STATE OF THE NATION (Hansard, 30 October 1975)

§ Q4. Mr. Norman Lamont
asked the Prime Minister whether he will make a ministerial broadcast on the state of the nation.

§ Q6. Mr. Blaker
asked the Prime Minister whether he will make a ministerial broadcast about the state of the nation.

§ Q7. Mr. George Gardiner
asked the Prime Minister if he will make a ministerial broadcast on the state of the nation.

§ Q9. Mr. Peter Morrison
asked the Prime Minister whether he will make a ministerial broadcast on the state of the nation.

§ The Prime Minister
When I think it appropriate to do so, Sir.

§ Mr. Lamont
Will the Prime Minister take an early opportunity to explain the inexplicable—the Government's attitude to public spending? Has he seen the warning, recently given by certain eminent economists, that unless public spending is cut there will not be enough cash to finance any revival of industrial activity, and unemployment will therefore rise still further? Is he aware that every time the Chancellor of the Exchequer's gramophone needle gets stuck and he says that cuts in public spending mean higher unemployment, that only confirms the impression that he does not know what he is doing?

§ The Prime Minister
Every time the Conservative needle gets stuck it is at the point just before the Opposition tell us what cuts they would make. My first point on this is to refer to the way in which for three and a half years members of the present Opposition cheered every challenge to the Leader of the Opposition by the then Prime Minister, and then to challenge them to tell us whether they would, for a start, cut the financial resources of the National Health Service. When I get an answer on that from the 1753 right hon. Lady I shall begin to take Opposition Members seriously.

§ Mr. Buchan
I welcome the solicitude of all hon. Members for my constituency and the assurance given by my right hon. Friend about the discussions that are taking place between Members and the Secretary of State this afternoon. May I make this simple point—[HON. MEMBERS: "No."] May I ask my right hon. Friend whether he is aware that the town of Linwood in my constituency depends entirely upon the continuation of Chrysler in Britain and that we should be faced with a mini-Jarrow if anything went wrong? If money were not forthcoming from the Government, or from other sources, would my right hon. Friend accept that the state of this nation would impel us to take other means of dealing with the Chrysler multinational company in this country in pursuance of the undertakings that we have been given?
I suggest that if the money that we seek—[Interruption.]

§ Mr. Speaker
Order. Will hon. Members please keep quiet? It is for me to decide whether the hon. Member is out of order.

§ Mr. Buchan
Does my right hon. Friend agree that if the money that we seek this afternoon does not come forward in support of the Chrysler Corporation, the Government will have to adopt other measures to deal with the situation, not stopping short of nationalising it?

§ The Prime Minister
I am glad to have from my hon. Friend a really serious and important question affecting the livelihood of many thousands of workers. The reaction of the Conservative Party to that question was, of course, typical. I have said in answer to an earlier question today that we are trying to get a full appraisal of this situation: my right hon. Friend has asked for it. I have asked for, and I think I am in a position to say that I have received, an assurance that no irrevocable decision will be taken before there is a possibility of my right hon. Friend and myself discussing with the heads of the Chrysler Corporation the whole situation, the appraisal and any possibilities which it or anyone else may have for solving this problem. It is very difficulty. I would not want to under-rate its gravity today.

§ Mr. Blaker
Would it not help the people to understand the causes of our present economic situation if the Prime Minister were to give a talk about the merits of public ownership as demonstrated by results in this and other countries? Could he not explain, for example, how it is that the Soviet Union, which has nearly a third of its work force engaged in agriculture and vast areas of farmable land, is constantly having to buy large quantities of wheat from the United States, only 4 per cent. of whose population is so engaged?

§ The Prime Minister
There is no ministerial responsibility for these international grain situations, or any comparisons with this country. However, the hon. Member, who, I know, is one of the most fair-minded Members—he would, I am sure, wish to study the record over the years—will know that, as Lord McGowan said, if we had not nationalised coal, we should have had a total coal famine in this country year after year. I am sure that the hon. Gentleman will wish to applaud—he voted for the decision of the Government of which the right hon. Member for Finchley (Mrs. Thatcher) was a member, and she has not dissociated on this matter, so far as I know—the success of Rolls-Royce engines under public ownership, under nationalisation proposals carried through by the Conservative Government.

§ Mr. Cant
Returning to the general economic state of the nation, what importance does my right hon. Friend attach to the growing propensity to save among the higher income groups, with the result that 13½ per cent. of disposable income is being saved? Does he feel that he should send out to the nation a clear message that everyone who is embarking on this saving binge should buy a car and buy a house in order to raise aggregate demand and reduce unemployment?

§ The Prime Minister
Knowing the expertise of my hon. Friend, but not knowing the figures that he has quoted, I naturally defer to his great knowledge of these matters. I am sure that he would understand if I were to ask for a little time to study his figures or, better still, to ask the Chancellor of the Exchequer to do so.

§ Mr. Gardiner
Will the Prime Minister recognise that, in the national interest, he 1755 cannot go on ducking the question put to him by my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont)? Although we recognise that it is very hard for him to enlighten the nation on these matters when the Chancellor of the Exchequer is himself in the dark, would he tell us why we have not yet received the full promised statement from the Chancellor on the Government's spending programme and the level of the public sector borrowing requirement, and when we shall get it?

§ The Prime Minister
The statement referred to by my right hon. Friend was made, as I said it would be made, at the Mansion House, and he has answered many questions about it here. However, if the hon. Member is concerned with the actual figures for the PSBR, as I understand him to be, they rose from minus £4 billion to £6,325 billion, a turnaround of £10,325 billion, under the Conservative Government.

§ Mr. Cyril Smith
rose—

Hon. Members
How long?

§ Mr. Speaker
Order. There are still one or two hon. Members with Questions linked to this one.

§ Mr. Smith
When the Prime Minister makes a ministerial broadcast on the state of the nation, would he particularly deal with two aspects—first, the fact that already, much as we are concerned about Chrysler, more than 25,000 people in the textile industry have lost their jobs, and what he proposes to do about it; secondly what the Government's post-August 1976 policy on incomes will be?

§ The Prime Minister
In my answer to the previous question I said "billions" when I should have said "millions". On the first question by the hon. Member for Rochdale (Mr. Smith); he is absolutely right. Hon. Members of all parties have pressed this on the Government. We have made it clear that, although we do not believe in the introduction of general import controls for balance-of-payments reasons, or other broad economic reasons, we are closely examining certain industries. The hon. Member will have seen a very important statement made by the Secretary of State for Trade in the last 24 hours on this question. I cannot say more on this question.

§ Mr. Atkinson
Would my right hon. Friend accept that his recent answer about Chrysler now makes it imperative that he concedes to the TUC leaders their request for the introduction of import controls? Will he not accept that the introduction of such controls would be a contribution towards raising the level of world trade and the recovery of employment in this country? Would he not therefore agree that if we are, as a party, moving towards a planned economy, it would be contradictory to omit something like £20,000 million-worth of trade from that planned economy?

§ The Prime Minister
I have said that my right hon. Friends and I are meeting the TUC this afternoon to hear its views—as the CBI gave its views—on what particular lines we should be taking at the forthcoming Heads of Government economic meeting. I would not automatically accept from my hon. Friend that swingeing and sweeping and generalised import cuts would automatically, as he hopes, increase the level of world trade. All past experience suggests that they would reduce it.
He has referred to motor cars—Chrysler and so on—in this context. All leaders of the motor car industry—I am speaking only of that industry since he referred to it—believe that to introduce import restrictions on motor cars would lead to a fall in motor car production because of the effect on our exports and, indeed, because of the remarkable record in exports by the British motor car industry over the last month or two.

§ Mr. Morrison
Is the right hon. Gentleman aware that the nation expects him, as Prime Minister, to answer and not avoid questions, as he has done today? Does he or does he not agree that he and his Government have borrowed about £175 on behalf of every man, woman and child this year? If that is so, does he not think it right to tell the nation that that is so?

§ The Prime Minister
The problem of PSBR has been much discussed in the House and no doubt will be again when we come to the debate on the Gracious Speech. It is clear that it can be reduced only by increased taxation, which I do not think the Conservative Members are proposing, or by cuts in Government 1757 expenditure. But not only the Government have a duty here: the so-called alternative Government have a duty, too. We have not had one whisper out of them about how to save Government expenditure.

§ Mr. Faulds
As the Prime Minister has at last set his feet on the road to Mecca and as he has made no statement to the House about the agreement with the Saudi Arabian Government, which is so crucial to our economic well-being, would it not be advisable to include this matter in his next Prime Ministerial broadcast, whenever it may be, so that people can get to know the tremendous opportunities under a number of headings that that agreement presents to Britain?

§ The Prime Minister
I agree about the opportunities presented by the successful discussion we had with the Saudi Arabian Government last week. On Middle East policy generally, it may be a disappointment to my hon. Friend, but the position described to the House by the Foreign Secretary and myself has not changed in any way on these matters. Incidentally, if I were ever to set out on the road to Mecca, I am not sure that I would go along with my hon. Friend on that pilgrimage.

§ Mr. Peyton
If the Prime Minister does decide to intrude upon the nation's entertainment time, perhaps he would steel himself to the really unpalatable and answer the question relating to the borrowing power which my hon. Friend the Member for Chester (Mr. Morrison) asked him just now: does he or does he not see dangers for the nation in this indefinite practice of attempting to borrow our way out of trouble?

§ The Prime Minister
To answer that question properly would intrude for more than the 14 minutes during which I have intruded into the time of public business. This matter has been fully debated in the House. [HON. MEMBERS: "Answer."] My right hon. Friend and I have repeatedly said in economic debates in the House and elsewhere that the size of the public sector borrowing requirement is a matter of considerable anxiety. My right hon. Friend has described to the House the very painful cuts which have been made in the coming year's expenditure, 1758 out of which the Opposition will seek to make the most political advantage—[HON. MEMBERS: "Oh."] Oh yes, they will—and local authorities—everyone. The whole thing will come out. I should like the right hon. Lady the Leader of the Opposition to repudiate it when they do.
I have said, because successive Governments have found this to be a fact, that a decision on the right level of expenditure on public sector borrowing requirements is best taken two or three years ahead. We are doing it in relation to the PESC discussions, as they have been known to successive Governments. The results will be made known to the House at the proper time.