§ Q1. Mr. Brittanasked the Prime Minister if he will list his official engagements for 20th July.
§ The Prime Minister (Mr. James Callaghan)I presided at a meeting of the Cabinet this morning and I shall be holding further meetings throughout the day.
§ Mr. BrittanWill the Prime Minister tell those of his colleagues whom he meets today that their continual public squabbling about the £1,000 million spending cuts—coupled with the Government's inexcusable delay in announcing them—is causing immense damage to confidence in the pound and that, when the cuts are finally announced, his colleagues must not run off whining about 1512 them to the Lobby, but must either give them their fullhearted support or get out of the Cabinet?
§ The Prime MinisterI am grateful for the hon. Gentleman's help, but I do not need it, thank you very much. As to public squabbling—unless the hon. Gentleman has bugged the Cabinet room —I can promise him that our discussions are extremely amicable, even though they are keenly argued. I do not think that there is any inexcusable delay in taking decisions on cuts that will begin to apply on 6th April 1977.
§ Mr. HefferDoes my right hon. Friend accept that some of us regret that the discussions have been so amicable? We are all deeply concerned about unemployment and feel that further cuts in public expenditure could lead not to a decrease in unemployment, as is suggested, but to an increase in unemployment. Will my right hon. Friend explain whether the argument is about the switch of resources or the confidence of foreign bankers?
§ The Prime MinisterIt is a threefold argument about the use of resources after April 1977, the financing of public expenditure, for which we are having to borrow about £1 in £4, and confidence. [HON. MEMBERS: "Oh"] There is nothing new about those figures. They have been going on for some time, started by Lord Barber, as everyone knows. We are now trying to get some order into the situation.
In addition to the discussions that we are having with a view to reducing expenditure next year, the problem we have to face—which is causing as much trouble as anything—is the tremendous number of new bids that have been put in that have to be taken into account. I have seen a figure that has been widely bandied about, but it is a different figure.
There is a real dilemma with unemployment. If we reduce public expenditure, in the short run it will increase unemployment; no one can deny that. If we do not reduce public expenditure, we shall have to consider, and others will consider, whether we can finance the continued level of public expenditure. If we are unable to do so, that will create even higher unemployment.
§ Mrs. ThatcherDoes the Prime Minister recollect that it is exactly 10 years 1513 to the day that the then Labour Prime Minister put the famous financial crisis measures of 20th July 1966 before the House, when the right hon. Gentleman himself was Chancellor of the Exchequer? Bearing in mind that borrowers cannot be choosers, and that some cuts are therefore inevitable, why is he taking so long to bring his proposals before the House? Is he aware that his procrastination makes his predecessor look positively decisive?
§ The Prime MinisterThe right hon. Lady still does not seem to have hoisted in the point that these expenditure proposals take effect from April 1977. We are discussing next year's financial proposals and not this year's. When the expenditure cuts were made on 20th July 1966, they took effect immediately. We have constantly refused to take panic decisions in relation to this year. There is no need to do so, because the deficit is capable of being financed and there is no pressure on resources. To do otherwise, as Opposition Members seem to be pressing us to do, would be to create an absurd situation, which I would not tolerate. What we are concerned with is next year. That is the year we are discussing.
§ Mrs. ThatcherWhy is a decision when unemployment was below 1 million a panic decision but a decision when unemployment is above 1½ million not a panic decision?
§ The Prime MinisterI do not know to what the right hon. Lady is referring. What we are discussing is next year's estimates. We are discussing what the likely impact on resources will be and whether we can finance the borrowing, and these kinds of issue. These matters deserve consideration. Indeed, we have time to discuss them and thrash them out, and that is what we are doing. I have already told the House that I hope that we can produce a statement before we adjourn for the Summer Recess. That is still my intention, as far as we can do it, but there is no reason for the right hon. Lady to suggest that there is any need for a panic decision or an urgent decision on these matters when, by thrashing them out, we can get agreement. On the whole, I prefer to carry a Labour Government through this because I would not trust the right hon. Lady.