Speeches, etc.

Margaret Thatcher

House of Commons PQs

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [927/182-90]
Editorial comments: 1515-1530.
Importance ranking: Major
Word count: 2950
Themes: Industry, Pay
[column 182]

City Of London

Q1. Mr. Rifkind

asked the Prime Minister when he last visited the City of London.

Q4. Mr. Charles Morrison

asked the Prime Minister when he last visited the City of London.

Q10. Mr. Grylls

asked the Prime Minister when he last visited the City of London.

The Prime Minister (Mr. James Callaghan)

I last visited the City of London on 16th February when I attended the annual dinner of the British Overseas Trade Board and its Advisory Council.

Mr. Rifkind

Is the Prime Minister aware that both the City of London and British industry are gravely concerned about the fragile condition of British Leyland? Does the Prime Minister recall that in 1975 the Government said that future public money for British Leyland would depend on better industrial relations and increased productivity? Does he not agree that industrial relations at Leyland are in a parlous state and that production is only one-third of total capacity? When will the Government decide that enough is enough?

The Prime Minister

The hon. Gentleman has called attention to a serious problem. The funds that were made available by the Government and that are committed will of course continue to be made available, but there must be a review of the situation before further funds are committed. As the hon. Gentleman may know, the Secretary of State for Industry yesterday had a letter from the National Enterprise Board. The Government are giving serious consideration to this and my right hon. Friend will make [column 183]a statement as soon as we have been able to conclude our deliberations.

On industrial relations, I recognise the difficulties that have arisen as a result of the pay policy of the past two years and that the policy has created difficulties with differentials, but it has been a necessary step in overcoming inflation. I say to those who are concerned about differentials that perhaps the biggest differential of all is between the man who is in a job and the man who is out of one, and some of them could be out of one.

Mr. Grylls

Is not the most helpful thing the Prime Minister could say to British Leyland that stage 3 of the policy will be more flexible? Would it not be the supreme irony and very sad if the social contract in the end was responsible for bringing down British Leyland?

The Prime Minister

I am grateful for the first part of the hon. Gentleman's question because it gives me an opportunity to say that the discussions with the trade union movement will clearly have to be on the basis of a more flexible policy than there has been during the past two years. I have made this clear from the Dispatch Box time after time, and I hope that this will be understood in British Leyland.

As the TUC does not wish to come to a conclusion on this matter until after the Budget, it is not possible for us to reach finality now. I hope that those in British Leyland who feel that they have a genuine grievance—and I do not deny that—will remember that the agreement runs out in August and that thereafter—and possibly before then if an agreement is concluded—there will be an opportunity to get greater flexibility. The Secretary of State for Industry is considering the position of Leyland and he will make a statement to the House as soon as he can.

Mr. Morrison

Is the Prime Minister aware that last month foreign-made cars accounted for 43 per cent. of the home market? Given that choice and preference of the taxpayer, how much longer does the Prime Minister think that the British taxpayer will be willing to pour money into British Leyland to produce cars that are increasingly not wanted at home and to support a company that is, [column 184]regrettably, giving a worse name to British industry every day?

The Prime Minister

I hope that we shall not carry that point too far, because I am sure that the hon. Gentleman does not want to pour scorn on an important British national asset. British Leyland's record last year was that the company failed to produce about 200,000 cars that had been included in its plan. I hope that Leyland understands that not only European car manufacturers but the Japanese are simply waiting to pour cars into this country for every car that we fail to produce.

Mrs Dunwoody

When he visits the City of London will the Prime Minister discuss with what is probably the wealthiest local authority in the world the situation of tenants living in the Barbican, who not protected by the Rent Acts and who are in dire need because there is no willingness on behalf of the City of London to protect the interests of these people?

The Prime Minister

Perhaps my hon. Friend will put that question to the appropriate Minister. I shall draw it to his attention, but I am not sure that it is a responsibility for a Minister.

Mr Pardoe

Will the right hon. Gentleman give no credence to the new myth that the problems of British Leyland are due to the pay policy? Is he aware that the problems of Leyland pre-dated the present policy and the last Government's pay policy? Will he also not go to the City of London for advice on how to run Leyland, because the City has already virtually destroyed the company? Will he look at Meriden, which has not been disrupted by the pay policy, and draw the appropriate conclusion?

The Prime Minister

I shall take all those considerations into account with pleasure. I have never thought that there was any particular connection between the Question on the Order Paper and the supplementaries that I am asked, so the hon. Gentleman can be certain that I shall not be going to the City for that purpose.

Mrs. Thatcher

Is James Callaghanthe right hon. Gentleman aware that we are asking whether the problems of Leyland do not [column 185]demonstrate the weaknesses of his two main pillars of policy, the social contract and the industrial strategy? Are they not mutually incompatible? Does he not agree that we are getting neither the production from the nation as a whole nor the productivity that we need because we have neither a pay policy that allows for differentials nor a taxation policy that permits of incentives?

The Prime Minister

The right hon. Lady is adding to her consistent policy of a completely negative approach on all these questions. She is aware that although she failed to support the incomes policy, some of her spokesmen did, including the Opposition spokesman on Treasury policy. I do not know why she should go back on his policy in this matter. The right hon. Lady is consistently negative on this matter and on industrial strategy. She is consistently negative on industrial democracy and consistently negative on devolution. Indeed, it is difficult to know what she stands for on any single issue.

Mrs. Thatcher

Is not the right hon. Gentleman aware that the negative thing is to refuse differentials and the negative thing is to refuse incentives? Does he not realise that the positive thing is to give differentials for skill and the positive thing is to give incentives? Only in this way shall we get the positive results that his Government will never get.

The Prime Minister

The only way in which the right hon. Lady exceeds her capacity for a negative approach is in her capacity for stating the obvious. The Government's position on differentials has been made completely clear. I made it clear in my answer to the hon. Member for Surrey, North-West (Mr. Grylls), who asked a constructive question on this matter earlier. The right hon. Lady is not trying to help industrial relations in this matter; nor is she concerned with the future welfare of British industry. She has only one concern—naked ambition.

ROYAL COMMISSION ON LEGAL SERVICES

Q2. Mr Tebbit

asked the Prime Minister if he will appoint a further person to the Royal Commission on Legal Services.

[column 186]

Q6. Mr Brotherton

asked the Prime Minister if he will recommend the appointment of an additional member to the Royal Commission on Legal Services.

The Prime Minister

No.

Mr. Tebbit

In view of all that has happened since the Prime Minister appointed a Mr. Joseph Haines to the Royal Commission, including the publication of a scandalous breach of confidence in a recent book, is he still convinced that Mr. Haines is a suitable person to sit in judgment on the British legal profession?

The Prime Minister

Yes.

Mr. Brotherton

In view of that reply, will the Prime Minister tell the House by what criteria he judges whether a man is suitable to sit in judgment on the legal profession?

The Prime Minister

When I look at the hon. Gentleman, I have no doubts as to what is suitable.

Mr. Thorpe

Will the right hon. Gentleman confirm that, among other things, the Royal Commission will have to consider the arrangements for determining the remuneration of the profession? Since one of the members, Mr. Haines, appears to get his remuneration by selling confidences to the highest bidder and since the legal profession exists, and only subsists, on the basis of trust and confidence between client and lawyer, does the right hon. Gentleman think that this gentleman has very much to offer?

The Prime Minister

The right hon. Gentleman has suffered a great deal from personal obloquy and should be the last person to pursue that sort of vendetta against someone else.

Mr. Skinner

Does my right hon. Friend agree that the ex-Leader of the Liberal Party is the last person who should be raising matters of this sort, because he was the man who opened supermarkets on the South Coast and got money from pensioners and others——.

Mr. Speaker

Order. We all know that personal attacks are deprecated.

Mr. Skinner

The right hon. Gentleman got away with it.

[column 187]

Mr. Speaker

The right hon. Gentleman was not referring to an hon. Member of the House or I should have intervened earlier.

Mr. Thorpe

On a point of order, Mr. Speaker. I have never opened a supermarket or anything else on the South Coast.

Mr. Skinner

It is a well-known fact that the right hon. Gentleman was involved in opening supermarkets and being paid appearance money by London and County Securities Limited when he was a director of that company and when the auditor had already published the result of his investigation on the accounts and the books of the company had been in default.

CHANCELLOR OF THE EXCHEQUER

Q3. Mr. Wrigglesworth

asked the Prime Minister if he will list the responsibilities which he has allocated to the Chancellor of the Exchequer.

The Prime Minister

The Chancellor of the Exchequer is responsible for all Treasury business, including the direction of economic and financial policy and the control of public expenditure. He is the Minister responsible for the Inland Revenue and Customs and Excise and some other smaller Departments. The Chancellor is also Chairman of NEDC and a governor of the International Monetary Fund.

Mr. Wrigglesworth

Can my right hon. Friend give the House his views on the proposal by the Cabinet Secretary for splitting the Treasury into different parts and, in particular, on the proposal, which had the support of his two predecessors, for putting the public expenditure part of the Treasury into the Civil Service Department?

The Prime Minister

I have been reading the evidence with very great interest and watching some of the articles appearing in the Press. I shall continue to give these matters my full consideration and if I have any change to propose I shall inform the House.

Mr. Michael Marshall

Will the right hon. Gentleman take this opportunity to tell the House and the country what he [column 188]has so far refused to tell us, namely, what are the responsibilities between himself and the Chancellor of the Exchequer in view of his position as economic overlord, about which we have heard so much but seen so little?

The Prime Minister

I repeat that I have taken over no responsibilities from the Chancellor of the Exchequer, but I am still First Lord of the Treasury.

Mr. Kilroy-Silk

In what year shall we have a return to full employment?

The Prime Minister

The problem of unemployment is one that afflicts the whole of the Western industrialised world. I propose to discuss these matters with President Carter when I visit the United States next week and also to raise them at the Rome European Council, because it is clear that no one nation can return to full employment on its own. It will require international effort and we shall bend all our efforts to secure that at the earliest possible moment.

Mr. Gow

Does the Prime Minister recall a letter that the Chancellor of the Exchequer wrote on 15th December 1976 to the managing director of the International Monetary Fund in which he stated that it would be a continuing part of the Government's strategy to reduce the share of resources taken by the public sector? Will the right hon. Gentleman take this opportunity of confirming that that is still an essential element of Government strategy?

The Prime Minister

Yes, we shall keep to the formula agreed with the International Monetary Fund. If circumstances change, we shall have other discussions with it. If the circumstances change, the arrangements can be changed.

Mr. Atkinson

If the rate of inflation is likely to rise to 17 per cent. year on year together with massive unemployment, the two things happening together, does that not suggest that the Treasury has failed in its purpose? Is it not time to reconsider the dismantling of the Treasury? If we are serious about job creation, should we not have an economic directorate to replace the parts of the Treasury that have singularly failed to intervene in the economy and done nothing to put right the shortcomings of a free market system?

[column 189]

The Prime Minister

Although there may be advantages in changing the machinery of the Treasury and in making other combinations, I express no view on that this afternoon. I do not think that will solve the fundamental economic problems that we face, although it may make for a better organising of them.

As a result of the depreciation of sterling last autumn, together with the increase in food prices, inflation will be at a higher level than we had expected or were working for in the first half of this year, but I repeat as strongly as I can that if we can get a third round in the wages agreement, on the present forecasts and from what we can see of matters such as the strength of sterling and the price of imported commodities and food and raw materials, there is every reason for there to be a substantial falling away in the rate of inflation in the second half of this year and the first half of 1978.

Mr. David Steel

Is the Chancellor of the Exchequer still responsible for devising the formula by which the current rate of inflation is dinned into the public's mind? If so, by how much is it reduced from the 8.4 per cent., which is the figure that he gave us so clearly during the last election?

The Prime Minister

The figure of 8.4 per cent. has been explained many times as a short-term forecast over a period of three months. I try to give the House the most accurate forecasts but I regret to say that, as others have discovered before me and no doubt will discover after me, they are usually wrong. However, we must try to take some account of what is forecast. The best forecast that I can give the House now is the one that I have already given, namely, an increase during the first half of this year and a rapid falling away from the middle of 1977 to the middle of 1978.

Mr. Prior

Does the Prime Minister agree that it would be quite wrong for his hon. Friend the Member for Tottenham (Mr. Atkinson) to blame the Treasury for the high rate of inflation and the high rate of unemployment? Would it not be better if the Government considered their own record and did the necessary thing?

[column 190]

The Prime Minister

I do not think that it would be altogether fair to blame the Treasury. I blame the previous Government. The right hon. Gentleman was a distinguished ornament of a Government who printed money like a drunken sailor on his first night ashore. At least his Government hold this record, namely, that the rate of expansion of the money supply under the Administration of which he was an ornament has never been exceeded in this country before. Thank heavens a Labour Government came in and started to put matters right.