PRIME MINISTER
Engagements
Q1. Mr. Boyes
asked the Prime Minister if she will list her official engagements for Tuesday 15 January.
The Prime Minister (Mrs. Margaret Thatcher)
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
Mr. Boyes
Is the Prime Minister aware that the Department of Health and Social Services estimates that in 1984 140,000 homeless people, at a cost of £380 million—an increase of over 600 per cent.—will have used board and lodging accommodation, much of it substandard, lacking in heating, lighting and toilet facilities and representing a serious fire risk? Should not the Government be advocating an increase in the amount of cash available for public sector house building rather than a decrease, so that people can escape from despair, desperation and degradation?
The Prime Minister
No. I believe that the Government's housing policy is the right one and that most people wish to own their own homes. Home ownership has gone up 1.7 million since we were in power and in accordance with that wish the majority of house building is taking place in the private sector.
Mr. Sayeed
Does my right hon. Friend agree, and will she take time today to consider, that this nation's economy is not a one-commodity economy, and that to consider it as such is simplistic, if not downright hysterical? Does such a view not ignore the fact that under this Government inflation is down, productivity is up and the export of goods and services is ever-increasing?
The Prime Minister
Yes, I agree with my hon. Friend. Gross domestic product is at its highest ever level, fixed investment across the economy is at its highest ever real level, retail sales are at their highest ever real level—up 4 per cent. in volume in 1984—profits are up 20 per cent. in the first three-quarters of 1984 and non-oil exports are up 12.5 per cent. in volume in the three months to November over a year ago. Britain is still worth investing in.
Mr. Kinnock
May I express the wish, with regard to the Prime Minister's last sentence, that many more people agree with her that Britain is worth investing in? Will she accept that on the Opposition side of the House we find the speculation against the pound irresponsible and irrational, but that we also feel that her Government's handling of the current crisis is an epic of bungling indecision that will cost the industries and the households of this country very dear? Will she let this shambles continue, or will she now help the pound by sacking the Chancellor of the Exchequer?
The Prime Minister
I am not sure whether the right hon. Gentleman means that he would have put interest rates up earlier, not at all, or later. Of course, he will not say—[Interruption.]—because he has not got a clue. [column 181]The speculation to which he referred has gone on, not only against the pound, but against other currencies. In the last day, record lows against the dollar have been reached by the Swiss franc, the Italian lira, and by the French franc, and the deutschmark also reached a 12-year low. Yesterday, the deutschmark stood at $3.20 in New York. The speculation which the right hon. Gentleman condemns has gone on against all currencies in Europe. We took what we believed to be the right decision because we had to consider exchange rate policy along with several other factors.
Mr. Kinnock
The truth is that the Prime Minister did not take the right decision in any calm fashion. She and the Chancellor of the Exchequer were eventually forced to panic into taking some kind of decision. As she has compared our condition with that of Germany and Switzerland, is she saying that she would do what the Germans and Swiss do, and that she would intervene? If so, will she come clean and admit it? Will she stop dodging the question and asking what the policies of others are and, instead, tell the country what it wants to know, which is what she and her Government will do to stop the crisis in currency and interest rates?
The Prime Minister
I recall recently two occasions when Germany intervened. I emphasise that I recall only two occasions. The intervention was not successful, as I indicated—[Interruption.] Will the right hon. Gentleman listen, as he might then learn a thing or two—[Interruption.]
Mr. Speaker
Order. These are very serious matters. The Prime Minister is seeking to answer the question, and should be heard.
The Prime Minister
Intervention alone was not successful, because, as I indicated to the right hon. Gentleman, yesterday the deutschmark also reached a 12-year low in New York. No single country has enough reserves to counter large volumes of currency moving round the world. We used the interest rate because we thought it right to do so in the circumstances in the exchange market. I remind the right hon. Gentleman that he predicted doom and gloom in July, when we had to do precisely the same thing. Since July, when he predicted doom and gloom and we eventually managed to get down interest rates, inflation has remained at, or below, 5 per cent., output across the economy has continued to grow, exports have been up in volume and retail sales have been higher in the fourth quarter. What the right hon. Gentleman predicted would happen in July did not happen, and the economy is being properly handled by my right hon. Friend Nigel Lawsonthe Chancellor of the Exchequer.
Mr. Kinnock
In July I asked the Prime Minister what she would do to give new strength to our economy. Since then we have lost 80,000 jobs and billions of pounds have flowed out of our economy. Will she now answer the question that the whole of Britain is asking? What is she going to do to change her policies in order to bring us strength, to stop the speculation, to bring down interest rates and to give us a secure future? The right hon. Lady has not yet answered that question.
The Prime Minister
The right hon. Gentleman's points are not right. After the interest rate increased to 12 per cent. in July output across the economy continued to grow. Construction output was up 3 per cent. in the third [column 182]quarter over the second, exports were 6.5 per cent. up in volume in the three months to November over the previous three months and the doom and gloom that he predicted did not come to pass—[Interruption.] It did not come to pass because my right hon. Friend Nigel Lawsonthe Chancellor of the Exchequer took the right decision to contain inflation, and we have been containing public expenditure. That is why the Stock Exchange today is 14 points higher than a month ago, 233 points higher than at the time of the 1983 election, 395 points higher than at the time of the 1979 election and 803 points higher than the lowest point under the Labour Government.
Mr. Rippon
It is a shame to change the subject. Will my right hon. Friend take the opportunity to ask Chancellor Kohl whether he agrees that we are fully entitled to celebrate the end of a war which secured the freedom, not only of Britain but West Germany? Might Chancellor Kohl not agree also that the only aspect we have to regret about our victory on VE day is the fact that the United States did not heed Sir Winston Churchill 's advice to shake hands with the Russians as far east as possible?
The Prime Minister
I know that there is a good deal of feeling that we should have a national celebration of VE day. I understand that feeling and believe that we should celebrate not only victory but peace with freedom and the fact that for some 40 years we have had peace with freedom across Europe. We are considering the form of a national commemoration, which will honour the dead and point to the reconciliation and reconstruction that has been achieved. We shall make an announcement in due course.
Mr. Steel
Returning to the currency crisis, does the Prime Minister recall that in October 1976, when she was Leader of the Opposition, she said that the drop in the value of pound sterling to $1.66 was due to the lack of confidence of other countries in the Chancellor's policies? Now that the right hon. Lady is in office, does she consider that the current drop in the value of the pound sterling to below $1.12 is a massive international vote of confidence in her Administration's success?
The Prime Minister
The right hon. Gentleman's question shows that he cannot understand that the strength of the dollar is an entirely new and different phenomenon. Otherwise, the right hon. Gentleman would realise that that currency affects not only sterling but the Swiss franc, the Italian lira, the French franc and the deutschmark, whose value has fallen to record lows. Normally one expects the richest nation in the world to have great outflows of capital to finance other countries. In fact, for some time, the United States has been attracting capital from the rest of the world and has not been putting capital out because of the debts in the rest of the world, because previously the banks overlent and other countries borrowed more than they could repay.
Q2. Mr. Strang
asked the Prime Minister if she will list her official engagements for Tuesday 15 January.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Strang
Accepting the Prime Minister's preoccupation today with the sterling crisis, will she take time to reconsider the war of attrition against the miners? The right hon. Lady may believe that the miners are misguided, but they are accepting severe privation and [column 183]showing heroic determination in fighting for their communities and the dignity of work. Does the right hon. Lady recognise that in June, September and October last year real negotiations which almost secured a settlement took place? Why can we not have a resumption of negotiations without preconditions to secure a principled and balanced conclusion to a dispute which is not helping sterling and is damaging the economy?
The Prime Minister
Some 73,000 members of the National Union of Mineworkers are not on strike. More than 20,000 members of the NUM have returned to work since the beginning of November, including 1,800 so far this week. The only attrition against the miners is being carried out by the leadership of the NUM.
Q3. Mr. Cartwright
asked the Prime Minister if she will list her official engagements for Tuesday 15 January.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Cartwright
Can I take it that the Prime Minister has now overruled the view of the Foreign and Commonwealth Office, expressed to me last week by letter, that any celebration of the 40th anniversary of VE day would be at best nostalgic and at worse anti-German? Will the right hon. Lady ensure that any celebrations are genuinely international in character and involve all our wartime allies?
The Prime Minister
I believe that we are entitled to national celebrations, and I have said that we shall be bringing forward some proposals. I hope that those will celebrate the victory of freedom over tyranny and that they will also celebrate 40 years of peace with that freedom. It will, therefore, be a celebration with two aspects to it.
Mr. Favell
In view of the clamour from Opposition Members for increased public spending, may I ask my right hon. Friend to spare a word for those engaged in the wealth-producing private sector? After all, they have borne the brunt of the recession, they need all the help they can get and, contrary to popular belief, the vast majority of them are not engaged in building roads and sewers.
The Prime Minister
The health of the public sector depends on having a flourishing private sector, and that [column 184]depends on not putting so many burdens on those in that sector that they cannot make sufficient profits to re-invest and extend their activities. I absolutely agree with my hon. Friend.
Mr. Ryman
On a point of order, Mr. Speaker——
Mr. Speaker
Does it arise directly out of questions?
Mr. Ryman
It does, Mr. Speaker. In answering questions, the Prime Minister spent seven minutes answering two questions.—[Hon. Members: “Three” .] Before the Christmas recess, when a Minister of State at the Home Office purported to answer a question by taking eight minutes, you ruled, on a point of order raised by me, that you would exhort Ministers in future to restrict the length of time they took in purporting to answer questions. The Prime Minister, in her attempt to answer questions, clearly infringed that ruling that you gave before the Christmas recess. I ask for your guidance for future reference.
Mr. Speaker
The whole house knows that I should like to see shorter supplementary questions, which I think would lead to shorter answers from the Front Benches. In fairness to the Prime Minister, she was answering a very important question put on three occasions by the Leader of the Opposition. As a general principle, however, I agree with the hon. Gentleman that shorter questions would be beneficial.
Mr. Faulds
On a point of order, Mr. Speaker——
Mr. Speaker
Does it, too, arise directly out of questions?
Mr. Faulds
Yes, Mr. Speaker. Two of the three hon. Members who asked questions this afternoon did not, in their preliminary phraseology, refer to the Prime Minister's business today. Is it not the requirement that such a reference should be part of the phrasing of questions, and would it not have been right for you to have drawn the attention of the hon. Members concerned to that fact?
Mr. Speaker
The hon. Gentleman is entirely right, but I suppose that that preliminary phrase takes up that little bit of extra time. The whole House knows what we are about when we have these open questions.