Speeches, Interviews & Other Statements

Margaret Thatcher

HC S: [No confidence in Government economic policy]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [65/241-52]
Editorial comments:

1659-1750. Audio of the speech is also available on this site.

Importance ranking: Key
Word count: 6168
Themes: Health policy, Economy (general discussions), Employment, Industry, Monetary policy, Privatized & state industries, Public spending & borrowing, Taxation, Trade, Energy, Strikes & other union action, Foreign policy (USA), Foreign policy (Asia), Housing, Science & technology, Law & order, Conservatism, Labour Party & socialism, 1984-85 coal strike
[column 241]

The Prime Minister (Mrs. Margaret Thatcher)

I beg to move, to leave out from “House” to the end of the Question and to add instead thereof:

‘congratulates Her Majesty's Government on the success of its economic policies in securing low inflation and rising output and employment; and calls upon it to maintain policies based on sound finance, individual freedom and encouraging enterprise as the only foundation for lasting growth in output and jobs.’.

The debate arises upon an Opposition motion which calls into question the economic policy of the Government. It is, of course, wholly appropriate that we should debate these issues just before the long recess. After 13 months of the present Parliament, we are more than happy to take stock of the performance of both Government and Opposition. For the last 40 minutes we have listened to the rhetoric of Neil Kinnockthe Leader of the Opposition. It was difficult to find a thread running through his speech. It was a speech that matched the motion but not the occasion.

As I listened, I concluded, not for the first time, that the right hon. Gentleman's compatriot, the late Nye Bevan, was wrong. The religion of Socialism is not the language of priorities: it is the priority of language. I listened to the right hon. Gentleman's words and statistics but I could not possibly discern any policy there. He wanted widespread expansion and a high deficit; nevertheless, he wanted low interest rates and he failed to [column 242]observe that the United States has had a very strict monetary policy and a much smaller proportion of its national income devoted to public expenditure than this. He criticised the level of national insurance contributions but I do not hear him moving motions to reduce the amount of pensions.

The right hon. Gentleman had something to say about North sea oil but he failed to see that, if we are successful—as we are—in producing North sea oil, those who earn money from that industry will either buy more manufactured goods from abroad, leading to higher imports, or we shall, by their efforts, be able to export capital to repay the assets in future years. But the right hon. Gentleman is against both higher imports and the export of capital. His words, in short, were emotive, excessive and evasive.

As we debate these issues of economic policy, the interest of the House and of the country lies not in hyperbole but in realism. The right hon. Gentleman would do well to remember the words of the noble Lord Barnett in his book, “Inside the Treasury” :

“The 1974–75 Labour Government had a difficult economic and financial task, rendered impossible by pledges foolishly made without any serious thought as to where the money would come from. You name it, we were pledged to increase it.”

Judging by the right hon. Gentleman's speech, the Opposition have learnt nothing.

As I expected, the right hon. Gentleman devoted much of his speech to unemployment. I shall have more to say about unemployment later. At the outset, I want to make one point. Unemployment will not be cured by the quick fix—by injections of public spending, each becoming less potent than the last. The result only will be record inflation.

On the Government side of the House we shall not peddle the easy solutions that do so much damage in the long run. We care enough about unemployment to do the difficult things that alone will achieve a lasting improvement in our capacity to create new jobs.

Nevertheless, the right hon. Gentleman still claims to be able to put Britain back to work by extra spending and extra borrowing. What credibility can he possibly have in criticising the present level of interest rates when his policies could result only in still higher interest rates? Those policies would end, as they did before, with the nation's finances in disarray and a Socialist Government going cap in hand to the IMF.

The right hon. Gentleman is aware of the consequences of what happened last time. He mentioned one of them. I shall just mention two: first, Britain's overseas debt was doubled during the lifetime of the Labour Government and, secondly, spending on the National Health Service was cut, in real terms, for the first time in 25 years. Yet he has the nerve to attack a Government who have paid back half those debts and who have spent more, in real terms, on the National Health Service every year since they came to power.

At best, the right hon. Gentleman's economic thesis is inadequate; at worst it would destroy the jobs that we have and drive away those that we seek to gain. That was the spending programme that the right hon. Gentleman's party put to the electorate, which saw to it at the last general election that the Labour party recorded the lowest share of the popular vote in its history. By contrast, this Government have accepted the challenge of long-term economic reform. [column 243]

I shall divide my remarks into three parts. I shall comment first on the framework of the Government's economic policy, then on unemployment and finally on the coal strike. The central objective of our economic policy has been to create in Britain the framework of a market economy, the type of responsive economy in which industry and commerce can flourish, not only to produce goods and provide jobs, but to generate the wealth upon which our public services depend. Our strategy demands sound money and lower inflation, both of which we have achieved. It welcomes technological change and ensures the freedom which comes from wider ownership of property.

The first requirement for a successful market economy is the defeat of inflation. It was Lenin's dictum that if one wished to destroy a nation one should first debauch its currency—and he spoke as a dedicated revolutionary, not as a prophetic monetarist. Our first aim, therefore, has been to defend our nation by defending the worth of its currency and to break for good the dangerous trend towards higher inflation.

Thanks to the prudent financial policies pursued by my right hon. Friend Nigel Lawsonthe Chancellor of the Exchequer and Sir Geoffrey Howehis predecessor, the prize of lower inflation has been won and we shall not put it in jeopardy now. Stable prices remain our eventual goal. [Interruption.] Stable prices are something that the right hon. Gentleman's party has never achieved, and never could. Our ability to protect ourselves against the tide of overseas interest rates depends upon sticking to these policies.

Countries such as Germany and Switzerland have long succeeded in keeping their interest rates well below American rates, but only because they first earned an international reputation for sound money and low inflation. The right hon. Gentleman chided us about interest rates. I remind him that during the lifetime of the Labour Government, United Kingdom interest rates were, on average, 4 per cent. higher than United States rates. That has changed. A few weeks ago, our short-term interest rates were nearly 3 per cent. lower than comparable United States rates. Damaging industrial strikes have temporarily robbed us of this advantage. We shall seek to regain it, but if we followed the right hon. Gentleman's prescription for more public spending, not only would interest rates rise sharply, but we would also lose the prospect of reducing direct taxation and leaving people more of their own earnings to spend and save as they choose.

Our task in reducing income tax is not easy. [Interruption.] Wait for it a little longer, as my right hon. Friend Nigel Lawsonthe Chancellor said in his Budget statement. [Interruption.] If hon. Gentleman will listen, they may hear something to their advantage. As public expenditure has risen dramatically in the post-war period, so the taxation net has inevitably spread much wider. In 1936, only 3.5 million people paid income tax, and a married man did not begin to pay until he earned one and a half times average wages. Now, nearly 24 million people pay income tax, starting at less than half average wages, and if we followed the right hon. Gentleman's prescription, many more people would be paying much higher income tax.

We have made a start in reducing personal tax. Since 1979, the income tax threshold has risen by 16 per cent. [column 244]in real terms, after falling under Labour. A modern market economy is just a matter of taxes—[Interruption.]—and incentives.

Mr. Speaker


The Prime Minister

Opposition Members dare not listen, Mr. Speaker. They can only shout, because they have no arguments. Do not worry, Mr. Speaker; I shall plough steadily on.

A modern market economy is also about competition, which puts the customer first and keeps the producer on his toes. What is produced needs to be sold; it will be sold only if other people are prepared to buy it. No amount of controls, restrictive practices, planning or monopoly can win Britain export orders; only being competitive can do that. This is the only policy that makes sense for a country which derives 30 per cent. of its national income from the world's market place. It is a matter of record that those who succeed best in the markets of today are those willing to adapt to change, producing new goods and services as new tastes develop.

In the past, mechanisation eventually created more jobs than it destroyed. The same will surely be true of today's innovations—the new electronics, the computer, the cable and the satellite. But for those whose jobs are lost the process of change can be painful. We must stand ready to mitigate the hardship for them and their communities by generous redundancy payments, by retraining and by helping to create new businesses. To cling to old industries, processes and working practices leads not to the security which people seek but to the decline which they fear.

Mr. Tam Dalyell (Linlithgow)

Can the Prime Minister be more precise, and say how her Government will create new businesses for my constituents at British Leyland in Bathgate, with the unemployment problems that they already face?

The Prime Minister

As the hon. Gentleman is aware, the Government can do certain things to help. We can keep down inflation, give incentives in personal taxation—I shall come to that shortly—and help with such matters as enterprise allowance, loan guarantees and the creation of small businesses. We can also reduce bureaucracy. Indeed, the Government are doing all those things. In the end, it will be for people to respond by being prepared to create and build up businesses for themselves. The right hon. Gentleman extolled the virtues of the United States, which has an enterprise culture, under which people are prepared to respond to the incentives that they are given.

I turn to the subject of ownership as part of the market economy. Although both sides of the House disagree about the importance of inflation, the reduction of income tax and the management of change, it is still the role of private property in society which divides us most sharply. Indeed, the Leader of the Opposition said:

“We cannot remove the evils of capitalism without taking its source of power, ownership” .

Ownership is indeed a source of power, which is precisely why more of it should be with the citizen, and less with the state.

If we look around the world, we see that those countries which deny private property rights also deny other human rights. We seek to redress the balance between the citizen and the state by restoring to private ownership industries that have lain under the pall of nationalisation. In the past [column 245]year alone, Enterprise Oil, Scott Lithgow, Sealink, Wytch Farm, INMOS and Jaguar have passed in to the true ownership of the citizens and many of their employees have been the first to acquire a stake in them.

We are well on course for the denationalisation of British Telecom and British Airways in the coming year. Most fundamental of all, three quarters of a million families are buying their own council houses—a policy which the Labour party opposed the whole way—freeing themselves from the control of town halls. Indeed, owner-occupation is at an all-time record. Socialists oppose the widening of property ownership because it brings to every citizen a new independence and breaks down the old class divisions on which they thrive. We seek a country where every earner can be an owner—a country which is utterly repugnant to Socialism—so that capital and labour have a shared interest and class divisions are a thing of the past.

The right hon. Gentleman spewed out statistics. I will give a few of our very tangible achievements. We have sound money, lower income tax, competition and ownership. Those are long-term policies, but they have already brought real advances. Inflation this year and last is the lowest for 16 years. Output is higher than ever before. [Interruption.] It appears to be a laughing matter for Opposition Members. I thought that they had said that good news for Britain was good news for the Labour party, yet when one says that output is higher than ever before they do not seem to like the fact that it has been achieved by a Conservative Government. Productivity is at record levels. The real personal disposable income of our citizens is higher than at any time under Labour. Profits are up 40 per cent. over the past two years. Investment is up 10 per cent. on a year earlier.

We are providing a framework for an enterprising economy whose success can alone provide for the public services we need.

Mr. D. N. Campbell-Savours (Workington)


The Prime Minister

May I finish this passage in my speech?

Indeed, on health, education and social security our record stands comparison with that of any previous Government and it is better than that of previous Governments. Therefore, I say to the House that, far from the caricature of the economy drawn in the Opposition's motion and given in the right hon. Gentleman's speech, the deep-seated problems in our economy are at last being tackled and real advances have been made.

Mr. Campbell-Savours

How does the Prime Minister respond to the protests of her right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) who accused her of insensitivity to people in need and of inflexibility, and was supported by Conservatives in Portsmouth after the by-election who also accused the right hon. Lady of inflexibility? Are they all wrong, or could they possibly be right?

The Prime Minister

There are not half as many of those who believe that they are right as there are of those who voted the Government into power with the biggest majority in history. After that, the Conservative party won the European election. The latter people are very much more likely to be right in their judgment.

I am grateful to the hon. Gentleman for the timing of his intervention because I was about to reach the point in [column 246]my speech which deals with unemployment. With unemployment as high as it is and still rising, creating jobs is the main challenge of our times. The success of the long-term policies of which I have already spoken is vital if we are to tackle the fundamental causes of unemployment rather than just its symptoms.

However, there are other steps. This year's Budget saw the abolition of the national insurance surcharge—something we promised to complete in this Parliament but achieved in the first Session—and it also saw the reconstruction of corporation tax. Taken together, those two measures will greatly reduce the bias in favour of machinery and against the employment of people—a bias introduced by the previous Labour Government. To stimulate the growth of new business in Britain, the Budget improved share option schemes and reduced direct taxation. We cannot yet compete with the United States in the tax incentives offered to industrial pathfinders, but we are getting closer.

The Government applaud those who can earn high incomes by building new enterprise and creating jobs for others. We want more of them here because they are assets to our country. The right hon. Gentleman's ill-disguised xenophobia to foreign investment and enterprise is not for us.

Mr. Michael McGuire (Makerfield)

Is it not true that every month since the Government came to power jobs have been lost? Will the right hon. Lady tell us when a balance will be reached so that the jobs lost in any month will equal those gained? That position has not yet been achieved after five years of her Government.

The Prime Minister

Unemployment has fluctuated. I accept the hon. Gentleman's—[Interruption.]—underlying assumption. Unemployment has risen and is continuing to rise—I said that a moment ago, but it has not risen every month. As I said, it is a great burden and tragedy. If the hon. Gentleman's Government knew the answer to unemployment, why did they allow it to increase to 1.5 million? They should have been able to reduce that figure substantially. I am sure that if right hon. and hon. Members knew the answer they would not have allowed unemployment to rise so high. They did not know it and many people in Europe face the same problem.

I wish to analyse some of the causes. Over a period of about 15 years, the economy of the United States—and, indeed, that of Japan—has been much more successful in creating new jobs than those in Europe. At the recent London summit we spent some time considering the reasons for that. The answers appear to lie, first, in the greater flexibility of their labour markets, in which wages and working practices adapt much more quickly to economic conditions. Secondly, they have a greater readiness to seize the opportunity of new technology. Thirdly, they have a greater willingness to move from older manufacturing industries into services; and, fourthly, a much larger part is played by small businesses in their economy.

Therefore, the Government have set out to improve the education and training of young people to equip them for the changing world that they will face. The youth training scheme—the best of its kind in Europe—provided 350,000 places last year and the enterprise allowance scheme is helping 1,000 of the unemployed a week to set up their own businesses. [column 247]

The latest figures on unemployment have been deeply disappointing, but other indicators suggest a strengthening in the labour market. Vacancies are up for the fourth month running and the number of people in work has risen by 260,000 over the past year, with 330,000 extra jobs in service industries. I understood Opposition Members to say that they welcomed good news but they seem singularly reluctant to cheer this. That increase in the number of jobs is welcome to Conservative Members at any rate, but it comes at a time when the numbers in the working population are rising still faster.

During the past six years those leaving school have outnumbered those retiring from work by over a million and that trend will continue for the rest of the decade. [Interruption.] I hope that the hon. Member for Rother Valley (Mr. Barron) will not accuse any Government of being responsible for the demographic figures. It would be completely wrong to do so. Our task of creating sufficient jobs is made even harder by demographic factors. The employment figures belie the Opposition charges of a stagnant economy. Every month, 340,000 people leave the unemployment register. About 28,000 new service sector jobs are created and about 10,000 new businesses start up. Every quarter, it is estimated that self-employment increases by 17,000. Every year some 6 million people change jobs. The proportion of our people in work in this country is about the same as in Germany but higher than that in France, Belgium, Italy and the Netherlands.

The problems of unemployment are severe but they are not helped by the attempt of the Opposition to pretend that there is an easy answer which happens to have eluded most of the countries of western Europe and also eluded them in government. The claim of the Labour party to represent the interests of the unemployed is totally hollow. It is the party which opposes efforts to restructure industry to meet changing demands. It is the party which in opposition supports every wage claim, even when its effect is to price people out of work.

Ms. Clare Short (Birmingham, Ladywood)


The Prime Minister

The Labour party is the party which supports every strike, no matter what its pretext, no matter how damaging. But, above all, it is the Labour party's support for the striking miners against the working miners which totally destroys all credibility for its claim to represent the true interests of working people in this country.

It is a tragedy that this coal strike has occurred at a time when the coal industry had the brightest prospects for many years. The Government had shown their commitment to the industry by a massive investment programme far in excess of “Plan for Coal” . New export orders were being won. Applications for conversion from oil to coal were running at record levels under this Government. Now, since the strike, eight coal faces have already been lost. I understand that the closure of faces as a result of this strike is equivalent to the capacity of about four pits and the NCB has said that faces at 25 more pits are at risk.

The NCB is having to buy coal from abroad to meet a major export order for America which could guarantee 1,000 jobs in Durham for 10 years. There are now more withdrawals than applications for coal conversion grants and the investment programme is being held up. [column 248]

All of those things are bad both for the future of the coal industry and for miners who are on strike and their families. Not only have they lost about £3,000 per family on average but their jobs are being put at risk by the very leaders who claim to defend them. Perhaps that is why the leadership of the NUM, having failed on three previous occasions to gain the requisite majority by a ballot, resorted to a series of devices to call this strike without a national ballot.

The Leader of the Opposition remained silent on the question of a ballot until the NUM changed its rules to reduce the required majority. Then he told the House that a national ballot of the NUM was a clearer and closer prospect. That was on 12 April—the last time that we heard from him on the subject of a ballot. But on 14 July, he appeared at a NUM rally and said, “There is no alternative but to fight: all other roads are shut off.” What happened to the ballot? [Interruption.] The Leader of the Opposition knows that this strike, started by manipulation of union rules, has been maintained by violence and intimidation—methods which are repugnant to the vast majority of miners. We have seen up to 10,000 so-called pickets massed to prevent other workers from going to work by fear or by violence. Such picketing is not just in clear contravention of the TUC guidelines, it breaches the instruction given in 1974 by the National Union of Mineworkers itself that the number of pickets should not exceed six in any local situation. I hope, therefore, that today when the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) winds up he will end Labour equivocation with a clear condemnation of mass picketing. That would at least be one ambiguity he could clear up.

Mr. Alexander Eadie (Midlothian)

The right hon. Lady must be aware that the National Union of Mineworkers' decision to hold a special delegate conference on Friday 10 August was a lifeline for her in the sense that she could assist in arranging negotiations before that conference met. Are we to take it that, while she is speaking today on behalf of the Government, the policy she is putting forward to this House and the country is that she will starve the miners' wives and families into submission? Will not the right hon. Lady agree that that policy is a political and social disaster for this country?

The Prime Minister

There are good jobs for those striking miners, and they know it. If anyone is stabbing them in the back it is not this Government. [Interruption.] I notice that no hon. Gentleman took advantage of an interjection to condemn mass picketing or to condemn the union for not holding a national ballot.

Those responsible for these tactics have failed in their objective to close down the steel industry, failed to prevent the movement of coal and failed to coerce working miners into joining the strike. For that we must thank not only the courage of those miners who have stayed at work and their families but the police, who have commanded widespread support and gratitude.

The millions of members of the working population who are subsidising miners' jobs to the tune of £130 per week are entitled to ask what this dispute is about. This dispute is not about pay, because the current offer will keep miners 25 per cent. above the industrial average compared with 18 per cent. under Labour. It is not about compulsory redundancies. There have been none, and there have already been well over 20,000 inquiries about [column 249]voluntary redundancy—more than the number of redundancies the NCB are seeking. It is not about voluntary redundancy terms, because those are the most generous ever—£33,000 for a 49-year-old miner compared with £1,500 under Labour.

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

Bearing in mind that all the other pit closures in the past have been effected in accordance with the colliery review programme, will the Prime Minister tell the House why the decision was taken—and who took it—to close Cortonwood without a negotiation according to the colliery review programme?

The Prime Minister

The hon. Gentleman is well aware of the pit closure procedure and of the processes it must go through. I am grateful to the hon. Gentleman for interrupting when he did because I am just coming to the subject of pit closures.

I have said what the dispute is not about. It is not about pay, compulsory redundancies or voluntary redundancy terms. After seven days and 35 hours of talks between the National Coal Board and the NUM, the only point at issue was the NUM demand that pits should remain open even when they are not beneficial to the industry. This is a new and totally unreasonable demand.

The tripartite report of the last Labour Government which endorsed the NCB “Plan for Coal” in 1974 said:

“Inevitably some pits will have to close as their useful economic reserves of coal are depleted” .

That report was signed, among others, by the then Secretary of State for Energy, Mr. Eric Varley, and by the hon. Member for Midlothian (Mr. Eadie).

The Labour Government not only accepted the principle that uneconomic capacity must be closed; they embodied it in legislation. Section 6 of the Coal Industry Act 1977, passed when the present right hon. Member for Chesterfield (Mr. Benn) was Secretary of State for Energy, provides that the Secretary of State may make to the National Coal Board such grants as in his opinion

“will further assist in the re-deployment of the manpower resources of the Board and the elimination of uneconomic colliery capacity.”

Mr. Tony Benn (Chesterfield)


Mr. Michael Foot (Blaenau Gwent)


The Prime Minister

As I mentioned the right hon. Member for Chesterfield I must give way to him, but if he wishes I shall give way to the right hon. Member for Blaenau Gwent (Mr. Foot) first.

Mr. Foot

The right hon. Lady referred to “Plan for Coal” . Will she now answer the question that she did not answer earlier: does she think that the “Plan for Coal” was properly carried out in the Cortonwood case?

The Prime Minister

Cortonwood will go through the normal procedures, and that has been said. The right hon. Gentleman is trying to distract attention from the fact that the closure of uneconomic pits was not only Labour policy, but that it was contained in their legislation. The Labour Government first put it in legislation in 1967, and they re-embodied it in legislation in the time of the right hon. Member for Chesterfield. Having mentioned the right hon. Gentleman, I give way to him.

Mr. Benn

I am grateful to the Prime Minister for delivering herself completely into our hands, because the National Union of Mineworkers was consulted every time [column 250]there was a discussion about the future of a pit. As Secretary of State, I offered the NUM a veto on all pit closures, as the right hon. Lady will know very well. The Cortonwood case precipitated a national coal strike, as was intended, because the Prime Minister wanted to precipate it by breaking the essential element in the “Plan for Coal” , which was agreement with the NUM on the future of the industry.

The Prime Minister

So the right hon. Gentleman absolutely agrees with the closure of uneconomic pits. [Hon. Members: “Answer.” ]

Mr. Speaker

Order. It is no good hon. Members shouting “Answer” at the Prime Minister. She is seeking to do so.

The Prime Minister

The right hon. Gentleman has not argued that he is against the closure of uneconomic pits. He put it in legislation. [Hon. Members: “Answer.” ] I will, if right hon. and hon. Members will be quiet for a moment. The right hon. Gentleman has argued that it is all right to close uneconomic pits, provided the correct procedure is followed. [Interruption.] Of course he has. [Interruption.] That is precisely the essence of his argument. So he agrees with the closure of uneconomic pits, and he is trying to use Cortonwood as a way of saying that the procedure is not being followed. The National Coal Board has made it clear that the procedure will be followed at Cortonwood. If right hon. and hon. Members agree that they enshrined the policy of the closure of uneconomic pits in legislation and that all that is between us is procedure, the strike should soon end. [Interruption.]

Mr. Benn


The Prime Minister

Mr. Speaker——

Mr. Speaker

Order. I do not think that the Prime Minister is giving way.

The Prime Minister

I have more to say about the right hon. Gentleman, and at the end of it I shall gladly give way to him again, because no doubt he will wish to intervene at that point.

Of course, uneconomic capacity was closed under the previous Labour Government. Indeed, during the stewardship of the right hon. Member for Chesterfield 22 pits were closed—some of them uneconomic—and 17,000 men became redundant on terms that were not a patch on those available now. The right hon. Gentleman said in the House on 4 December 1978:

“I have never found the NUM in any way unreasonable where closures are necessary because of exhaustion or because pits are out of line in economic terms.” —[Official Report, 4 December 1978; Vol. 959, c. 1015–16.]

Mr. Benn

The Prime Minister, with every comment, makes our case. Let the country understand that the reason why the NUM gave its support to “Plan for Coal” was that the future of the industry, including closures, was to be agreed with the NUM. There is now a coal strike because the Government were deliberately prepared—they prepared it years in advance—to break the agreement with the mineworkers that the industry would be developed in agreement with them. If the Prime Minister tonight told Mr. MacGregor that there was to be a settlement on the basis that all closures would be agreed with the NUM, the strike would end tonight.

The Prime Minister

I am not prepared to hand over the management of the National Coal Board in my time [column 251]any more than the right hon. Gentleman was in his. If he reads his speech he will note that he said that if the NUM came to him he could pass on what it said to the National Coal Board. The NCB must be free to manage. The right hon. Gentleman quibbles about the procedure of those pits. He admits that it was his policy to close uneconomic pits. He admits that he repeated it in legislation. He cannot plead that he did not know what he was doing when he confirmed that——

Mr. Benn


Mr. Speaker

Order. It seems that the Prime Minister is not giving way.

The Prime Minister

I have twice given way to the right hon. Gentleman and have answered him. I assume that he will have a chance to catch your eye again, Mr. Speaker. Indeed, as I have still more to say about the right hon. Gentleman, no doubt he will have another chance to intervene.

Now, in its anxiety to follow the leadership of the NUM, the Labour party seems to have repudiated the policy of the right hon. Member for Chesterfield—[Interruption.] It has because it is for the closure of uneconomic pits.

The Opposition's new view now seems to comprise two elements: first, that pits must never be closed, regardless of cost, unless they are geologically exhausted and, secondly, that there should be more investment in old pits, presumably at the expense of new ones. Those are totally new views, different from the policy which the Opposition followed in practice.

The taxpayer is already spending £1.3 billion a year on the coal industry. That is more than the total of the salaries of doctors and dentists in NHS hospitals; it is the equivalent of 28p on petrol; it is equivalent to an increase of more than £2 a week in the retirement pension; and it is double the total amount spent on all four scientific research councils. Labour's new policy would mean that the subsidy would increase without limit—[Interruption.]

“It is the Government's policy to phase out subsidies to the nationalised industries. In line with this the Government hope that the coal industry will be able to operate without the need for assistance, apart from the social grants” .—[Official Report, 27 November 1975; Vol. 901, c. 1062.]

I hoped that I could agree with the right hon. Member for Chesterfield because those were his words and not mine.

Mr. Benn

I am grateful to the Prime Minister for again clarifying the difference between the two sides of the House. The difference that has emerged in her latest comment is that she believes that the coal is valuable while we believe it is the miners who are valuable. That is the difference between our approach to the future of the industry and her own.

The Prime Minister

The right hon. Gentleman runs away from it again. He put the closure of uneconomic pits into legislation. He operated that policy. He is now trying to change it.

We can improve our industrial performance only if an efficient coal industry can provide the cheap energy that workers in other industries need to stay competitive so that they can keep their jobs and win others. I would have thought it would be a matter of pride for the coal industry [column 252]that it should make profits that could pay for schools and hospitals rather than losses which drain funds away from them. In the market economy, an efficient coal industry should help to finance the social services, not become one itself.

It is because we believe that the coal industry has a prosperous future based on efficient, new capacity that we are not prepared to write the blank cheque on the taxpayer which the NUM and the Labour party demand. The offer which the NCB has made to the miners is a fair and reasonable one. Indeed, as a former president of the TUC said at the weekend, it is the most generous that he could recall for any group of workers. In making that possible, the Government have carried out their proper role. I hope that, before too long, this message will get through, and that miners will return to build the prosperous future that awaits them, and that peace will return to the coalfields.

One reason why the strike has not ended before now is the aid and comfort given to the leadership of the NUM by the right hon. Gentleman and his friends. A branch colliery president was recently quoted by the Sunday Telegraph as saying of the Leader of the Opposition:

“He has let himself be used as a puppet by the people who believe in extra-parliamentary tactics, and he has fallen for it hook, line and sinker” .

The right hon. Gentleman leads a party which claims to support democracy but repudiates those miners who have voted democratically to remain at work and have done so in accordance with their union procedures. He leads a party which condemns violence in general but supports the mass picketing which inevitably ends in violence. He leads a party which has allied itself to the wreckers against the workers.

The forces to which the right hon. Gentleman has lent his voice and support have no more love for parliamentary democracy than for the jobs and homes of those who oppose them. Sooner or later, when he has ceased to be of value to their purpose, they will turn on him, just as surely as they have turned on the police, on the steel workers, and on working miners and their families.

There is only one word to describe the policy of the right hon. Gentleman when faced with threats, whether from home or abroad, and that word is appeasement. He will live to regret it. It is no policy for Britain.