HC Deb 25 January 1977 vol 924 cc1167-71
Q1. Mr. Skinner

asked the Prime Minister if he has any plans to pay an official visit to the Channel Islands.

Q2. Mr. Gwilym Roberts

asked the Prime Minister if he will visit the Channel Islands.

The Prime Minister (Mr. James Callaghan)

I have at present no plans to do so.

Mr. Skinner

Did my right hon. Friend see a recent report in The Sunday Times suggesting that £1,000 million is lost in the financial year to the United Kingdom taxman by tax evasion through the Channel Islands? Did he see a recent report that Spillers—the bread and biscuit group—had raised £11 million on the pretext of investing in new plant and machinery and had used the money to set up a company in the Channel Islands to evade the profit levels set by the Price Commission? Should not these loopholes be closed immediately? In his new rôle as economic supremo, will he not take on the task himself, as the Chancellor has not?

The Prime Minister

I always look to my hon. Friend for accuracy in these matters, so I must repudiate once again the last part of his supplementary question. Tax avoidance and tax evasion are serious matters. I agree with my hon. Friend that they are not admirable devices and that the persons who carry out evasion or avoidance are not to be admired. My right hon. Friend the Chancellor of the Exchequer is constantly considering the possibility of closing loopholes and has taken several steps in this direction, for example, on capital transfer tax. I shall draw to my right hon. Friend's attention what my hon. Friend says.

Mr. Roberts

In view of the special relationship between the Channel Islands, Britain and the Crown, will my right hon. Friend initiate negotiations with the Governments concerned to try to close the loopholes by which thousands of people and many British companies are dodging British taxes? During those negotiations, will my right hon. Friend also bring forward a matter that I have raised with the Home Office concerning Channel Islands prisoners who are in British gaols? They are separated for long periods from their families and are imprisoned because of the medieval laws which operate in the Channel Islands.

The Prime Minister

I take note of what my hon. Friend says about discussions with the authorities in the Channel Islands, although the Chancellor of the Exchequer is free to take what legislative action he thinks right. My recollection, from a former office I held, is that as the Channel Islands have few facilities for holding prisoners we offer them facilities from time to time. I shall bring the matter to the attention of the Home Secretary.

Mrs. Thatcher

Does the right hon. Gentleman recall that, although his hon. Friend the Member for Bolsover (Mr. Skinner) today asked a supplementary question about the Channel Islands, where the level of unemployment is about 2 per cent., this time five years ago he was busy disrupting Question Time in the House of Commons because the then announced level of unemployment was unacceptably high, although it was two-thirds of the level of unemployment announced today. Does the right hon. Gentleman accept that the figures announced today illustrate the failure of all his economic policies and demonstrate once again that the Labour Party is the natural party of unemployment?

The Prime Minister

I can only admire the humbug of hon. Members who cheer that question, when I recall that the policies they have been pressing upon the Government would at least double the present level of unemployment. As for the nature of the problem, I agree with the right hon. Lady that the total is not one that should be tolerated. But I repeat what I have often told the House, that I do not think it is possible that the figure will be reduced for some time. As long as we are trying to squeeze inflation out of the economy, this is unfortunately one of the consequences that we must face. However, the right hon. Lady should assist in these matters by explaining to the country that if we are to overcome inflation difficult measures must be taken. The Government intend to continue to take them.

Mrs. Thatcher

The fact is that it is the Labour Government's refusal to take the appropriate measures earlier that has led to large unemployment now. Is the Prime Minister aware that he may run away from responsibility but he cannot run away from the facts?

The Prime Minister

I have no intention of running away from the facts. The right hon. Lady shares considerable responsibility for the present level of unemployment.

Mrs. Thatcher

Rubbish.

The Prime Minister

The right hon. Lady was a member of the Administration which allowed the M3 figure to rise to unprecedentedly high levels. That has been working its way through the economy for some years. The right hon. Lady knows it. That figure has now been reduced. It is coming down fast. That is why we can look forward with some confidence to a considerable improvement in our economic prospects, to increasing exports, to a better balance of payments position, and to the regeneration of British industry. All that will lead to more employment.

Mr. Heffer

Without in any way indulging in the humbug we hear from the Opposition Benches, may I say that my right hon. Friend must be aware that on the Labour Benches and in the Labour Party in the country there is a deep and growing concern about the level of unemployment? When will the Cabinet get down to dealing with the question of unemployment by introducing, for example, public works schemes, policies of import substitution and much else? We cannot tolerate the present level of unemployment for much longer.

The Prime Minister

My hon. Friend is right in saying that genuine concern about the matter is felt throughout the country. The Cabinet and I certainly share that concern and feel it very deeply. A number of measures have been introduced, such as the youth employment subsidy, the job creation scheme, work experience projects and schemes for apprenticeships. All these have helped. I was looking at the figures the other day, It is reckoned that during this year such measures will assist about 200,000 young people. I cannot promise my hon. Friend the party, the House or the country that unemployment will be substantially reduced, whatever palliatives are introduced during the next few months. I cannot avoid saying that. It must be understood. I ask the country to have patience. The economic situation is steadily improving, and the improvement will continue.

Mr. Prior

Was not the February 1974 election fought on the slogan "Back to work with Labour" and was not the October election of that year fought on the basis that the Labour Government had got unemployment moving down? Therefore, why does the Prime Minister have the humbug to try to cast the blame on to someone else?

The Prime Minister

What I did was to suggest that, as the right hon. Gentleman knows, his right hon. Friend the Leader of the Opposition should share the responsibility. I did not cast it off on to her; I said that she should share it, and she should. So should the right hon. Gentleman, because he was a member of the same Administration. It is true that the February 1974 election was fought on the slogan "Back to work with Labour", and within a matter of days my right hon. Friend the then Secretary of State for Employment—the right hon. Member for Ebbw Vale (Mr. Foot)—had got the miners back to work.