GOVERNMENTS PROGRAMME
Q1. Mr. Canavan
asked the Prime Minister whether he is satisfied with the progress being made in implementing the proposals in the Queen's Speech.
The Prime Minister (Mr. James Callaghan)
I refer my hon. Friend to the reply which I gave to the hon. Member for Reigate (Mr. Gardiner) on 8th April.
Mr. Canavan
Will my right hon. Friend reconfirm the commitment in the Queen's Speech to attack unemployment? Does he not agree that an alternative Socialist solution to the nation's unemployment problem might be forthcoming if he did not restrict his Westminster job creation scheme by bestowing most of his privileges and patronage on those who supported him in the recent leadership election?
The Prime Minister
I assure my hon. Friend that that is not the way to get a job.
Mr. Canavan
I am not asking for one.
An Hon. Member
Tell him how.
The Prime Minister
I will give my hon. Friend a little private advice about that. The trouble with my party is that there is so much ability and so much talent that it is impossible to meet all the requirements that should be met. [column 187]
Concerning the serious part of the question, I agree that unemployment is too high in Scotland. There is no doubt that the first task is to overcome the problem of inflation. When we can do that, I believe that we shall see moving ahead in Scotland the investment that is required to produce productive jobs. Meantime, as my hon. Friend knows, the Government have taken a number of steps concerning the dispersal of jobs in the Ministry of Defence and elsewhere which will have along-term effect on improving the position.
Mr. Gordon Wilson
In view of the Budget's relaxation of the industrial development certificate policy and the growing unemployment in Scotland, will not the Prime Minister realise that the pledges given in the Queen's Speech have not been fulfilled and that the time has now come for a deployment of the Scottish oil revenues towards solving this very serious problem in our country?
The Prime Minister
I am glad to say that, although serious in Scotland, unemployment has increased less than in any other region in the United Kingdom except for the North of England and, I think, Northern Ireland. As the hon. Gentleman indicates, that is partly due to the oil development, which has had the effect of providing some 50,000 to 60,000 jobs in Scotland. I am sure that Scotland appreciates this. I also believe that Scotland will want to share its good fortune—I have never detected any selfishness in anybody in Scotland—with the whole of the United Kingdom, because the United Kingdom as a whole is stronger than Scotland would be individually.
Mr. Kilroy-Silk
While we are talking about jobs, is my right hon. Friend aware that unemployment on Merseyside is higher than anywhere else in the United Kingdom? Can he tell us when the people on Merseyside, especially the 3,000 school leavers unemployed there, will get a job?
The Prime Minister
I think that the answer is the same. The Government must concentrate on reducing the level of inflation. When the level of inflation is reduced to a point where productive investment will take place, we shall see the growth of jobs. This is the first and [column 188]overriding task of the Government. As I am asked what progress has been made concerning the Queen's Speech, I refreshed my mind on it at lunch time, and my hon. Friend will be glad to know that this was the first and highest priority to attack. Therefore, we are doing what we said we would do.
Mr. David Steel
Since the Queen's Speech also referred to the efforts to bring about a just and peaceful settlement in Rhodesia, will the Prime Minister take this opportunity of commending the blunt and constructive approach to this matter of Dr. Kissinger?
The Prime Minister
Yes, Sir. I think that the speech made by Dr. Kissinger, of which I have read only Press reports, should commend itself to the Europeans in Rhodesia. I say that not because we wish in regard to the future of the Europeans there to be vindictive, but because we believe that this is the best way in which they can hope to have a long-term future in that country. This fact is recognised perhaps more by the Africans in Rhodesia than by Europeans there. I hope that the weight of Dr. Kissinger 's words will now get through to the Europeans.
Mr. Adley
Now that Mr. Jack Jones has joined the Prime Minister in his eulogies about the incomes policy, will not the Prime Minister complete this king-size, hypocritical somersault by recommending to Mr. Jones and his colleagues at the next stage that the incomes policy should be £1 plus 4 per cent.?
The Prime Minister
I thought that the hon. Gentleman used the word “hypocritical” .
Mr. Adley
In terms of policy.
The Prime Minister
Trade union leaders deserve encouragement rather than the sneers and jeers of Conservative Members.
TUC AND CBI
Q3. Mr. Atkinson
asked the Prime Minister if he will arrange a meeting with the TUC Economic Committee.
Q8. Mr. Michael Latham
asked the Prime Minister whether he will now seek [column 189]an early joint meeting with the CBI and the TUC.
Q9. Mr. Skinner
asked the Prime Minister if he will be meeting the TUC in the near future.
The Prime Minister
I met representatives of the TUC yesterday and I shall be seeing them again, together with representatives of the CBI, on 5th May when I take the chair at the next meeting of the National Economic Development Council.
Mr. Atkinson
Does my right hon. Friend agree that now that the Government have given a pledge to trade union leaders—that, in the event of the current voluntary wage discussions failing to agree, the Government will not introduce a statutory policy—the best thing that can now happen is for this House to allow trade union leaders to get on with concluding a voluntary agreement? Will he also accept that the other part of the desire of trade union leaders—namely, the wish to discuss an early return to full employment—means that the public sector now has the responsibility of providing 1 million jobs in the next four years? Will he now give a pledge that provision will be made for that objective to be reached?
The Prime Minister
My hon. Friend is right to say that hand in hand with the aim of overcoming inflation is the desire to produce more employment. However, I do not agree with his analysis that this must fall on the public sector. It is important that productive jobs should be created and that we should rely on investments on which a successful return can be expected. That is the way to achieve more employment rather than transferring more and more jobs to the public sector. There is a part for the public sector to play and it will do so, but it is impossible to assume that 1 million jobs can be created.
Mr. Michael Latham
Since it is the employers who will have to pay the 3, 4 or 5 per cent. at the next stage of the incomes policy, could not the Government pretend to take some notice of employers' views as well as of the views of the TUC?
The Prime Minister
Yes, Sir. We take notice of everybody's views, including even the hon. Gentleman's. On the question of who is to pay, the increase in [column 190]wages will be paid for out of increased production and productivity. Those increases will be contributed to by management and by people on the workshop floor.
Mr. Skinner
Will my right hon. Friend recall that in the discussions on these matters last year the trade union negotiators agreed to the £6 policy on the basis of no increase in unemployment and no cuts in public expenditure? Will he give a guarantee that his time round in the negotiations there will be a reduction in unemployment and no cuts in public expenditure? Will he be able to tell the TUC what he intends to do about speculators who invest abroad without paying a dollar premium? Indeed, what action do the Government intend to take to stop that speculation in future?
The Prime Minister
No, Sir, I do not think I can give answers to all those questions. Such a reply would demand more than a yes-no-yes kind of answer to supplementary questions. It is generally recognised that the future level of unemployment depends on the future level of inflation. The trade unionists with whom we are discussing these matters are aware of that and in the interests of their members they are now desperately keen to secure an agreement that will reduce inflation. There is no point in giving guarantees on matters of this kind. We believe that such an agreement will produce conditions in which unemployment will begin to go down.
As to cuts in public expenditure, my right hon. Friend the Chancellor of the Exchequer in his Budget, and also the White Paper, made clear that the level of public expenditure will be maintained this year. As the economy takes off again, there will be room with that increase in production to enable levels of public expenditure to be maintained. I prefer not to answer my hon. Friend's further supplementary question because it would mean that my reply would take far too long.
Mrs. Thatcher
Bearing in mind that the pound has fallen by an average of 1 cent per week since the beginning of the last pay limit, why is James Callaghanthe Prime Minister basing his whole economic strategy on the next pay limit? Does he not agree in the long run the pound [column 191]will continue to be in difficulties and that confidence will continue to dwindle if the Government do not reduce the rate of their own expenditure as well as the rate of inflation?
The Prime Minister
I think that that is too simple a view. I hope that the right hon. Lady will not give countenance to that view because it is misleading. The plain truth is that the 3 per cent. limit, or a figure in the area of 3 per cent., whatever the final negotiated figure may be—[Interruption.]—I hope that Opposition Members will not jeer, because a most important process is now taking place and what is needed is help from hon. Gentlemen.
As for the future of sterling, one should not neglect the view of the market. One must always take it seriously, and I do so because I have lived through it before. But the market is not infallible and can be wrong. Indeed, I believe that at this time the market has overdone things and that perhaps we shall see some change. There is no doubt that if agreement is reached—as I firmly hope it will be in the light of the discussions I have had yesterday and today—the questions of wages policy and the future of sterling, a matter of concern to all of us wherever we sit in the House, will be more than assured.
Mr. Pardoe
Will the Prime Minister say whether he shares Mr. Len Murray 's expressed surprise at the fall in the value of the pound in recent weeks? If so, will the right hon. Gentleman when he has a moment to spare, perhaps in his bath tonight, write down in two columns on a piece of blank paper the reasons why anybody in the world today should hold or buy sterling and the reasons for not doing so? Does he not conclude that the country is virtually ungovernable?
The Prime Minister
The hon. Gentleman is given to extravagant utterances and he has lived up to his reputation this afternoon. It was not said that we were ungovernable when in an earlier period wages were increasing at a rate of 30 or 40 per cent. If at that time it had been said that in future we would be aiming at a figure in the area of 3 per cent., people would have regarded that as a miracle. It is a demonstration of the fact that the country is showing [column 192]self-discipline and understanding of the situation and is taking the matter in hand.
The reasons for the holding of sterling are many and various. One lies in the fact that this is a stable parliamentary democracy and is a country where people can invest in the knowledge that debts will be met. That is one of the major reasons why people prefer to hold investments and overseas holdings in this country, and it is clearly right. There are other technical factors involved, such as interest rates and so on. But basically the reason is that people rely on this country and on our word. That is why they keep their sterling here.
Mr. Noble
When my right hon. Friend meets the TUC, will he remind its members of the memorandum recently submitted to the Secretaries of State for Trade and Industry—[Interruption]—on the textile clothing and footwear industries, particularly bearing in mind the need to renegotiate the Multi-Fibre Arrangement, and will he look at the possibility of introducing a similar scheme for footwear?
The Prime Minister
Perhaps my hon. Friend would be good enough to have a word with me afterwards, because I confess that I did not hear all of that question. However, in relation to both footwear and textiles the Secretary of State for Trade has taken action. He has recently met representatives of the two industries. I shall be glad to have a word with my hon. Friend about it if he would care for that so that we can discuss the matter further.
Mr. Grylls
When the Prime Minister told the meeting of the shop workers' union on Sunday that he could not guarantee that they would not be sea sick but that they would get safely to port, was he thinking of a sinking pound and an inflation rate four times that of West Germany, or is it not more likely that the ship may sink unless he takes command and cuts public expenditure right now, as my right hon. Friends have suggested?
The Prime Minister
Picking up the last part of that supplementary question. I do not believe that cuts in public expenditure would do anything more than increase unemployment to a marked [column 193]degree. Looking at the division of public expenditure, which I have in front of me, I would not recommend that as a policy at present. What is important is that in 1977 and 1978 there should be room for the increased production in industry which will then take place. I believe that the Chancellor's work on public expenditure is creating that room in the next two years.