HC Deb 09 November 1976 vol 919 cc207-10
Q1. Mr. Wyn Roberts

asked the Prime Minister if he will place in the Library a transcript of his "Panorama" broadcast on economic policy on 25th October.

Q3. Mr. Neubert

asked the Prime Minister whether he will place in the Library a transcript of his "Panorama" broadcast on economic policy on 25th October.

The Prime Minister (Mr. James Callaghan)

I did so on 26th October.

Mr. Roberts

The Prime Minister said that he was in favour of sustainable growth. If it is clear—as it probably is and has been for some time to the Prime Minister—that we cannot get this growth without reducing public expenditure, is he not failing the country now by postponing the reduction in public expenditure to future years?

The Prime Minister

No, Sir. I do not accept what the hon. Gentleman says about the levels of public expenditure. We have to ensure that they do not clash with the requirements of private industry for investment. There are ample funds at present available in the banks for borrowing. The problem that we all have to deal with, as was recognised in the Conservative Party's own document, is that of overcoming inflation. That will encourage investment more than anything else.

Mr. Robinson

Is my right hon. Friend aware that if the Government adopt the same attitude of constructive and reasoned firmness in their dealings with the IMF as he showed in his "Panorama" broadcast, and that if he resists the imposition of any further devaluation or deflation, he will be assured of the widest support from the Government Benches?

The Prime Minister

Certainly I do not expect any support from the Opposition, who have been consistently and continually misrepresenting what I said on "Panorama", both in its intent and in its meaning. It is about time that we had a little honesty from the Conservative Party.

Mr. Neubert

Does the Prime Minister recall that in that interview he said that he would fight on if he had half a chance, and that to have lost two out of three Labour seats last Thursday gives him rather less than half a chance? Would not it be a better response to the nation's needs to give the British people an early chance to choose an alternative Government?

The Prime Minister

The plain truth is that until the Tory Opposition spell out their policies their return would be an unmitigated disaster for the British people. The only ambition that the Opposition have is to rule and then to divide. The biggest monument that they have ever left on our Statute Book is the Industrial Relations Act.

Mr. Wrigglesworth

In view of some of the interpretations that have been put upon last week's by-elections, would my right hon. Friend care to comment on the fact that the Conservative proportion of the vote in Workington was about 35.8 per cent. of the total electorate and that in Walsall, North the Conservative proportion of the vote was about 22.3 per cent?

The Prime Minister

I did study the statistics rather carefully and came to the conclusion that—[HON. MEMBERS: "You lost."] Well, we did keep one stump up out of three. The other conclusion I came to was one in which I agree entirely with the Conservative Party—that the troubles of our economy are … longstanding and deep-seated. To make the structural changes that are necessary … will need a settled approach over a long, hard haul", and that is just what we intend to do.

Mrs. Thatcher

Is the Prime Minister aware that the Government's present lending rate, coupled with their spending rate, means that the whole economic strategy is in ruins? Now that they have been given the "thumbs down" by the electorate, will the Prime Minister allow the Chancellor—who has never got an economic forecast right—to introduce yet another Budget to correct yet more mistakes?

The Prime Minister

I am aware that forecasts are liable to turn out wildly wrong"— that is another quotation from "The Right Approach". [Interruption.] I thought hon. Gentlemen knew that, and if they want to hear more from their own document—there is little sense in being too dogmatic now. I am aware that the right hon. Lady was being rather Goebbelistic in her misdescription on the radio last Friday, when she said that we always left a financial mess. Let us look at the record. In 1970 the Conservatives were left with a balance of payments surplus on current account. In 1973 they left us with a large deficit. In 1970 the Labour Government were repaying debts. In 1973 the Conservatives left us with a deficit of £4½ billion. In 1973—[HON. MEMBERS: "Too long."] Yes it is too long for the hon. Gentleman; I know that. In 1973 Lord Barber left us with an increase in the money supply of 28 per cent. The increase in the money supply is now 12½ per cent. Will the right hon. Lady have the decency to withdraw what she said?

Mrs. Thatcher

Not to a—[Interruption.]

Mr. Speaker

Order. The Prime Minister was listened to. I hope that hon. Members will listen to the right hon. Lady.

Mrs. Thatcher

Not to a Prime Minister who has done what he has done to the British pound, or to a Government who have done what this Government have done to the British pound overseas. Will the Prime Minister answer my question? As Prime Minister of a Government who have had record inflation and unemployment and have put record debt around the necks of future generations, does he intend to change the economic strategy that is bringing this country to disaster, or will he carry on with higher taxation at home and higher humiliation abroad?

The Prime Minister

I notice that the right hon. Lady does not have the decency to admit that she was totally misleading people on the radio last Friday morning. Even in the euphoria of victory she should have some respect for the truth. I demand that the right hon. Lady withdraw her remarks. [Interruption.] If she will not do so, now that the facts have been pointed out, we shall all know what value to place on her future utterances on these matters. As to the existing situation, the British people are sceptical of short-term instant solutions"— [Interruption.] That is another quote from "The Right Approach". I find that I cull most of my best answers from that document. The trouble is that Opposition Members do not seem to like the quotations when I give them. We intend to pursue with consistency our long-term aims. I hope that the right hon. Lady will now withdraw her remarks.

Mrs. Thatcher

With this kind of Prime Minister and that kind of reply I do not wonder that he has been rejected at the by-elections.