Speeches, etc.

Margaret Thatcher

House of Commons PQs

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [991/1096-1102]
Editorial comments: 1515-30.
Importance ranking: Major
Word count: 2303
Themes: Defence (general), Economic policy - theory and process, Employment, Industry, Monetary policy, Privatized & state industries, Pay, Public spending & borrowing, European Union (general), Economic, monetary & political union, Foreign policy (Americas excluding USA), Local government, Local government finance, Strikes & other union action
[column 1096]

EUROPEAN COMMUNITY HEADS OF GOVERNMENT

1. Mr. Spearing

asked the Prime Minister when she next expects to meet the Heads of Government of the member States of the EEC.

The Prime Minister (Mrs. Margaret Thatcher)

I expect to meet the Heads of Government of the member States of the Community at the next meeting of the European Council, which will take place in Luxembourg on 1 and 2 December.

Mr. Spearing

Will the Prime Minister assure the House that the informal Heads of Government meeting that she has called the European Council will not on this occasion, or on any other occasion, convert itself into a formal Council of Ministers capable of taking legislative decisions? If any informal decisions are taken, will she confirm that they will be subject to the full scrutiny procedures of the House?

The Prime Minister

We do not usually take that sort of decision at the European Council of Heads of Government. We try to clear the way for decisions by other councils, subject to the legislative procedures and customs of their own legislative assemblies.

[column 1097]

Mr. John MacKay

When my right hon. Friend meets the Heads of Government will she urge on them the need for the Economic Community to give every possible help to the new Government of Jamaica to try to undo the damage that eighteen and a half years of Socialism has done to Jamaica?

The Prime Minister

I am grateful to my hon. Friend. I have already sent a message of congratulations to the new Prime Minister of Jamaica. I hope that he will have a very successful period in government and that we shall be able to help him with his objectives.

Mr. English

As the European Council discusses foreign policy, will it have on its agenda when it meets any question relating to the constitution of Canada, or is that regarded as a matter of internal concern relating only to a member State? If it is of internal concern only to a member State, is it of internal concern only to Britain or to Canada?

The Prime Minister

I should be very surprised indeed if the European Council had on its agenda the subject of the constitution of Canada. But I congratulate the hon. Gentleman on his ingenuity. We have received informal emissaries from the Government of Canada, but so far we have received no formal request about the constitution.

PRIME MINISTER

(Engagements)

Q2. Mr. Pawsey

asked the Prime Minister if she will list her official engagements for 4 November.

The Prime Minister

This morning I welcomed President Stevens of Sierra Leone and later 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. This evening I hope to have an audience of Her Majesty the Queen.

Mr. Pawsey

During the course of my right hon. Friend's busy day, will she take time to reflect on the call by British Leyland shop stewards for an all-out strike against the company's offer of 6.8 per cent.? Will she say what effect that may have on future public funding for British Leyland?

[column 1098]

The Prime Minister

Since British Leyland was taken into the public sector the British taxpayer has provided more than £1,000 million to the company to enable it to get on its feet again. Of the £300 million that my right hon. Friend Sir Keith Josephthe Secretary of State said last December was available for this financial year, £275 million has already been drawn. It will be a tragedy if a strike at British Leyland takes place—a tragedy for those who work there, for the company and for Britain. Many overseas people will say that, just as Britain gets a super car, she goes on strike. That will be very damaging to Britain. In the meantime, we must leave Sir Michael Edwardes in charge, and allow him to do any negotiating that needs to be done.

Mr. Foot

In view of the reports of Cabinet discussions on the rapidly intensifying economic crisis facing the nation, will the right hon. Lady tell us when the Chancellor of the Exchequer intends to introduce his next Budget? Will it be just before the Queen's Speech or just after?

The Prime Minister

I thought that the right hon. Gentleman was about to ask a really worthwhile question. As is customary at this time of year, the Cabinet is discussing public expenditure with the objective of keeping the total of public spending next year within the amount which has already been published. The right hon. Gentleman will be aware that these things take quite a time so he will be able to ask the same question for quite a number of Tuesdays or Thursdays hence.

Mr. Foot

I thought for a moment that the right hon. Lady was about to give us an informative answer. Will she now tell us whether any fresh proposals about Government action on economic matters will be included in the Queen's Speech and in the statements that she and the Chancellor will make at the time of the Queen's Speech?

The Prime Minister

The Queen's Speech will take its customary form. I expect that the right hon. Gentleman will be taking a part—perhaps a very prominent part—in the debate.

Mr. William Shelton

Does my right hon. Friend agree that past inflation bears a heavy responsibility for present [column 1099]unemployment, that the Government cannot reflate their way out of inflation and, therefore, that interest rates should remain at their present level until they can be reduced without being inflationary?

The Prime Minister

I agree that we cannot possibly deal with unemployment on a long-term basis—indeed, no Government can—until we have thoroughly tackled the question of inflation. Until that is reduced, there is no basis for confidence in the future on the part of industry, which is vital for restoring what we need in order to expand. No one wants interest rates reduced more than I do, but as right hon. and hon. Members will be aware, interest rates would have been higher but for a certain amount of intervention to keep them where they are at present.

Mr. David Steel

Will the Prime Minister say whether the Government are stumbling into an incomes policy in the public sector only?

The Prime Minister

No. The right hon. Gentleman must not confuse cash limits with a rigid incomes policy for the public sector. It is always a mystery to me that most women and most small businesses know how to budget within a certain amount of money whereas many Liberal Members do not.

Mr. Wilkinson

In view of my right hon. Friend's deliberations this morning can she say whether it is still her expectation that the defence expenditure in real terms this financial year will meet an outturn of 3 per cent. increase, and whether that is still the full objective of the Government in the next financial year?

The Prime Minister

We met that target last year. We are not able to say what the precise outturn this year will be. Of course, we are considering the outturn next year along with all the other programmes. The outturn next year will result in an increase in expenditure over this year.

Cannock Wood

Mr. Gwilym Roberts

asked the Prime Minister what plans she has for visiting Cannock Wood.

The Prime Minister

I have at present no plans to do so.

[column 1100]

Mr. Roberts

Is the Prime Minister aware that hundreds of people in Cannock Wood who voted Tory in May 1979 did not expect the Tory Government to double inflation, push unemployment well above the 2 million mark, destroy business confidence, wreck local government services and raise interest rates to an all-time high. What message does she now have for those electors in Cannock Wood except “More of the same and worse” ?

The Prime Minister

My message is, first, that the people of Cannock Wood must be pleased that the Government are taking a firm line on reducing inflation and, secondly, that they will be the first to understand that demands for enormously high pay lead to high unemployment. I am sure that they will be the first to argue against that and be critical of people who strike their way on to the dole. Thirdly, I hope to have the hon. Gentleman's support, if he wants to see interest rates reduced, for trying to keep public spending down so that in the longer run we can keep interest rates down.

PRIME MINISTER

(Engagements)

Q4. Mr. McNamara

asked the Prime Minister if she will list her official engagements for Tuesday 4 November.

The Prime Minister

I refer the hon. Gentleman to the reply which I gave earlier.

Mr. McNamara

Does the right hon. Lady and her right hon. Friend the Secretary of State for the Environment ever reflect upon the old adage “penny wise, pound foolish” ? Is she aware that as a result of the moratorium on council contracts, essential fire precautions for hostels for the homeless within the city of Hull cannot now go ahead, thus increasing bed and breakfast costs for the local authority; that during the coming winter months non-completed council houses will be open to vandals; and that essential work to remedy this situation and to give homes to the people will be denied because of this foolish edict?

The Prime Minister

Every council must keep within certain spending totals, [column 1101]and there is nothing laudable about spending beyond one's means.

Mr. John Townend

Having abolished the Clegg commission and suspended the Pay Research Unit, will my right hon. Friend now advise local authorities to take similar action so that a reported 19 per cent. increase for firemen, based on comparability, is stopped this year? Is she aware that if it is not it will undermine the Government's policy of keeping public pay increases within 10 per cent.?

The Prime Minister

The Government have absolutely no standing in the negotiation of that pay claim, which is done wholly between the firemen and the local authorities. The Government perhaps come in in two respects—first, in the amount that we give in the rate support grant to met that claim, and we have already indicated that amounts will only be within single figures. Secondly, in so far as the Home Office is concerned, the fire inspectorate must agree to any reductions which can fully and properly take place within proper fire safety regulations. Otherwise, it is wholly up to the local authorities. I hope that they will have due and proper regard for the great sacrifices that must now be made by the private sector.

Mr. Sheerman

As the Prime Minister has tragedies in British industry so much on her mind, will she spend some time today thinking of the tragedy of ICI, which for the first time in its history has failed to make a profit? Will she consider the thousands of jobs in the organics division which it is now planning to cut in the coming weeks and months, and also the people, such as those in my own constituency, who will be hard hit by more and more redundancies?

The Prime Minister

I understand that one of the problems that ICI faces is certainly the effect upon it of combined wage claims and the high exchange rate. One of the reasons why we very much hope to reduce interest rates, assuming that we can get public spending down, [column 1102]is the effect it might have on reducing the high exchange rate. But first we must secure the co-operation of hon. Members in trying to reduce public expenditure so that we can reduce public expenditure so that we can reduce public sector borrowing, and therefore, high interest rates.

Mr. Watson

In view of the continuing high level of interest rates, and the need to reduce the public sector borrowing requirement, will the Prime Minister again examine the case for a tax upon the windfall profits of the major clearing banks?

The Prime Minister

I am certain that my right hon. and learned Friend Sir Geoffrey Howethe Chancellor will be considering all methods of reducing the public sector borrowing requirement.

Mr. Woolmer

As the unemployment rate has apparently increased much faster than the Prime Minister thought, can she say when she expects unemployment to rise above 2½ million? Can she also say whether a further round of tax rises and public expenditure cuts will reduce unemployment or increase it?

The Prime Minister

With regard to forecasts on unemployment, I follow the well-established precedents of the right hon. Members for Cardiff, South-East (Mr. Callaghan), Leeds, East (Mr. Healey), and Ebbw Vale (Mr. Foot). I do not give forecasts on unemployment. With regard to cuts in public spending, as all public spending has, ultimately, to be financed out of the productive sector, most of which is the private sector, the more resources that we put into the public sector the less there is available to purchase goods in the private sector, which is where unemployment is likely to rise.