Speeches, etc.

Margaret Thatcher

House of Commons PQs

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [994/316-20]
Editorial comments: 1515-1530.
Importance ranking: Major
Word count: 2297
Themes: Economic policy - theory and process, Employment, Monetary policy, Energy, Public spending & borrowing, Taxation, Trade, European Union (general), Foreign policy (USSR & successor states), Foreign policy (Western Europe - non-EU), Law & order, Local government finance, Media, Northern Ireland, Social security & welfare, Terrorism
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Q1. Mr. Nicholas Baker

asked the Prime Minister if she will list her official engagements for 25 November.

The Prime Minister (Mrs. Margaret Thatcher)

In addition to my duties in this House I shall be having meetings with ministerial colleagues and others, including one with the President of the Cyprus House of Representatives. This evening I shall be presiding at a dinner for the Prime Minister of Luxembourg.

Mr. Baker

Is my right hon. Friend aware that, despite the welcome announcement yesterday by my right hon. and learned Friend the Chancellor of the Exchequer of a reduction in next year's rate support grant, there is great concern that that will lead to unjustified rate increases? Will my right hon. Friend remind county and district councillors of their duty to cut staff before services and to examine rigorously the functions which those authorities perform?

The Prime Minister

It is vital that local authorities reduce the costs of their operations by the 3 per cent. economy announced by my right hon. and learned friend yesterday. After all, many companies in the private sector are having to economise to a far greater extent than 3 per cent. They cannot afford to have increased rates put upon them and they would bitterly resent it if they were. Local authorities are now reducing their staffs. The reports for the last quarter showed the biggest decrease that we have ever had. They must continue to look at the efficiency of their operations and to see whether a considerable number of them can be performed more efficiently by the private sector.

Mr. Foot

Is it not a fact that the measures announced by the Chancellor of the Exchequer yesterday on behalf of the Government can only add to the terrible and shameful figures of unemployment announced today? What were the calculations on increased unemployment as a whole contemplated by the Government when they accepted these measures at a Cabinet meeting last week?

The Prime Minister

The measures were necessary to try to liberate resources for the private sector. In view of the vastly increased borrowing, which was mounting up, it was not possible to contemplate reducing the interest rate unless we made it clear that we were determined to reduce the borrowing for the next financial year. We hope that the reduction in interest rates will give new confidence to private industry, and to farming, and will enable them steadily to expand and plan to increase stocks and investment.

Mr. Foot

Will the right hon. Lady now answer the question? What was the figure for increased unemployment involved in these measures as a whole which the Cabinet had before it? Was it not in the range of about 100,000? Is not that a proper reckoning of the extra unemployment which the Government intend to force on these already appalling totals? Is it not the case that every time the Cabinet meets in Downing Street it adds to the unemployment totals?

[column 317]

The Prime Minister

Unemployment has been occurring far more in the private sector than in the public sector. It was therefore vital to try to get interest rates down in order to give confidence to the private sector, because that is where the new businesses will start and where new jobs will occur.

Mr. Foot

Since the right hon. Lady will not answer our questions on unemployment properly, will she ensure that every month when the unemployment figures are announced it is done by the Secretary of State for Employment in the House, so that we shall be able to get answers to our questions?

The Prime Minister

No. They will continue to be announced as they have been announced for a long time and as they were announced when the right hon. Gentleman was Secretary of State for Employment. He knows the distress of increased unemployment. After all, during the period when he was Secretary of State, unemployment rise by 100 per cent.

Mr. Foot

Does the Prime Minister appreciate that we shall go on fighting for proper statements on these matters so that the House can deal with unemployment? We shall demand a debate on the the subject every month. Does she understand that the difference between her Government and the Labour Government is that we fought to bring the figures down and she means to put the figures up?

The Prime Minister

The right hon. Gentleman will demand whatever debates he chooses and will use his own days for whatever debates he chooses. Perhaps I was unduly kind to him, because unemployment during his period as Secretary of State for Employment rose by more than 100 per cent.

Sir Paul Bryan

My right hon. Friend will have heard after the Chancellor of the Exchequer's statement yesterday the recommendation of the previous Chancellor, the right hon. Member for Leeds, East (Mr. Healey), that the MLR should go down by 4 per cent. and the public sector borrowing requirement should go up to £18 billion. Will she comment on the effect of those joint measures on future unemployment?

The Prime Minister

I thought that that recommendation was one of the rashest statements that the right hon. Member for Leeds, East (Mr. Healey) has ever made. It lost him and his party all credibility.

Mr. David Steel

Will the Prime Minister tell us what the Secretary of State for Industry meant when he said in his weekend speech that the Government had lost the first year? Have we any guarantee that the Government will not lose the second year as well? Now that output is below the level achieved during the three-day week, has she not succeeded in putting the country on a two-and-a-half-day week?

The Prime Minister

The statement by my right hon. and learned Friend Sir Geoffrey Howethe Chancellor of the Exchequer yesterday made clear that we are determined to take firm action to continue to bring the rate of inflation down and therefore to provide the only sound basis for expansion. With regard to the reduction in the level of output in manufacturing industry, it was also going down over a large period of the previous Government's term of office. It is not unknown for the level of employment in the [column 318]service industries to increase while that in manufacturing goes down, often because of better technology and reduced overmanning.

Chancellor Schmidt

Q2. Mr. McNamara

asked the Prime Minister if she will make a statement about her discussions with the Chancellor of the Federal German Republic.

The Prime Minister

I held talks with Chancellor Schmidt in Bonn on 16 and 17 of November. Our talks covered many international political and economic issues and questions relating to the European Community. They took place in a friendly atmosphere, and a wide range of agreement was established.

Mr. McNamara

In view of the tragedy in Italy, whence the right hon. Lady has just returned, may I express the sympathy of the House and the hope that the Government will do everything that they can to help?

In the Prime Minister's discussions with Chancellor Schmidt, did she talk about energy prices for industry and particularly the differential between energy prices for industry and particularly the differential between energy prices for British industry and the prices for German and Italian industry—which amounts to £10 per ton of heavy fuel oil—and its effect on the competitiveness of various countries in the EEC?

The Prime Minister

We were all gravely distressed to hear of the earthquake in Italy which has turned out to be even more tragic than we had first thought. We have been in contact with the Italian authorities who asked yesterday afternoon for a planeload of blankets and tents. A plane left yesterday with 5,000 blankets and 216 six-man tents. Another will go tomorrow if need be. We shall do everything that we can to help the Italian Government and people over this difficult period.

On energy prices, we await the full CBI report with the keenest possible interest. It can be misleading to quote average prices. I did not discuss the matter with Chancellor Schmidt, but I should point out that the biggest factor in electricity prices is the price of coal. If that goes up electricity prices will follow.

Mr. Farr

Did my right hon. Friend discuss with the West German Chancellor the EEC embargo on the export of grain to Russia? If so, did she express her displeasure at recent exports of about ½ million tons to Russia which were negotiated by West German companies?

The Prime Minister

We did not discuss that matter. As my hon. Friend is aware, we have consistently backed the request of the United States that we should not export surpluses from the EEC cheaply to Russia. We stand wholly by that attitude.

Mr. Dalyell

Will the Prime Minister accept from one who went in an official capacity after the earthquake at Friuli that the best aid is given within 72 hours? What are we doing about vaccines and medicines, which are urgently required? In particular, are the Government pressing the Commission to act under the system of chapter 59 payments for aid to disaster areas? We gather from Brussels that the funds are short.

The Prime Minister

We were in touch with the Italian Government to offer vaccines and medicines from the moment we heard of the earthquake. We were told that [column 319]they are not required at the moment. If the Italian Government require them, they will come back with a request. No such request having yet been received for these materials, we stand ready to provide them. The Community is also considering aid under its powers to see whether there is anything that it can offer. If necessary, it will make transfers out of the existing budget.



Q3. Mr. Ralph Howell

asked the Prime Minister if she will list her official engagements for Tuesday 25 November.

The Prime Minister

I refer my hon. Friend to the reply which I gave earlier.

Mr. Howell

My right hon. Friend has great support throughout the country for the firm and realistic policies which she has pursued and which were portrayed by the Chancellor of the Exchequer yesterday. Is she aware that great damage has been done to the proposals as a whole by the inclusion of an increase in the national insurance contributions? Is she aware that the same revenue could have been raised by indirect taxation, bearing in mind my right hon. Friend's firm commitment to restore incentives to work and to solve the “Why work?” problem.

The Prime Minister

A very considerable increase in indirect taxation would have been required to raise that amount of money. As my hon. Friend knows, the national insurance scheme is not a mere transfer of income. It is an insurance scheme and one's right to benefits from it depends on the contributions made throughout life. It is important to maintain that link. We are in the difficulty, faced by all Governments, that we have to provide not only for rising benefits, but for rising numbers, particularly among retirement pensioners. There is only one way to provide for those who do not work and that is by contributions from those who do.

Mr. Molyneaux

In the course of a busy day, will the Prime Minister inquire into the circumstances in which authorisation was given and facilities provided for a television interview with a convicted prisoner in one of Her Majesty's prisons?

The Prime Minister

I have no intention of holding an inquiry although I should like to make clear that I share the hon. Gentleman's distaste at seeing convicted murderers on television. It is thought that the Government have absolutely nothing to hide about the [column 320]Maze prison or about their attitude to those on hunger strike. There can be no such thing as a political prisoner. It was thought that this was one possible way of counteracting the IRA propaganda campaign.

Several hon. Members


Mr. Speaker

Order. We were one minute late starting Prime Minister's questions. I shall therefore allow one further minute.

Dr. McDonald

Is the Prime Minister aware that the cut in the standard rate of income tax by 3p in the pound will cost £6 billion in lost revenue by the end of the next financial year? Is she not ashamed of the fact that the old, the sick, the poor and the unemployed pay for those cuts in income tax, which go mainly to benefit the rich, through cuts in welfare spending?

The Prime Minister

Welfare spending, like all other spending, has to be financed by those who are in work. We do no good by demanding more benefits and denying the means to pay for them. The full value of the pension in terms of what it will buy will be preserved. Last year, we added to the provision for pensions because the amount that had been provided was not sufficient. This year, we provided more than was warranted by the price increase. The undertaking is to compensate fully for price increases over the life time of a Parliament.

Mr. William Hamilton


The Prime Minister

That means either making up the shortfall or taking into account the over-provision next time.