§ The Prime Minister (Mr. James Callaghan)I met representatives of the TUC on 28th February. Further meetings will be arranged as necessary.
§ Mr. GouldWill my right hon. Friend point out to the TUC that the one good feature of the secret Conservative report on confrontation with the unions is that it apparently gives the short shrift that it deserves to the belief of the Leader of the Opposition that a referendum would be a useful weapon in the Tory armoury? Is it not disturbing that the Conservative Party is apparently thinking in terms of confrontation when our own experience over the past four years shows that co-operation with the unions is not only possible but is very beneficial to the whole country?
§ The Prime MinisterUnless and until the Opposition decide to publish this document, I have no particular knowledge of it. However, if it is true that it is pointing in the opposite direction, namely, that there should be no confrontation, it is high time that the Conservative Party revised its whole approach to trade unions. The great misfortune of British politics is that the Conservative Party seems to have come to the conclusion that it cannot beat the trade unions, but its distaste for them is such that it cannot co-operate with them, either.
§ Mr. David SteelIs the Prime Minister aware that some of us are dismayed by the reception given yesterday to Mr. Weighell and Mr. Jackson at the Scottish Trades Union conference? Will he make it clear in future meetings with the TUC that the Government are determined to stick to a fourth phase of pay policy, preferably by agreement with the trade unions?
§ The Prime MinisterI am not yet in a position to discuss what happens when the present phase of pay policy is over. I note that Mr. Weighell and Mr. Jackson are in the public sector. In this sector the Government have a special responsibility and must take a view about pay. The comments that have been made—by Mr. Basnett, for example—emanate mostly from trade union leaders in the public sector. We should discuss these matters with them, but it would be wrong at this stage to do anything except to try to win through on the current pay round. Then we should be able, as we are now increasingly able, to present the trade union movement with the statement that inflation is going down, and will stay well in single figures, and that much will depend upon our being able to maintain it in single figures during 1979.
§ Mr. Terry WalkerWhen he next meets the TUC will my right hon. Friend discuss the implications of his "Buy British" speech at Huddersfield, with special regard to the news that British Airways wish to buy foreign aircraft? Will he make sure that the TUC and trade unionists are reassured by the fact that the Government will be influencing British Airways over this matter?
§ The Prime MinisterIn reply to the general point, I, with my colleagues, have been giving a good deal of attention to 663 the subject of "buying British". Although I am strongly in favour of that concept I must emphasise that the British goods must be in the shops and elsewhere if they are to be bought. Therefore, perhaps we should start with the relationship between suppliers and those who sell the goods. I hope to have more to say about that matter later.
As for British Airways, there is a great conflict of interest, which is probably threefold. I do not propose to be rushed into a statement, but the whole matter will be considered carefully and our conclusions laid before Parliament.
§ Mr. HannamWhen the Prime Minister meets the TUC, will he discuss the increasing shortage of young people coming forward for training in engineering skills? The Budget has done nothing to provide incentives for young people or anybody else to take up skilled training? Is this not related to our low level of productivity? When will he do something about the situation?
§ The Prime MinisterI am surprised to hear the hon. Gentleman make that comment, because I understood that the Engineering Training Board was carrying out a very good job and maintaining the level of training and engineering during this recession at a higher level than had been maintained earlier. However, I shall bring the hon. Gentleman's remarks to the notice of my right hon. Friend the Secretary of State for Employment and I shall examine the matter further.
§ Q2. Mr. Robinsonasked the Prime Minister when he next plans to meet the TUC.
§ The Prime MinisterI refer my hon. Friend to the reply which I have just given to my hon. Friend the Member for Southampton, Test (Mr. Gould).
§ Mr. RobinsonWhen my right hon. Friend next meets the TUC will he further remind it of the firm and courageous support given by the Government to British Leyland, which makes such an important contribution to the nation's economy, balance of payments and employment? Will he contrast the Government's attitude with the irresponsible and hypocritical equivocation of the Opposition who, despite their weasel words of support, 664 voted against the provision of finance on a sufficient scale as to ensure the success of this vital national asset?
§ The Prime MinisterI welcomed my hon. Friend's informed speech on this subject when we debated the order relating to British Leyland. It was in marked contrast to some of the other speeches that we have heard.
It is the case that the Opposition seem to be a little uncertain whether to support British Leyland. Indeed, at one stage they were not even certain whether they intended to vote against the order. However, I hope that they will clear up the uncertainty of their attitude towards this great firm and the industry that depends on it.
§ Mr. Michael MarshallDid the Prime Minister have an opportunity to read the full report in The Times about the relationship between the TUC and the major parties? If he did, did he take in the remark from a senior Whitehall source, contained at the end of that report, that the TUC could probably count on a better relationship with Tory Ministers, since Labour Ministers treated it with contempt?
§ The Prime MinisterI saw that remark as reported. I thought that if that was typical of former civil servants' opinions, on which they advised the previous Administration, it was a jolly good job that those civil servants had now retired.
§ Mr. William HamiltonWill my right hon. Friend discuss with the relevant union leaders in the National Health Service the consequences of the speech made by the right hon. Member for Leeds, North-East (Sir K. Joseph), who suggested the establishment of two Health Services, one private and one public—the public one dealing with all the less glamorous facilities, such as geriatric and mental health, and the other, presumably, with rich women wanting abortions?
§ The Prime MinisterI would consider discussing this matter with the TUC, but I have no doubt, without discussing it with its members, what their views would be, namely, that there should be one Health Service in this country and that good health is not something that should be denied to anybody because of poverty.
§ Mrs. ThatcherDoes the Prime Minister agree that although he is discussing problems of pay, the real problem in this country is low output, and that one of the limiting factors in the way of increasing output is likely to be an insufficiency of skilled labour? One of the reasons for that is that the differentials are not sufficient to give proper rewards for skill and extra responsibility? Will he discuss the matter with the TUC and tell the House what are his proposals to restore those differentials and give the TUC the freedom to negotiate to see that differentials are restored?
§ The Prime MinisterI agree with some part of the right hon. Lady's comments, although instead of saying that the problem is due to low output, I would say that it is more due to low productivity and that we need a higher level of productivity if we are to have a high wage economy.
The shortage of skilled labour has been discussed with NEDO on a number of occasions at National Economic Development Council meetings, and will continue to be discussed. The subject is under review by employers and trade unions, and I shall bring to their notice the right hon. Lady's observations.
§ Mrs. ThatcherThe Prime Minister is ducking the main question. He will not get sufficient people training for extra skills until the differentials are restored. Is he aware that skillcentres have vacancies for those who wish to take up engineering skills—vacancies that are not being filled by our workers are going instead to foreigners? [HON. MEMBERS: "Oh."] Does he agree that until he restores differentials, the retraining programme will not be taken up by the unemployed for whom those places are meant?
§ The Prime MinisterI do not think that I would object to skillcentre vacancies that are otherwise not required going to foreigners, and I hope that the right hon. Lady would not do so. All our past experience shows that those trained in British factories who then return to their own countries tend to order from British firms and increase our future exports. On the subject of differentials, the right hon. Lady shows her incomplete understanding of the way in which bargaining systems 666 work. It is not for me to restore differentials; that is a matter for negotiation between trade unions and employers.