Prime Minister
(Washington Visit)
The Prime Minister (Mrs. Margaret Thatcher)
With permission, Mr. Speaker, I shall make a statement on the visit which I paid to the United States from 19 to 21 February, accompanied by my right hon. and learned Friend Sir Geoffrey Howethe Foreign and Commonwealth Secretary and my right hon. Friend Michael Heseltinethe Secretary of State for Defence.
In the course of my visit I delivered an address to a joint meeting of the United States Congress. I had a meeting with President Reagan and meetings with eight members of the United States Cabinet and with other senior members of the Administration, as well as with the Chairman of the Federal Reserve Board. I also met leading members of the Senate and House of Representatives.
My colleagues and I were guests at a luncheon at the White House and the President and Mrs. Reagan came to a dinner at the British Embassy to mark the 200th anniversary of the establishment of diplomatic relations between the United Kingdom and the United States.
The principal themes discussed in my talks with the President and other members of the Administration were East-West relations and arms control, economic issues and the middle east.
On East-West relations and arms control, we agreed that the West's objective in the negotiations which will open in Geneva on 12 March should be a sizeable and verifiable reduction in nuclear weapons, which would allow us to maintain security at a lower level of weaponry and at lower cost.
In our discussions on the strategic defence initiative we reaffirmed the four points agreed during my visit to Camp David in December; and, in particular, that research, as permitted under the anti-ballistic missile treaty, should go ahead, but that eventual deployment of a defensive system in space would be a matter for negotiation under the terms of the treaty. I expressed the hope that British scientists would be associated with research into the strategic defence initiative.
In our discussion of economic issues I explained the concern in Europe at the continued rise of the United States dollar against other currencies. I found this concern widely shared within the United States Administration, not least because of the adverse effect on its own agricultural and manufacturing industries, but it was recognised that no easy remedy existed. The President and I agreed that the best contribution the United States could make to a long-term solution lay in a reduction of its budget deficit. The President has put specific proposals to Congress to this end. I argued strongly against protectionist measures as a way of dealing with the trade effects of the high dollar on the United States economy. I was assured that the Administration were not contemplating such measures.
On the middle east, the President and I both felt that the time was propitious for fresh efforts to arrive at a solution of the Arab-Israel problem. We both expressed our support for King Hussein 's endeavours to arrive at a common position among moderate Arab Governments and I welcomed the result of King Fahd 's recent visit to Washington. The President confirmed that his proposals of September 1982 remained on the table and that the Administration were ready to pursue them with the parties.
Our talks also dealt with central America; with co-operation against terrorism; and with Northern Ireland— [column 174]where I thanked the President and members of Congress for their efforts to discourage the donation of funds to organisations which promote and sustain violence. In addition, I raised a number of bilateral issues, in particular the case for more American purchases of British defence equipment and the matter of unitary taxation.
The visit enabled my right hon. Friends and me to convey the British point of view on current issues, as well as the extent of Europe's contribution to the NATO Alliance and Britain's particular contribution to the defence of Western interests worldwide.
Mr. Neil Kinnock (Islwyn)
May I commend the directness of the Prime Minister's statements in Congress and elsewhere in her condemnation of fund raising for terrorists in Northern Ireland, and also commend her refusal to endorse the American Administration's policy of so dangerously acting in central America in order to undermine and overthrow the democratically elected Government in Nicaragua?
Does the right hon. Lady recall saying in the Guildhall last November that there was an urgent need for negotiations between the superpowers
“because of the dangers of war and because we are on the verge of new technologies in space which would cost so much to develop” ?
Why has the right hon. Lady done a complete U-turn and shown such pathetic haste to fall in behind the star wars initiative, when it can add absolutely nothing to movements towards peace, negotiations on disarmament or to more effective deterrence against war on this planet?
Does the right hon. Lady agree that the recent bout of speculation against the pound and other currencies was sparked off by the ill-timed comments of President Reagan at last Thursday's press conference? Is it not the case that the Prime Minister built up expectations that she could, with flattery and fawning, persuade the President to bail out the pound, and that her complete failure to do so is a direct reason for the current collapse of sterling? Will she now tell us what she intends to do to arrest the fall in the currency, with all its terrible consequences for interest rates and for import prices for Britain? Or, alternatively, is she just going to sit back helplessly and hopelessly and watch the pound shrivel to below the level of the dollar?
The Prime Minister
I thank the right hon. Gentleman for his initial comment about the importance of not allowing moneys to get through to the IRA in Northern Ireland. The right hon. Gentleman mentioned the strategic defence initiative. He will, I imagine, have observed that the Soviet Union is already well on the way to research and is, I believe, ahead of us in laser research and electronic pulse beams. It is also already ahead of the West in having an anti-satellite capability and in having experience of the anti-ballistic missile system around Moscow, which has been there for 20 years, and in having experience of updating it. It is absolutely vital for the United States to engage in research in order to catch up with the Soviet Union, to ensure that nuclear deterrence remains balanced, and to make absolutely certain that the Soviet Union does not leap ahead of us in research on anti-ballistic missile weapons when the United States is not doing any.
Therefore, right from the start, I supported President Reagan's initiative on strategic defence. I supported research right from the start—[Interruption.] I supported research on the strategic defence initiative right from the start. Right back in 1977 we were well aware that [column 175]the Soviet Union was ahead in lasers and electronic pulse beams, and we wondered why the United States did not embark on a programme to catch up. Therefore, we fully support that research programme. It is absolutely vital for balance between the Soviet Union and the United States. As President Reagan made perfectly clear in his statements and as was made perfectly clear at Geneva, if, as a result of that research, weapons were deployed, their deployment would come within the anti-ballistic missile treaty of 1972 and would have to be negotiated properly, as it would be, so that the balance and the deterrence would be maintained.
I understand that Opposition Members are not worried about keeping a balance between the Soviet Union and the West. The Government are anxious about that and anxious to maintain the effectiveness of the deterrent. The work is to enhance, not to diminish, the deterrent.
Regarding sterling, the right hon. Gentleman seemed utterly to ignore the fact that the dollar has surged against all European currencies, including the yen and the Swiss franc, and has reached a record high. However, the right hon. Gentleman conveniently chooses to ignore that. During the past month sterling has appreciated against all the major currencies except the yen and the dollar.
Only two actions can be taken against a surge of currency, and they are limited. One can engage in joint intervention on a small scale compared with the enormous sums involved. It has been done under the Williamsburg agreement, but it can be done only in a way which makes speculators hesitate. It is not a prolonged exercise, and the right hon. Gentleman knows it. The other weapon is interest rates. I am not sure whether the right hon. Gentleman is urging that they should rise or fall.
Mr. Julian Amery (Brighton, Pavilion)
Is my right hon. Friend aware that, far from being a slap in the face to her, President Reagan's comments after her visit were a confirmation of what she has been saying during the past six years, that is, that the high rate of the dollar encourages our exports and acts as a tariff barrier against American imports, and that American interest rates are not all that high? The President was saying what she had been saying for a long time—that it is time for us to reorganise our economy so that we can compete in a world where no central bank intervention can possible succeed in balancing the currencies.
The Prime Minister
I do not believe that there is any action which the G5 countries could have taken to stop the surge of the American dollar on the scale that we have witnessed. I agree that there are three possible explanations. One is the strength, free enterprise and enterprising nature of the American economy, which means that Americans do not cast all their cares on the Government. As President Reagan said, the 7 million jobs created during the past two years were all created by the American people, not by the Government. The second explanation is the size of the deficit and the interest rates necessary to finance it. That is undoubtedly having an effect on the rate of the dollar. The third explanation is the speculators who have been piling in. That is where intervention can sometimes help, if it happens on the right occasion and if it is done in a co-ordinated way.
Mr. David Steel (Tweeddale, Ettrick and Lauderdale)
Is the Prime Minister aware that many members of Congress were surprised at her enthusiasm for the strategic [column 176]defence initiative, as they are deeply divided on the issue, and many of them feel that priority should be given to seeking a worldwide agreement on banning all nuclear weapons from outer space? I endorse her view that the time may be propitious for a solution to the Arab-Israel conflict, but what specific plans has she to support the initiative taken by King Hussein, King Fahd and President Mubarak? When the Prime Minister left the United States, President Reagan said of the weakness of sterling that each country should stand on its own two feet. Did those words have a familiar ring about them?
The Prime Minister
With regard to the strategic defence initiative, the right hon. Gentleman says that some members of Congress were surprised. I can say only that they showed their appreciation in a very welcome way with prolonged applause throughout the speech and at the end. I am sorry that the right hon. Gentleman did not observe that or that he chooses to ignore it.
With regard to weapons, only a certain amount of testing is allowed under the anti-ballistic missile treaty. The deployment of weapons would have to be negotiated under the anti-ballistic missile treaty, which is a treaty without a terminal date. The President has made it clear that the deployment of such weapons, if it came to that, would be negotiated under that treaty.
With regard to fresh efforts on the middle east, the President's speech of September 1982 still stands. I am sure that the right hon. Gentleman recalls that speech, which was very welcome at the time. Of course, one is doing everything possible to support King Hussein in the welcome efforts that he is making to contribute to a settlement of the Arab-Israeli problem.
Mr. Dennis Walters (Westbury)
When discussing the middle east with the President, was my right hon. Friend able to persuade him of the urgent need to launch a major initiative now which responds positively to the appeals of King Hussein and which is prepared to deal firmly, if necessary, with Israeli intransigence?
The Prime Minister
I have made it clear that President Reagan said that his speech of 1982 and the plan that it laid out is still on the table, but fresh efforts will be made to try to further the approach that he indicated then. It is important that we should know exactly how far the Palestinian Council and the Palestinian people accept some of the proposals put forward by King Hussein. The position on that is not yet fully clear.
Mr. Robert Sheldon (Ashton-under-Lyne)
Bearing in mind the fluctuations in the dollar-sterling rate, not just in the past few days but during the past four years, does the right hon. Lady agree that the decline from $2.40 to almost parity in that period shows that the abolition of exchange controls was a dreadful mistake?
The Prime Minister
The right hon. Gentleman referred to the past four years. Since 1979, the dollar has appreciated against sterling by 95 per cent., against the deutschmark by 80 per cent. and against the French franc by 140 per cent. May I point out that the French franc is exchange-controlled.
Mr. Ian Lloyd (Havant)
In her wide-ranging and far-sighted address to both Houses of Congress, my right hon. Friend the Prime Minister referred appropriately to the union of mind and purpose between the British and American peoples. Since from our long historical [column 177]experience the most important symbol of such unity is the unity of currencies, and since we may be approaching an opportunity that may not recur—parity between the pound and the dollar—will my right hon. Friend consider the consequences, which might be most interesting, of declaring the dollar to be legal currency in the United Kingdom?
The Prime Minister
I see no prospect of unity of currencies. The answer to the latter half of his question is that the possibility does not exist.
Mr. Jack Ashley (Stoke-on-Trent, South)
Is the Prime Minister aware that when in that speech she expressed friendship with the United States she spoke for most people in Britain and that when, in the same speech, she expressed bitter, vindictive hostility against the Soviet Union, she spoke only for herself and the stupid, simple-minded Right-wing members of the Conservative party?
The Prime Minister
The right hon. Gentleman cannot have read the speech fully. I quoted from Mr. Brezhnev in that speech. I gather that the right hon. Gentleman thought those words were mine, but they were not.
Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)
Does my right hon. Friend agree that the present problem of currencies is not so much a matter for Europe or Britain? Does not the problem rest in the hands of Americans, because they are the ones who find that their farmers are going bankrupt and that their industry is unable to export? If we keep our nerve, the balance of currencies will return, because America must live in the real world in the end, as we found after the pound went too high in the 1980s.
The Prime Minister
Yes, Mr. Speaker, the question to which so many right hon. and hon. Members have referred was one from the American press asking the President whether he intended to intervene because of the bad effect that the high dollar was having on agriculture and manufacturing industries. The President indicated—as I understand, because he did not say so—that he did not think that intervention except under the Williamsburg agreement would be likely to occur. I believe that the Williamsburg agreement, which involves joint intervention, is still operative and could therefore have some effect against speculators.
Mr. Willie W. Hamilton (Fife, Central)
Does the Prime Minister think that it was wise to criticise a friendly Commonwealth Government just to receive the plaudits of the United States, particularly since that Commonwealth Prime Minister is visiting the United Kingdom this week? Will she ever understand that, however much she licks the boots of President Reagan he and his Government will go their own way and not take a blind bit of notice of what she says to them?
The Prime Minister
The hon. Gentleman refers to the decision by New Zealand not to accept ships at her ports if New Zealand thinks that they have nuclear weapons on board. I have made it clear, and shall continue to make it clear wherever I am in the world, that British Navy ships are seconded to NATO. We believe in NATO, even if the Opposition would like to destroy it. So long as we believe in NATO and our ships are seconded to NATO, we cannot reveal what weapons they carry. I therefore repeat for the [column 178]hon. Gentleman's benefit that I have no intention of saying which ships—or whether our ships—carry nuclear weapons. That is my duty to keep faith with the NATO agreement.
Mr. Jonathan Aitken (Thanet, South)
Is my right hon. Friend aware that the success of her visit will be seen widely as having much strengthened the Anglo-American alliance and that that is welcome by many of my right hon. and hon. Friends? My right hon. Friend has expressed support for the SDI research programme. Why was she so cautious and why did she not go on to support the eventual deployment of these weapons, because they, with the anti-ballistic missile treaty, would make the world a much safer place?
The Prime Minister
I am grateful to my hon. Friend. The purpose is to cement the fundamental alliance between Great Britain and the United States and between the English speaking peoples of the world. It is too early to conclude what might come out of the SDI programme. It will take many years to develop and we shall during that time have to rely solely on the nuclear deterrent. When we know what will come out of it, the United States will have to negotiate under the anti-ballistic missile treaty. In several years time we shall be in a better position to judge the effect of research.
Mr. Roy Beggs (Antrim, East)
Did the Prime Minister have an opportunity during her discussions with President Reagan to express appreciation of the contribution which American investment makes to job creation in Northern Ireland? Was she given any reason to believe that there would be further American investment to help to provide jobs for young people and so wean them away from paramilitary organisations and to help to speed progress towards normality?
The Prime Minister
One has to take advantage of the high dollar in two respects. First, it encourages exports to the United States from all parts of the United Kingdom, and a number of companies are taking advantage of that. Secondly, it is a very good time for inward investment into this country from the United States. That will be encouraged.
Mr. Hugh Dykes (Harrow, East)
Does my right hon. Friend agree that the massive deficit in the United States, its huge defence spending, the boom in imports and the boom in foreign deposits are more important factors than some other factors to do with United States' economic tradition and internal behaviour such as labour mobility? In that context, and bearing in mind what the President unfortunately said at the press conference, surely it behoves us to look after our interests in Europe more, for example, by joining the EMS as a full member, by defending ourselves and by putting more pressure on the Americans to adopt a more internationalist monetary policy?
The Prime Minister
I believe, and the Americans believe, that the fundamental strength of the American economy is the underlying enterprise culture of the American people. They go for self-reliance and success. People, not the Government, create jobs, as the President said in his statement at that press conference to which my hon. Friend referred. The Americans have a much less rigid labour market. Many more small businesses are [column 179]starting up in the United States than in Britain. That underlying difference is the fundamental strength of the American economy.
My hon. Friend is aware that the dollar has surged against all European currencies. It is at a record high. Therefore, to join the EMS would make no difference. It would inhibit some of our present freedom of action.
Mr. John Hume (Foyle)
Will the right hon. Lady confirm that the Northern Ireland problem was one of the subjects discussed with President Reagan? Apart from the subject of cutting off the flow of funds to the IRA, were any other aspects of the Northern Ireland problem discussed? Did President Reagan make any other positive offers of assistance to resolve that problem?
The Prime Minister
No, nor would I expect him to do so. As the hon. Gentleman knows, the United States purchases a number of export products from Northern Ireland. The hon. Gentleman will have seen my comments that a dialogue continues between this Government and Mr. Garret FitzGerald 's Government in the Republic of Ireland with a view to achieving peace and stability in Northern Ireland.
Viscount Cranborne (Dorset, South)
Is my right hon. Friend aware of the increasing interest shown by the United States Administration and by representatives on Capitol hill in the subject of Afghanistan, especially humanitarian aid in that country? Did my right hon. Friend have an opportunity to discuss that matter with the President of the United States?
The Prime Minister
We did not discuss in detail the position of Afghanistan. We pursued the subject of trying to persuade the Soviet Union to withdraw from Afghanistan to leave that country to determine its own future.
Mr. Andrew Faulds (Warley, East)
Does the Prime Minister really not understand that, once the massive technological and industrial base for the research and development of star wars has been established over the next 20 or 30 years, it will be impossible to abandon the project—because of the effect on jobs in the American economy or to abandon the negotiations on the project?
The Prime Minister
It is vital to ascertain through research exactly what can be achieved. As I have said, the Soviet Union was already well ahead with certain types of research. For the Soviet Union to have gone ahead and to have had a system that would stop nuclear missiles, and, in that way, stop the nuclear deterrent, and for the United States to have done nothing would have upset the balance upon which our security ultimately depends.
Mr. Tim Yeo (Suffolk, South)
During my right hon. Friend's visit to Washington, did she have the chance to observe the contribution made by small businesses in the United States towards the creation of jobs? Will my right hon. Friend lend the full weight of her authority to the efforts in this country to remove bureaucratic and other obstacles to the development of new businesses?
The Prime Minister
We had considerable discussions on this subject with the President and the Commerce and Treasury Secretaries. An outstanding feature of the American economy is the fact that the jobs created have come from small business and the numbers employed by big manufacturing business are decreasing. It is, therefore, [column 180]vital to secure in this country that same enterprise culture that enables these new small businesses to come into existence. We must examine the possibility of reducing the number of regulations so that it is easier to start up businesses here than it is.
Mr. Tam Dalyell (Linlithgow)
Did President Reagan, Secretary Shultz or any other senior American approve of the fact that the right hon. Lady did not negotiate on the Falklands?
The Prime Minister
No one said anything to the contrary to me. I made my position very clear, and it is very different from that of the hon. Gentleman.
Mr. James Hill (Southampton, Test)
I thoroughly agree with my right hon. Friend on SDI. Indeed, early-day motion 404, which was signed by myself and several of my and right hon. and hon. Friends, is totally in line with her view. Did my right hon. Friend obtain an understanding from President Reagan on NASA that there would be a sharing of research work? Will that mean more job opportunities? If so, will my right hon. Friend spell this out loudly and clearly so that the Opposition doubters will see in this move the defence not only of this country but of the whole of Europe and understand the need in the distant future to destroy nuclear stores? This will mean the eventual protection of everyone and technology transfers with the USSR.
The Prime Minister
With regard to the SDI, Secretary Weinberger is anxious that other European countries should join the research effort. It is my belief that we shall not be the only country that offers to do so. It is important that we do so that we can keep up with the latest technological developments in a sphere in which we would otherwise have no opportunity to engage.
Mr. Ian Wrigglesworth (Stockton, South)
As the Prime Minister did not just return from Washington empty handed with regard to economic policy, but, worse than that, we now have a record low against the trade-weighted index of all currencies, will she take further steps now to stop the disruption and distortion to world trade caused by the economic policy being followed in Washington? Will she reconsider her reply that the only answer to the problem is united action in Europe with our partners in the European Community, and consider entry into the European monetary system?
The Prime Minister
I have said over and over again that all the currencies in the European monetary system are also at record lows against the dollar. The EMS does not protect one from a surge by the dollar. Most countries have gone down on the trade-weighted index because of the strength of the dollar. The same factor is affecting us all.
Several Hon. Members
rose—
Mr. Speaker
Order. I have to take into account the fact that we have a heavy day ahead of us. [Interruption.] Order. Hon. Members should listen to what I have to say. I propose to allow questions to continue for a further 15 minutes, during which time I hope that every hon. Member who is now standing will be called.
Mr. Dennis Skinner (Bolsover)
Perhaps the Prime Minister will answer the question that I asked her before she went to Washington. When she talks about the dollar being dominant in world currency markets and tries to [column 181]explain that all currencies are suffering, why is the trade-weighted index at an all-time low today? Is she aware that any British citizen who wants to buy Italian currency will have to pay a premium on the forward exchange markets to get hold of it? It is the first time that that has happened in the 30 years that the Prime Minister has been in the House. If that is the case, what success has she brought back from Washington, especially when we take into account that she has spent in total £2 million of taxpayers' money on gallivanting around the world.
The Prime Minister
With regard to the real part of the hon. Gentleman's question on the trade-weighted index, the dollar is of course 25 per cent. of that index and therefore most currencies are much lower than they were. He tries to say that other countries have not suffered. Since 1979, the dollar has appreciated against sterling by 95 per cent., against the deutschmark by 80 per cent., against the French franc by 146 per cent., the lira by 153 per cent. and the Swiss franc by 68 per cent.
Mr. Spencer Batiste (Elmet)
I welcome the strategic defence initiative announced by my right hon. Friend and our participation in it, but did she take the opportunity to raise with the President during her discussions the serious problem posed to co-operation in high-tech industries between our countries by American claims to legislate for other countries extraterritorially in contravention of their sovereignty and in breach of international law?
The Prime Minister
Yes, Mr. Speaker. That matter has been pursued many times. It was pursued on this occasion with regard to the anti-trust legislation and unitary taxation. Both matters were raised.
Mr. Greville Janner (Leicester, West)
When the Prime Minister refers to the President's speech in 1982 as still standing and being welcome, is she aware that it was welcomed by one side only? If there is to be peace in that area, there must be consent on both sides. While Israel is only one nation among many, it is the only democratic nation in that area, and it is one side of the argument. Its interests, which the Prime Minister did not mention, are entitled to be recognised.
The Prime Minister
As the hon. and learned Gentleman will be aware, that speech fully recognised, as have other statements since and all statements from this Government, the right to security of all states in the area. That has never been in doubt. That speech also set out a course of action for the future under which the West Bank may become a part of a federated Jordan. I hope that the hon. and learned Gentleman will welcome a settlement of the problems in that area which fully recognises not just Israel's right to exist, but to exist behind secure borders.
Mr. Anthony Nelson (Chichester)
Does my right hon. Friend accept that most people in this country believe that her statement to both Houses of Congress was an important re-statement of the special cultural, historical, economic and security interests linking our two countries? Will she bear in mind that those people in the House and outside who are wholehearted supporters of the Government's economic policy are not indifferent to this country's exchange rate and believe that more can be done on a [column 182]European basis to correct the problem, more adequately to reflect this country's assets and interests by a more realistic exchange rate?
The Prime Minister
Only two things can be done about an exchange rate, and both of them to a limited extent. The first is interest rates. My hon. Friend will be well aware that we took action here, but the purpose of interest rates is not to defend a specific exchange rate, but to hold a strict monetary policy. The other thing is intervention under the G5 arrangement. At first it appeared to have stopped the surge of the dollar, but there is so much money moving around the world from non-residents and leads and lags on trade that intervention could not regularly stop the surge of the dollar. It can come in from time to time to make it uncertain for the speculator.
Mr. David Winnick (Walsall, North)
Is the right hon. Lady aware how humiliating it is for this country for her to go to Washington and to act as a kind of echo of President Reagan? She should perhaps be reminded that this country is not a satellite. Is she aware that there is a great deal of admiration for the way in which New Zealand is standing up to the pressures of the United States? One would have expected her to try to understand that point of view instead of once again simply carrying out President Reagan's wishes?
The Prime Minister
We go to the United States as allies in NATO. I believe that most people in this country, if not the hon. Gentleman or the Opposition, are grateful to the United States for keeping 300,000 troops on the central front in Europe. They help to maintain, among other things, this country's right to freedom, justice and democracy. With regard to the Nicaraguan point, I repeat that we and the United States Government share a common—
Mr. Winnick
I said New Zealand.
The Prime Minister
I am sorry, did the hon. Gentleman say New Zealand? I have already fully answered about New Zealand. We shall not reveal which of our ships is carrying nuclear weapons.
Mr. James Couchman (Gillingham)
When my right hon. Friend offered British co-operation and the co-operation of scientists with the SDI was she aware how appropriate that was, coming as it did within a few days of the 50th anniversary of the invention of radar by my kinsman, Sir Robert Watson-Watt, a defence system which has been crucially important over the past 50 years and continues to be so?
The Prime Minister
I am grateful to my hon. Friend. I think the United States fully appreciates this country's excellence in research and also its inventive genius. It is pleased that we have offered to help in the SDI research programme.
Mr. A. E. P. Duffy (Sheffield, Attercliffe)
When the Prime Minister did her “Garret FitzGerald and I” party piece in Congress, was she implying that his support would run to the pitiless killing, within a few hours, of an Irish schoolboy by British soldiers, or is she quite indifferent to the political consequences of an intensification of the shoot-to-kill policy in the north of Ireland to the position of Dr. FitzGerald in the south and to constitutional nationalism in the north of Ireland?
[column 183]The Prime Minister
I believe that Dr. Garret Fitzgerald and I take exactly the same view about terrorism and the IRA. Let me make my view clear. I am grateful to our security forces and the police in Northern Ireland for the excellent way in which they do everything to protect the citizens of that country.
Mr. Henry Bellingham (Norfolk, North-West)
Did my right hon. Friend tell the President that employment in the United Kingdom is rising? Does she agree that much more emphasis should be placed on the advantages of the more competitive pound, and that a sharply falling dollar would have disastrous consequences for the world economy?
The Prime Minister
Yes, I pointed out that employment in the British economy is rising, as my hon. Friend knows. In the year to last September, the numbers employed rose by about 340,000. However, that rise did not have an impact on the unemployment register because many married women came into jobs. Therefore, the number of jobs is rising but the number of unemployed is not falling.
With regard to my hon. Friend's other point, a number of people who are worried about the surge of the dollar would also be worried if it suddenly turned and sharply fell. Both would have disastrous consequences on certain parts of our economy.
Mr. Terry Davis (Birmingham, Hodge Hill)
If the Prime Minister attributes the strength of the dollar to the underlying strength of the American economy, how can she deny that the weakness of the pound is due to the underlying weakness of the British economy after six years of Conservative Government?
The Prime Minister
If the hon. Gentleman takes that view, he will also take the view that the Japanese, German and Swiss economies are weak. That is not so, and I am not prepared to call weak an economy that, in spite of a coal strike, grew by 2.5 per cent., has record output and investment and an increase of employment.
Mr. David Crouch (Canterbury)
Is my right hon. Friend aware that there will be a widespread welcome for the emphasis given to the middle east question? She has twice referred to the President's speech in 1982, which was then an initiative. Does she agree that what we want now is not an old initiative but a new one, and would she consider stressing that point in further talks with the President?
The Prime Minister
Probably one of the most important things to try to establish is whether the Palestinian people will accept security council resolution 242 as modified by resolution 338. If it is acceptable to the Palestinian people as a whole, that opens the way to further negotiations through the most excellent offices of King Hussein.
Mr. Martin Redmond (Don Valley)
Will the Prime Minister answer a question that is puzzling the House? Did President Reagan feed her any Pal meat when she was in America?
The Prime Minister
I am sorry, I did not hear. Will the hon. Gentleman kindly repeat his question?
Mr. Redmond
Did President Reagan feed the right hon. Lady any Pal meat?
[column 184]The Prime Minister
I am sorry that I asked the hon. Gentleman to repeat his question. It was not worth answering, nor taking up the time of the House.
Mr. John Wilkinson (Ruislip-Northwood)
I recognise the great mutual benefits that would ensue from joint research on the SDI between the United States and the United Kingdom. However, did my right hon. Friend endorse the foreign policy and security implications behind the SDI, that is, that an effective space-based defence, rather than diminishing deterrence, would improve and enhance it?
The Prime Minister
The United States makes it clear that embarking upon this programme will enhance deterrence, as my hon. Friend has said, and not reduce it.
Mr. Dick Douglas (Dumfermline, West)
Will the Prime Minister concede that it is trifle embarrassing to watch the so-called Iron Lady casting herself, like a simpering teenager with a crush, on a B-grade actor who short changes her $1.033 to the pound. Will she stop praising the United States economy and telling us what benefits it has, and do something to enhance our economy by building up the manufacturing base and stopping our capital and monetary assets flowing to the United States?
The Prime Minister
The first part of the hon. Gentleman's question showed more of his mind than of mine. That is absurd and ridiculous. I have great admiration for the United States economy, which has had the ability, over the past 20 years, to create the number of jobs that have been created there, as the President said, not by the action of Government but by the action of the people, against a financial and regulated framework that has reduced the number of regulations and the amount of taxation. There are drawbacks. One of the reasons for the high dollar is the deficit and the high interest rates required, even with all the advantages of the United States economy, to draw in money from the rest of the world. The President has sent proposals to Congress to try to deal with the deficit, and set the aim of a balanced budget during his last state of the union speech.
Mr. Christopher Murphy (Welwyn Hatfield)
Did my right hon. Friend have time to discuss Trident and the possibility of increased offset opportunities to benefit the United Kingdom aerospace industry?
The Prime Minister
I believe that my right hon. Friend Michael Heseltinethe Secretary of State for Defence had particular discussions, and I mentioned to the President the need to purchase more British equipment. I mentioned a number of orders that we have in mind that would be of great benefit to some of our companies.
Mr. Kinnock
At Christmas time, the right hon. Lady let it be known that President Reagan had told her that he would intervene to stop the rise of the dollar. What has happened since? Why, in the intervening period, has the President chosen to let her down so badly? As to the answers that she gave on star wars, she asserted in the past half hour that the Soviet Union is producing an effective defence against the Western deterrent. If that is the case, why is she spending vast sums of money on Trident to make additions to that deterrent arsenal? In view of the fall in the pound, how much extra will the Trident missile cost?
[column 185]The Prime Minister
With regard to intervention, that was agreed under the Williamsburg economic summit under certain specific conditions.
Mr. Kinnock
Camp David.
The Prime Minister
The Camp David summit dealt almost exclusively with the SDI and one or two other things, but not so much with the economic aspect. I think that the right hon. Gentleman is referring to the G5 meeting which took place later in Washington, and from which there was a communiqué—
Mr. Denis Healey (Leeds, East)
What about the new agreement?
The Prime Minister
I am answering the right hon. Member for Islwyn (Mr. Kinnock), not the right hon. Member for Leeds, East (Mr. Healey).
I think that the right hon. Member for Islwyn is referring to the G5 arrangement agreed among the G5 countries later in Washington, which was set out in a communiqué. If the right hon. Gentleman does not think that it was, he can find the communiqué.
Mr. Healey
On a point of order, Mr. Speaker. The Prime Minister, somewhat to my surprise, referred to what I said. I was simply reminding my right hon. Friend the Member for Islwyn (Mr. Kinnock) that the Prime Minister, after her return from Washington in December, said that there was a great new agreement, but it simply repeated the earlier agreement, on joint intervention to prevent the rise of the dollar. My right hon. Friend was asking the Prime Minister why the President of the United States has now ditched her.
The Prime Minister
I repeat what the facts are, Mr. President—[Laughter.]—Mr. Speaker.
Mr. Speaker
Order. We have all done it.
Mr. Healey
The right hon. Lady did it.
The Prime Minister
The facts are that first it was agreed under the Williamsburg summit in June 1983 that in certain circumstances there could be co-ordinated intervention. That was repeated at the G5 meeting in Washington, which took place well after Christmas. There has been a certain amount of intervention, as has already been announced and as the right hon. Gentleman knows. The amount of intervention cannot deal fully with the sums of money that are being moved about the world, as the right hon. Gentleman knows, both by non-residents and also by the leads and lags in trade. At any rate, this Government have not had to go to the International Monetary Fund, as happened under the previous Labour Government.
[column 186]Mr. Harry Ewing (Falkirk, East)
On a point of order, Mr. Speaker. When answering a question from one of her hon. Friends I believe that the Prime Minister inadvertently misled the House. I am sure that she would not want a misleading answer to remain on the record. In answer to a question about her discussions with President Reagan regarding unemployment, in this country and an increase in employment the Prime Minister said that she told President Reagan that although employment in this country increased last year by 300,000 it had not made any impact upon unemployment because—I believe that this is the misleading part of her answer—large numbers of married women came on to the register. That is clearly not the case. The Prime Minister is creating the impression that the increase in unemployment last year was due almost entirely to married women coming on to the register. I am sure that the Prime Minister would not want such a misleading answer to remain on the record.
Mr. Speaker
I believe that that point of order comes into the category of trying to extend Question Time. Since the Prime Minister has been charged with giving an incorrect answer, however, perhaps she would like to answer it.
Mrs. Thatcher
Those jobs, Mr. Speaker, were not filled from the unemployment register. If they had been filled from the unemployed register the number of unemployed would have fallen. I believe that a considerable number of married women going back to work was a factor.
Mr. Dave Nellist (Coventry, South East)
Given that the question asked by the hon. Member for Southampton, Test (Mr. Hill) went on for two minutes but seemed to go on for much longer, given also that during the three quarters of an hour of questions on the Prime Minister's statement a large amount of the time was taken up by questions from right hon. and hon. Members on the Front Benches, in order to protect the rights of Back Benchers I wonder whether, Mr. Speaker, you would consider extending questions on the Statement for a further five minutes, since there are only about half a dozen more hon. Members who wish to ask questions?
Mr. Speaker
I cannot do that, in fairness to a Standing Order No. 10 application, a ten-minute Bill and those who wish to take part in the subsequent debate. I try to look after the interests of Back Benchers and to include as many as possible. Because of the importance of the statement, I have allowed questions on it to continue for rather longer than I would normally allow.