PRIME MINISTER
(Engagements)
Q1. Mr. Skinner
asked the Prime Minister if she will list her official engagements for 30 October.
The Prime Minister (Mrs. Margaret Thatcher)
This morning I presided at a meeting of the Cabinet. In addition to my duties in this House I shall be having further meetings with ministerial colleagues and others.
Mr. Skinner
Quite apart from the question of who won at the Cabinet meeting this morning, will the Prime Minister confirm that she is proud that her crony Lord Matthews of Trafalgar House wants to haul down the British flag in order to pursue the right hon. Lady's low-pay policy? Did Lord Matthews get the wage-cutting idea from the Quinton Hazell subsidiary in South Africa—of which the right hon. Lady's husband is a director—which is paying starvation wages? What steps will the Department of Trade take to ensure that the code is no longer infringed.
The Prime Minister
On the first part of the hon. Gentleman's question, I [column 692]think that he is referring to the two Cunard liners that are to fly under different flags. I understand that it is a matter of keeping the liners competitive. If they are not competitive they might leave British ownership altogether. On the second part of his question, the reports on Quinton Hazell have been given to the Board of Trade in accordance with the voluntary code. They will be placed in the Library of the House, as is the customary practice.
Mr. Lyell
As the Cabinet rightly discusses further measures to bring public spending under proper control, will my right hon. Friend use all the weight of her authority to ensure that those measures bear upon the proper control of pay and current spending, and not on further cuts in capital expenditure, which provides jobs and investment for the future?
The Prime Minister
I agree whole-heartedly with my hon. Friend's objective. It is better to make any public expenditure economies bear on the revenue side of the budget rather than on the capital side, which often goes to the private sector. Having said that, I have to say that it is not always easy to do so. Currently, our objective is to hold public spending to the levels previously published, not to cut it overall. There are certain aspects of the programme where public expenditure is increasing sharply, which means that there will have to be reductions in other parts of the programme.
Mr. Foot
If the Cabinet this morning discussed further cuts in public expenditure, will the Prime Minister say what they are? Will she say what calculations were before the Cabinet about the further increases in unemployment that will result from such cuts?
The Prime Minister
All aspects were discussed, and are regularly discussed by the Government. I repeat that the Government's objective is to hold the public spending totals that have been published. In some ways I regret that we do not have Denis Healeythe former Chancellor of the Exchequer's objective in mind when he reduced public spending by £5 billion in one year.
Mr. Foot
As the right hon. Lady's responsible for the Cabinet, will she say what further increases in unemployment [column 693]will result from her decisions today? Has she taken into account the deepening unemployment crisis, based on the Department of Employment's figures, as described on the front page of the Financial Times today.
“Service industries hit as employment figures plunge” ?
The Prime Minister
The way to secure good longer-term prospects for jobs is to make the defeat of inflation one's top priority.
Mr. Bob Dunn
Does my right hon. Friend agree that the British people's patience would be sorely tried if yesterday's vote by British Leyland workers were to lead ultimately to industrial action? Does she accept that industrial action can only damage the improving image of British Leyland at home and abroad?
The Prime Minister
We are obviously very much concerned that just when British Leyland has a super new car, which we have all been doing our best to promote as hard as we can, there might be the threat of industrial action. We must leave this matter to Sir Michael Edwardes and the board to deal with. They have been very successful to date, and I hope that they will be successful in bringing British Leyland through this particularly difficult period. We wish the new car well.
Mr. Torney
Will the Prime Minister between her engagements today, consider the serious plight of the woollen textile industry in my constituency and the surrounding parts of West Yorkshire? It is suffering mass unemployment. Will she take some action to stop the unfair competition from abroad, including from the Common Market, which is creating this problem, and will she give aid to this important industry, to alleviate unemployment in my constituency?
The Prime Minister
We operate the multi-fibre arrangement and we increase the number of quotas where that is appropriate. At the moment there are some 400 quotas with a number of different countries. We shall continue to watch the basket regulation carefully to see whether there is any chance of applying for more. We shall need a new agreement. The present one was negotiated by the previous [column 694]Government. There will be a new agreement because we are very concerned to see that textiles have a fair chance.
2. Mr. Jessel
asked the Prime Minister if she will list her official engagements for 30 October.
The Prime Minister
I refer my hon. Friend to the reply that I gave a moment ago.
Mr. Jessel
May I remind my right hon. Friend that most of us fought the last general election on the issue of giving top priority to the conquest of inflation? Is she aware that my constituents are pleased that the cost of living is now much more stable—(Hon. Members: “Oh!” )—and that their message to her is that they want her to stick to her guns?
The Prime Minister
I am grateful to my hon. Friend. Will he please tell his constituents that the conquest of inflation must have top priority and that I shall do exactly as he says?
Mr. Bagier
Will the right hon. Lady accept that, whatever the views of the constituents in Twickenham, the views of the constituents in Sunderland, South are vastly different? In the Cabinet meeting this morning was there any discussion of the serious effect of unemployment throughout the country? Is the right hon. Lady aware that, far from being prepared to receive lectures on the economy from her, the unemployed in areas like the North-East want to know what practical action she will take to alleviate their problem?
The Prime Minister
In the longer run, good jobs must depend on the conquest of inflation. If we go the way that successive Governments have gone in the past 30 years—that is, reflating and printing money each time—we shall finish up with a higher level of unemployment and inflation. We have to break that cycle once and for all. Contrary to what the hon. Gentleman said, I believe that even in Sunderland, South the constituents prefer a falling rate of inflation to a rising one.
Mr. Rippon
Will my right hon. Friend confirm that, in the light of this morning's Cabinet meeting, control of the public sector borrowing requirement and [column 695]of the money supply remains at the heart of the Government's policy? Does she agree that the reason why both are rising so sharply is that the cost of public borrowing and the cost of unemployment are so high? That is because interest rates are so high. Are we not in danger of creating a society in which money lending is the only profitable business?
The Prime Minister
I agree with my right hon. and learned Friend that there must be no question of printing money to get an artificial boom, which would lead ultimately to hyper-inflation and higher unemployment. The Government always confirm and stand absolutely on that. We shall not go in for printing extra money. My right hon. and learned Friend knows that I am every bit as anxious as he is to try to bring down interest rates, because I much prefer them to be lower. The key to getting them down is to reduce the amount of borrowing in the economy, and for that public spending must bear its share of the blame.
Mr. Arthur Davidson
Is the Prime Minister aware that my constituents want jobs? Does she not feel ashamed sometimes that she has managed to bring record levels of unemployment to an area that has never known high unemployment? Will she stop lecturing these people about high wages, because they have never had high wages, and they are still being thrown out of work every day as a result of her policies?
The Prime Minister
I make two points in reply to the hon. and learned Gentleman. The key to better jobs lies in keeping British industry competitive with other industrial nations on the Continent. There is no way out of that fundamental truth. The second point, which illustrates the first, is that in the past three years monetary demand has increased in the economy by 50 per cent. It did not go into increased output; it went into increased prices and increased imports. That is the answer to the Labour Party's policy, which is to reflate, which would be catastrophic.
3. Mr. Adley
asked the Prime Minister if she will list her official engagements for 30 October.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
[column 696]Mr. Adley
In the light of the evidence of the increase in pacifism, as shown by the CND march the other day, and given the interest of the Soviet Union and, apparently, of certain Labour Members in British unilateral disarmament, will my right hon. Friend take every opportunity to remind those in this country who are easily led of the result of appeasement in the 1930s, and the even greater horrors and dangers of nuclear appeasement in 1980?
The Prime Minister
I believe that appeasement always has the same result. It gives encouragement to a potential aggressor. That is why this Government will never go the way of appeasement, although any Government formed by the Labour Party might.
Mr. Ernie Ross
Will the Prime Minister take time to consider the fact that the majority of people in this country believe that the decision that her Government took this week to allow prisoners in the H block cells in Northern Ireland to wear civilian clothes was both humane and wise? Does she agree that if, as a result of the hunger strike, coffins are carried out of the Maze prison into the Catholic areas, the violence and confusion that will result will be unacceptable to this country? Will she therefore take further decisions to ensure that those coffins do not have to be carried out of the Maze prison?
The Prime Minister
As I indicated last Tuesday, and as my right hon. Friend Humphrey Atkinsthe Secretary of State for Northern Ireland had indicated previously, a decision was taken before the hunger strike began to allow all prisoners in Northern Ireland to wear civilian clothes, of prison issue, in place of prison uniforms. That decision had been discussed for several months. We thought it advisable to take it before the hunger strike began. There can be no question of any concessions to those on hunger strike now that the hunger strike has begun, and I sincerely hope that they will not persist in it.
Mr. Hannam
Will my right hon. Friend take the opportunity today to point out to the Leyland workers and others in the public sector that with inflation, on a three-monthly basis, running well down into single figures over a [column 697]12-month period, in accepting a single-figure pay increase they will not necessarily reduce their standards of living?
The Prime Minister
We are all most anxious for British Leyland to succeed and for the new car to have considerable sales. It is ironic that there should be a strike threat just when British Leyland has restored its share of the market and is up to about 23 per cent. We earnestly hope that that strike will not come about. We shall have to leave the negotiations to the management of British Leyland to secure that end.
Mr. Geoffrey Robinson
Will the Prime Minister find time today to reconsider her remarks about the competitiveness of British industry? Is she aware that with the present level of sterling there is no chance for whole sectors of British manufacturing industry to be competitive? So long as that remains the case, the prospects for employment and for the Prime Minister's borrowing requirement will get worse.
The Prime Minister
Competitiveness has deteriorated sharply. A part is due to the exchange rate—the smaller part. The greater part, as the figures show, is due to people paying themselves increases for producing the same amount or less. That is abundantly shown by the figures. Two-thirds of the decrease in competitiveness is due to increased pay not matched by increased output. One-third is due to the exchange rate. The way to hope to bring down the exchange rate is to try to reduce interest rates substantially, and that goes back to the question of trying to secure reductions in public expenditure below the levels that would otherwise obtain.