HC Deb 04 May 1976 vol 910 cc1060-3
Q3. Mr. Lawson

asked the Prime Minister if the ministerial broadcast on the Budget by the Chancellor of the Exchequer on 6th April represents Government policy.

Q6. Mr. Wyn Roberts

asked the Prime Minister if the Chancellor of the Exchequer's television broadcast on the Budget on 6th April represents Government policy.

Q8. Mr. Tebbit

asked the Prime Minister if the television broadcast made by the Chancellor of the Exchequer on 6th April, which concerned economic policy, represents Government policy.

Q9. Mr. MacGregor

asked the Prime Minister, whether the Chancellor of the Exchequer's television broadcast on the Budget on 6th April represents the policy of Her Majesty's Government.

The Prime Minister


Mr. Lawson

The Chancellor, in that broadcast, stressed the importance of investment and the Prime Minister has just reiterated it. Will he therefore help encourage investment further by repudiating firmly and categorically the National Executive Committee's industrial proposals and by repeating his own wise words at the Adam Smith festivities in Kirkcaldy three years ago, when he said that the Labour Party's big mistake was to think it knew how to run a company's business better than the company itself.

The Prime Minister

I had better look at what I said before I take it exactly in that form. Whatever I said on the Adam Smith Memorial occasion, I must confess I do not exactly recall at this moment. On the general question, it is, of course, clear that this country still has a very large private sector, which must be enabled to make adequate returns on the capital invested. That has always been the policy of this Government and it will continue to be the policy of this Government. As for any proposals that may emanate from the National Executive Committee, I have no ministerial responsibility for them.

Mr. Skinner

Is my right hon. Friend aware that, currently, he has no instruments to force investors to put their investment into those areas of the economy—mainly the manufacturing base—where it is needed? Does he recall that when we had the argument on the £6 pay policy last year it was suggested that the reduction that would occur would allow more investment to take place? This has not taken place. What discussions have been entered into this time to ensure that wage restraint will lead to a situation that has not occurred for many years past?

The Prime Minister

There is a difference between my hon. Friend and myself on this point. I do not believe that one can force a large private sector to invest. Therefore, one has a choice between a wholly controlled economy and a mixed economy. As for that part of the sector in the mixed economy which is private, one can lead a horse to water but one cannot make it drink. Therefore, one has to apply the necessary incentives to compel it to drink. As this party has always stood for a mixed economy and not for a totally controlled economy, that must be the basis upon which our economic policy proceeds.

Mr. Wyn Roberts

Will the Prime Minister give a firm assurance that the pay deal with the TUC will not contain hidden concessions, to be revealed at a later date, which will add substantially to public expenditure? Does he agree that industry is currently being discouraged from investing in job creation by the Price Code?

The Prime Minister

From the analysis that I have been able to make so far, I think the answer to the second part of the question is "No". But there will be discussions with the CBI as well as the TUC on this matter. Indeed, many firms' profits are at the moment well below the reference level to which they are entitled, and that is not a factor that should cheer any one of us. It is a very serious factor in this matter. Regarding hidden commitments, of course I give the assurance that if an agreement is reached this week, or within a few days, it will. perhaps, be for the Chancellor to indicate to the House the full nature of the agreement that is reached, so that the House will know what it is.

Mr. Dalyell

Is the Prime Minister aware that people who pronounce Kirkcaldy as "Kirkcauldy" instead of "Kirkcuddy" do far more for the Scottish National Party than many who talk about devolution?

The Prime Minister

I have simply no answer to that.

Mr. Tebbit

Does the Prime Minister agree that if any company in the drugs industry looked at the nature of the compensation that is being offered to companies in the aerospace industry under the Government's nationalisation proposals it would have no cause whatsoever to make any further investment until the threat of nationalisation of the drugs industry is lifted? Would the Prime Minister care to do that here and now. before he prejudices more jobs?

The Prime Minister

At a quick glance I cannot see that in his Budget Broadcast on 6th April the Chancellor referred to that industry at all

Mrs. Millie Miller

Is my right hon. Friend aware that the corollary of what he has said about the mixed economy is that we should then not be giving massive grants to those companies that proclaim private enterprise freedom, on which they say the future of their industries depends? In other words, if we have a mixed economy, should we not let the State industries receive grants and let the others make their own way by competition?

The Prime Minister

There is, of course, a substantial case for selective aid in these fields, and it is along the lines of that policy that the Government have been moving. However, basically, of course, any industry, whether privately- or publicly-owned, must be able to make an adequate return on the capital employed if the workers in that industry are to get decent wages and if the investment in it is to be replaced. There is no dodging that fact, under whatever system one lives.

Mr. MacGregor

In view of uncertainties that have arisen since the Chancellor's broadcast, about the precise pay targets that the Government are aiming at, will the Prime Minister confirm that the recent statement by the Secretary of State for Trade that anything above the 3 per cent. norm will mean that the Government will not achieve their inflation targets represents Government policy? If the limit is above 3 per cent., will the Government compensate by reductions in tax concessions or reductions in public spending?

The Prime Minister

I suggest that the hon. Member waits and sees.