Speeches, etc.

Margaret Thatcher

House of Commons PQs

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [923/1167-74]
Editorial comments: 1515-1530.
Importance ranking: Major
Word count: 2619
[column 1167]

Channel Islands

Q1. Mr. Skinner

asked the Prime Minister if he has any plans to pay an official visit to the Channel Islands.

Q2. Mr. Gwilym Roberts

asked the Prime Minister if he will visit the Channel Islands.

The Prime Minister (Mr. James Callaghan)

I have at present no plans to do so.

Mr. Skinner

Did my right hon. Friend see a recent report in The Sunday Times suggesting that £1,000 million is lost in the financial year to the United Kingdom taxman by tax evasion through the Channel Islands? Did he see a recent report that Spillers—the bread and biscuit group—had raised £11 million on the pretext of investing in new plant and machinery and had used the money to set up a company in the Channel Islands to evade the profit levels set by the Price Commission? Should not these loopholes be closed immediately? In his new rôle as economic supremo, will he not take [column 1168]on the task himself, as the Chancellor has not?

The Prime Minister

I always look to my hon. Friend for accuracy in these matters, so I must repudiate once again the last part of his supplementary question. Tax avoidance and tax evasion are serious matters. I agree with my hon. Friend that they are not admirable devices and that the persons who carry out evasion or avoidance are not to be admired. My right hon. Friend the Chancellor of the Exchequer is constantly considering the possibility of closing loopholes and has taken several steps in this direction, for example, on capital transfer tax. I shall draw to my right hon. Friend's attention what my hon. Friend says.

Mr. Roberts

In view of the special relationship between the Channel Islands, Britain and the Crown, will my right hon. Friend initiate negotiations with the Governments concerned to try to close the loopholes by which thousands of people and many British companies are dodging British taxes? During those negotiations, will my right hon. Friend also bring forward a matter that I have raised with the Home Office concerning Channel Islands prisoners who are in British gaols? They are separated for long periods from their families and are imprisoned because of the medieval laws which operate in the Channel Islands.

The Prime Minister

I take note of what my hon. Friend says about discussions with the authorities in the Channel Islands, although the Chancellor of the Exchequer is free to take what legislative action he thinks right. My recollection, from a former office I held, is that as the Channel Islands have few facilities for holding prisoners we offer them facilities from time to time. I shall bring the matter to the attention of the Home Secretary.

Mrs. Thatcher

Does James Callaghanthe right hon. Gentleman recall that, although his hon. Friend the Member for Bolsover (Mr. Skinner) today asked a supplementary question about the Channel Islands, where the level of unemployment is about 2 per cent., this time five years ago he was busy disrupting Question Time in the House of Commons because the then announced level of unemployment was [column 1169]unacceptably high, although it was two-thirds of the level of unemployment announced today. Does the right hon. Gentleman accept that the figures announced today illustrate the failure of all his economic policies and demonstrate once again that the Labour Party is the natural party of unemployment?

The Prime Minister

I can only admire the humbug of hon. Members who cheer that question, when I recall that the policies they have been pressing upon the Government would at least double the present level of unemployment. As for the nature of the problem, I agree with the right hon. Lady that the total is not one that should be tolerated. But I repeat what I have often told the House, that I do not think it is possible that the figure will be reduced for some time. As long as we are trying to squeeze inflation out of the economy, this is unfortunately one of the consequences that we must face. However, the right hon. Lady should assist in these matters by explaining to the country that if we are to overcome inflation difficult measures must be taken. The Government intend to continue to take them.

Mrs. Thatcher

The fact is that it is the Labour Government's refusal to take the appropriate measures earlier that has led to large unemployment now. Is the Prime Minister aware that he may run away from responsibility but he cannot run away from the facts?

The Prime Minister

I have no intention of running away from the facts. The right hon. Lady shares considerable responsibility for the present level of unemployment.

Mrs. Thatcher

Rubbish.

The Prime Minister

The right hon. Lady was a member of the Administration which allowed the M3 figure to rise to unprecedentedly high levels. That has been working its way through the economy for some years. The right hon. Lady knows it. That figure has now been reduced. It is coming down fast. That is why we can look forward with some confidence to a considerable improvement in our economic prospects, to increasing exports, to a better balance of payments position, and to the regeneration of British industry. All that will lead to more employment.

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Mr. Heffer

Without in any way indulging in the humbug we hear from the Opposition Benches, may I say that my right hon. Friend must be aware that on the Labour Benches and in the Labour Party in the country there is a deep and growing concern about the level of unemployment? When will the Cabinet get down to dealing with the question of unemployment by introducing, for example, public works schemes, policies of import substitution and much else? We cannot tolerate the present level of unemployment for much longer.

The Prime Minister

My hon. Friend is right in saying that genuine concern about the matter is felt throughout the country. The Cabinet and I certainly share that concern and feel it very deeply. A number of measures have been introduced, such as the youth employment subsidy, the job creation scheme, work experience projects and schemes for apprenticeships. All these have helped. I was looking at the figures the other day, It is reckoned that during this year such measures will assist about 200,000 young people. I cannot promise my hon. Friend the party, the House or the country that unemployment will be substantially reduced, whatever palliatives are introduced during the next few months. I cannot avoid saying that. It must be understood. I ask the country to have patience. The economic situation is steadily improving, and the improvement will continue.

Mr. Prior

Was not the February 1974 election fought on the slogan “Back to work with Labour” and was not the October election of that year fought on the basis that the Labour Government had got unemployment moving down? Therefore, why does the Prime Minister have the humbug to try to cast the blame on to someone else?

The Prime Minister

What I did was to suggest that, as the right hon. Gentleman knows, his right hon. Friend the Leader of the Opposition should share the responsibility. I did not cast it off on to her; I said that she should share it, and she should. So should the right hon. Gentleman, because he was a member of the same Administration. It is true that the February 1974 election was fought on the slogan “Back to work with Labour” , and within a matter of days my right hon. [column 1171]Friend the then Secretary of State for Employment—the right hon. Member for Ebbw Vale (Mr. Foot)—had got the miners back to work.

Defence Chiefs of Staff

Q3. Mr. Michael Marshall

asked the Prime Minister when he next intends meeting the Defence Chiefs of Staff.

The Prime Minister

If the House will permit me, I should like to express my deep regret at the news of the death yesterday of the Chief of the Defence Staff, Sir Andrew Humphrey. The answer to the hon. Member's Question is that I see the Chiefs of Staff from time to time in the course of normal Government business.

Mr. Marshall

The whole House will wish to be associated with the Prime Minister's remarks, in view of the tragic death of the Chief of the Defence Staff yesterday.

Will the right hon. Gentleman take this opportunity to pay tribute not only to that distinguished officer but to all other holders of the office and to reaffirm that his Government—indeed, any Government—regard their prime duty as the defence of the realm?

The Prime Minister

Yes, Sir. That is certainly my very strong view, but the matter must also be seen in conjunction with our relations with our NATO Allies. None of us is an island unto himself in these days. I should like to repeat the view expressed by Chancellor Schmidt yesterday that although the build-up of Soviet arms is a matter for concern it may be that in the future the Soviet Union will attain parity in strategic nuclear weapons and tactical nuclear weapons. The Soviet Union exceeds us in conventional weapons, but it would be wrong to panic, because at present the balance is still maintained, and I believe that the security of the West is still in good shape.

Mr. Ron Thomas

When my right hon. Friend meets the Chiefs of Staff will he explain to them that over the past three years our defence commitments overseas, especially in Western Germany, were equal to the loan that we have just had to obtain from the International Monetary Fund, with all its conditions, and that over the next 12 months the balance [column 1172]of payments cost of our military commitments overseas could rise to £1,000 million? In the light of his efforts to try to secure an offset agreement, which have failed, will my right hon. Friend also tell the Chiefs of Staff that we can no longer afford the economic burden of military commitments overseas?

The Prime Minister

I believe that that would unnecessarily weaken the defence of the United Kingdom. The presence of British troops in Central Europe as they are today is not only a source of stability to Central Europe but a means of an extended protection of our own islands. Therefore, I cannot accept what my hon. Friend says.

Mr. Ian Gilmour

On behalf of my right hon. Friend the Leader of the Opposition and my other right hon. and hon. Friends, I should like to express the same regret as the Prime Minister has expressed about the death of the Chief of the Defence Staff, who was a very brave, very distinguished and very able officer.

The Prime Minister said that there was no need to panic about the Soviet defence forces. We are not talking about panic but Vice-President Mondale said yesterday that America would build up her NATO forces provided her European Allies were prepared to do the same. Will the Prime Minister now assure the House that he is prepared to match America's resolve?

The Prime Minister

I shall certainly want to discuss the matter with Vice-President Mondale when he arrives, because I wonder how it would be reconciled with the proposals to reach a new strategic arms limitation agreement with the Soviet Union, which I assume would have the effect of reducing expenditure—I trust that it would—and with the need, as I see it, to try to put some fresh life into the negotiations on mutual balanced force reductions that have hung fire for two years in Vienna. This seems to me the better course for us to follow, because it is the view of a number of us in the NATO Alliance—not merely myself; I know that Chancellor Schmidt shares this view—that the strain of the Soviet Union's present build-up of arms, in terms of its economic strength, must be considerable, and both of us should seek to relieve ourselves of these strains.

[column 1173]

MOSCOW

Q4. Mr. Ridley

asked the Prime Minister if he will pay an official visit to Moscow.

The Prime Minister

I have at present no plans to do so.

Mr. Ridley

Nevertheless, does the Prime Minister recall the Helsinki Agreement, when the Russians agreed to limit their arms build-up and to increase the freedoms of their citizens? When will the right hon. Gentleman publicly rebuke them for having done the reverse in both cases, as he has just admitted?

The Prime Minister

I leave public rebukes to the hon. Gentleman. In my view, that is not the best way of dealing with the Soviet Union in these matters. [An Hon. Member: “Yes, it is.” ] That is a difference of opinion. As far as I can see, the Opposition's policy on these matters in relation to the Soviet Union seems to be to cut off trade, to have an arms race and to reduce political contacts to a minimum. I do not believe that any of that makes sense.

Mr. Whitehead

In the formal or informal contacts that his Administration will be having with the Russians in the run-up to the Belgrade Conference, will my right hon. Friend tell them that they should not be misled by certain Right-wing circles' misuse of Russian dissidents who have recently left the Soviet Union into feeling that there is not deep discontent and disenchantment in this country at the continuing persecution of dissidents in the Soviet Union?

The Prime Minister

I believe that that is well understood by the Soviet leadership. Although some Members of the Opposition believed that we yielded up more than the Russians in the Helsinki Agreement, I believe that the reverse is the case. It will be much more difficult for the Soviet Union to live up to its undertakings in relation to Basket III than it is for the West to fulfil its undertakings under the Helsinki Agreement. This, of course, will be a matter for serious discussion when we go to Belgrade.

Mr. Churchill

Is the right hon. Gentleman aware that the whole nation will [column 1174]regret the loss of the Chief of the Defence Staff—a fine airman and a loyal servant of his country—and that the House will wish to convey its sympathy to Lady Humphrey?

What did the right hon. Gentleman mean in his television broadcast last night with the Federal German Chancellor, when he declared that building up armaments must be as much a strain on the Soviet Union as it is on us, bearing in mind that the Soviet Union is spending three times the NATO average on defence and that Britain is unilaterally reducing its defence expenditure? What did he have in mind?

The Prime Minister

If the hon. Member's figures are correct—I do not know that they are—and the Soviet Union is spending three times as much as we are, I should have thought that it followed automatically that the strain would be three times as great.

Mr. Newens

If my right hon. Friend does have contacts with people in the Soviet Union or Czechoslovakia, will he make it clear to them that many of us on the Government Benches who are proud to proclaim Left-wing and Socialist ideas utterly deplore the treatment meted out to the signatories of Charter 77 in Czechoslovakia, as well as to Soviet dissidents?

The Prime Minister

I was asked a question about this matter last week and I should be very happy to repeat at any time what I said then.