Q1. Mr. Lawson
asked the Prime Minister if he intends to make a ministerial broadcast on Her Majesty's Government's economic policy.
The Prime Minister (Mr. James Callaghan)
I refer the hon. Member to the reply that I gave to the hon. Member for Norfolk, South (Mr. MacGregor) on 27th July.
Mr. Lawson
Since this is clearly an appropriate time, will the Prime Minister explain, in the light of the profound understanding of economics that he displayed during his period as Chancellor, [column 868]precisely how it is that the £1,000 million increase in employers' national insurance contributions releases resources for manufacturing industry?
The Prime Minister
I am grateful for the hon. Gentleman's magnanimous tribute, even though it is belated by about 10 years. I accept it in the spirit in which he made it. The Chancellor of the Exchequer gave an explanation of the increases in national insurance contributions and I have nothing to add to it.
Mr. Watkinson
Does the Prime Minister agree that profits are rising strongly this year and the indications are that they will rise more strongly next year, and that, therefore, now is the time to invest? An integral part of our industrial strategy involves planning agreements. When shall we see the fruits of that?
The Prime Minister
The Price Code gives substantial advantages to industry, and this is certainly an opportunity that managers and employers should grasp. It is an opportunity given to them by the stability they now enjoy as a result of the social contract agreed yesterday. There is a growing acceptance of the idea of planning agreements, especially among larger companies, and the Government intend to speed up those agreements as far as they can.
Mr. Fairbairn
Who and how many are the parties to this so-called contract, and what proportion of the electorate do they represent?
The Prime Minister
Without going into arithmetical proportions, over the last three years the social contract has enabled us to substantially reduce the incidence of strikes. In consequence, I no longer get the same complaints about the interruption of flow of materials into and out of factories, and that also helps exports. In all those and many other circumstances, the contract between the Government, the Labour Party and the trade unions has been of great value to the country, and it might be a little better if the Opposition sometimes acknowledged that.
Mr. Robinson
Will the Prime Minister make it clear to the CBI that British industry has a unique contribution to make because of the advantages of [column 869]having the lowest level of industrial disputes for nearly 10 years and an undervalued exchange rate, which should give it enormous investment incentives? Does he agree that there is evidence of a strong growth in world markets and that it is high time British industry began to invest more, to get production up and unemployment down?
The Prime Minister
It was indicative of the Opposition's attitude that they jeered through that recital. It is in the national interest that there should now be substantial new investment in a particularly favourable combination of circumstances. There has never been a better opportunity for export-led growth than we have at present—[Interruption.] Why do Opposition Members want to jeer at their country every day? I do not understand it. We have never disguised the difficulties that lie ahead. I hope that hon. Gentleman will assist in getting across the combination of circumstances that now exists, which will give us an opportunity, in the next two or three years, to prepare for the 1980s—or are the Opposition frightened that we shall succeed?
Mrs. Thatcher
In an earlier reply James Callaghanthe Prime Minister stressed how much importance he attaches to securing the agreement of the TUC. Doubtless that applies to the proposals for public expenditure cuts. Does he attach equal importance to securing a clear decision, on a Government motion, on his public expenditure cuts, before the House rises?
The Prime Minister
An announcement will shortly be made about the business for next week—[Hon. Members: “When?” ] In due course.
Sir G. Howe
You are wriggling.
The Prime Minister
I would not wriggle in front of the right hon. and learned Member for Surrey, East (Sir G. Howe). He is the last one in front of whom I would wriggle. We have announced our policy, and if the Leader of the Opposition wishes to challenge it, she is entitled to do so.
Mrs. Thatcher
I was challenging the Prime Minister to say whether he would dare to table a Government motion on public expenditure cuts and put it to the House. I take it from his reply that the answer is “No” .
[column 870]The Prime Minister
An announcement will be made about this matter. If anybody wishes to challenge the policy, he will be free to do so. The Opposition have the time to challenge that policy—let us see what they do with it. I understood from some remarks by the Opposition spokesman that there was some modified support for our policy. If the Opposition are satisfied with that policy, why should we table a motion?
Central Policy Review Staff
Q2. Mr. Dalyell
asked the Prime Minister if he will now disband the CPRS.
The Prime Minister
No, Sir.
Mr. Dalyell
May we be sure that the CPRS has not become something of a fifth wheel on the coach of Government?
The Prime Minister
No, Sir, I think it has not. I find the papers and submissions prepared by the CPRS extremely valuable as a commentary on the work of Departments. I think that its existence is certainly justified.
Mr. Hugh Fraser
Will the Prime Minister consider the whole question of scientific advice available to the Government, since this aspect of policy appears to have been put into cold storage, if not actually destroyed? Would it not be better to spend the money involved in the CPRS on ensuring that the Government are given much better central scientific advice?
The Prime Minister
Yes, Sir. The organisation of scientific advice and its application to the work of Departments have concerned me. We reached the conclusion that it was a matter of organisation, but I do not know that there is a perfect answer. It would be better to appoint a chief scientist in each Department, geared into the machine of the Department, rather than to have one central chief scientist who would be responsible for operating over the whole area of activity. It is also intended—although agreement has not yet been reached—to recruit a scientist to the CPRS itself.
Mr. Christopher Price
Is the Prime Minister aware that if there are to be cuts in public expenditure, many Labour Members will expect them to come at [column 871]the top as well as at the bottom? It is felt that there are elements of the work of the CPRS, particularly in its rôle in reviewing the area of foreign affairs, in which one could save public expenditure by getting rid of those elements completely.
The Prime Minister
That is a very prejudiced point of view. There are only 17 members of the CPRS. We shall not save much of the £1,000 million on them. In regard to their work on the Foreign Office review, I thought, when I examined the situation in another capacity, that they could make a valuable contribution. It has become fashionable to attack particular organs of government, but I have seen nothing of the work of the CPRS that leads me to believe that it has fallen away in quality. As one who has had the opportunity of seeing that body at work, I believe that it makes a valuable contribution.
Mr. David Steel
Since the nuclear industry has not developed long-term methods for dealing with nuclear waste, and since there are wide safety and security implications in the wider use of uranium and plutonium, will the Prime Minister say whether the CPRS is involved in decision-making about the future nuclear power station programme of the Government, or is this being left to the Department of Energy? Are we to have more public debate on this matter?
The Prime Minister
It is open to the CPRS to submit any paper it wishes on this nuclear aspect or on any other. Without notice, I cannot say whether it has already done so.
Food Policy
Q3. Mr. Hooley
asked the Prime Minister if he is satisfied with the co-ordination between the Secretary of State for Social Services, the Minister of Agriculture, Fisheries and Food and the Secretary of State for Prices and Consumer Protection in matters concerning national food policy.
The Prime Minister
Yes, Sir.
Mr. Hooley
Is my right hon. Friend aware that although the Secretary of State for Prices and Consumer Protection is busy subsidising certain foods, such as sugar and butter, there is a great deal of scientific evidence that these may [column 872]be positively dangerous foods if taken in excessive quantities? Will he try to bring into closer consultation those concerned with agricultural prices and medical services in formulating future food policy?
The Prime Minister
I hope that there is already a great deal of medical consultation. On the whole, I believe that people will go on eating what they like without paying over-much attention to the medical consequences. We must of course have certain limitations. I believe that there is already cross-fertilisation between the two Departments to make sure that medical consequences are taken into account.
Sir David Renton
Is the right hon. Gentleman aware that the cost of food distribution will be increased if the Dock Work Regulation Bill is passed and implemented? Will he seriously consider dropping the Bill, since the measure is not popular on either side of the House, in the country, or among the trade unions?
The Prime Minister
No, Sir.
Mr. Ioan Evans
Does my right hon. Friend realise that something should be done between the Departments about the common agricultural policy? Although there is a subsidy on butter and, indeed, a butter mountain, the Common Market countries are now envisaging a levy on margarine. Consequently, the consumer feels that the system is not working in his best interests. Will the Prime Minister take steps to end the CAP as early as possible?
The Prime Minister
From the very beginning the Government, and our predecessors, have had considerable views about the CAP and its impact on consumers. I have asked—and have informed the other Heads of Government on this matter—for a full review of the CAP and its impact and about the requirements that should be made before the next price review takes place in the spring. Clearly it does not work out satisfactorily for us, and one or two proposals from the Commission on these matters seem to be plain daft.
Mr. Watt
Will the Prime Minister tell the House whether he is satisfied with the co-ordination between the Ministry of Agriculture, Fisheries and Food and the Foreign Office, because between them they [column 873]have made a dreadful mess of the fishing policy—or does such a policy exist at all?
The Prime Minister
I know that the hon. Member for Banff (Mr. Watt) continues to paddle his own canoe—[An Hon. Member: “Or his trawler.” ] No, he would not paddle a trawler; he would sail it. I am sure that the hon. Gentleman must be satisfied with the progress being made by my right hon. Friend on fishing policy, in ensuring proper safeguards for our fishermen in future.
Mrs. Dunwoody
I welcome the comments by my right hon. Friend about the need for a review of the CAP, but will he accept that when people have not enough money to buy butter, it is nonsense to increase the price of margarine to such an extent that it is impossible for them to buy that commodity either? Do not some of his friends in Brussels realise that if they lowered the price of dairy produce they might be astonished to see how much of that produce would be bought in the shops?
The Prime Minister
I do not think I can add to my previous rather explosive comment. As I said, it is one of the things that I regard as rather daft.
Mr. Pardoe
Will the Prime Minister say whether he regards the food gap as being as important as the energy gap? May we see some evidence from the Government that they wish to close the food gap?
The Prime Minister
I have, certainly since the Yom Kippur war, been very clear about the serious impact of the energy gap. The food gap is serious, but I have a feeling that there is a great deal of undeveloped potential for producing food. In some cases it is a matter of distribution.