CBI AND TUC
Q1. Mr. Norman Lamont
asked the Prime Minister when he next intends to meet the CBI and the TUC.
Q2. Mr. Tim Renton
asked the Prime Minister when he next proposes to meet the TUC and the CBI.
Q5. Mr. Molloy
asked the Prime Minister what arrangements he has to meet the TUC and CBI.
Q6. Mr. George Rodgers
asked the Prime Minister when he next intends to meet the TUC and the CBI.
Q10. Mr. James Lamond
asked the Prime Minister if he will be meeting the TUC and the CBI in the near future.
[column 1137]The Prime Minister (Mr. James Callaghan)
I hope to meet both the TUC and the CBI shortly after the recess.
Mr. Lamont
Will the Prime Minister in fairness explain why the tax bill on everybody—regardless of whether he belongs to a union, regardless of the wage increases he has had, and regardless of whether he accepts Government's policy—should be determined by bargaining, with the TUC, when the Prime Minister said two years ago that if the social contract broke down we should drift into fascism? Did he have in mind the sort of “corporate Statism” that we have now?
The Prime Minister
The hon. Gentleman seems to be repeating some of the arguments used in the debate yesterday. I have no doubt that the general debate will go on. As regards the relationship between wages and the Budget, I should think that even the hon. Gentleman would acknowledge that no Chancellor of the Exchequer can construct his Budget today unless he takes account of the likely movement of wages. Therefore, if he is a wise man, as he is—and that leads me to a later answer that I shall be asked to give—he will seek to achieve an understanding and agreement with those who are bargaining about wages.
As for the corporate State, I thought that my right hon. Friend the Lord President of the Council destroyed that hoary old argument in a brilliant speech yesterday.
Mr. Molloy
Does not my right hon. Friend agree that to combat inflation we require the full co-operation of the TUC and the CBI, and that it does not help if in one week Opposition spokesmen, including the Leader of the Opposition, agree with that and the next week return to their damaging, silly policy of indulging in fruitless trade union bashing?
The Prime Minister
I agree with my hon. Friend, but on this as on so many other matters the Opposition, I regret, are not only divided but have a split mind. It is only a few weeks since the right hon. Lady would a wooing go. I thought that she was making good progress with the trade unions. Who could fail to respond to her charm? [Interruption.] Hon. Members speak for themselves. It was only last night, when the matter was put to the test and we saw the reactions of [column 1138]Conservative Back Benchers, with their acidulated dislike of the trade unions, that we realised that her wooing was bound to fail.
Mr. Renton
If the Chancellor of the Exchequer is such a wise man, why did he make the extraordinarily ill-timed remark last night that he might have to be satisfied with a second-best incomes policy? Is not that abandoning the country to the likes of Kenneth Gill, the Communist member of the TUC General Council, who has already rejected the 3 per cent. wage deal out of hand?
The Prime Minister
It is the right of the Opposition to pursue these questions. I do not dispute that. But I suggest to hon. Members on both sides of the House that if we are to attempt to overcome inflation, and try to reduce it to half the level that it is this year, we should now permit a period of reflection and discussion between the TUC and my right hon. Friend the Chancellor and others, in order that these questions may be worked out without the House intervening, until the matter comes back to the House in the light of the reports that my right hon. Friend will be making in due course.
Mr. Rodgers
When my right hon. Friend next meets the TUC and the CBI, will he focus attention on the problems of the textile industry? Is he aware that the labour force in that industry has diminished by over 30 per cent. during the last nine years, and does he agree that the case for stringent import controls is now overwhelming?
The Prime Minister
I know the difficulties of the textile industry. Indeed, only yesterday my right hon. Friends the Secretaries of State for Industry and Trade met the TUC Textile Clothing and Footwear Industries Committee and had a full discussion about this matter. The Committee pressed its view that imports of some of these items should be cut, but went on to say that it thought the Government's actions on imports to date had been helpful. In my view, it would be best to continue to keep these matters under review and seek to help the industry as much as possible in other ways.
Mrs. Thatcher
Now that Denis Healeythe Chancellor of the Exchequer has announced what he himself called the “second-best [column 1139]pay strategy” , will James Callaghanthe Prime Minister say whether any items other than tax reliefs are negotiable against pay increases?
The Prime Minister
I do not think that my right hon. Friend the Chancellor of the Exchequer announced a second-best policy. [Interruption.] I was here listening, and some of those who are shouting were not. What my right hon. Friend said was that in certain circumstances he might be forced back to a second-best policy. I suggest to Opposition Members that that is better than getting boxed in, as did the former Leader of the Conservative Party some two years ago, to the destruction of his Government. Nothing is negotiable in this sense. The Chancellor of the Exchequer has to understand what the trade union movement, in so far as it can speak with a united voice, intends to do, on incomes and wages claims this year, so that he may adjust his Budget accordingly. That will require a period of detailed study, and I hope that will be done without too much publicity.
Mrs. Thatcher
In that case, to use the Prime Minister's words, what does “adjusting his Budget accordingly” include?
The Prime Minister
“Adjusting his Budget accordingly” means that he will make due allowances for any alterations he has to make.
Mr. Thorpe
As one who hopes that the Chancellor's initiative will succeed, may I ask the Prime Minister whether the fact that the Leader of the House yesterday ruled out any policy backed by statute and the Chancellor indicated, within one week, that he would probably have to fall back on a second-best policy, means that the Government's options have been dramatically narrowed?
The Prime Minister
No, I do not think that is so. Some trade union leaders reacted immediately to the situation as they saw it, and some of their members are also reacting. But if we are to overcome inflation in this country we shall have to do it by the voluntary co-operation of everyone. The Government cannot paddle this canoe by themselves. Everyone must lend a hand if we are to succeed.
[column 1140]CHANCELLOR OF THE EXCHEQUER
Q3. Mr. Blaker
asked the Prime Minister whether he will dismiss the Chancellor of the Exchequer.
Q4. Mr. Wyn Roberts
asked the Prime Minister if he will dismiss the Chancellor of the Exchequer.
The Prime Minister
No.
Mr. Blaker
In that case, will the Prime Minister ask the Chancellor to pay attention to the debates on this year's Finance Bill? Is the Prime Minister aware that had the Chancellor listened to what was said by the Conservative Party, during last year's debates, about the impact of the 25 per cent. rate of VAT and the damaging effect of capital transfer tax on small businesses and farms, he might have avoided putting a number of people out of work and the humiliating climb down that he has made this year?
The Prime Minister
That is not the case. My right hon. Friend said that he believed the rate of VAT should be reduced, and I think the reduction has been generally welcomed throughout the country. Rates of tax are often generable up and down and I dare say this one will be, too.
Mr. Les Huckfield
Does my right hon. Friend agree that it is time more attention was focused on the CBI and some of its members, and also on the niggardly investment response that it has made to the tax concessions already received? Is not the most fundamental issue facing the country the lack of economic growth?
The Prime Minister
Yes, Sir. I agree with my hon. Friend's last point. But the biggest single disincentive to investment is inflation and, clearly, the counter-inflation strategy is a necessary precondition to investment recovery. The assurances of the tax allowances and stock relief will serve to bolster business confidence. I have seen a recent report that business confidence is beginning to return, but it is early days yet. I think that the Budget may have helped that.
[column 1141]Mr. Roberts
Returning to the Chancellor's pay offer, does the Prime Minister think it fair and just to the country, including trade unions, that only the tax reliefs part of any wage bargain should be subject to statute, and that the limitation on wage increases should not be subject to statute and, therefore, un-enforceable?
The Prime Minister
We cannot apply strict logic in this area, if we do not want to fall into the errors that the previous Conservative Government fell into. Unless there were a real corporate State it would be impossible permanently to regulate wages and incomes by statute. That is the difference between tax allowances and rises in income.
Mr. Kinnock
Is my right hon. Friend aware that it is a pretty daft idea to consider dismissing my right hon. Friend the Chancellor of the Exchequer, whether the request comes from Wales or England, Blackpool or Conway? Given that we have a deadline for the fixing of a new pay arrangement announced by my right hon. Friend the Chancellor in his Budget Statement of early June, it is necessary to carry it through with the full assent of the TUC and individual trade union leaders. Consequently, must not all options be re-opened, so that we can have a genuinely renegotiated policy, not within the parameters that have been rather rigidly set by my right hon. Friend?
The Prime Minister
I recognise the force of my hon. Friend's point that what is necessary if we are to carry the work people with us is a voluntary agreement. So far I go with him. But my right hon. Friend the Chancellor pointed out the limits within which he could give reliefs if we are to achieve both his and the TUC's aim. The TUC's aim is not different—it is to reduce inflation by at least one half during the current year. That is the overriding factor. My right hon. Friend pointed out in his Budget Statement the parameters within which this could be done, but in the end the House will have to decide, in the light of the success or otherwise of the discussions with the TUC—and I hope that they will be successful. If the TUC comes forward with other propositions, my right hon. Friend and others will want to examine them, but that will not destroy the basic [column 1142]arithmetic of how to cut inflation down by half this year.
CRIME
Q7. Mr. Teddy Taylor
asked the Prime Minister if he will recommend the establishment of a Royal Commission to consider the increase in crime.
The Prime Minister
No. The Government recognise and share the widespread concern about crime, but the development of effective counter-measures is a better answer than an investigation by a Royal Commission.
Mr. Taylor
Does the Prime Minister—a former Home Secretary—agree that the absence of alternative effective counter-measures and the dramatic upsurge in the number of crimes of violence more than justify a reappraisal of policy? If the Prime Minister is not prepared to agree to the appointment of a Royal Commission, will he invite the Home Secretary to initiate a study into vandalism, which appears to be becoming a major social disease?
The Prime Minister
The only reason I cannot agree to the appointment of a Royal Commission is that it would be more likely to examine causes than entirely new remedies that are unknown to all of us. It is useful that the police service has been increased substantially during the past 12 months, both in Scotland and in England and Wales. Many other factors are being studied. I agree that the increase in the number of crimes of violence is a disturbing commentary on our society, but I am not sure that a Royal Commission would remove those causes. They lie much deeper in our society—namely, in the attitudes in individual families. I should like to see a greater sense of responsibility in that regard, to enable us to deal more effectively, in the home and at the beginning, with our children. It may be lack of responsibility in that direction that causes violence and vandalism.
Mr. Whitehead
Without embarking on anything as grandiose as a Royal Commission, does my right hon. Friend agree that we need a modest committee inquiry to look at the law on identification in view of apprehension about some alleged criminals in recent trials?
[column 1143]The Prime Minister
I know to what my hon. Friend is referring, but I should be grateful if he would table a Question on the matter to my right hon. Friend the Home Secretary. I have not gone into the matter.
Mr. Whitelaw
Does the Prime Minister agree that in dealing with the worrying feature of juvenile crime the Government's attitude to the future working of the Children and Young Persons Act is of crucial importance? If he agrees with that view, will he ensure that the Government reply urgently to the Report of the Select Committee on Expenditure, which the Government so far have not done? Does he not agree that there has already been an overlong delay in making a reply?
The Prime Minister
I shall look into that matter. I am not informed about it. I was responsible for that Act. I think that the weakness in the Act is that successive Governments have not been able to devote to that measure the resources that were promised when it went through the House. I believe that the principles of the Bill are still right. I shall look into the point.