ORMSKIRK (Hansard, 16 November 1976)

§ Q1. Mr. Kilroy-Silk
asked the Prime Minister if he will make an official visit to Ormskirk.

§ The Prime Minister (Mr. Jamea Callaghan)
I have at present no plans to do so.

§ Mr. Kilroy-Silk
That reply will disappoint many of my constituents. Does my right hon. Friend realise that Mersey-side as a whole is suffering from a serious industrial and economic decline which is largely unrelated to the industrial recession, and that the threatened closure of the Courtaulds factories at Skelmersdale and Aintree and the proposed redundancies at Plessey in Liverpool and in Kirkby will have a catastrophic effect on the industrial life of the whole area? Is it not now time for the Government to relate their industrial policy to the particular needs of Merseyside before it is too late?

§ The Prime Minister
I recognise that there are special problems for Merseyside, which suffers from structural weaknesses arising from the decline in the port industry over many years and also in some 1107 other industries such as shipbuilding and ship repairing. That is why it was given special development area status two years ago. Since then, a number of offers have also been made of selective assistance to a total of about £4½ million and advance factory projects have been undertaken.
But the position of Merseyside cannot be isolated from the general economic position of Britain as a whole, and there is no future in indulging in a consumer boom which would have worse consequences at the end of the day than if we were to focus our attention on earning our living by increasing our exports.

§ Mr. Graham Page
Is the Prime Minister aware that he will be welcome in Crosby, the constituency next door to Ormskirk, if he will come there and explain what he said at the Lord Mayor's banquet last night—that there must be proper reward for skill and responsibility? What practical steps is he taking to ensure that reward?

§ The Prime Minister
There will be continuing discussions with the TUC about the next round of wage increases, which must recognise skill and responsibility in some form or other and which, I take it, will be reflected also higher up the scale. What has happened is the result of the wage settlements that have been agreed by the TUC over the last couple of years. They have had the effect of helping to reduce inflation. It has been generally acknowledged that, when there is a rough-and-ready agreement such as we have had over the last two years, anomalies are created. I often spend my time explaining this. I hope to have the assistance of Opposition Members also.

§ Mr. Heffer
Will not my right hon. Friend agree that if he did come to Merseyside he would undoubtedly have a wanner response than he had from his City audience last night? Would he not agree that one does not have to be concerned with the consumer, in the sense of a consumer boom, to get the building industry back to work? The construction industry on Merseyside is in a dire situation. Could not assistance be given to that industry in order to get many of those thousands of workers back to work at the earliest possible moment?

§ The Prime Minister
Perhaps I may be allowed to say that I was in Merseyside in September and had a warm welcome from many people. I should be happy to go back again. As regards the construction industry, my hon. Friend has pursued this matter with great assiduity for a considerable period, but I cannot promise exceptional measures for the construction industry. There is no prospect at this moment of the construction industry going ahead until there is a general return of confidence as we overcome inflation. As inflation is overcome, I believe that there will be an upturn in the economy.

§ Mrs. Thatcher
Is the Prime Minister aware that there is little point in talking about taxation and pay anomalies unless he is prepared to take action to deal with them? Does he agree with the view expressed by his Secretary of State for Social Services on the radio that, in equity, short-term benefits should be taxable?

§ The Prime Minister
The theory is often very different from the practice. In 1948, short-term unemployment benefits were taxed. It resulted in such an administrative dog's breakfast that the practice was abandoned six months later. Since then, successive Governments have considered how these matter can be rectified, so the issue of principle is, frankly, of less importance than what can be done in practice.
I am bound to say to the right hon. Lady—I hope that she will not join in—that among some newspapers a most squalid campaign is being developed which bears no resemblance to the reality of the situation. There is a real problem here. If there is an overlap between people who are at work and the unemployed because by statute—agreed by this House, with the consent of both parties—the benefits of the unemployed are related to increases in the cost of living—

§ Mr. Churchill
An £8-a-week increase?

§ The Prime Minister
The hon. Gentleman knows even less about this than he does about Mr. Ponomarev.
We also have a wage agreement which limits the increase in wages—as has been 1109 done over the last year—to below the increase in the Retail Price Index. This clearly creates substantial anomalies and, I think, considerable grievances, but it is far easier to state the grievance than it is to consider the remedy, which would require not only legislation but a substantial increase in the number of civil servants. Although the Opposition make noises about it, they are committed to reducing that, too.
Nobody wants to deny that there is a problem here which must be considered. [Interruption.] I shall go on saying it until it sinks into hon. Gentlemen's thick heads. Stating that there is a problem does not necessarily produce the remedy within 24 hours.

§ Mrs. Thatcher
But the Prime Minister has known about the problem for months and months and was warned in the Budget debate that this would happen: that if he increased unemployment pay by about £8 a week—in other words, by 15 or 16 per cent.—and the pay for those in work by only 5 per cent., he would have this problem. Will he take any action at all?

§ The Prime Minister
The right hon. Lady is descending to a squalid tactic. It is not so long ago that the Opposition were pressing for a six-monthly review to be based on the Retail Price Index, and on 24th June the House passed this year's uprating order without a Division, in 74 minutes flat. Who are the humbugs now?