HC Deb 17 June 1976 vol 913 cc732-5
Q2. Mr. Blaker

asked the Prime Minister whether the interview given by the Chancellor of the Exchequer on BBC television on the "Money Programme" on Friday 21st May on economic policy represents Government policy.

21 Mr. Norman Lamont

asked the Prime Minister whether the interview by the Chancellor of the Exchequer on BBC Television's "Money Programme" on

The Prime Minister

Yes, Sir.

Mr. Blaker

How can we expect the world to have confidence in the Chancellor when the Leader of the House and the Secretary of State for Energy have both made it clear in public that they do not regard him as fit to be Treasurer of the Labour Party?

The Prime Minister

I did not know that they had said such a thing, and the hon. Gentleman is misrepresenting the situation when he puts it in that way. They are entitled to say whom they would like to see as Treasurer of the Labour Party. On the whole, I believe that they would all prefer to see me continue, but as they cannot have that pleasure, in a democratic party such as ours a choice must be made and will be made by the votes of the constituencies and by all the others who make up the Labour Party Conference.

Mr. Atkinson

Does my right hon. Friend accept that his successor, whoever he may be, will have to show tremendous expertise to gain a balance in Labour Party funds, which show a tremendous debt this year—in fact, almost double the previous year—and that that person will have a great responsibility on his shoulders? Does he also accept that whoever takes on the job of treasurership of the Labour Party will find his job much easier if those trade unionists who yesterday took the decision to sacrifice their living standards to prevent any further cuts in public expenditure—[Interruption.] Will the Prime Minister now say that the Government do not intend to go back on their word, reiterated repeatedly over the last 12 months, that our primary function will be to safeguard the level of public expenditure?

The Prime Minister

I take note of my hon. Friend's election address. There is in fact no governmental responsibility for the finances of political parties—our own or any others. It is clear from the financial results that have been published that all voluntary organisations have been hit very hard by inflation. It would be a very sad thing if the level of political activity, voluntarily financed, were to be reduced because of the effects of inflation. I hope that, in pursuance of his campaign, my hon. Friend will throw his full support behind the Government's successful efforts to reduce inflation, so that whoever succeeds me as treasurer will have a much easier task.

Mr. Lamont

Is it not the case that in the past there has been a connection between the level of public expenditure and inflation? If so, is not any deal with the TUC, purchased at the price of agreeing not to cut public spending, likely to prove pointless and self-defeating, and to lead to a further weakening of the pound?

The Prime Minister

No. In economic matters I have never believed in isolating one factor and placing all the weight on it. Other considerable weight should be placed upon issues not of public expenditure but of the level of wage increases in any year. Of course, as the hon. Gentleman knows full well, the level of the money supply under the Government that he supported was at an incredibly dreadful rate, from which this country has not yet recovered.

Mr. Wrigglesworth

Whilst in no way under-estimating the remarkable achievement of the TUC yesterday, does my right hon. Friend agree, as he seemed to indicate, that there are many other influences on inflation in this country, as was ably demonstrated by the Chancellor of the Exchequer in the last Administration—for example, by the oil sheiks and by the money markets over recent weeks? Does he agree that it might be wise, therefore, to make clear to trade unionists and their wives that despite yesterday's remarkable achievement, there are many other battles to be won before we see the end of this war?

The Prime Minister

Yes, Sir. I agree with my hon. Friend. Indeed, I think that the Chancellor, both this afternoon, when I heard him answering questions, and on other occasions, constantly reiterated the theme, as I have reiterated it, that voluntary restraint on wage increases is not the only issue that affects the fortunes of this country or the future prosperity of our people. It is upon all factors, not on any single one in isolation, that we have to concentrate.

Mrs. Thatcher

Is the Prime Minister aware that we would agree with him that too much weight should not be attached to any one factor for economic recovery? It is because we take that view that we think he is putting too much weight on pay restraint alone. May I urge upon him the view urged by my hon. Friends on the Chancellor of the Exchequer, that pay restraint is not enough, that pay restraint plus the standby loan is not enough, and that, until the Government face their responsibility and reduce the Budget deficit, the sacrifices in pay restraint and in increased taxes which have been made will be wasted?

The Prime Minister

That is a repetition of questions and answers made on many previous occasions. [Interruption.] I have nothing to add to the answers that I have given to similar questions on previous occasions. My view is clearly on the record and will remain on the record.

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