PRIME MINISTER
Engagements
Q1. Mr. Forth
asked the Prime Minister if she will list her official engagements for Tuesday 26 February.
The Prime Minister (Mrs. Margaret Thatcher)
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
Mr. Forth
In accepting our congratulations on the outstanding success of her recent visit to America—[Interruption.]
Mr. Speaker
Order. There is very limited time for Prime Minister's questions.
Mr. Forth
—will my right hon. Friend confirm that she agrees with President Reagan that, for the European currencies to establish a correct relationship with the dollar, it will be essential for the European countries to move towards American labour laws—[Interruption.]—American labour mobility, social security and attitudes to work?
The Prime Minister
I thank my hon. Friend for the first part of that supplementary question. Part of the strength of the dollar is due, of course, to the great strength of the American economy—particularly in the matters to which my hon. Friend refers—to the much lower public expenditure, the much better labour laws and, as the President said during his press conference, the fact that when it came to job creation it was individual workers, business people and entrepreneurs—not the Government—who created virtually every one of the 7 million new jobs in the past two years.
Dr. Owen
As the sterling trade weighted index has fallen to a record low, will the Government now accept the advice of the Governor of the Bank of England and, more importantly, of the CBI, and join the exchange rate mechanism of the EMS?
The Prime Minister
In the last day the dollar has reached a record high against sterling, against the French franc and the lira, and it has reached the highest figure for over 13 years against the deutschmark and for 10 years against the Swiss franc. All of that has occurred in the last day. As the right hon. Gentleman knows, joining the EMS would not help in the surge of the dollar against all European currencies. Nor would it mean that we would not have to apply some of the many financial disciplines. It would mean, I am afraid, that we should have less freedom of action to control our own monetary conditions.
Sir William Clark
Has my right hon Friend noticed that over a third of the employees of British Telecom have agreed to take part in the share option scheme in that company? Does she agree that that is proof positive that the ordinary person in this country wishes to belong to a capital-owning democracy?
The Prime Minister
Yes. The British Telecom share issue, which was the largest to be conducted on either side of the Atlantic, has been a great success, particularly for the 2 million people who purchased shares and for the people who work in BT. It is a success of capitalism in that it has spread genuine ownership more widely among our people.
[column 169]Mr. James Lamond
As the Prime Minister is fond of lecturing us along the lines that the customer is always right and that if we have the right goods at the right price we shall be able to sell them, why does she continually complain that the customers who are buying dollars are mistaken in the value that they put on the pound?
The Prime Minister
I have just indicated that part of the strength of the dollar lies in the strength of the American economy, particularly in things which the hon. Gentleman would not like and would not be able to do. The other part arises from the high deficit and the high interest rates. I am not sure whether the hon. Gentleman would want our interest rates to be even higher.
Q2. Mr. Stokes
asked the Prime Minister if she will list her official engagements for Tuesday 26th February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Stokes
In view of the large number of letters from special interest groups which my right hon. and hon. Friends receive constantly, will my right hon. Friend confirm that we here represent the whole nation and not sections of it?
The Prime Minister
I am aware that my right hon. and hon. Friends receive many letters. Of course, every group has the right to make its own representations. The Government have the duty to assess all the demands and their effect on the taxpayer. That is what we must do and we must represent the will of the majority.
Mr. Kinnock
Does the Prime Minister recall telling us last June that it was not right for the EC to raise a loan for budgetary purposes? If she still feels that, how does she explain the Government's recent decision to extend additional overdraft facilities to the Common Market, in view of the fact that in the last six months she has already made advance payments of £285 million to the EEC? Can she tell us how much the current overdraft will be and what conditions she has put on it?
The Prime Minister
In view of the Parliament's decision about the budget, the only way for the EC to carry on is to have a budget this year of one twelfth of what the budget was for last year. As that has not been enough to meet outgoings, particularly on some of the agricultural commitments, the monthly amounts have been brought forward and there are facilities to enable the EC to continue. I do not know whether the right hon. Gentleman would wish it to be totally and utterly disrupted. That would give cause for great concern to our own people.
Mr. Kinnock
After Fontainebleau last year we were told that there was a new machinery that would iron out all the difficulties and that it was largely attributable to the negotiating genius of the Prime Minister. Can the right hon. Lady now answer these questions: how much is the overdraft, what are the conditions on it and does it not mean that we are paying for our own rebate?
The Prime Minister
No. The rebate this year will eventually come, as did the rebate for last year. The right hon. Gentleman will recall that he thought the rebate for last year would not come, but it did come. The new regime cannot come into operation until details are laid before the House. The right hon. Gentleman will recall that it is not [column 170]due to come into operation until 1 January 1986 and that all the orders must come before this House for approval first.
Q3. Mr. Tim Smith
asked the Prime Minister if she will list her official engagements for Tuesday 26 February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Smith
Does my right hon. Friend agree that today's strike action by teachers constitutes a grave dereliction of duty? Does it not further damage the reputation of the teaching profession and its claim to put first and foremost the interests of Britain's schoolchildren?
The Prime Minister
I agree with my hon. Friend. For teachers to pursue a pay claim at the expense of children in their care seems to us to be totally and utterly wrong.
Mr. Gould
Does the Prime Minister recall that when I wrote to her a month ago I asked what her response would be if, after interest rates had been raised to crisis level, the downward pressure on the pound continued? Would she care to answer that question now? Are there to be yet higher interest rates, or do we have to live both with the plunging pound and with record interest rates, which have failed to do their job?
The Prime Minister
The hon. Gentleman will have heard my reply to the right hon. Member for Plymouth, Devonport (Dr. Owen). The hon. Gentleman tries to ignore half of the situation. Over the last day the dollar has reached a record high against almost all European currencies. Over the past month sterling has appreciated against all major currencies except the yen and the dollar. He knows full well that interest rates are designed to maintain strict monetary conditions. He is well aware also that it would be singularly unhelpful for me to answer any questions about future interest rates or intervention. He knows that that would be unhelpful. He knows that it would be totally wrong for me to do so and, therefore, my answer to him is no.
Q4. Sir Anthony Kershaw
asked the Prime Minister if she will list her official engagements for Tuesday 26 February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Sir Anthony Kershaw
I welcome the announcement that was made yesterday by my right hon. Friend the Minister for Overseas Development of a further gift of 30,000 tonnes of grain to the Sudan. However, will my right hon. Friend bear in mind that the famine is by no means conquered and that much more aid will be necessary before the harvest in the autumn?
The Prime Minister
I am aware that my hon. Friend has recently returned from the Sudan. I am grateful to him for welcoming the action taken by my right hon. Friend Timothy Raisonthe Minister for Overseas Development, who was there at about the same time. The action that we have taken for the Sudan means that our aid to that country has reached about £13 million since the onset of the damaging drought conditions. We shall bear in mind the great privations that those in the Sudan are suffering, as well as what we are doing for Ethiopia. Many refugees are coming into the Sudan from Ethiopia. I thank my hon. Friend for his welcome to the Government's action.
[column 171]Q5. Mr. Tom Clarke
asked the Prime Minister if she will list her official engagements for Tuesday 26 February.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Clarke
Is the Prime Minister aware that, notwithstanding the interruptions of her right hon. and hon. Friends a few moments ago in response to a supplementary question about the teachers' strike, parents are deeply worried about the current teachers' dispute, specifically in Scotland? Will she agree to an independent pay review, which seems to be a fair way of settling the problem? Does she accept that parents are worried because they do not want to see the same intransigence on the teachers' dispute as the Prime Minister has shown over the miners' strike and other industrial issues?
The Prime Minister
The teachers' pay claim is a minimum flate rate increase of £1,200 per teacher, which would cost about £600 million. All of that money would have to come from other taxpayers, other parts of education or other parts of the Government system. Teachers' pay has kept pace with inflation since 1979. The employers have offered them arbitration and they have refused. I see no reason for an independent inquiry.
Q6. Mr. Pawsey
asked the Prime Minister if she will list her official engagements for Tuesday 26 February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Pawsey
Has my right hon. Friend had an opportunity of reading the forecast made yesterday by the London Business School, which says that the economy will grow by 3½ per cent? Will she say what impact that growth will have on employment, industry and exports?
The Prime Minister
My hon. Friend is correct. The latest economic forecasts show optimism about growth in 1985. This follows on 1984 when, in spite of the miners' strike, we had growth of 2½ per cent. In spite of the miners' strike, output rose. Employment rose by about 342,000 in the year to September 1984. Investment reached an all-time record. An optimistic forecast on top of that good record is excellent news.
Q7. Mr. Wareing
asked the Prime Minister if she will list her official engagements for Tuesday 26 February.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
[column 172]Mr. Wareing
Did the Prime Minister warn President Reagan, on her visit to America, that the overwhelming majority of the British people would regard any direct intervention or any proxy intervention by America in Nicaragua as a danger to world peace? Did she warn him that there would be no support from her Government because the British people realise that the support that is being sent to the Contras is contrary to all the interests of those in the Western world?
The Prime Minister
I made it perfectly clear that we and the Americans firmly support the Contadora process and will continue to do so.
Mr. Sayeed
Will my right hon. Friend take time today to consider the proposition that it is better to lend to the EEC than to borrow from the IMF?
The Prime Minister
Yes. My hon. Friend makes his own point in his question.
Q8. Mr. Frank Cook
asked the Prime Minister if she will list her official engagements for Tuesday 26 February.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Cook
Bearing in mind that the Prime Minister has established herself very firmly in the minds of the populace, and even some sections of the media, as history's greatest misleader of the nation, will she choose to explain to the House today how she can ask Americans to stop supporting insurgents in Northern Ireland and yet, at the same time, give succour and support, directly and indirectly, to the Contras in Nicaragua to undermine a democratically elected Government?
The Prime Minister
In reply to the hon. Gentleman's very carefully rehearsed question, I repeat that I had occasion to thank both President Reagan and Speaker Tip O'Neill and Members of Congress for the way in which they have done everything to stop funding coming from the United States of America to aid terrorism in Northern Ireland. I also made it perfectly clear, as I have repeated, that we stand firmly for the Contadora process. To add one little thing—which the hon. Gentleman is so anxious that I should do—we regard those democratic elections to which the hon. Gentleman has referred as actually flawed in the run-up to the election, for reasons which my right hon. and learned Friend Sir Geoffrey Howethe Foreign and Commonwealth Secretary has given many times.