CBI AND TUC (Hansard, 8 June 1976)

§ Q1. Mr. Forman
asked the Prime Minister when he last had discussions with the CBI and the TUC.

§ Q2. Mr. Brittan
asked the Prime Minister when he last met the CBI.

§ Q10. Mr. Arnold Shaw
asked the Prime Minister when he last met the heads of the CBI and TUC.

§ The Prime Minister (Mr. James Callaghan)
I refer the hon. Members and my hon. Friend to the reply which I gave to the hon. Member for Blackpool, South (Mr. Blaker) on 27th May.

§ Mr. Forman
When he had his discussions with the CBI and others, did the Prime Minister take the trouble to get hold of a copy of the MORI Survey into the attitudes of working people, which showed that 86 per cent. of those polled favoured living in a free enterprise society and that the same percentage favoured wider profit sharing as an incentive to increase productivity?

§ The Prime Minister
I did not get hold of a copy of the survey. Responses can depend on the way questions are framed. I have not had an opportunity to examine this questionnaire, but I dare say that it is as valuable as a great many others, including those which forecast the results of General Elections.

§ Mr. Shaw
Is my right hon. Friend aware of the recent Financial Times survey of business forecasts, which showed the recovery in the economy to be in full swing? [Interruption.] Is he aware that this contained high investment intentions, although unfortunately, investment has been flagging? [Interruption.]

§ Mr. Speaker
Order. The hon. Member speaks even slower than I do.

§ Mr. Shaw
In view of the unstinting contribution of the TUC, will my right hon. Friend nudge the CBI to encourage its constituent members to improve investment?

§ The Prime Minister
My hon. Friend has made a most valuable point, on which the House should reflect. Investment has been sluggish so far, but there is reason to believe that it is now improving. Certainly the Department of Industry survey, which was published yesterday, suggests a sharp rise in investment in 1977. If that is true, it wil probably be the first time that British industry has taken advantage of an export-led boom before the consumer cycle has taken full effect. The fact that the Government have made available several hundred million pounds through the accelerated capital projects scheme will encourage industry to go ahead with further investment. We ask them to do so.

§ Mrs. Thatcher
When the Prime Minister next meets the TUC and the CBI, will he tell them that the Chancellor's statement yesterday represents not a victory for the Government but a defeat for their policies? When he next addresses the CBI, will he tell it that his only policy 1193 is to put Britain deeper into the red, to keep the red flag flying here?

§ The Prime Minister
I still have hopes that one day Question Time will be a serious period, without Members just thinking up clever phrases in advance and then shouting them across the Dispatch Box.
I think that the general opinion held about the credit that was advanced yesterday—I agree that that opinion is not shared by the Leader of the Opposition, but the right hon. Lady is in a somewhat isolated position in this matter—is that it was a valuable reinforcement of the international monetary situation.
A collapse of the international monetary situation would do no good to anyone in the western industrialised world. It was mainly for that reason that the central banks got together to ensure that a currency that, in their view, was undervalued should not be attacked in a way that would destroy the bastions of the monetary system. The right hon. Lady says that that represents a defeat for the Government's policies. All I can say to her, in the immortal words of one of my predecessors, is that if she believes that she will believe anything.

§ Mrs. Thatcher
Does the Prime Minister realise that he had to borrow from the central bankers—capitalist central bankers—because they had not got enough confidence in his Government's policies to purchase sterling?

§ The Prime Minister
The central bankers do not purchase sterling in this sense, although they may intervene from time to time. This is normal, standard practice, under which central banks give assistance to each other by means of swap facilities. I am sure that one day the right hon. Lady will understand these things a little better.

§ Mr. Bidwell
Has my right hon. Friend noticed that the Trades Union Congress has called for the strongest anti-racist laws to emerge from this place? Will my right hon. Friend comment on the present situation, having regard to the anxiety about immigration generally? Will he confirm that it is the Government's policy to prosecute policies to develop racial harmony in this country?

§ The Prime Minister
I have not discussed this matter with the TUC or CBI, but my hon. Friend and the whole House will deplore the events that took place in his constituency at the weekend. It would be wrong for me to comment in detail on the murder, or on the demonstration, as criminal charges will come before the courts, but perhaps the House will allow me to say that race relations in this country have been good over the years, thanks to the good sense and moderation of the vast majority of our people of all communities.
I think that the House will deeply regret the murder that took place at Southall but will want to pay tribute to the stand against violence taken by the leaders of the Asian and other minority communities in that area. I think that the House will also want to thank the police for the work that they did. I urge everyone not to allow passion to destroy our reputation as a tolerant, cohesive and unified society.
The Government have taken a determined stand against racial discrimination in any form, and we shall continue to do so. The Race Relations Bill, which is now before the House, has received support from all parties. When, as I hope, it goes on to the statute book, with the support of all parties, it will be an indication to the minorities in our midst that they can live here as free and equal citizens with everyone else.

§ Mr. Grimond
As the Prime Minister now consults the CBI and the TUC, will he think of consulting others, as well? As the Chancellor has now bought us some more time with these standby arrangements, will the right hon. Gentleman sound out the various parties in the House, of which there are six, on the question whether there is any common ground for supporting the sort of measures that will need to be taken if we are to avoid another crisis in a year or two?

§ The Prime Minister
I notice that the right hon. Gentleman said "in a year or two" That is sufficient unto the day in some ways. But I would put that—[Interruption.] If hon. Members would only contain themselves, they might sometimes hear the end of a sentence without interruption. I would put that as too distant a perspective for any measures 1195 that need to be taken. No doubt we shall be discussing the real problem in due course. I have read that, after hours of anxiety, a motion is to go on the Order Paper, although I have not yet had the advantage of reading it. I have no doubt that we shall be discussing these matters, and that will be the opportunity to take counsel together to see what is necessary.
I have stated the main problem, as I see it, on many occasions—namely, that with the upturn in investment to which my hon. Friend the Member for Ilford, South (Mr. Shaw), referred, there will be what, in the vernacular, I call two buckets put into the same pool of savings. This will cause problems not only to the Government but to the country as a whole if we are to avoid inflation. I go on saying that, because I think that those are the steps that need to be taken.