PRIME MINISTER
Engagements
Q1. Mr. Wareing
asked the Prime Minister if she will list her official engagements for Tuesday 9 July.
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.
Mr. Wareing
Does the reported decision of the Secretary of State for the Environment to scrap the present system of constraints on local authority finance through penalties and targets denote the first part of the Government's U-turn in response to their failure to hold the seat in the Brecon and Radnor by-election? What further concessions are likely as the Government go further down the slope towards electoral disaster?
The Prime Minister
No final decisions have yet been taken on the rate support grant settlement for 1986–87. The hon. Gentleman will be aware that on 16 January 1985 my right hon. Friend Patrick Jenkinthe Secretary of State for the Environment said:
“I should like to be able to abandon targets and holdback”
but that
“Much depends on the level of local authority spending in the coming year” .—[Official Report, 16 January 1985; Vol. 71, c. 338.]
Mr. Ian Lloyd
In the context of President Reagan 's timely reminder yesterday that the campaign against terrorism worldwide must be indivisible, is my right hon. Friend aware of any event which throws a more glaring light on the squalid and contemptible character of political opportunism than the appearance on a public platform in the centre of London, with a representative of an [column 894]organisation with objectives and methods indistinguishable from those of the IRA, of a member of the Privy Council, the Leader of the Opposition? Can my right hon. Friend do anything to ensure that the authority and prestige of the Privy Council are not illegitimately transferred in that way?
The Prime Minister
My hon. Friend has made his point very cogently and I am glad that he has brought the matter to more public attention.
Mr. Hattersley
Does the Prime Minister endorse the judgment of her Chancellor that ours is the most successful economy in western Europe, or have her civil servants had the opportunity during her busy day to explain to her the phoney nature of the statistics on which that claim was based?
The Prime Minister
My right hon. Friend Nigel Lawsonthe Chancellor was endeavouring to point out the fact that no other country in Europe has such a good record as Britain in the creation of new jobs in the past year.
Mr. Hattersley
It is clear that the Prime Minister has not read what the Chancellor said. He said that we had the best growth rate in western Europe, but the statistics, which I assume were available to him, show that only one EEC country had a worse growth rate than ours. Does the Prime Minister endorse or repudiate the Chancellor's manipulation of the figures?
Secondly, while we are on the subject of Government achievements, will the Prime Minister now answer the question that I asked her 10 days ago, but which she ducked twice then and has continued to duck, and confirm that she has presided over the highest ever levels of unemployment, company liquidation, real interest rates, mortgage rates and manufactured trade deficit in the history of this country?
The Prime Minister
May I point out to the right hon. Gentleman that we have also presided over record output, record standard of living, record investment and record overseas assets.
Mr. Hattersley
I simply ask the Prime Minister to answer the question that I have now asked her on three occasions: are the allegations that I make about the record catastrophes over which she has presided true or false?
The Prime Minister
I do not influence the right hon. Gentleman's questions. He must not influence my answers. [Interruption.] We have record output, record standard of living, record investment and record overseas assets. I only regret that Neil Kinnockthe Leader of the Opposition is not here so that I can say it to him.
Mr. Alan Howarth
Does my right hon. Friend agree that lower taxes achieved as a result of the privatisation programme would be valuable and welcome, but that the only way to secure for the longer term a low-taxation economy, with all its benefits for employment, is to hold absolutely firm against the pressures for raising public expenditure, and to reduce public expenditure as a proportion of gross domestic product?
The Prime Minister
Yes, Sir. I believe that most people would prefer more net take-home pay. The only way to achieve that is to reduce taxation or increase growth in the economy. Both need room to be made for private enterprise and growth in the private sector.
[column 895]Mr. Steel
Does the Prime Minister recall telling us last Tuesday how glad she would be to welcome here the Conservative candidate for Brecon and Radnor as the new Member of Parliament? As in her newspaper interview yesterday she dismissed with contempt some of her colleagues as flexi-toys, have not they been proved right in suggesting that she is out of touch with the electorate? How would she describe the people of Brecon, now that they have spoken for Britain?
The Prime Minister
I congratulate the winner of the Brecon and Radnor by-election on his victory. I note that the tenure of those in seats won by Liberal and Social Democratic candidates in by-elections tends to be rather short, as my hon. Friends the Members for Sutton and Cheam (Mr. Macfarlane), for Skipton and Ripon (Mr. Watson), for Crosby (Mr. Thornton) and for Croydon, North-West (Mr. Malins) will testify.
Mr. Patrick McNair-Wilson
Has my right hon. Friend yet had time to reflect upon the demand from the Director General of the Confederation of British Industry for an immediate 2 per cent. cut in the base rate? What reply would she give to him, bearing in mind the fact that many of the world's economic indicators, including oil, continue to present a confusing picture, and our own inflation rate still requires a firm hand?
The Prime Minister
I think that my hon. Friend found the reply in his last few words. Our own inflation rate still requires a very firm hand. As my hon. Friend is well aware, it is not possible to say anything about the interest rate from this Dispatch Box other than that one does not wish it to be high for a moment longer than the inflation rate requires.
Q2. Mr. Skinner
asked the Prime Minister if she will list her official engagements for Tuesday 9 July.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Skinner
Does the Prime Minister recall that, in the 1970s, many hon. Members on both sides of the House tried to take the lid off the Crown Agents scandal? Is she aware that another City scandal, relating to Johnson Mathey Bankers, has not been properly dealt with in the House by the Chancellor of the Exchequer or by herself? Is she further aware that yesterday 135 hon. Members tried to table a motion which would have enabled the House to debate the matter during our proceedings on the Finance Bill today? Why does she not do the decent thing and tell the Governor of the Bank of England to publish the Price Waterhouse report, so that we can know the truth about this sordid affair? Or is the real truth that some of those City crooks are a little too close to home for comfort?
The Prime Minister
The hon. Gentleman is well aware that my right hon. Friend Nigel Lawsonthe Chancellor of the Exchequer made a full statement to the House and was questioned on it. I have nothing further to add to that statement.
Q3. Mr. John Townend
asked the Prime Minister if she will list her official engagements for Tuesday 9 July.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Townend
When will the Government stop giving the impression in the country that public expenditure is [column 896]being reduced when the facts show that public expenditure is inexorably increasing? Will my right hon. Friend ensure that the Fowler review produces substantial savings in social security, which can be used to take the low-paid completely out of tax?
The Prime Minister
As my hon. Friend is aware, Nigel Lawsonthe Chancellor's policy is to restrain total public expenditure, but within that total to carry out our pledges on priorities. My hon. Friend will be aware of what those pledges were: defence, law and order, the Health Service and pension provision. Those have been fully honoured within the total restrained public expenditure, and it is still our policy to endeavour to make further reductions in direct taxation. Had the Labour Government's rate of taxation held, people would be paying £6 billion more in income tax than they are now.
Mr. Robert Sheldon
Does the Prime Minister now believe in the middle way? If she does, will she define it?
The Prime Minister
I believe in the right way. It is the way in which we are going.
Q4. Mr. Colvin
asked the Prime Minister if she will list her official engagements for Tuesday 9 July.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Colvin
Will my right hon. Friend take time today to reflect on the meeting yesterday with the Chiefs of Defence Staff, contrasting the Conservative party's united policy on nuclear deterrence with the divided policies of the SDP and the Liberal party? Will she acknowledge that although middle-of-the-road policies may be all right for some, driving all over the road is dangerous for everyone, and that the more help the Liberal party can get from the British School of Motoring, the better?
The Prime Minister
I do not know the policies of the Liberal party or the SDP on nuclear deterrence. They seem to be at sixes and sevens. The Conservative party is the only one that has a firm policy. The Government's policy is that of a firm independent nuclear deterrent, the firm defence of everything in which we believe and honourable and loyal membership of the NATO Alliance.
Mr. Winnick
Is the Prime Minister aware that, following Brecon and Radnor, many Labour supporters would welcome the appointment of the Secretary of State for Trade and Industry as chairman of the Conservative party? Is she further aware that Labour supporters could hardly ask for more than she and the Secretary of State being principally responsible for putting across the Government's message?
The Prime Minister
Labour supporters have nothing to boast about at present.
Mr. Dykes
On economic management, is not the reality that we need all the instruments of economic demand management, including lower interest rates, lower taxes and more capital spending on public and private account to create new jobs?
The Prime Minister
I would dearly like to have more capital spending, but not more total spending. My hon. Friend will be aware that if we want more capital spending, we must have less current spending, unless we put a higher burden of taxation on the working population. We are not entitled to put a higher burden of taxation on [column 897]the 40 per cent. of pensioners who pay income tax, or on the 41 per cent. of those who pay income tax but who earn below average male earnings. My hon. Friend will find that we are following the right overall policy.
Mr. Donald Stewart
Is the right hon. Lady aware that, although reductions in income tax for the lower paid will be generally welcomed, it is grossly offensive to the bulk of wage and salary earners to presume that their first priority is a reduction in income tax? Most people are not so greedy and selfish as to have that as their main aim. They would prefer action by the Government to put the unemployed back to work.
The Prime Minister
I believe that most people think that they are entitled to a larger share of their hard-won earnings in their own pockets. If the right hon. Gentleman takes a different view, perhaps he will say how much tax he would levy on those many people who would prefer to have their taxation reduced.
Q5. Mr. Dubs
asked the Prime Minister if she will list her official engagements for Tuesday 9 July.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Dubs
Is the Prime Minister aware that during the first five years of her Government the crime rate increased by nearly 40 per cent.—about double the rate during the five years under the last Labour Government? Despite all her talk about pledges on law and order, more money for the police, and so on, is it not a fact that the criminals have never had it so good?
The Prime Minister
I believe that we have never had a more effective police force or one with higher morale and greater efficiency. I should have thought that the hon. Gentleman would join in congratulating the police on their excellent record.