Friend that it is necessary, in the interests of world peace, to pursue the prospects of getting agreements both on a comprehensive test ban treaty and on strategic arms limitation talks. Nor do I rule out, as some seem to do, direct contacts between Soviet citizens and organisations and our own citizens and organisations. I believe it is valuable, provided that we make clear to Soviet organisations what our position is, as I assume [column 785]the right hon. Lady the Leader of the Opposition did yesterday when she met the Soviet Ambassador. If she was not contaminated, I do not believe anybody else need be.
Mr. Ian Lloyd
Since the Prime Minister may be presumed to be interested in the advance warnings which are available of the sort of catastrophe which arise from advanced forms of Socialism, is there any possibility of his having an early conversation with his opposite number, the Prime Minister of Sweden, to discuss with him the appalling financial consequences for that Government of the present attempts to salvage the shipbuilding industry?
Hon. Members
It is a Tory Government.
The Prime Minister
As far as I can remember, the Swedish shipbuilding industry prospered when there was a Socialist Government and has come to grief now that there is a Conservative Government. I think the same would be true in this country.