HC Deb 09 March 1972 vol 832 cc1645-54
Q3. Mr. John D. Grant

asked the Prime Minister if he will place a copy of his public speech about inflation to the Engineering Employers' Federation in London on 23rd February in the Library.

Q4. Mr. Joel Barnett

asked the Prime Minister if he will place a copy of his public speech to the Engineering Employers' Federation in London on 23rd February on inflation in the Library.

Q8. Mr. Clinton Davis

asked the Prime Minister if he will place in the Library a copy of his public speech which he made on the increase of pay to the miners to the Engineering Employers' Federation in London on 23rd February.

Q9. Mr. Atkinson

asked the Prime Minister if he will place in the Library a copy of his public speech dealing with prices and incomes made to the Engineering Employers' Federation on Wednesday, 23rd February, 1972.

Q10. Mr. Kinnock

asked the Prime Minister whether he will place in the Library a copy of his public speech at the Dorchester Hotel on 23rd February on wages.

Q11. Mr. Duffy

asked the Prime Minister if he will place in the Library a copy of his public speech on economic matters to the Engineering Employers' Federation in London on 23rd February.

Q12. Mr. Arthur Davidson

Davidson asked the Prime Minister if he will place in the Library a copy of the public speech on economic affairs which he gave to the Engineering Employers' Federation in London on 23rd February.

Q14. Mr. Skinner

asked the Prime Minister if he will place in the Library a copy of his public speech on Government policies delivered to the Engineering Employers' Federation in London on 23rd February, 1972.

Q18. Mr. Sheldon

asked the Prime Minister if he will place in the Library a copy of his public speech in London on 23rd February to the Engineering Employers' Federation on economic matters.

Q19. Mr. Onslow

asked the Prime Minister if he will place in the Library of the House of Commons a copy of his speech to the Engineering Employers' Association on 23rd February.

The Prime Minister

As I indicated in the reply that I gave last Tuesday to Questions from my hon. Friends the Members for Leicester, South-West (Mr. Tom Boardman), and Bolton, West (Mr. Redmond), I did so on 24th February.——[Vol. 832, c. 306.]

Mr. Grant

In that speech the right hon. Gentleman referred to the need for an understanding with the trade unions, and he is to meet the T.U.C. later today. When he meets the T.U.C., would he, first, disregard some of the more reactionary advice that he is getting from some of the back-seat drivers on his own benches——

Mr. Arthur Latham (Paddington, North)

Disqualified drivers! [Laughter.]

Mr. Grant

I was frightened that no one would get the message.

While he is still at the driving wheel himself, would the right hon. Gentleman try to forget his own progress from school prefect to Tory Chief Whip, try to drop this bullying attitude of confrontation, and get into genuine consultation, which means talking to the trade unions with an open mind and without pre-conceived and rigid ideas?

The Prime Minister

I am sure that the T.U.C. this afternoon will be glad to know that it will not hear anything like that.

Mr. Barnett

Now that the right hon. Gentleman has reversed his more rigid policies on subsidies to both private and public industry, will he ignore the advice that he is being given by some of his hon. Friends and confirm that he is still prepared to give subsidies to nationalised industries, in the same way as he has done to the Coal Board, in order to restrain excessive price increases?

The Prime Minister

We announced last summer that as the nationalised industries were members of the C.B.I. they were prepared to comply with the request of the C.B.I. to limit price increases to 5 per cent. That they have done, with the exception of the recent coal increase, when the C.B.I. itself agreed that, because of the exceptional circumstances, increases should go to 71 per cent. Naturally, the Government hope that the C.B.I. will find itself able to maintain and to justify a similar attitude towards prices. The Government hope that the T.U.C. will respond to this.

Mr. Atkinson

I hope that the Prime Minister will not exploit my question for short-term political ends. I want to ask him a question which is very sensitive and emotionally charged for the Labour movement, and which I believe to be a very important question—[An HON. MEMBER: "Then get on with it."] If the hon. bonehead will give me a chance I will get on with the question.

Does the Prime Minister recall that in 1965 Lord George-Brown predicted, on behalf of the D.E.A., that our manufacturing industries would employ 9.1 million people and that there would be a severe shortage of skilled workers? Lord George-Brown's prediction and those of the D.E.A. are one million people out. One of the reasons why that prediction is totally wrong is that they underestimated the whole business of investment in manufacturing.

Is the right hon. Gentleman aware that there is now 10 per cent. spare capacity in manufacturing and that if he inflates in the orthodox way the inflation that the Chancellor is likely to give manufacturing industry will be absorbed in the extra 10 per cent. capacity, and will not effectively bring down the unemployment figures?

The Prime Minister

This is a matter that we have discussed at previous Question Times and also in debates on unemployment. We have recognised the impact on the demand for labour in this country of technological change and also of wage increases. I should have thought that the whole House was by now agreed that additional investment in manufacturing industry is required to provide additional employment, but also that additional employment will have to be found in the service industries. In this, I think that there was another error, in that S.E.T. discriminated against the service industries in a deliberate attempt to bring down the amount of employment in them.

Mr. Onslow

Is my right hon. Friend aware that his speech on 23rd February was a marked and welcome contrast to the spiteful, mischievous and shallow attitude of the titular Leader of the Opposition and his friends? Is my right hon. Friend further aware that he has the full support of all thinking people in this country in his efforts to cure the economy of the after-effects of six years on the poison drip of Socialism?

The Prime Minister

Yes, Sir. My hon. Friend is right in referring to all thinking people in what was undoubtedly a colourfully phrased supplementary question.

Mr. Kinnock

Does the right hon. Gentleman not recall that in that speech on 23rd February and in subsequent speeches he has repeated variations on his continual theme of asking people to stand on their own two feet? How does he expect British industry and the trade unions to take any notice of that when, in view of current policy changes, he is standing on his own two heads?

The Prime Minister

The hon. Gentleman will have recognised that there is a purpose in helping an industry to reconstruct itself so that it can become a viable entity. This has often been the purpose of Governments. It was achieved with the cotton industry in the 1950s and there is no reason why it should not be achieved with certain other industries in the 1970s. What is not justifiable is to pour subsidies into industries which have no possibility of ever becoming viable.

Mr. Redmond

Will my right hon. Friend confirm that when he has met trade union leaders he has had a number of questions and suggestions from them which he has considered seriously, and that many of those suggestions and requests have incurred policy changes?

The Prime Minister

Yes Sir. I have told the House before that, altogether, I have had eight meetings with the T.U.C. in the 21 months that the Government have been in office. It is absolute nonsense to say that we have not had contact with the trade union movement. I have had discussions with the General Council, the Economic Committee and the Social Insurances Committee. As for policy, where we have thought it right we have implemented policies which were also those requested by the T.U.C. and which I have enumerated before—the reflationary measures, the increases in pensions and related benefits, the repayment of post-war credits, the annual up-ratings of pensions, the major expansion of training facilities, and the postponement of the six-day rule for payment of benefit. One might expect, therefore, that the trade union movement, through its leaders, would also make a response to these policies.

Mr. Roy Jenkins

Can the Prime Minister tell us whether there has or has not been a shift in Government economic policy in the past month? Have the Government learned something, or have they not.

The Prime Minister

During the past month the Government have taken a decision about Upper Clyde Shipbuilders, which was to put forward a realistic policy for reconstruction on the Clyde, which I personally promised the shop stewards when they came to see me in July.

Mr. Tapsell

Would it not be very much in the public interest, and particularly in the interest of the poorer sections of our fellow countrymen, if hon. Members opposite, instead of continually pressing for measures which will lead to rising prices, were to give their support to those policies being pursued by the Government which are calculated to stabilise prices.

The Prime Minister

I agree with that, but it is too much to expect a leader and a party who are both retreating as fast as they can from responsibility ever to support policies which will be for the general good. As for this Government, I should have thought that the measures announced yesterday by the Minister of Agriculture regarding the prices of foodstuffs would have been strongly supported by Her Majesty's Opposition, if they had any sense of responsibility at all.

Mr. Duffy

Will the Prime Minister study today's divergent forecasts by the Bank of England and the National Institute? He will then recognise a very close identification of priorities between the Bank and his own 23rd February speech. Will he therefore give the closest attention to the recommendation of the National Institute for a reflation of demand, which will bring about a serious reduction in unemployment?

The Prime Minister

All Governments receive a great deal of advice of a budgetary kind at this time of year about the measures they should take. The Government set out their own policy, and that does not depend on the Bank of England or the institute.

However, an important factor which the institute has brought out is the decrease in wage demands over the last year to a level of between 8 per cent. and 8½ per cent. in the public sector and 9 per cent. in the private sector.

That certainly refutes the argument so often adduced by the party opposite that the Government's policies are directed only to the public sector. In fact, the institute bears out that the Government have been successful in this matter both in the private and public sectors.

Mr. Burden

Has my right hon. Friend noticed that Question No. 4, standing in the name of the hon. Member for Heywood and Royton (Mr. Joel Barnett), refers to "inflation in the Library"? In which Library is there inflation? What does my right hon. Friend know about this?

The Prime Minister

It is probably a somewhat inaccurately worded Question, but I took it in the sense in which it was intended.

Mr. Arthur Davidson

Will the right hon. Gentleman be a little more explicit than he was in his speech—indeed, than he is in any of his speeches—and say precisely with what level of unemployment the British people must learn to live?

The Prime Minister

I have always said that the present level of unemployment is too high. The measures that we have taken are intended to bring it down. What is more, we have always made it plain that we would never hesitate to take additional measures when they were justified.

No Government have ever said that the British people should live with a particular level of unemployment, except for the present Leader of the Opposition who, in the measures of 20th July, 1966, indicated very clearly to his party that they would have to live with considerable unemployment.

Mr. Tom Boardman

Does my right hon. Friend agree that restraint in wage and salary increases is the only way to provide a sound base for growing increases in real earnings and a rising standard of living for us all? Is it not regrettable that since hon. Gentlemen opposite have been in opposition they no longer appear to support this objective?

The Prime Minister

I agree with my hon. Friend. When hon. Gentlemen opposite were in power they tried every form of so-called incomes policy—guidelines, declarations of intent, voluntary policy and compulsory policy—and each one failed. The present Government, on the other hand, have had success in the past 21 months in dealing with this matter. [Interruption.]

If hon. Gentlemen opposite really cared for the interests of their constituents and fellow trade unionists they would support a reduction in price increases from 11 per cent. to 5½ per cent. That is an achievement which we have secured but which the Labour Government could not have secured.

Mr. Harold Wilson

Instead of falsifying what I said on 20th July, 1966—as the right hon. Gentleman consistently used to falsify what Mr. Hugh Gaitskell had said earlier on the question of unemployment—will the Prime Minister quote the exact figures I gave in 1966 and say whether he is now capable of reaching the figures I then mentioned?

The Prime Minister

The right hon. Gentleman knows perfectly well that the declared object of his policies was to increase unemployment.

Mr. Wilson

indicated dissent.

The Prime Minister

Oh, yes. His measures of 20th July were deliberately designed to achieve that. What is more, they succeeded, and that is why the right hon. Gentleman then had a surplus on the balance of payments.

I am not prepared to tell the British people that they must live with the same figure of unemployment because the plain fact is that with a combination of taxation policies, monetary policy and regional policy this country, with the co-operation of the trade unions and management, ought to be able to increase its production and have low unemployment figures, just as other European countries do.

Mr. Wilson

Instead of all this waffle, will the right hon. Gentleman now answer my question? [Interruption.] Instead of twisting my words again, will he quote the figures that I used, and what I said?

The Prime Minister

There is no spiral of words of the right hon. Gentleman that I could twist any further, even if I wanted to. The right hon. Gentleman announced measures which increased unemployment, and he said that the country would have to live with them.

Mr. Roy Jenkins


Mr. Speaker

Order. There are still two hon. Members on the back benches whose names are down to Questions which are included in the series which the Prime Minister is now answering but who have not yet asked supplementary questions, though they have indicated to me their desire to do so. I am doing my best to call them. Mr. Skinner.

Mr. Skinner

May I bring the Prime Minister back to 1972? Is he aware that he exposes himself more than a little when he talks about curbing inflation yet is in the process of passing legislation which will double rents in the next few years?

Getting back to his speech at the Engineering Employees' Federation, does he recall saying that a wage increase of 20 per cent. to the miners could be regarded as a defeat for the country? How does he square that with an increase in profits of 24 per cent. in the third quarter of last year—an increase which received his approval?

The Prime Minister

The hon. Gentleman will never acknowledge that no firm in this country can be efficient, maintain employment and expand unless it has the resources for investment—and they can come from nowhere except profits. The Labour Government reduced profitability to such a low level that firms could not invest, and so unemployment increased. [Interruption.]

When the hon. Gentleman talks about rents, why does he not emphasise that under the Bill he has in mind 1¾ million tenants in the public sector will be getting rent rebates, and that in the private sector, for the first time—[Interruption.] Hon. Gentlemen opposite do not like to hear this because they are anxious to distort the whole position. In the sector of private rents 700,000 to 800,000 people will be getting rebates for the first time in history. This, therefore, is putting public money where it is needed, and it represents the best policy.

Mr. St. John-Stevas

May I express to the Prime Minister my sense of personal relief——

Mr. Russell Kerr

Why the walking stick?

Mr. St. John-Stevas

I am explaining that now—that the policy on lame ducks appears to have been modified?

May I also tell him how much I welcome the visit of the leaders of the T.U.C. this afternoon to Downing Street as a further instalment in the building up of that one nation to which my right hon. Friend referred when he first came to Downing Street?

The Prime Minister

The meeting with the T.U.C. this afternoon is of importance, but it can be of value only if it is conducted with a frank exchange of views in which the positions of both sides are clearly made known to each other and understanding is shown. I have found in the past 21 months that it has been possible to have discussions on this basis, and certainly I shall continue to do so.

Mr. Sheldon

The whole House knows that when it comes to the matter of retreating the Prime Minister has retreated, particularly on the subject of subsidies. Will the right hon. Gentleman give the House the criteria he uses, or intends now to use, as to which subsidies he will erect? Why, for example, is he intending to subsidise sugar rather than school milk, and potatoes rather than rents?

The Prime Minister

The hon. Gentleman knows that the Government's policy on rents has been to ensure that the people who are in need are the people who get the subsidies. That has never been acceptable to the party opposite because it believes in a policy of general subsidies. We do not. We believe in using subsidies for specific purposes. That has always been stated in our policies, and we carry them through.

Back to