TUC
Q1. Mr. Robinson
asked the Prime Minister when he plans next to meet the TUC.
The Prime Minister (Mr. James Callaghan)
I meet representatives of the general council from time to time, at [column 210]National Economic Development Council meetings and on other occasions. Further meetings will be arranged as necessary.
Mr. Robinson
I am grateful to the Prime Minister for that reply. When he next meets the TUC, will he pursue with it the argument that any form of incomes policy is possible only if we have economic growth and that economic growth is totally incompatible with the European monetary system? Does he agree that it becomes him, above all, as a Prime Minister who has taken so many clear-cut decisions on so many difficult issues, to do the same with this difficult issue, to forsake the straddling position of the EMS and to say that it is in our national interest to stay out?
The Prime Minister
That was a slightly complicated question. But I agree with the early part of my hon. Friend's remarks, namely, that growth and an increase in incomes are interrelated. It is not without significance that this year, because of the restraint in the growth of incomes, industrial production compared with the corresponding quarter of last year is going ahead at about 4 per cent., which is the best for many years.
As to the second part of the question, this depends upon the nature of the scheme about which my hon. Friend is talking. It is a scheme which needs to be symmetrical and which will have to wrap up both strong and weak currencies if it is to encourage growth. I do not know whether the arrangements which have been published so far achieve that end.
Mrs. Thatcher
Does not James Callaghanthe Prime Minister recognise the blatant injustice of imposing sanctions on Ford, when that company has already suffered the worst strike in its history because it has tried to support the Prime Minister's rigid 5 per cent. pay policy? Is he not aware that the Ford company has one of the best records in Britain for providing jobs, investment and exports and that his decision can only damage all three?
The Prime Minister
When the right hon. Lady asked me a similar question last week I said that I recognised the dilemma for Ford. But there is an overriding national interest here. We are not ready to see the big fish get away while we catch only the tiddlers. As to the [column 211]TUC, I do not propose to buy any motor cars from it.
Mrs. Thatcher
Is it not in the overriding interest of this country to have companies which provide jobs, exports at competitive prices nd investment? Does the Prime Minister recall that about a year ago he was very anxious to persuade Ford to go to South Wales and set up a new plant there? He said that Ford had demonstrated its confidence in Britain and that he must do all that he could to repay that confidence.
The Prime Minister
That is why we are pursuing our present policy. I promise the right hon. Lady that if every other firm pays an increase of between 16 per cent. and 17 per cent. to its employees——
Mr. Nicholas Winterton
Out of profits.
The Prime Minister
—Ford will not be able to hold its prices for very long and we shall find the price of Ford cars going up substantially whether or not Ford wants them to.
Mr. Bagier
Will my right hon. Friend ignore the hysterical shriekings of the Leader of the Opposition? When he next meets the TUC, will he ask it to think again about pay policy? Will he ask it whether it really believes that increases on the scale given by Ford, and other increases in the pipeline, are good for Britain, for the unemployed and for people who suffered from the steep rise in the inflation rate between 1974 and 1977?
The Prime Minister
The answer to the first part of my hon. Friend's question is “Yes” . On the latter part, I totally agree. That is why we will pursue this policy, and pursue it as long as we have public support, which at present is overwhelming. Public opinion does not want to see exceptions made just because a company is large or multinational. Everyone will be treated in the same way.
PRIME MINISTER
(ENGAGEMENT)
Q2. Mr. Hannam
asked the Prime Minister if he will list his official engagements for Tuesday 28th November.
[column 212]The Prime Minister
In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others. This evening I shall be host at a dinner in honour of the Prime Minister of Luxembourg.
Mr. Hannam
Will the Prime Minister take time today to explain why in February 1974 he went around the mining valleys entreating the miners to smash the then Government's pay policy, saying that 16 per cent. was not far too much and that pay restraint to contain inflation was, to use his words, “utter drivel” ? Is he not ashamed of that statement today?
The Prime Minister
I have refreshed my memory. It is clearly one of the catchphrases of the Conservative Party. I made clear at the time that because of the increase in money supply under Lord Barber and the way in which price increases were taking place—[Interruption.]
Mr. Speaker
Order.
The Prime Minister
It is all right, Mr. Speaker, I know that Conservative Members have to let off steam now and again. The fact is that price increases were taking place at double the rate of today. Therefore, it was not possible to expect miners or anybody else to hold down their wage claims. Today we are in a different situation. Wages went ahead last year at twice the rate of prices. We are now trying to get these into a proper relationship with each other.
Dr. McDonald
Will my right hon. Friend take time to study the wages council award for workers in licensed hotels and restaurants? This gives increases which will raise the highest paid in that area to only £42.80 a week and the lowest paid to £33.20. That is well below the Government's minimum wage target. What action will my right hon. Friend take to ensure that employers on wages councils pay their workers at least the minimum wage set out in the White Paper?
The Prime Minister
This is not a matter to which I have directed my attention today. It is not the case that the Government have laid down a minimum wage. We have proposed a figure of which negotiators should take account when fixing their rates of pay. Whether [column 213]this particular wages council has done so I am not aware, but I am sure that my right hon. Friend, who has just emerged from 45 minutes' questioning, could give my hon. Friend the answer.
Mr. Marten
If the Prime Minister has a moment to spare today will he read the document “Britain's New Deal in Europe” on which he and too many of my right hon. and hon. Friends campaigned in the referendum? The document refers, on page 9, to the fact that fixed exchange rates put jobs at risk. Will he bear that in mind when considering the European monetary system?
The Prime Minister
I should very much like to examine that statement. My own view, held for many years, is that fixed exchange rates are far better than variable exchange rates. The experience of the last few years has surely demonstrated that. Both have their disadvantages, but it depends upon the conditions on which the exchange rates are fixed as to whether they are successful.
Mr. Frank Allaun
In his duties today, will my right hon. Friend consider immediate plans for introducing grants for 16 to 19-year-olds staying on at school? Would not that help to reduce unemployment? Is not further education far better than the waste, hopelessness and humiliation of “signing on” ?
The Prime Minister
A Bill will be introduced on education which will include references to this principle. However, I cannot undertake that we can meet all the priorities which everyone is thrusting at us at present. There is a fixed limit on public expenditure, to which the Government intend to hold. That is the way to keep sterling stable, preserve jobs and keep prices down.
Mr. Prior
If the Prime Minister is concerned about sanctions and seeing that justice is done to all, including Ford, will he take time off today to write to the TUC leaders asking them why their own increases asking them why their own increase are up to 20 per cent. this year and 60 per cent. over three years? Will he report back to the House what action he intends to take against them?
The Prime Minister
I understand that the same question was put to my right hon. Friend the Secretary of State for Employment.
[column 214]Mr. Prior
He did not answer it.
The Prime Minister
This seems to be a matter on which common sense should apply, but I do not see much sign of it on the Opposition Front Bench at present.
CHANCELLOR OF THE EXCHEQUER
Q3. Mr. Rost
asked the Prime Minister if he will dismiss the Chancellor of the Exchequer.
The Prime Minister
No.
Mr. Rost
Why does the Prime Minister punish innocent victims like Ford with penal sanctions, rather than punishing the guilty party, in this case, his own Chancellor of the Exchequer, who created inflation by overspending and overborrowing?
The Prime Minister
I do not think that Ford is either guilty or innocent in this matter. Nor is the company being punished. We intend not to purchase vehicles from it. Unless the Government are to be compelled to purchase vehicles from a particular company—and I must say that this would be a new rule—Ford is not being punished. Ford is only the example of the national dilemma about which people must make up their minds. Do they want prices kept down or not? The Opposition clearly do not. Therefore they are ready to support every inflationary wage increase that is advanced.
Mr. Canavan
Instead of sacking my very good friend the Chancellor of the Exchequer, will the Prime Minister organise a slight Government reshuffle? In the interests of official secrecy will he make the Chancellor of the Exchequer the PPS to the Secretary of State for Energy, and in the interests of open democracy will he make the Chancellor of the Exchequer?
The Prime Minister
If my hon. Friend is not careful he might very well find himself in that position. But I must say that there has never been anybody who has borne this task for so long with so much physical and intellectual stamina as has my right hon. Friend the Chancellor, and the country owes him a debt of gratitude.
[column 215]Mr. Peter Bottomley
Will the Prime Minister recognise that one of the difficulties facing the Chancellor of the Exchequer is that the Government have decided that it is in the national interest to keep down inflation and that it is impossible to do that if pay increases rise about 5 or 10 per cent? On the other hand, however, the Labour Party and the TUC conferences have both voted against this policy. Therefore, from where does the Prime Minister get his support?
The Prime Minister
I am grateful to the hon. Member for the information that he has given me. The last time that I received support was on the vote on the Queen's Speech, which is the way in which Governments always derive support. It was a big majority then, despite the Opposition's attempt to try to remove the Government.
Mr. Molloy
Will the Prime Minister and the Chancellor see the leaders of the TUC and the CBI and ask them to state clearly whether they recognise that the policy of the Leader of the Opposition is to have a wages explosion as a matter of political expediency? The right hon. Member for Lowestoft (Mr. Prior) only last week on LBC was encouraging the CBI not to co-operate with the Government. The joint policies of the Leader of the Opposition and the right hon. Gentleman spell grave disaster for Britain and the British people if the Conservatives ever come to power.
[column 216]The Prime Minister
I am not sure whether the Leader of the Opposition wants a wages explosion——
Mrs. Thatcher
Of course not.
The Prime Minister
The right hon. Lady interjects “Of course not” and I accept that. In that case, I do not understand how a policy of trying to work to an average can succeed in keeping inflation down.
Mr. Donald Stewart
Is the Prime Minister aware that any action against Ford is grossly offensive to the democratic process, because the company has taken no action against any statute law in the United Kingdom? What legal or moral basis does the right hon. Gentleman have for taking these proceedings against the company?
The Prime Minister
I do not want to argue morality at the Dispatch Box. It is not a moral question, but a question of how we manage to ensure that the jobs of the people of this country are safeguarded, that inflation does not get out of hand and that prices do not go up. On that basis, we have decided to take certain actions. I am certain that we are right and that, despite the dilemma, the public understand, why we are doing it. That is why they continue to support us.