HC Deb 02 February 1971 vol 810 cc1456-60
Q2. Mr. William Hamilton

asked the Prime Minister if the public speech made by the Chancellor of the Exchequer at Birmingham on 11th January on inflation represents the policy of Her Majesty's Government.

Q3. Mr. Barnett

asked the Prime Minister if the public speech of the Chancellor of the Exchequer to Birmingham Chamber of Commerce on 11th January, on economic policies, represents the policy of Her Majesty's Government.

Q14. Mr. John D. Grant

asked the Prime Minister whether the public speech by the Chancellor of the Exchequer concerning inflation to the Birmingham Chamber of Commerce on Monday, 11th January, 1971, represents the policy of Her Majesty's Government.

The Prime Minister

Yes, Sir.

Mr. Hamilton

So much for Government policy! Does the right hon. Gentleman recognise that quite responsible organs of public opinion, including The Times, castigated that speech as being irresponsible and disappointing and, in particular, criticised the Chancellor of the Exchequer for his very foolish, offensive and offhand disregard of the T.U.C. proposals—[Interruption.]—for curbing inflation and the fact that he made no mention whatever of prices, a promise on which the right hon. Gentleman and the Tories were elected?

The Prime Minister

I do not accept those strictures on my right hon. Friend the Chancellor of the Exchequer. As he pointed out in that speech, he had had an opportunity for three weeks to make a careful study of the proposals put forward by the T.U.C. as to how this matter should be dealt with, and had in the end concluded that they did not represent a satisfactory way of dealing with the present inflation; and I entirely support him in that.

Mr. Barnett

Is it not Government policy, while restraining wages, to encourage prices and profits to rise to provide the resources for industrial investment? Will the Prime Minister, therefore, confirm that it is contrary to Government policy to act directly on prices?

The Prime Minister

There is certainly no encouragement being given by this Government for prices to rise. [HON. MEMBERS: "Oh!") As far as the nationalised industries are concerned, we have been constraining prices as a matter of policy. As for our agricultural policy, that was clearly explained at the General Election—[Interruption.] It is perfectly all right for hon. Gentlemen opposite, in their nervousness, to giggle. It was a deliberate point of policy which would enable the Government to reduce taxation. Already, both in the direct field and in corporate taxation, those steps have been taken.

Mr. Speaker

Mr. St. John-Stevas.

Mr. John D. Grant

On a point of order. Are you aware, Mr. Speaker, that this Question is being answered with my Question No. 14?

Mr. Speaker

I am aware of that. Any hon. Member who has a Question being answered with another is entitled to put a supplementary question. I will call the hon. Member in due course. In the meantime, it is as well to have supplementary questions coming from alternate sides of the House. Mr. St. John-Stevas.

Mr. St. John-Stevas

Does not the prime responsibility for the present inflation fall on the head of the right hon. Gentleman the Leader of the Opposition, who lost his nerve in the last days of the Labour Administration and, judging by his performance on "Panorama" last week, has not got it back since?

The Prime Minister

I find myself in agreement with my hon. Friend—but what concerns the country even more is the fact that the Labour Party still shows itself to be a firm ally of inflation as well as a supporter of industrial disorder.

Mr. John D. Grant

Is the right hon. Gentleman aware that his replies today will hardly be seen as a serious attempt to justify his election pledges? Will he endeavour to get a firm grip on the Chancellor of the Exchequer.

An Hon. Member

By the throat.

Mr. Grant

—and perhaps, at a stroke, suggest that he stands on his own two feet in these matters and does not seek to abdicate his responsibilities to courts of inquiry?

The Prime Minister

I had understood hon. Gentlemen opposite to be some of the firmest advocates in industrial relations of arbitration, courts of inquiry and so on. I am surprised that the hon. Gentleman is disputing that.

Mr. William Clark

Would my right hon. Friend agree that prices would have been very much lower if the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) and his colleagues had shown more courage in standing up to inflationary wage demands a year ago?

The Prime Minister

That is, of course, absolutely right, but it was a deliberate policy of the Leader of the Opposition and the then Chancellor of the Exchequer to encourage roaring inflation in an attempt to make people feel better in their pockets and to win the General Election. What irritates hon Gentlemen opposite now so much is the fact that they lost.

Mr. Harold Wilson

If the right hon. Gentleman genuinely believes that, why did he claim two days before the election that he had all the magic wands necessary to deal with the situation—which, he says, he then understood—at a stroke? Why has he not done so?

To come to the more serious remark which the right hon. Gentleman made, if I understood him aright he said that it has not been the policy of the Government to encourage increases in prices. [Interruption.] I think the right hon. Gentleman said that. Does he then repudiate what his right hon. Friend the Chancellor of the Exchequer told the Press the day before he went to Cyprus for the Commonwealth Finance Ministers Conference, because that is what his statement would appear to mean. [Interruption.] Does he repudiate that? I am asking a question and I want an answer from the Prime Minister.

Recognising, if not agreeing with, the fact that the Chancellor of the Exchequer has rejected the T.U.C. proposals, may I ask the right hon. Gentleman whether he would not be wise at this stage to meet the T.U.C. and discuss these proposals? He will have to do it sooner or later. Would it not be a good thing to do it now?

The Prime Minister

There exists a forum at which such discussions take place and at which these matters have, in fact, been discussed. That is the N.E.D.C., and that organisation is the right place for Government Ministers, together with the T.U.C., representatives of the C.B.I., the nationalised industries and the independents, to have the fullest possible discussions about these matters. The Government have always been willing to do this. I have taken part in discussions on these matters, and I shall go on doing so.

Mr. Harold Wilson

Will the Prime Minister answer the question whether he is repudiating what the Chancellor of the Exchequer told the Press the day before he went to Cyprus?

The Prime Minister

I have known the right hon. Gentleman long enough now to know that I cannot take any words like that without examining them. When he gives me the quotation he wishes to refer to, I will answer it.

Several Hon. Members rose


Mr. Speaker