Speeches, Interviews & Other Statements

Margaret Thatcher

House of Commons PQs

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [987/226-30]
Editorial comments: 1515-1530.
Importance ranking: Major
Word count: 1720
Themes: Employment, Monetary policy, Foreign policy (Middle East), Foreign policy (USSR & successor states), Labour Party & socialism, Local government, Local government finance
[column 226]



Q1. Mr. Bob Dunn

asked the Prime Minister if she list her official engagements for Tuesday 24 June.

The Prime Minister (Mrs. Margaret Thatcher)

Earlier today I had a meeting with King Hussein and the Prime Minister of Jordan. In addition to my duties in this House, I shall be having further meetings with ministerial colleagues and others.

Mr. Dunn

Will my right hon. Friend take time today to congratulate the Conservative-controlled Kent county council, which now employs 51,000 people compared with 57,000 people two years ago? Does not that show that where the political will exists, real cuts in the bureaucratic burden can be made?

The Prime Minister

I shall respond to my hon. Friend's invitation and congratulate Kent county council. It is showing great consideration for its ratepayers. Its example should be followed.

Mr. Gordon Wilson

Has the Prime Minister had a chance to look at the unemployment figures and notice that the figures for Scotland have increased by 27,000 in one month? Although she has abandoned Scotland, does she not realise that she will drive young people on to the streets because the political system cannot take care of their needs and aspirations?

The Prime Minister

Of course I have looked at the unemployment figures today. If our top priority is to squeeze inflation out of the economy, we must inevitably suffer some unemployment in the short term. [Interruption.] I was answering a question that was put by an hon. Member who rose to his feet to ask it. If our top priority is to squeeze inflation out of the economy, it is, sadly, inevitable that in the short run we shall suffer some unemployment. I was asked about unemployment among the young. The hon. Gentleman will know that the MSC recommended increasing the number of places available under the youth opportunities scheme [column 227]and that my right hon. Friend has accepted that recommendation in full.

Mr. James Callaghan

Does not the right hon. Lady understand the consternation with which those figures have been received by the country, especially as they will increase drastically during the next few months? Does she not realise that they are the highest figures for unemployment since the 1930s, that the greatest number of days have been lost as a result of industrial disputes since the 1920s, and that we now have the highest and most crippling interest rates that we have ever had? For how long does the right hon. Lady propose to bask in that complacent air of hers? For how long does she think we can go on suffering? How much industry will be left by the time she thinks that she has conquered inflation?

The Prime Minister

The right hon. Gentleman will have heard my previous reply on the priority of squeezing inflation out of the system. I phrased that reply very carefully. It is almost totally in accordance with what the right hon. Gentleman said when the unemployment figures under his Government were very high. I quote—[Interruption.]

Mr. Speaker

Order. The House must listen to the answer. [Hon. Members: “Why?” ] Order. Our democratic procedure demand that people have the right to be heard.

The Prime Minister

When the right hon. Gentleman was asked a similar question about unemployment, he gave this reply:

“As long as we are trying to squeeze inflation out of the economy, this is unfortunately one of the consequences that we must face.” —[Official Report, 25 January 1977; Vol. 924, c. 1169.]

The right hon. Gentleman knew it, and I know it. He was ready to take harsh decisions under the aegis of the IMF. We are ready to take harsh and difficult decisions to prevent the IMF's coming in.

Mr. Callaghan

Although the country knows it well, is it not right that I should remind the Prime Minister that when I made that statement, the result of the policy was that inflation went down to under 8 per cent., compared with the 22 per cent. that we have now? In the first 12 months of the right hon. Lady's Government [column 228]unemployment has increased by 350,000. Under the Labour Government it went down steadily—[Interruption.] It went down steadily from 1977 for two full years. The right hon. Lady has thrown away that advantage. Does the Prime Minister not realise that a return to the old policies that she is talking about will not be tolerated in this country? She must change her policy.

The Prime Minister

The right hon. Gentleman has undoubtedly chosen the period and the statistics very carefully. The quote that I gave him was from 1977. He will recollect that the inflation that he had to squeeze out of the system had, under a Labour Government, reached 26.9 per cent. in 1975. Consequently, he had rising unemployment. The right hon. Gentleman inherited a figure of 550,000 unemployed, yet unemployment peaked at a figure of 1.5 million under his Government. He put it up far further than this Government have done. Of course we regret unemployment, but unless we squeeze inflation out there will be higher unemployment in the future.

Mr. Callaghan

The time will come when the right hon. Lady will have to stand on her own two feet on policies instead of referring back to other people's speeches. If she wants to swap statistics—and I do not care for it much—I accept that over the whole period of the Labour Government unemployment went up by 600,000 in five years. She has put it up by 350,000 in 12 months.

The Prime Minister

I do not quarrel with statistics if they are accurate. I trust that the right hon. Gentleman will forget neither his record nor some of the strictures that he made from this Dispatch Box. I am prepared to take responsibility, which the right hon. Gentleman was not prepared to take for a long time. Yes, we do have to go through a period of determined, tough policies in order to squeeze inflation out of the system. Yes, we do have to get the money supply down. I believe that those policies will work, but they must be given time to work, and total support.

Mr. Callaghan

If the Prime Minister is telling us—and I do not accept it—that we have to go through these policies in order to achieve success, will she please give us some indication of her time [column 229]scale so that the unemployed may know how long they have to stay out of work?

The Prime Minister

In so far as the policy of squeezing inflation out of the system consists of reducing the supply of printed money, the rate at which it works will depend upon the amount of co-operation that we receive, particularly on wage claims. If wage claims are related to any increase in output, there will be less unemployment, inflation will fall more quickly, and the sale of our goods in other countries will improve and increase rapidly.

Mr. Montgomery

Has my right hon. Friend seen the report that the Russians are withdrawing 10,000 Soviet troops from Afghanistan? Can she say what comfort that will bring to the 500,000 Afghan dead and the 2 million refugees?

The Prime Minister

We heard of that announcement while we were in session at the economic summit in Venice, and we made a pronouncement upon it. We did not take a great deal if notice of it, believing that it was a ploy carefully designed to influence us in what we were saying at the summit. It will be of use only if that withdrawal is permanent and leads to the withdrawal of all Soviet troops from Afghanistan, which is still an occupied country, and which still has resistance fighters fighting for the independence of their country.

Q2. Mr. Pawsey

asked the Prime Minister if she will list her official engagements for Tuesday 24 June.

The Prime Minister

I refer my hon. Friend to the reply which I have just given.

Mr. Pawsey

Will my right hon. Friend take time during the course of her busy and exciting day——

Mr. William Hamilton

Not very exciting if one is on the dole.

Mr. Pawsey

Will my right hon. Friend consider the situation in local government, and in particular the way in [column 230]which local government is financed? Will she consider introducing a new method to take the place of the present archaic rating system, which is manifestly unfair?

The Prime Minister

I agree that the local rating system is not equitable. We have stopped the rating revaluation that was due to have taken effect within the next four or five years. Our pledge is ultimately to abolish the domestic rating system. We said in our manifesto that a reduction in income tax must take priority over that objective. But we still have that objective, and when we have dealt with the income tax position and increased productivity, we hope to be able to take some steps towards achieving it.

Mr. Hardy

Does the Prime Minister agree that when the school leavers come on to the market shortly they will exacerbate the situation and there will be more young people unemployed than ever before in this country's history? Will she, at an early date, consider introducing the urgent measures that will be required to remove the sheer waste and demoralisation that her policies are inflicting on the country?

The Prime Minister

Unemployment among school leavers will rise when the main school leavers come out of school at the end of the summer term. Therefore, we shall indeed face increasing problems. That is why the Manpower Services Commission and my right hon. Friend the Secretary of State for Employment have placed special emphasis in their relief schemes on helping to secure job opportunities for the young under the youth opportunities scheme. This is not a problem that is peculiar to this country. I can understand why everyone is distressed by the unemployment figures today, but they are higher in percentage terms in places such as Italy, Belgium and Ireland, where unemployment is of the order of 8 to 9 per cent., and they have an even bigger problem than we have.