§ Ql. Mr. Blakerasked the Prime Minister if the public statement by the Secretary of State for Industry at the Union of Post Office Engineers' Conference on 19th June 1977 concerning the economy represents Government policy.
§ Mr. BlakerIs the Prime Minister aware that his right hon. Friend was reported as saying that the Labour Government do not intend to hand over to the Tories the hard-won fruits of their policy? Does the right hon. Gentleman think that one of the fruits that his right hon. Friend had in mind was the current unemployment figure of 1,450,000? In the light of recent trade union decisions, is there any prospect of avoiding an increase in that figure?
§ The Prime MinisterI always thought that my right hon. Friend was a man of good sense. The quotation has undoubtedly confirmed that view. As I have said on many occasions, unemployment is the one serious blot in the progress that the Government are making. In view of the fact that world trade is not increasing as fast as we had all planned and 1417 hoped for when we met as a group of international countries, I do not look for —[Interruption.] I shall shout a little louder. I do not look for as much support from that as I would have hoped. Therefore, it is even more imperative to overcome inflation so that we can start domestic expansion in due course.
§ Mr. RadiceDoes my right hon. Friend agree that without the social contract we could not have got through the past two years? Does he further agree that if free collective bargaining leads to a wages explosion it will undo all the sacrifices that trade unionists have made over the past two years and abort any economic recovery?
§ The Prime MinisterThere is no doubt that the social contract contributed a great deal to maintaining good industrial relations at a time when the British people were suffering an overall cut in their standard of life. It enabled us to preserve some social cohesion in those circumstances. I am not surprised—I do not think anybody else is—by the great tensions that have arisen as a result of the policy. What is important is that we should have moderate wage settlements during the next 12 months. I entirely agree with my hon. Friend that if there is an explosion it is clear, as I have frequently said, that a great deal of the hopes that we have for reducing inflation will be destroyed.
§ Mrs. ThatcherIs the Prime Minister aware that many of us think that there is rather more than one blot upon his economic record and that the fact is that the result of his whole incomes policy has now led, inevitably, we believe, to a low-output, low-wage, high-prices and high-tax economy? Does he not recognise that unless he changes that strategy this country will fall progressively further behind in its standard of living compared with those of our industrial competitors?
§ The Prime MinisterWhat I think is true, as I have spelt out to the right hon. Lady on many occasions, is that unless we have an increase in productivity, and unless both management and unions work together to achieve that, the standard of life of this country will progressively fall behind. There is no difference between us on that. What I do not understand from the right hon. Lady—I still do not understand it after having read the speech 1418 that she made last Monday—is what alternative policies she has for producing the magic recipe that has so far escaped the country during the past 30 years.
§ Mrs. ThatcherPerhaps the Prime Minister will one day say to the people of Britain what I believe the people of Ashford and Stechford are wanting him to say, namely, that they believe that they can spend their money better than he can and that he should leave them with a bigger proportion of their own earnings in their own pockets. Is the right hon. Gentleman aware that until he has some sort of incentive policy we shall get what we have had under his prime minister-ship and that of his predecessor, namely, a flat reduction with no prospects of an increase?
§ The Prime MinisterNo, I do not interpret the attitude of the British people in that way at all. The real truth is that the British people want both lower taxes and higher services. They want both more money in their pockets and no waiting lists at the hospitals when there is an operation pending.
§ Mrs. Kellett-BowmanThey want an election.
§ The Prime MinisterThe fact that people want all these things is a problem for all democratic Governments. Hence. I come back to what I have always said; we have got to get higher productivity out of manufacturing industry. That is our first requirement and our first essential. On whatever side of the House the Leader of the Opposition may sometimes find herself sitting, she will have to come back to this problem and try to solve it.