HC Deb 29 July 1976 vol 916 cc867-70
Q1. Mr. Lawson

asked the Prime Minister if he intends to make a ministerial broadcast on Her Majesty's Government's economic policy.

The Prime Minister (Mr. James Callaghan)

I refer the hon. Member to the reply that I gave to the hon. Member for Norfolk, South (Mr. MacGregor) on 27th July.

Mr. Lawson

Since this is clearly an appropriate time, will the Prime Minister explain, in the light of the profound understanding of economics that he displayed during his period as Chancellor, precisely how it is that the £1,000 million increase in employers' national insurance contributions releases resources for manufacturing industry?

The Prime Minister

I am grateful for the hon. Gentleman's magnanimous tribute, even though it is belated by about 10 years. I accept it in the spirit in which he made it. The Chancellor of the Exchequer gave an explanation of the increases in national insurance contributions and I have nothing to add to it.

Mr. Watkinson

Does the Prime Minister agree that profits are rising strongly this year and the indications are that they will rise more strongly next year, and that, therefore, now is the time to invest? An integral part of our industrial strategy involves planning agreements. When shall we see the fruits of that?

The Prime Minister

The Price Code gives substantial advantages to industry, and this is certainly an opportunity that managers and employers should grasp. It is an opportunity given to them by the stability they now enjoy as a result of the social contract agreed yesterday. There is a growing acceptance of the idea of planning agreements, especially among larger companies, and the Government intend to speed up those agreements as far as they can.

Mr. Fairbairn

Who and how many are the parties to this so-called contract, and what proportion of the electorate do they represent?

The Prime Minister

Without going into arithmetical proportions, over the last three years the social contract has enabled us to substantially reduce the incidence of strikes. In consequence, I no longer get the same complaints about the interruption of flow of materials into and out of factories, and that also helps exports. In all those and many other circumstances, the contract between the Government, the Labour Party and the trade unions has been of great value to the country, and it might be a little better if the Opposition sometimes acknowledged that.

Mr. Robinson

Will the Prime Minister make it clear to the CBI that British industry has a unique contribution to make because of the advantages of having the lowest level of industrial disputes for nearly 10 years and an undervalued exchange rate, which should give it enormous investment incentives? Does he agree that there is evidence of a strong growth in world markets and that it is high time British industry began to invest more, to get production up and unemployment down?

The Prime Minister

It was indicative of the Opposition's attitude that they jeered through that recital. It is in the national interest that there should now be substantial new investment in a particularly favourable combination of circumstances. There has never been a better opportunity for export-led growth than we have at present—[Interruption.] Why do Opposition Members want to jeer at their country every day? I do not understand it. We have never disguised the difficulties that lie ahead. I hope that hon. Gentlemen will assist in getting across the combination of circumstances that now exists, which will give us an opportunity, in the next two or three years, to prepare for the 1980s—or are the Opposition frightened that we shall succeed?

Mrs. Thatcher

In an earlier reply the Prime Minister stressed how much importance he attaches to securing the agreement of the TUC. Doubtless that applies to the proposals for public expenditure cuts. Does he attach equal importance to securing a clear decision, on a Government motion, on his public expenditure cuts, before the House rises?

The Prime Minister

An announcement will shortly be made about the business for next week—[Hon. Members: "When?"] In due course.

Sir G. Howe

You are wriggling.

The Prime Minister

I would not wriggle in front of the right hon. and learned Member for Surrey, East (Sir G. Howe). He is the last one in front of whom I would wriggle. We have announced our policy, and if the Leader of the Opposition wishes to challenge it, she is entitled to do so.

Mrs. Thatcher

I was challenging the Prime Minister to say whether he would dare to table a Government motion on public expenditure cuts and put it to the House. I take it from his reply that the answer is "No".

The Prime Minister

An announcement will be made about this matter. If anybody wishes to challenge the policy, he will be free to do so. The Opposition have the time to challenge that policy—let us see what they do with it. I understood from some remarks by the Opposition spokesman that there was some modified support for our policy. If the Opposition are satisfied with that policy why should we table a motion?