PRIME MINISTER
Unemployment
Q1. Mr. Wigley
asked the Prime Minister whether she remains satisfied that Her Majesty's Government's financial measures will have a significant effect on reducing unemployment.
The Prime Minister (Mrs. Margaret Thatcher)
Our financial policies are designed to continue to reduce inflation and to secure a lasting improvement in the performance of the British economy, so providing the foundations for sustainable growth in output and lasting jobs. Improvements in the employment position always lag behind other indicators when coming out of a recession. Last year almost 4 million people left the unemployed register.
Mr. Wigley
As the Budget assumes a continuing level of 3 million unemployed at a cost of £15,000 million to the Government, would it not make more sense, instead of paying those people to do nothing, to pay them a little more to do worthwhile work? If that needs a few more pence on the standard rate of income tax, is that not a price worth paying to ensure that the burden of unemployment is properly shared among the community, instead of putting on the 20 per cent. at the end of the jobs queue, with no economic benefit, and causing social cancer?
The Prime Minister
Last year my right hon. and learned Friend Sir Geoffrey Howethe Chancellor of the Exchequer allocated some £150 million to a programme to help some of the long-term unemployed to do a certain amount of social work. It has not been easy to have that programme taken up. The hon. Gentleman will also know that we have extensive programmes on special employment measures and training programmes, which this year already amount to £2 billion.
Mr. Eggar
Was not this a Budget for more employment? Will my right hon. Friend give a particular welcome to the announcement by her right hon. and learned Friend about reductions in North sea oil taxation, as that will lead specifically to more jobs in the oil supply industry?
The Prime Minister
Yes. My right hon. and learned Friend's Budget was a Budget to lay the foundations for sustainable growth. It contained substantial measures to help industry. The last Government put £4 billion extra on employers in national insurance taxation, by loading the national insurance contributions to employers. This [column 345]Government have taken off £3 billion from employers in an effort to help with jobs. I agree with my hon. Friend that the purpose of the reduction of tax on North sea oil was to try to get future exploration in North sea oil and therefore more jobs in that industry and its associated support industries.
Mr. Kilroy-Silk
Is not the Prime Minister ashamed that there are still 100,000 unemployed 19-year-olds—14,500 in the north-west—all of whom left school in the year in which she came to office, and not one of whom has ever had a proper full-time job?
The Prime Minister
Yes, there are a considerable number of young people who are unemployed, and that is precisely why we are introducing a special training programme to take effect from September, because there are still shortages of some skills, even in the present state of unemployment. We are introducing that programme at a cost of about £1 billion, so that young people can either stay on in education, or find a job, or have training. Unemployment will then not be an option for them.
Engagements
Q2. Mr. Duffy
asked the Prime Minister if she will list her official engagements for Thursday 17 March.
The Prime Minister
This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today, including one with the Spanish Foreign Minister and another with Mr. Thorn, President of the European Commission. This evening I am giving a reception for the Commonwealth Parliamentary Association.
Mr. Duffy
The Prime Minister claimed yesterday that the Budget showed her Government facing their problems with honesty and fairness. Is she so brazen as to tell the House now that that is how she sees the Budget's meanness to old-age pensioners and its neglect of the unemployed and the industrial wastelands of the north?
The Prime Minister
The Budget has the honesty to cover the vast majority of expenditure by taxation so that we do not have to borrow too much and thus put up interest rates. That will be of great help to the construction industry and all manufacturers who wish to hold stocks.
My right hon. and learned Friend Leon Brittanthe Chief Secretary dealt with the hon. Gentleman's point on pensions yesterday, giving quotations from the Labour Government to the effect that the historic method is the fairest method that there is. We do not know what the historic or actual increase in RPI will be on 17 June—[Interruption.] We do not know what the historic increase in the RPI will be when it is published on 17 June. That is the latest figure that we can take. Whatever it is, that will be given to the pensioners and in the following year likewise. So they will get an actual increase. [Hon. Members: “Oh.” ] We shall do away for all time with the undershoot, overshoot, clawback vocabulary that has grown up. Perhaps the hon. Gentleman will remember and acknowledge that one of the Government's first actions was to make good the undershoot to pensioners caused by his Government.
Mr. Higgins
As some doubt has been expressed recently about the Government's commitment to the Gleneagles agreement, will my right hon. Friend confirm [column 346]that she supported it at the Heads of Commonwealth Governments' meeting and that there has been no change in policy since then? Does she agree that it would be wrong if British international teams or international sporting events were to suffer because some individuals were persuaded to take part in sporting events in South Africa?
The Prime Minister
The Gleneagles agreement was reaffirmed at Lusaka and Melbourne and we are therefore committed to it. One of the objects is to try to ensure that sports all over the world are multi-racial. We hope that that will eventually come about.
Mr. Foot
Does the Prime Minister agree that the value of the old-age pension is expected to fall by 2 per cent. between November 1982 and 1983? As that is the fact does she not think that the whole effort of her Government to try to disguise the nature of the clawback is a pathetic failure?
The Prime Minister
No, certainly not. Leon BrittanMy right hon. and learned Friend gave some quotations on the historic, or actual, method being very much better. I do not know what the level of inflation for May, to be published on 17 June, will be. I do not know what the level of inflation in November will be. Every time a Government have tried to predict that they have tended to get it wrong and therefore we have undershoot and overshoot. It is far better to give the increase in actual terms. I cannot say what the inflation rate will be in November 1983 and neither can the right hon. Gentleman, but I hope that it will be low.
Mr. Foot
Is the right hon. Lady not aware that the Chancellor is assuming that it will be 4 per cent.? Therefore, she is engaged in cheating the pensioners—[Hon. Members: “Withdraw.” ] As the right hon. Lady seeks to take shelter by referring to the Labour Government's actions, will she now confirm that the value of the pension under the Labour Government was increased by 20 per cent., whereas under her Government, by any reckoning, it will be 3 per cent. or even less?
The Prime Minister
On 22 December 1981 the hon. Member for Birmingham, Perry Bar (Mr. Rooker) said that the historic basis
“is very sensible considering the trouble that the Government have had over the past few years.” —[Official Report, Standing Committee B, 22 December 1981; c. 186.]
The hon. Gentleman was referring to the fact that in the past seven years the forecast had been accurate only twice. Therefore, it is better to work on an actual amount rather than a forecast amount.
I believe that the total increase in pensions under the Labour Government was broadly what the right hon. Gentleman said, but will he admit that it would be a great deal fairer, when he tells the National Pensioners Convention that he agrees with its demand for greater pensions and when he gives the impression that those pensions will be given, to give the figures for the increase in national insurance contributions that would be required if pensioners' demands were to be met in full? To be fair, one must consider the burden on the working population. If pensioners' demands were to be accepted it would mean an increase in the weekly national insurance contributions of £20 a week for the man with average earnings.
Mr. Foot
I am not at all surprised that the right hon. Lady wishes to escape from her shabby treatment of the pensioners by trying to accuse other people. Will she now [column 347]confirm that under the Labour Government there was never any cut in the uprating? She cut it in 1981 and, under these proposals, will do the same in 1983.
The Prime Minister
Our pledge to the pensioners at election time was to protect them against the fall in the value of money. At present—[Interruption.]—taking our upratings from the Labour Government, the pension has increased by 68 per cent. and the RPI by 61 per cent. It is already 7 per cent. ahead of inflation.
Mr. Speaker
Order. I rise to say that some hon. Members are deliberately making a rumbling noise and I shall have no hesitation in naming the constituencies of those concerned if it continues.
Monopolies and Mergers Commission and Office of Fair Trading
Q3. Mr. McCrindle
asked the Prime Minister whether, in the light of recent decisions by the Monopolies and Mergers Commission and recommendations on matters placed before it by the Office of Fair Trading, she remains satisfied that both bodies continue to fulfil their functions adequately in the public interest; and if she will make a statement.
The Prime Minister
Since both bodies deal with complex and difficult issues, their operation is often controversial. Both bodies recognise this and seek to take full account of different views in fulfilling their functions.
Mr. McCrindle
Now that there is a programme of investigation into the nationalised industries by the Monopolies and Mergers Commission, does the Prime Minister feel that there may be an argument either for a separate body to continue that extremely important work or, at the very least, the creation of a separate division within the Monopolies and Mergers Commission for that purpose while the commission continues with its inquiry into private mergers? Alternatively, is there a case for extending the remit of the Office of Fair Trading, so that it can be more involved in the investigation of proposed private mergers?
The Prime Minister
I recognise the reasons for my hon. Friend's proposal, but it would be a pity to set up an extra body when the present Monopolies and Mergers Commission is dealing with such matters, including the many references of public sector industries that have already been made to it, most of which have been [column 348]published. It can call on consultants to help with its audit work, but it would be better to allow the present arrangements to continue for a further period before reviewing them.
Engagements
Q4. Mr. Parry
asked the Prime Minister if she will list her official engagements for Thursday 17 March.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Parry
Will the Prime Minister discuss the effect of the Budget upon unemployment with her right hon. and learned Friend the Chancellor? As my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) has said, all our regions are becoming industrial wastelands and deserts—the north-west, the north-east, Scotland and Wales. The Budget does nothing for unemployment. Will the Prime Minister say that she will fight an early general election and also tell the unemployed of Darlington where they will find jobs?
The Prime Minister
The hon. Gentleman is aware that the only way to maintain enduring jobs is to produce products that are good value for money, of good design and serviced, if necessary, wherever they may be sold in the world. There is no other recipe. Industry must go that way. The hon. Gentleman is aware that some of our industries are overmanned and that one of our car plants has been on strike and is unlikely to increase its sales. It is handing sales to some of our competitors.
Sir Anthony Kershaw
Does my right hon. Friend agree that the announcement by her right hon. and learned Friend that child benefit is to rise by 11 per cent. in November makes this the highest rate of child benefit ever? Does that not reach a section of the population that needs it?
The Prime Minister
That is correct. The child benefit is now at its highest ever level. Tax thresholds are 5 per cent. higher in real terms than they were in 1978–79.
Mr. Rooker
On a point of order, Mr. Speaker. Is it in order for the Prime Minister to come to the Chamber prepared to quote hon. Members in Committee proceedings totally out of context?
Mr. Speaker
I never comment on Ministers' replies.