I would just make a short statement to start if I may. At the outset of this election, all of the three major Parties, set out very starkly and realistically how they see the economic situation. All three manifestos were in agreement that Britain was facing the biggest crisis since the war. Then within a week, the Labour Party started to backtrack, they started a cover up operation, they set about painting the clouds with sunshine. The rate of inflation you were told, had been halved, when in fact, the reverse was done. Unemployment you were told, was going down, when in fact it was going up. Wages increases you were told were only going up a little when in fact we are in the middle of a wages crisis. Even the number of strikes and days lost we were told was going down. When their own Government statistics show the opposite, the simple fact is, that despite all their concessions to the unions there has been more strikes and more days lost under this Government than there were under us in the comparable period last year. So what happens, what has changed in the five or six days from the publication of the Labour Manifesto and Mr Healey 's now infamous 8.4%;? I will tell you what happened, Labour's back paid managers realised that they could not get through three weeks of an election campaign solely on the strength of their social policies, after all they have told us that the social contract or nothing. The social contract was the only thing that stood between us and our negotiations, and when the social contract looked more frail and more insubstantial with every day that passed, the only thing left to do, was to persuade the people that there was after all no crisis. In the circumstances, it was our duty and our responsibility to put before the electorate the true facts and the situation as we saw it.
They were the same facts of the situation that we had in mind when we published our Manifesto, they were the same facts that not only the Labour Party but also the Liberal Party had in mind when the published their manifesto, that is the reason behind the battle of the statistics, But this election is not mainly about business, it is about people. Their whole way of life is threatened by the subject, people's jobs, people's saving, people's standard of living that is what we have been fighting the election on, that is what we will continue to fight the election on. [end p1] That is … [line missing in text] and I am going to ask Geoffrey Howe to make a brief statement on this subject, he has circulated a larger paper, after that Margaret Thatcher is also here, and she will be prepared to answer any further questions you may have on rates or housing policies. [end p2]
Sir Geoffrey HoweGH
I have circulated our 2 papers, the first of them is a detailed paper on our tax credit scheme together with a notice explaining the way in which we have developed that since it was first published. The second is a point by point repudiation of some of Barbara Castle 's statements yesterday. I want to begin by deploring the bitter and partisan way in which Mrs. Castle has tried to mis-represent our carefully considered and realistic proposals for social policy. In particular I want to make this clear, we have three immediate and important priorities in our manifesto. First all to help home buyers, secondly to help food production and thirdly, this is my responsibility, to help in the protection of the elderly and all those who depend on long term social benefits. It is for that reason that we shall—and I want there to be no doubt about this—make the next increase in pensions and other long term benefits effective in January or February of next year. If people depending on those benefits had to wait until next summer as the Labour Party would allow them to do then there is a very real risk of a recent increase in those benefits being entirely eroded by inflation. Secondly I want to pick up one point that Barbara Castle made about the disabled. She is ought to imply that our other social programmes were being introduced regardless of what ought to be done for disabled people, and I very much regret the attempt to bring the issue at that time into narrow parties and debates. The last Conservative government created an obligation for any government in office at the present time to bring forward the proposals for additional help for the disabled and on the same day of this month we published our proposals for the disabled as Barbara Castle published hers, and I made a statement on that day acclaiming the attack that the approach was almost exactly the same, and acclaiming the attack that in this area there was no conflict between the parties. I very much regret the fact that she has tried to bring that kind of issue into conflict in the present debate. Our proposals for the disabled are set out in our manifesto. We have also set out the other longer term parts of our social policy which are equally important. We intend to re-activate our second pension plan as soon as we possibly can not to wait till 1976. This is and will be a foundation for a national politic [gap in text]. It was acclaimed by [gap in text] the last chairman of the parliamentary Labour Party. He advised Barbara Castle that any incoming Labour Government ought to leave it on the statute book and use it as a foundation for the future. Instead she chucked it aside and several years will be wasted until the introduction of the pension scheme can be worked out. Finally to provide additional provision for the other social needs to help get pensioners off supplementary benefits, to improve provisions for the family with child benefits, we intend to introduce our tax credit scheme. This is in fact the keystone of our social policy. We believe as in social policy elsewhere it is right to try to adopt policies that appeal to every moderate section of the community and the broad support given to the tax credit scheme by the Liberal Party as well as moderate opinion by the Labour Party confirms our views that tax credits represent just that sort of policy. [end p3]
The tax credit scheme build up will be high on the agenda for an incoming Tory Government, seeking as we shall do to hammer out policies, on the information we will be able to agree, we think that it is the best long term foundation for the improvement of our social programme. We shall therefore introduce legislation to a statutory framework as soon as possible, the actual operation of the scheme will be brought into effect as economic circumstances allow.
The first instalment will be the introduction of child pay for all children including the first and that will be paid directly to the mother.
That was Sir Geoffrey Howe, and Margaret on housing and all to rest of the general to me.
Has the costing of the tax credit scheme shifted in accordance with the inflationary period we are in?
Obviously there have changes in this social health as a result of changes in the value of money. The reappraisal actually involves some reduction in the costs, we are proposing a separate credit for married women as well. As recommended by the Select Committee in the House of Commons.
In fact, of course, the social cost depended on the time that it was introduced, that is why we have made very sure that the main market to recognise is to simplify our local system and to simplify our tax system and to bring them both together in a much more sensitive instrument.
The whole thing would then take care of itself, and within that framework that we shall establish, then we can introduce the social benefits, either then as resources allow.
The main criticism of your last scheme was the £1,300 million it was going to cost—most of it not going to the very poor, the people who welcome the scheme. Have you looked at that particular angle?
We have looked at that front obviously. The scheme itself as originally proposed was on certain assumed figures, it is possible to readopt in a number of ways, but not enough to comment on it seriously. One of the reasons for example, why we want to alter the arrangements for paying credit for married women. While we think the scheme can be used as a foundation to bring help to one parent families. But the social feature, is the provision of child credit which will take a larger number of poorer families off the social benefit, and will involve the abolition of the family supplement and the payment of credit through pensions, [gap in text] which will take well over a million pensioners off supplementary benefit. [end p4]
Do you intend to raise family allowances in the period before the tax credit scheme comes into operation?
An improvement in family allowances will play part of the introduction of the tax credit scheme. Barbara Castle yesterday I think sought to imply that the Labour Party's manifesto contained a committement to early improvement of family allowances. In fact she said in letters to [Shirley] Williams for one, that it wouldn't be possible for them to make any change in family allowances till April, 1976. By that time we hope that our frame-work for the tax credit scheme will be available and we shall have to see then how quickly additional resources are available for them.
Since Mr. Heath has put on his list the various schemes for second pensions—things that could be taken out of politics—would you be prepared to discuss with other parties, when coming into office, to use Mrs. Castle 's scheme as a basis for a second pension?
No we think we should follow the advice of Douglas Houghton. There is a difference between our position and hers. The difference is this, we have actually got on the statute book our 1973 social security act. Thousands of employers thousands of trade unions up and down the country and their members were actually at work on getting that scheme ready for introduction next April. It is there, all the details are there, the occupational pensions board is there, the reserve pension board is available and so on. It is all ready to go on the road and Douglas Horghton said last September that an incoming Labour Government should let that stand as the basis for future discussions on improvements for pension policies. An additional advantage of course if being founded on proper investment and not on occupational schemes. We would certainly want to use that as a basis for discussion with the other parties, trade unions, industries and so on for improving it in the future. It is [gap in text] than the rather imprecise proposals contained in Barbara Castle's last paper which she admits couldn't be got under way until 1978 at the earliest. Our show was on the road, Douglas Houghton told labour to kick it on the road, Barbara Castle is pushing it on the road, and we want to get it back on the road and then we will on that foundation for improvement and discussions with the other parties. [end p5]
Does not this mean you are seeking to reconcile things that might not have been … on the basis of other parties abandoning their policies and adapting to yours?
No it does not mean that happens, obviously our has a different emphasis, and ours is dependent on investment and … But we have the strong points to make that this is not out of line, with what most moderates in this country will welcome. And it was endorsed by last December.
We were making an objective moderate independent and sensible view and saying that, look for heaven's sakes build on this, get this show on the road first.
All the pressure groups supported the Labour scheme—the editorials supported the Labour scheme, eg, financial Times, are you not going to beat on a limb here?
No, I don't think that is right. Many of the commentators have supported our own objections, they particularly regretted the fact that the Labour Party scrapped our old scheme of last time.
Can you name a single supporter that agrees with your plan when it will take 44 years and Labour's will take 20 years?
Yes, indeed, I think that one of the commentators of the International Times, said [gap in text] other leading articles supported us as well. They were the Daily Mail and the Daily Telegraph for example.
Why these are mythical to and friends and witnesses in the press, speaking to the Chairman of the Labour Party last year, this was the right way scheme, no but he assumed the possibility to face up to a member of Parliament of the Labour Party to the problem of [gap in text] and he said of course there is room for improvement.
He said that those improvements could be made on the base of the Conservative Schemes.
That if all was allowed to go ahead, then many of the people at work would come within the social strategy from next April, and when we come to the thousands up and down the country who are actually working, we are far advanced at establishing occupational benefits for their employees. Blue collar workers white collar raises. That is all going ahead, I mean the last three years, should go to the [gap in text] [end p6]
Sir Geoffrey has very fairly said that it is not possible to say because of the Conservative programme, what will be the cost of big elements like the tax credit scheme. Why last night on the Party Political Broadcast they quoted from The Economist an assessment of how much the Conservative programme will cost. If you say it cannot be costed, why did you put out the figures from The Economist?
I am not saying that, what I am saying is that the tax credit scheme was as a result, was for an economic saving of some £2000 million pounds on that, so to take it out of the inflation, and taking it as whole, I am saying that we intend to introduce that difficult programme in stages as resources become available. The real point is this, the Economist statements and comparison of the programme, made it clear that ours was the least costly, made it also clear that we have identified the priorities in our programme, which was in the fields that I have mentioned, pensioners, food production and home buyers.
The rest depends on the extent to which resources become available. Questions about the cost of the programme should be much more properly directed to the other Parties than to ourselves.
I am sorry I do not understand that answer—you say if depends on the timing? If there are certain items that cannot be priced which may or may not be in the programme, how can they be costed?
The programme total cost of tax credit, will be calculated.
Well, first I would like to tell you gentleman, social contract is very good, we have made certain statements that we believe that are first priority and should be done now, you can certainly tell what those are.
We are going to put forward other proposals, but they will have to wait until resources are available, those are where we have not included in the immediate cost. What is the immediate cost, is what is what we say has got to done at this moment in time. On that basis, we claim, and other independent reports claim, that ours is the cheapest of the three. Now that is as I understand it, the position.
I hope that will end all that we have talked about.
Right now we go on. [end p7]
What does Sir Geoffrey think of the movement to form a National Federation of self-employed in view of the probable rise in national insurance contributions?
Well, I think that it must be directly attributical to the fact that I am making the same important point in the speech that I made on the other side of the country in Yorkshire.
It is important that the Labour Party are proposing very substantial and we think, quite unfair increases in the contribution from the self-employed, like the National Health scheme. We introduced some changes to make sure that everyone contributed on a proportionate basis to the cost and the rising cost of improving pensions, but the real cost of the scheme is to raise the contribution from the self employed from 5%; to 8%; and on a much larger band of influence. Every self employed person from Barrister to Barrowboys, is going to have to pay 8%; on income between £1600 and £2600 per year, and that means that they will have to raise, because that is in fact the capital, up to £238 additional income, to keep their tax position as it is today, we think that this is a quite unjust and indiscriminate attack on individual enterprises, on the many self employed units up and down the country, and we have made it clear in our Manifesto, that the self employed sector, should not have to become the ones to face the huge increases proposed by certain Governments.
On this question of providing working capital to save the companies from bankruptcy—would they bring in a reflationary budget? Could it be done without it? The Labour Party says we will have to have a reflationary budget whoever wins the election.
No, that is not what we intend, and I think that Mr. Ted Heath said very clearly yesterday, that the country's attributed position while it seems dangerous and we are very worried, and he made the point too, that in some ways it appeared to be a deliberate act of Labour policy, which we have made perfectly clear.
We have got to get clear recognition, as Mr Heath said we could do one of the two options, to make advance corporation tax. We have got to get that confidence back. But quite clearly we in our position, are not committed, until we see how that can be done. [end p8]
Since we are citing the wisdom of the newspapers, could the panel say whether they agree with The Times leader that a freeze is necessary now—starting with, Mrs. Thatcher?
No, I was on the news today, but I managed to persuade Mr. Crosland to call his various lady friends, I don't believe a freeze is immediately necessary that is to save us.
I have nothing to say.
Besides I feel in fact that Ted Heath, did very seriously yesterday, say what we believe is right, is immediately we should start discussions with all people involved and indeed chambers of commerce and many other organisations to see if it is possible in the circumstances in which we have and that is why we have say so much emphasis on a national vote a national unity and a broadly based Government, because such a Government is more likely to be able to get people to see the real dangers these days to come together. That is what we are asking people to do, that is what we are trying to do and that is our first start we have also said, of course, like Ted Heath said yesterday, that must be our main and certain objective. Because we have not ruled, he said again, we have not ruled out some form of legal backing must be necessary in this very dangerous situation.
Quite frankly from the start of this election we have said that if there is a [gap in text] and the Labour Party still appear to be absolute in ruling out any form of legal backing at all, in the services originally based, we believe that to be irresponsible and it does appear that they do rule all that out, I think it is worth trying out, whether in all circumstances, if any thing happens, they will rule out any form of legal backing, in any form. That is the answer and I don't mind saying that. [end p9]
Mr. Heath referred last night to a National Government and made comparison with the war period—would it not be more like the National Government of the 30's—particularly of the point you make now about legal backing for income and wages policies—surely it would exclude the bulk of the Labour Party and therefore you will just have a rump of the Labour Party and a rump of the Liberal Party in the National Government?
Well it isn't up to anyone certainly not to me to speculate on what will happen on the [gap in text] as the very difficult economic situation that this country faces develops in the months ahead. How that will change attitudes, what people will feel then is something which it would be absurd in my judgement to predict at the present time. What that will result in no-one can know. I really do wish that the speculate back to the Boer war on what the national government did then. It is to delve into history which would be a very nice academic exercise and I would be very pleased to indulge in it but I don't think it is something relevant to what we are speaking about to-day.
Are you suggesting that Mr. Heath was absurd or irrelevant yesterday?
That is not the point I am making. He was pointing out how important is national unity in the future is in the current circumstances if we face a very grave [gap in text]. I would have thought that that is a very perfectly clear proposition to the vast number of people who would believe. What I was saying, before the war is that-start comparing now with what the situation was then. I do not believe a totally valid proposal simply because he lived in very different times, but we do face a very serious economic crisis, many people think worse than the 30's that is why we simply maintain that a [gap in text] based government getting as much European relations as possible is the right way to our problem.
Mr. Whitelaw do you accept Lord Chalfont 's views that there is a small but extremely active group within the Labour Party who aim to destroy the politics and economics of the Political System?
Well those were his words, and of course I have not got the experience of exactly what happened inside the Labour Party to the same extent as Lord Chalfont and others may have. What I would say is this, we have had Lord Chalfont I think was speaking for Mr. Mayhew in Bath and Mr. Mayhew and others have said that the [gap in text] in the Labour Party are losing out and they should fight against the left wing. The only point which I think it is fair to make is that if Mr. Mayhew feels so strongly about that, and if he decides to leave the Labour Party, I have wish that he has decided then to prove his point by standing against one of the left wing members of the Labour Party are losing out and they should fight against the left wing. The only point which I think it is fair to make is that if Mr. Mayhew feels so strongly about that, and if he decides to leave the Labour Party, I have wish that he has decided then to prove his point by standing against one of the left wing members of the Labour Party and standing up in moderation against the left wing and removing one of the left-wing people he fears in politics. He did not take that course, he decided to stand against the Conservatives. I maintain that if he really wishes to fight in parliament, the Labour Party [gap in text] in moderation, it would have seemed wiser of him to have stood if a left-wing fell Labour seat and then he would have been able to establish the cause in moderation against the Labour Party. [end p10]
All this argument about the level of wage settlements—the 40%; argument—do you accept that all Mr. Heath was saying yesterday morning and what Mr. Foot and Mr. Wilson said were two different propositions?
All I am saying is that
Well indeed, we seem to be relying on what was said in the various newspapers, and I am perfectly happy in this regard to sit on the objective assessment on the various claims in the [gap in text] I think that it sets out the whole position very objectively and very fair.
What would the Conservative attitude be a 50%;, (but it may have been 15%;—hard to hear) pay claim from the Doctors?
That is one that will have to be considered by the [gap in text]or if one knows any other, the Horsley review body made clear in their last report that there was a [gap in text] and what I would say was that our own records of this spectacle, and the recognition of that review body, is a great deal better than that of the Labour Party. It is a very resultive review and not [gap in text]
We should in the role that we have done in the past wait for the Horsley review body to make its report and then consider the case that we have in hand.
Mrs. Thatcher—last time you were here we did not get round to nationalisation of development land—is this another area where the Conservatives would compromise after the Election Campaign?
No, at the General House Builders said it would increase the size of houses, and that people would not come forward with their land, because they happen to be compulsively acquired, and local authorities could no operate because their are already over burdened with work, and I hope that I am making myself clear. [end p11]
Mrs. Thatcher—you seem to name as a priority home buyers—are you only concerned with those who own their own homes?
No, all housing will have top priority. The housing market is extremely difficult. It is partly difficult because of the action of succession of governments over various things such as rent control over the years and none of us are likely to depart from that. I think one of the problems is that there is a good deal of spare accommodation which could be brought into use if the law were different, but it is not likely to be changed that amount. We did want some amendments to the rent bill, which you may have noted designed really to try to persuade people who haven't previously let property but who would like to to let it for the first time, because one of the real problems is that they are afraid to let because they can't get out a bad tenant or recover it when they want to. We want 2 amendments. First one along the line for landlord and business premises act, [gap in text] landlord and tenant in case of premises which haven't been let before could opt out of the act and there is a good precedent for that in the 1969 property act that was rejected. Also to say that people who built or again bought into property for letting the first time, again should be exempt from the control. Now both of these were designed to bring empty accommodation into use. Also we must move on about the students.
They were rejected. Now that means that you have got to go at solving your housing problem a different way. I think you can bring in the housing corporation a good deal more than previously and of course there was an objective with the housing and planning bill. I really would like to see councils when they offer houses in the future offering them not merely for rent but saying to a young couple— “look there's the house, if you want to rent it, you rent it, if you want to buy it, buy it, you want to have an option to buy it” . Now the renting costs you all know, the buying costs could be well known because it costs a bit more to have a mortgage but I think many would think it worth it, and the way of giving them an option is well known because one has been operated by the new town corporation. But I do think we should get away from the feeling that [if] you are going to council property you are going to be a tenant for the rest of your life, and I think also that we should try not to build massive council estates for council tenants only but aim to have a number of them for owner occupiers.
If you like to have a look there a 2 very interesting schemes, one is the Tonbridge scheme and the other is the Bromley scheme. The Tonbridge scheme are building a big new estate and they are building half the houses for sale, it is a council scheme and half for rent and they are offering the houses for sale to existing council house tenants on very favourable terms and next door are the new council houses which they are offering for rent. The Bromley scheme is one again which are offering existing council house tenants new houses built by again on advantageous terms, thereby releasing existing council house property.
I hope I have said enough. I think we can become much more imaginative in the way in which we solve it and give people a wider range of opportunities than they have got now. [end p12]
Mr. Whitelaw—in your very interesting article you referred to the Economist as the independent magazine—would it be in your opinion all right if the Labour Party in an Election Broadcast referred to the New Statesman and Tribune?
Well my view isn't very important because they will do exactly what they want to, whatever I say.
Question re 5 year programme—cash to industry, farmers, home buyers, pensioners—are we not entitled to know as to how the money is going to be raised for such plans?
I would have thought that on the costing of what we have said we will do immediately our programme is by far the cheapest of the 3 parties, and that [gap in text] we are perfectly prepared to stand by them, ours are much lower than the others and I think that question can probably be posed to those people who are really proposing very much bigger spending manifestos than we have. I think it is very important to get that point.
[unclear which question applies]
I would say that certainly it is extremely important that we do accept priority and that we do accept that there has to be respect in the spending of the government and local authority. We do accept in fact the need [gap in text] borrowing and control the money supply. We have clearly accepted in our manifesto, that is why we have produced the most least expensive manifesto because we are having regard where it matters. I think this is to our credit.
[unclear which question applies]
No. because we have made it perfectly clear that we believe and this is what we have said in our manifesto and I repeat it, we have said perfectly plainy in the current circumstances of this country at the present time we have to have specific priorities. Beyond those we cannot go if we are sensibly going to control our spending, our borrowing power and control the money supply. What we have said is we have then set out other proposals we have and we make it perfectly clear that these will have to wait until the resources allow. I would have thought that was a perfectly straighforward proposition, and I would make no bones about it., Anyone who pretends that everything is going to be done immediately and pretends that they are going to control public spending and borrowing and the money supply is not being honest at the election. We have done our best to say these will have to wait until we are able to check [gap in text] overiding priority. When we say that we mean exactly that. I think the costing in our [gap in text] to that part of our programme which we believe must and should take priority. [end p13]
[unclear which question applies]
I would not accept that our policies are not being made perfectly clear. The first one is of course to check the inflation and in that count, restoring confidence to our farming industry in order that we can produce the food that we must produce at home, otherwise to have a shortage and prices will rise in the shops.
That is number one.
Confidence in industry we have no doubt that it could be secure. Looking after those who have been hit hardest by inflation, the pensioners, and we made that perfectly clear, and housing in the round, as Margaret Thatcher has made very plain, is we believe a major part of any contract with the nation as a whole in the need of checking inflation.
That is what we have done, and have made perfectly clear, and as has been explained as clear, either that you deal with housing all together, and not with one particular section of housing, and I think that it is the simple answer.
Why is your major priority the owner occupier who is not the poorest—some would think it not necessary for the more hard up members of this community?
We are perfectly clear in saying, that housing all together is a major national priority. And if you are going to say to me, that in the field of housing, a vial of people in this country own their own homes, and home owners, is not something we should encourage, I don't believe you.
With due respect you have not answered my question—why you consider the owner occupier should be the main recipient of benefits out of your Manifesto?
I think that I have made it perfectly clear, that we believe it is right that confidence should be restored to our industries to our farmers, exactly how that is to be done, must be a matter of philosophies, of seeing the books and seeing the exact amount of all the different entries and no body is going to say “that is how we are going to do this” in advance, and I would be a quite irresponsible person to do so. [end p14]
[unclear which question applies]
Nor can any of the parties say exactly what that will cost because I believe that it is right that there should be an immediate review and it should be discussed by all Parties, and none of the other Parties have leaded the position to say exactly what that would cost.
I think in fact, that the figure and that will be put around in any event, and there are so many sets of economic settlements being put out, that the figures are there, so I believe that the feeling is there all along the lone anyway, is all in the mind, and in the minds of negotiators and from my own experience they need all the time that they can get and I don't accept this argument for one moment. I accept that only pay one that it is the whole economic situation, that we face everyone knows the crisis, and I don't believe that setting out the truth about the future, will be something that is irresponsible or outrage in one quarter or another. I think that we should try to guide the people in the country just as the election outcome should.
The same system that Mr. Healey used?
It is not going to be on the same proposition as Mr Healey set out his, on a specific cut in VAT and a specific action that is going to have to be interpreted.
I am quite sure that we have a very different matter as that which has been set out.
Sorry I am stopping now … .