HC Deb 27 February 1973 vol 851 cc1275-9
Q1. Mr. Meacher

asked the Prime Minister if he will place in the Library a copy of his public speech to the Conservative local government conference on 10th February on the economy.

Q6. Mr. Redmond

asked the Prime Minister if he will place in the Library a copy of his public speech on Saturday 10th February to the Conservative local government conference at Westminster on the subject of rates.

Q7. Mr. Skinner

asked the Prime Minister if he will place in the Library a copy of his public speech made on 10th February to the Conservative local government conference in London on the economy.

Q10. Mr. Norman Lamont

asked the Prime Minister whether he will place in the Library a copy of his public speech to the Conservative local government conference on 10th February on the economy.

Q11. Mr. Carter

asked the Prime Minister if he will place in the Library a copy of the speech he made on 10th February 1973 to the Conservative local government conference on the economy.

Q13. Mr. Adley

asked the Prime Minister if he will place in the Library a copy of his public speech to the Conservative local government conference in London on 10th February on the economy.

The Prime Minister (Mr. Edward Heath)

I did so on 12th February, Sir.

Mr. Meacher

Since in that speech the Prime Minister said, in his own words, that he wanted the lower-paid to be helped more than those at the top of the scale, why is he cutting back the gasmen to an extra £2.25 a week when, in a month, he will award to those on his own pay level an extra £6 a week in surtax reductions, an extra £5 a week in phase 2 and an extra £3.50 a week in reduced tax on unearned income? Why do people like him need six times the increase of the gasmen?

The Prime Minister

The hon. Gentleman knows perfectly well the arrangements for phase 2. These were confirmed in detail yesterday in the Green Paper. As for the changes in taxation, they were dealt with in the last Budget.

Mr. Redmond

When my right hon. Friend made that speech, he referred to the rates. In any discussions that he has on rates, will lie remember that we must not cloud the responsibilities of local councillors to their electors? Has he seen a report in last night's Bolton Evening News which shows that the Bolton rate is going up by the highest figure for 10 years under Labour control, whereas Tory councillors are even now keeping things on an even keel?

The Prime Minister

It is desirable that ratepayers should see the extent to which their rating assessment is being changed as a result of revaluation and the allocation of the actual rate poundage as between different items, for most of which local authorities are responsible, and no doubt they will compare one local authority with another.

Mr. Skinner

When the Prime Minister talked to the local government conference about monitoring public spending, why did he not point out that he himself was having a £40,000 heated indoor swimming pool built at Chequers? Is not that a luxury item? What is the Prime Minister's new slogan—"Come bathe with me and beat the freeze"?

The Prime Minister

The Trustees of the Chequers Trust accepted a present, which involved no public expenditure, in order to commemorate the two visits of President Nixon to Chequers—once under my predecessor and once when I was there —and his meeting with the Queen.

Mr. Lamont

On the subject of incomes policy mentioned in his speech, has my right hon. Friend seen the report in the Glasgow Herald of 26th February of a meeting of gasmen addressed by the Leader of the Opposition at which he said that the gasmen were not breaking the law and could depend on Labour's backing? Does not this show that the so-called peace plan put forward by the Leader of the Opposition is simply a twice-weekly charade in this House?

The Prime Minister

I read the report by the political correspondent of the Glasgow Herald. I have no means of judging its accuracy. No doubt the right hon. Gentleman has. He said, I see: Both in its content and its total impact, Mr. Wilson's speech was inflammatory and not designed to placate. It is interesting that that speech was made after he had written to me but before he had received my reply.

Mr. Carter

When the right hon. Gentleman wrote to the Civil Service staff side in 1966, deploring the Labour Government's wage control policies, he no doubt wrote sincerely, but in the light of his own experience would he not agree that that letter was unwise?

The Prime Minister

No. Perhaps I can draw attention, not only for the House but for all civil servants and for people outside, to the letter which was sent to the staff side which I have already quoted once in the House and which was designed to deal specifically with an occasion of this kind. I can read it again. It says: Subject to any requirements of an overriding national policy of general application the Government intends to continue to reacts and implement settlements on the basis of surveys by the pay research unit. There can be no doubt, whatever anyone has said about the Government's policy on pay and prices, that it is an overriding national policy and this was given to the staff side at the beginning of 1971.

Mr. Adley

Is it not clear that everybody in the country, or almost everybody, recognises the danger of inflation? Would my right hon. Friend agree that it appears that the Labour Party either has capitulated or is about to capitulate totally to the wishes of the militant trade unions and that this can do nothing whatever to cure inflation?

The Prime Minister

I do not believe that a policy which says that the whole of the price structure should be controlled and that there should be absolutely no control of wages is a viable policy. What is more, the trade union leaders themselves know that it is not a viable policy.

Mr. Harold Wilson

Since the Prime Minister invited me to intervene, if he will read all the reports of that speech—[Interruption.]—including that in The Times, he will see that I spoke entirely within the terms of the letter which I wrote to him and which he so foolishly rejected. Reverting, however, to the speech which was the subject of the Question, which was the Prime Minister's speech, can the right hon. Gentleman now vary the answer he gave me before Christmas about interest rates? In view of the almost weekly leapfrogging between clearing bank base rates and the interbank market dealings, against the background of a £4,000 million Government borrowing requirement and a demoralised gilt-edged market, in view of the inevitable consequences—[HON. MEMBERS: "Too long.")—for mortgage rates, which Conservative Members made so much of in the last election, will he now vary that answer and take interest rates in control?

The Prime Minister

As I told the right hon. Gentleman before, we take the same view as his administration: that interest rates are part of the means of securing an expansion or otherwise of the economy. If interest rates are to be used in that manner, obviously they cannot be controlled. What we have done is to deal with this under the allowances when people are calculating their costs, and I believe that to be the right approach. But if the right hon. Gentleman is saying that his speech, to which allusion has been made, was entirely in the terms of the letter lie wrote to me, it is strange that the conclusion should have been drawn that unwittingly he undermined his own peacemaking role by characterising it as nothing more than a trap".

Mr. Wilson

It was not a trap, although the right hon. Gentleman has created one for himself on that basis. But on the question of interest rates, does not the Prime Minister realise that, while any Government must be free to use purposive interest rates and other monetary policy, since the setting up of this free market in the City for interest rates the Government can now no longer control interest rates? They are out of their control. There is no bank rate and because of the £4,000 million Government borrowing requirement and the gilt-edged market, is it not a fact that there is no monetary policy at all—except one of steadily rising interest rates which are inflationary?

The Prime Minister

I cannot possibly agree with the right hon. Gentleman. He must have misunderstood the position. There never was a control of interest rates concerning money rates in this country under his administration. Obviously interest rates are interlocking with the demand for money and the demand created by overseas interest rates as well. I remember the right hon. Gentleman, when he was Prime Minister, on many occasions delivering a lecture on this matter to the House.