PRIME MINISTER
(ENGAGEMENTS)
Q1. Mr. Shepherd
asked the Prime Minister if he will list his official engagements for Tuesday 21st November.
The Prime Minister (Mr. James Callaghan)
In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others. This evening I hope to have an audience of Her Majesty The Queen.
Mr. Shepherd
During the course of the Prime Minister's visit, will he pause to reflect upon the rather wretched Ford strike? Does he not agree that Ford has no part in this strike in reality, and that apart from the £450 million that it will have cost the company in lost revenue, the cost to public funds has been enormous? Will he now give an undertaking that, provided Ford continues to quote better deliveries and lower prices, he will not give instructions to his Departments that they are forbidden to purchase Ford vehicles? If not, will he say why not?
The Prime Minister
I often reflect on the Ford strike and the consequences of it, including the fact that, if the workers accept the latest offer—that is, their present rate of pay plus 17 per cent.—it will probably mean that over the next 12 months they will be no better off than if they had avoided a nine-weeks' strike and had accepted 5 per cent. I often reflect on that.
I shall not give any instructions on this matter. If there is a decision by the Government to refrain from purchasing any particular products, as they are entitled to do as a customer, the firm in question will be notified in the first place.
Mr. Watkinson
Has my right hon. Friend had an opportunity to contact Chancellor Schmidt about his recent speech on the expansion of powers of the European Assembly? Will he say that Her Majesty's Government remain determined to keep to the undertaking, made [column 1087]during the debate on the direct elections? Will he say to Chancellor Schmidt that we do not agree with what he has said?
The Prime Minister
No, Sir, I have not contacted Chancellor Schmidt about it. I dare say there will be some discussion on the matter at the next European Council. We shall continue to enunciate the policy, as my hon. Friend says, that we have enunciated so far. Whether there is any change in Chancellor Schmidt 's position will become clear when we have our discussions.
Mrs. Thatcher
May I ask James Callaghanthe Prime Minister a question about the bakers' strike. Is he aware that the general secretary of the Bakers' Union is threatening those who stay at work that he will use the closed shop legislation to see that they are sacked? Will the Prime Minister condemn those threats?
The Prime Minister
I have been checking and it is clear that the union cannot use any closed shop legislation for this purpose. The closed shop is a matter for agreement between the employers and the employees. I understand that the employers have said that they would not insist on a closed shop in this particular case.
Mrs. Thatcher
So the Prime Minister clearly condemns those threats and the use of his own Government's legislation in that way?
The Prime Minister
At the risk of misrepresentation by the right hon. Lady, which I have no doubt I shall get, I do not believe that it is sensible for me to utter obiter dicta on every industrial dispute that arises and so inflame what is taking place, and I refuse to do so.
Mr. Loyden
Does not my right hon. Friend agree that, if Ford had settled in the early days of the negotiations, that would have avoided a dispute? Bearing in mind that Ford has made a statement that it could absorb the increase without increasing prices, would not that have been a better way of dealing with the problem?
The Prime Minister
I have not conducted these negotiations with the Ford company and I do not think that the House of Commons is a very good place in which to conduct them—nor, indeed, at [column 1088]the Dispatch Box. Increases in earnings have certain profound consequences on the rate of inflation, on growth and on investment. It is my responsibility to point that out. It is the responsibility of those who negotiate on both sides of industry to see how those particular national consequences fit their individual situations.
SECRETARY OF STATE FOR DEFENCE
Q2. Mr. Pattie
asked the Prime Minister if he will dismiss the Secretary of State for Defence.
The Prime Minister
No, Sir.
Mr. Pattie
Is the Prime Minister aware that, thanks to his Government, this country can no longer maintain its commitments to NATO in full? Is he further aware that the Royal Air Force is short of 200 pilots, that skilled men are leaving the Services at record rates and that our soldiers cannot even get enough for such items as boots and pullovers? If we are to go on with this Mad Hatter's tea party, will he agree to pay £7,000 to get rid of the dormouse?
The Prime Minister
I really begin to wonder whether the hon. Gentleman is in the pay of the Soviet Union. If I did not know that he was vice-chairman of the Conservative Party's defence committee, I should believe that he was, because rarely have I heard such a travesty of the arrangements which affect our Forces today. It is well known that the Royal Air Force is much stronger now than it was five years ago. It is well known that the Phantom aircraft which have replaced older aircraft are far more efficient, and there are more of them.
Of course, the hon. Gentleman would like to see many of the other factors which he quoted improved. But it does no good to the morale of the Armed Forces or indeed—I do not think that the Soviet Union will believe it—to other people's appreciation of our efforts to have these things said. [Interruption.] The right hon. Member for Chesham and Amersham (Sir I. Gilmour) will get his chance later, subject to Mr. Speaker. I always like to listen to the intellectual side of the Conservative Party, or perhaps I should say intellectual and liberal.
[column 1089]Mr. Heffer
Which one is that?
The Prime Minister
The hon. Member for Chertsey and Walton (Mr. Pattie) will be aware that there has been an improvement in recruitment, but it is unsatisfactory that too many experienced men are now leaving the Forces. I hope that can be corrected.
Mr. James Lamond
Did the Prime Minister hear the Secretary of State for Defence answer questions about the Harrier aircraft a few minutes ago? If so, does he agree that, if we sell these aircraft to the Chinese People's Republic on the basis that it is the enemy of the Soviet Union, that will make meaningful disarmament talks between ourselves, the United States and the Soviet Union more difficult? Does my right hon. Friend recall the importance that he placed on these talks when he made his excellent speech at the United Nations special session on disarmament?
The Prime Minister
The position about the supply of defence equipment is extremely political. Therefore, we consider it very carefully in conjunction with our allies. However, we would not allow our relations with any other country to be dictated by a third party. If we are discussing these matters, I can understand the reaction of the United States, for example, in the matter of the supply of MIG 23s to Cuba. All these sensitivities have to be taken into account. I made clear to the Chinese vice-premier that we did not wish to become just an arms supplier to China but that there were big and important commercial undertakings that we would like to explore. I am glad to say that he appreciated that particular matter. We handed to him an agreement, which I understand is to be initialled, which will provide for about $10 billion worth of trade between both our two countries by 1985. I think that is as important as the supply of Harriers.
Sir Ian Gilmour
Does the Prime Minister agree that it is bad for the morale of the Armed Forces for them to hear the Prime Minister once again exhibit his complete ignorance of what goes on in defence? Is he aware that his Government have not bought any new Phantoms but that, under him, they have just changed their role? Therefore, his answer [column 1090]was totally inaccurate. What are the Government proposing to do about preventing or putting a stop to the present disastrous exodus of highly skilled and trained men from all three Armed Forces because they are not being paid sufficient money?
The Prime Minister
I understand that the exodus of some of the skilled men relates to the fact that they have not yet fully appreciated that there will be a substantial increase in pay in April 1979 followed by another in April 1980 to bring them fully up to the general level of civilian pay. It is important that should be understood.
As regards my ignorance of military matters, I fully understand that I do not have the advantage that the right hon. Gentleman has had for some time of the assistance of the hon. Member for Stretford (Mr. Churchill), but that advantage has now been removed.
PAY POLICY
TUC TALKS)
Q3. Mr. George Rodgers
asked the Prime Minister if he can now make a statement on the discussions that have taken place with the Trades Union Congress representatives about wage guidelines and inflation.
The Prime Minister
I refer my hon. Friend to the statement made by my right hon. Friend the Chancellor of the Exchequer on 15th November.
Mr. Rodgers
Does my right hon. Friend agree that many trade unionists are prepared to accept that an incomes policy is an important ingredient in the control of inflation ingredient in the control of inflation but that they are not prepared to tolerate wage restraint in isolation? Does my right hon. Friend further agree that the control of wages, prices, profits and investments are all part of the mix and that attention should be focused on elements other than income if we are to reach an understanding with the trade union movement?
The Prime Minister
Yes, Sir, I would certainly accept that. As my hon. Friend knows, it has never been part of my approach to this matter that incomes or earnings are the sole cause of inflation—many other elements enter into it—or that we should neglect the factors to [column 1091]which he referred. But he will allow me to remind, not him perhaps, but others, that inflation is now half of what it was a year ago when the Government called for a 10 per cent. increase in national earnings. That was one of the reasons why it seemed appropriate that we should ask for this ambitious objective on this occasion.
Secondly, although there can be individual instances, in general I do not think that profits are too high at the moment if we are to get an appropriate level of investment. I am glad to say that investment is being maintained at a high level.
Mr. Cormack
Does the Prime Minister agree that trade unionists living in rural areas in particular are very concerned about the price of petrol? Will he confirm or deny the stories circulating today that the Government intend to abolish the road fund licence?
The Prime Minister
I believe that there is a Written Answer on this matter. [Interruption.] Perhaps hon. Gentlemen might care to hear the end of my sentence. It is not unusual to have Written Answers on this matter.
Mr. St. John-Stevas
On this major matter?
The Prime Minister
I am delighted to hear the new Leader of the House in good voice. We look forward to the touch of elegance which he will add to our proceedings from now on. Perhaps I can break the veil of secrecy by saying that the proposal will be spread over a period from now until 1983, and I have a feeling that there will be a substantial number of opportunities to ask questions of this Government between now and then.
Mr. Mellish
I recognise that in the past three or four years the trade union movement and the Government have produced between themselves and employers a result which has been greatly to the benefit of this country; and I understand the Government's present attitude. But does my right hon. Friend appreciate that it is difficult for many strong supporters of the Government to talk in terms of restraint on wages when, by direct Government policy mortgages are allowed to rise to their present level thereby [column 1092]creating problems outside the control of ordinary people? People are prepared to co-operate, but they want to see some action taken the other way.
The Prime Minister
If there had not been a certain amount of uncertainty about the prospects for this winter, mortgage interest rates would not have had to go up. All these things interact on each other. As my right hon. Friend said, it may be difficult to understand, but the general understanding is that if we do not succeed in one part of the economy, we have to take countervailing action in another part. I believe that is being understood more by the public generally. The best possible way during this winter is to have a substantial moderation in the level of wage settlements. If we do that, our present success in economic growth, in employment, with unemployment going down again this month, in the retail price index, in exports and in investment—that is the result of what has happened during the past 12 months—will continue.
Mr. St. John-Stevas
May I thank the Prime Minister for having, no doubt inadvertently, appointed me as a member of his Government, but let me assure him that I would rather be a shadow in the house of the Lord than a leader in “the tents of ungodliness” .
The Prime Minister
I should like to say with what delight we welcome the hon. Gentleman to his new post. I have a feeling that there will be a great deal of sport in the House over the next few months, or as long as he lasts. His ambition is likely to remain fulfilled for a very long time.
Mr. Anderson
On a point of order, Mr. Speaker.
Mr. Speaker
Order. Unless points of order arise out of Question Time, I normally take them after statements.
Mr. Anderson
My point of order arises out of a reply given by my right hon. Friend the Prime Minister, who confirmed that the Government have decided to announce, by means of a Written Answer, their decision to phase out the vehicle excise duty. That subject is clearly of major importance, not only to West Wales and rural areas but nationally. It seems wrong that there is no immediate opportunity for the [column 1093]House to question the appropriate Minister on the proposal.
Mr. Speaker
That is not a point of order. The Government of the day are always free to choose their own way of giving information to the House. Obviously we cannot discuss it now, but there will, no doubt, be plenty of opportunities later.
Mr. Norman Fowler
Further to that point of order, Mr. Speaker——
Mr. Speaker
Order. I have already said that it is not a point of order. I have ruled, I hope quite clearly, that it is not a point of order for me.