PRIME MINISTER
Engagements
Q1. Mr. Bob Dunn
asked the Prime Minister if she will list her official engagements for Thursday 18 June.
The Prime Minister (Mrs. Margaret Thatcher)
This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today. This evening I am giving a dinner for the Prime Minister of New Zealand.
Mr. Dunn
Has my right hon. Friend seen the figures relating to the manufacturing element within the index of industrial production for April? Were those figures discussed at yesterday's Cabinet meeting? If so, what conclusions were drawn?
The Prime Minister
The index of manufacturing output came out yesterday. It showed a welcome increase. If one looks—[Interruption.] I rather thought Opposition Members would have preferred an increase. Apparently they do not. Is it that they love bad news and hate it when the news is slightly better? There has been a run of figures in the manufacturing index that show that the position has steadied over a period of three or four months. One hopes that there will soon be an upturn.
Mr. Foot
May I assure the right hon. Lady that we welcome any signs of good industrial news, particularly as they come so rarely? On the assumption that the Cabinet agreed yesterday to the rail electrification programme, may I congratulate the right hon. Lady on accepting the wisdom of the railwaymen? That may be the best item of news since she yielded to the miners. At yesterday's Cabinet meeting, did the Government contemplate the rise in unemployment to the official figure of 3 million without making any change in the policies that have contributed so much to that unemployment?
The Prime Minister
The reports on electrification of the railways in today's newspapers are all over the place. The right hon. Gentleman would be well advised to wait until a statement is made. My right hon. Friend Norman Fowlerthe Secretary of State for Transport will make a statement when he is ready to do so. That will not be this week. Therefore, I advise the right hon. Gentleman to wait.
Of course we wish to take every step to reduce unemployment. We agree with most other countries, which believe that unemployment can best be reduced by first reducing inflation.
[column 1174]Mr. Foot
As regards railway electrification, I was trying to greet the good bit of news that apparently existed. It would seem that the Cabinet has not yet made up its mind about the programme. We shall follow that issue closely.
At yesterday's Cabinet meeting, was the official figure of 3 million unemployed on the register contemplated? Will the right hon. Lady answer the question to which she so frequently refuses to respond and say when she will reduce inflation to the figure that existed before she started to put it up?
The Prime Minister
The rate of inflation was increasing when the right hon. Gentleman's party left power. A number of price increases had been deliberately held up by referring them to the Price Commission. For example, the prices of electricity, gas and milk were all deliberately held up for the election. We had to take the decisions. The best policies to secure a reduction in inflation are those being pursued by my right hon. and learned Friend Sir Geoffrey Howethe Chancellor of the Exchequer. We agree wholly with the OECD communiqúe which says:
“Ministers reaffirm that bringing down inflation” ——
Mr. William Hamilton
Reading.
The Prime Minister
Of course. I am reading from the OECD communiqúe. The communiqúe—[Interruption.]
Mr. William Hamilton
Get on with it.
The Prime Minister
I am trying to.
Mr. Speaker
Order. This behaviour is ill-mannered and unfair.
The Prime Minister
The OECD communiqúe says:
“Ministers reaffirmed that bringing down inflation and inflationary expectations is the indispensable condition for re-establishing the basis for durable increases in employment and more vigorous sustainable growth.”
I agree with that.
Mr. Foot
Will the right hon. Lady now answer my simple question? When will the inflation figure be down to the one she inherited?
The Prime Minister
I expect inflation to fall in the coming months and that our average performance on inflation will be vastly superior to that of the Labour Government.
Mr. Montgomery
Will my right hon. Friend take this opportunity to confirm that the Government will not be deflected by demonstrations abroad from pursuing strong and fair policies in Northern Ireland? Does not she regret the disgraceful demonstration against the Prince of Wales in New York last night, which was organised by people who support the IRA?
The Prime Minister
Of course we shall not be deflected from pursuing the policies which have already been upheld in Northern Ireland. They are the correct policies to pursue and they give confidence. I very much regret the demonstration with which His Royal Highness was met in New York.
Q2. Mr. Trotter
asked the Prime Minister if she will list her official engagements for 18 June.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Trotter
In relation to the defence review considered by the Cabinet this morning and the great [column 1175]concern caused by the rumours that have been circulating for some time that especially affect the Royal Navy, can my right hon. Friend give an undertaking that the results of that will be published as soon as possible? Can she confirm that in the review full regard was paid to the threat posed by the ever-increasing strength of the Soviet navy?
The Prime Minister
Decisions have not yet been finalised, so I cannot tell my hon. Friend when a statement will be made. John NottMy right hon. Friend will make a statement as soon as he can, to end uncertainty. Of course, we take into account the Soviet threat, as does NATO. That was why we adhere to the NATO pledge to increase expenditure in real terms by 3 per cent. a year. The Government have done that and the argument now is how best to spend the increased resources which the Government have made available.
Mr. Joseph Dean
Will the Prime Minister take time today to discuss with the Secretary of State for Industry the reaffirmation of his decision to remove intermediate area status from Leeds from August next year? Is she aware that if that decision is carried through the once-prosperous city of Leeds may well become an industrial dust-bowl, like other large areas of the United Kingdom? If that happens, does she think that that will vindicate or condemn the outrageous policy she is pursuing?
The Prime Minister
Sir Keith JosephMy right hon. Friend knows the area very well indeed. He will take note of what the hon. Gentleman has said. The point of the policy is to concentrate help on the areas which are worst affected. That inevitably means withdrawing help from other areas. If we are to give help to the areas most adversely affected, we must withdraw help from other areas.
Mr. Rippon
On the subject of defence, will my right hon. Friend confirm that there is no truth in the ugly rumour that the Government may be contemplating, either today or at any other time, the sale of part of the Royal Navy, whether to Australia or to any other country?
The Prime Minister
My right hon. and learned Friend, being very skilled, tries to tempt me to make partial statements. I shall not respond to his temptations, but ask him to await a statement from my right hon. Friend John Nottthe Secretary of State for Defence, when he is ready to make one.
Q3. Mr. John Townend
asked the Prime Minister if she will list her official engagements for 18 June.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Townend
Does my right hon. Friend agree that a major problem facing the Government today is the escalating cost to the nation of the nationalised industries? Will she take time to inform the chairmen that the British public are fed up with wage awards that are way ahead of those granted in the private sector and have to be met by increased subsidies from the taxpayer, increased prices, or reductions in capital expenditure?
The Prime Minister
My hon. Friend is quite correct. Wage awards in the monopoly nationalised industries, not in the others, tend to be higher. That shows that the monopoly does not serve the British public well. Those monopoly industries are the inheritance of Socialism, which explains our efforts to try to privatise them as soon as possible.
[column 1176]Mr. George
In the light of the representations made by many sincere Irish-Americans yesterday, will the Prime Minister consider an initiative with President Reagan—that I would call a repatriation conference—in which we promise to return to this country those people who went to Ireland and took political, economic and social control, if the Americans will reciprocate and return political, economic and social control to those people who lived in America 30,000 years before the British realised that America existed?
The Prime Minister
The hon. Gentleman has made his point.
Mr. Butcher
Will my right hon. Friend find time today to endorse the conclusions of an Advisory Council for Applied Research and Development report that too much public sector purchasing of capital goods is based on in-house research and development, and that the transference of some of that research and development to private sector supplier companies might assist us in developing products suitable for export, rather than those designed simply for the domestic requirements of our nationalised industries?
The Prime Minister
I believe that what my hon. Friend says is substantially correct. We are trying to transfer more of the research and development resources to ordinary companies with a view to increasing exports. We must take into account the design of everything required by our public sector industries and the need to export to achieve the standard of living we require.
Mr. Winnick
Does not the Prime Minister realise that the Cabinet's decision to continue its present economic policies is a bitter blow to those who are unemployed and to the many who will become unemployed, and their families, in the next few months? Is the Prime Minister aware that the comment of the right hon. Member for Chelmsford (Mr. St. John-Stevas) about the Government's economic policies—enough is enough—will be the verdict of the country at the next election and will be appropriate for a Government of failure?
The Prime Minister
The inevitable deduction from the hon. Gentleman's question is that he wishes to create inflation on top of inflation. If we were to pursue that policy we should have fewer exports than we have now and we should lose more orders than we should obtain because already our inflation is above that in Germany. We must get it down if we are to obtain those overseas orders. That means we must continue to pursue the Government's policy.
Q4. Mr. Brinton
asked the Prime Minister if she will list her official engagements for Thursday 18 June.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Brinton
Is my right hon. Friend aware that the total cost of the administration of Government is running at over £8,000 million a year? Does she agree that there is still scope for further cuts in revenue spending, and will she pay particular attention to the Manpower Services Commission, many of whose activities are not cost-effective?
The Prime Minister
My hon. Friend is about right on the annual cost of administration. It is an enormous figure, [column 1177]and we must continue to look for every possible reduction and cut out all the waste and inefficiency that we possibly can.
My hon. Friend referred to the Manpower Services Commission. We are already looking at whether we can use the money in a more cost-effective way. The MSC is [column 1178]run by a joint body comprising the CBI, the TUC and the Government. The CBI is doing everything possible, and has set up a special programmes unit, to try to secure more jobs in the job opportunities programme for young people. It is being very active in that regard, and I believe that it will be successful.