HC Deb 18 July 1974 vol 877 cc659-64
Q3. Mr. George Gardiner

asked the Prime Minister if he will place in the Library a transcript of his television interview on 30th June on the subject of future Government policies.

Q6. Mr. Norman Lamont

asked the Prime Minister whether he will place in the Library a copy of his interview on ITN on 30th June about the economy.

Q8. Mr. Nigel Lawson

asked the Prime Minister if he will place in the Library a transcript of his interview on Government policies on Independent Television News on 30th June.

The Prime Minister

I did so on 5th July, Sir.

Mr. Gardiner

In his interview with ITN, the Prime Minister made some observations on the difficulties of minority government. Will he now learn the lesson from the mauling which the Government have received in the House this week and drop the more extremist parts of his legislation in the interests of national unity, or does he agree with the Chancellor of the Exchequer's judgment, given on Leeds Radio, that the present Government are no longer capable of governing?

The Prime Minister

The hon. Gentleman, in referring to a mauling, will recall that there was not much of a mauling last night, when right hon. Members of the Opposition realised the implications of some of their irresponsible votes this week. But we have noted the lessons of the actions of the Opposition this week. We have noticed that they have their own reflation programme of several hundreds of millions of pounds—mainly to the people who need it least. What I said in the broadcast about the difficulties of minority government has been proved by the safe irresponsibility which began when the Opposition knew that there would not be a June election. The right hon. Gentlemen of the Opposition let through the Budget and the Finance Bill's Second Reading. As soon as they thought they were safe, they started to give us the tomfoolery that we have had this week. I assure the hon. Gentleman that we have taken to heart the lesson they sought to teach us in this matter.

Mr. Atkinson

Does my right hon. Friend agree that the Leader of the Opposition owes the trade unionists of this country a genuine apology for the situation which is now affecting every trade unionist? Is my right hon. Friend aware of the estimates now being made by the Treasury and others, that within the 12-months' period ending in November the retail price index will be up by no less than 18 per cent. and that trade unionists will not have more than a 12 per cent. increase in their take-home pay over the same period? That represents a 5 per cent. or 6 per cent. drop in their living standards as a result of the policies pursued in the past three-and-a-half years by the Conservative Party.

The Prime Minister

I have not yet done a costing—although I shall do so—of the right hon. Gentleman's debts to trade unionists or to the country as a whole. They run into several thousands of millions of pounds for the three-day working week alone. It is a fact which the whole House knows—because the Leader of the Opposition used to mention it—that price increases from abroad take several months to work into the cost of living index. There is also the threshold position. In fact, every increase in the cost of living index this year has been caused either by world events—

An Hon. Member

What about the Budget?

The Prime Minister

The Budget did not raise the retail price index; on the contrary. It did not do so, if subsidies are taken into account. In fact, the Budget was worsened by the fact that the Conservative Party misled the people about nationalised industry charges, which they said would require £500 million. They required £1,400 million, which they knew during the election and kept from the people. These things are also due to policies of the previous Government which are still working through.

Mr. Lamont

Does the Prime Minister recall the suggestion made by Mr. Murray and the TUC Economic Committee on 12th June, that as part of their contribution to the social contract wages should not increase by more than the rise in the cost of living since the last wage increase? May I ask the right hon. Gentleman one simple question: can he name a single current wage claim which falls within those guidelines?

The Prime Minister

The hon. Gentleman, with his usual realism, will know that wage claims are often different from wage settlements. He will also be aware that in the social contract about which Mr. Murray was speaking on that occasion he and the TUC Economic Committee said—as I have repeatedly emphasised—that where price increases have been compensated by a threshold payment there should not be a further attempt to offset those increases by further wage increases if the threshold has dealt with it. Some wage settlements recently have gone far wider than most in the House would, I think, welcome. [An HON. MEMBER: "Which ones?"] I mentioned two last week. I shall mention a third now: the joint stock banks, which made inordinate profits in the last few months of the previous Government, are now making a large wage settlement to their employees at a time which makes the problems of those who are maintaining essential services in London much more difficult in the discussions on the London weighting allowance.

Mr. Speaker

Mr. Nigel Lawson.

Mr. Lipton

May we get on to the business for next week?

Mr. Speaker

The hon. Gentleman who had a Question down is being answered.

Mr. Nigel Lawson

As the Prime Minister has now admitted that the social contract has been breached on a number of occasions, will he tell the House what are the sanctions against breach of the social contract?

The Prime Minister

The hon. Gentleman, who is a student of these matters, knows that the social contract is a matter for responsibility in a democratic society and that the trade union movement is doing its utmost to achieve restraint in these matters. Stage 1, Stage 2 and Stage 3—for which we are still paying a heavy price in wage questions as well as other questions—having failed, we must all now do all we can to make a success of the social contract. I hope that Conservative Members, who fought the 1970 election on voluntary wage bargaining, and the Leader of the Opposition, who tried to achieve a voluntary agreement and failed because he would not produce a fair Government policy, will support us in these matters.

Mr. Heath

Will the Prime Minister refresh his memory about the impact of the Chancellor's Budget? It is quite clear from the changes he made, leaving aside the nationalised industry prices—[Interruption.]—I am being generous to the right hon. Gentleman. Leaving aside the increases in those prices, the increase in the retail price index is at least 3 per cent. and probably nearer 4 per cent., by the deliberate action of the Chancellor.

The real point I want to put to the Prime Minister is that he says that working through the pipeline are a large number of increases, arising from the increases in world prices. Does he really believe that is possible? All through the time we were in Government he was saying that there was no such thing as an increase in world prices.

The Prime Minister

I do not accept the right hon. Gentleman's figures on the Budget. I think that they were put forward by his right hon. Friend the Member for Carshalton (Mr. Carr) and refuted by my right hon. Friend the Chancellor. The right hon. Gentleman referred to nationalised industry prices. He has not explained why something that cost £1,400 million was announced to the country by his Government as costing £500 million. Did he know during the election that it would cost £1,400 million? Of course he did. Why did he not tell the country? Why did he say—[Interruption.] I shall come to the question of world prices. The right hon. Gentleman referred to the other matter. I have said that he knew that the nationalised industry increases would be £900 million more. Why did he not tell the country during the election? Will he answer that question? I noticed—

Mr. Evelyn King

On a point of order, Mr. Speaker. May I ask your guidance in the context of the back bencher? We have dealt with three Questions in 22 minutes. During that time the Prime Minister has been on his feet for about 15 minutes. Is that fair to back benchers who seek to take some part in these proceedings?

Mr. Speaker

I think we might go rather faster if there were a little more order in the House.

The Prime Minister

Before I come to world prices, I remind the House that the right hon. Gentleman referred to nationalised industry prices, and I replied that he misled the country to the extent of £900 million, which he has to explain.

The right hon. Gentleman is wrong about world prices. I warned him about their effect when he was making light of them. [Interruption.] It is on the record in HANSARD. I told the right hon. Gentleman that they were important. But he has responsibility for the internal policies—the Housing Finance Act and other measures—that forced up the cost of living.

Back to