HC Deb 06 June 1978 vol 951 cc24-6
Q3. Mr. Ovenden

asked the Prime Minister if he will list his official engagements for 6th June.

The Prime Minister

I refer my hon. Friend to the reply which I gave earlier today to my hon. Friend the Member for Sowerby (Mr. Madden).

Mr. Ovenden

Will my right hon. Friend give some priority to considering what action the Government can take to avert an increase in building society mortgage rates? Does he accept that such an increase would be very damaging to family budgets? Will the Government tell the building societies quite clearly that a rise in interest rates, at a time when they are holding very large reserves and when they are benefiting from tax cuts, would be quite unjustified and unacceptable?

The Prime Minister

I recognise that any increase in building society rates would be unacceptable and an additional burden on householders. Nevertheless, if the building societies themselves reach this conclusion I would not wish to stop them from doing it, although I would regret it. It seems to me that it is important that they should maintain their own balances properly and take whatever steps are necessary to achieve that. That is in line with the Government's policy of keeping all these matters of interest rates and other things, such as monetary supply, under control.

Mr. Tapsell

Among his official engagements today, will the Prime Minister give attention to the steady fall since Budget Day in the international value of the £ sterling and of our foreign exchange reserves? Will he tell us when the Government intend to announce the measures necessary to reverse these threatening trends?

The Prime Minister

The hon. Gentleman is an expert on City matters. He therefore knows that it would be quite improper for me to make any statement of a general nature about the position of sterling. What is quite clear is that the Government's policy is to ensure that by a combination of fiscal and monetary measures there will be an insurance, together with some continued moderation in wage claims and settlements, to enable us to maintain the level of inflation where it is now. I would like to see it come down, but I doubt whether that is likely. It will range between 7 per cent. and 8 per cent. But if we follow the policy that we intend to follow I see no reason why it should ever get back to double figures.

Mr. Dalyell

Since considerable sums of public money in relation to grant may be involved, can the Prime Minister in his own time and in his own way give his attention to the suspension of operations by the Cromarty Firth Development Company? Could a statement perhaps be made tomorrow by a Government Minister?

The Prime Minister

My hon. Friend was kind enough to warn me that he would raise this matter. I have already apprised the Secretary of State for Scotland of his views and I am sure that he will take into account my hon. Friend's request.

Mr. Charles Morrison

judging by the Prime Minister's earlier reply to his hon. Friend the Member for Sowerby (Mr. Madden), he is an avid reader of The Economist. Presumably, therefore, he thinks that the opinions of that magazine are worth paying attention to. Can he say what action he intends to take in the light of the recent opinion poll published by The Economist which showed that the vast majority of the British public was in favour of proportional representation?

The Prime Minister

I was very interested to read that. I look forward with interest to seeing whether it appears in the manifesto of the Conservative Party.

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