HC Deb 08 February 1979 vol 962 cc553-6
Q3. Mr. Parry

asked the Prime Minister if he will list his public engagements for 8 February.

The Prime Minister

This morning I presided at a meeting of the Cabinet. In addition to my duties in this House I shall be holding further meetings with ministerial colleagues and others. I will also be meeting my hon. Friend and other of my hon. Friends representing Merseyside constituencies.

Mr. Parry

Will my right hon. Friend reflect this afternoon on the "World in Action" programme shown on Monday which linked mortality with unemployment? A reference to Liverpool suggests a possible 1,000 premature deaths. Will the Prime Minister order a Government inquiry into this latest disease? Does he not agree that large private companies such as Dunlop and Plessey have announced substantial redundancies in Liverpool and could possibly be considered in the future to be parties to murder?

The Prime Minister

There is undoubtedly a connection—I am obliged to my hon. Friend for drawing this to my attention—between poor urban conditions and a higher rate of mortality just as there is a distinct relationship between earlier deaths among manual workers compared with deaths among non-manual workers. These are factors that must always be taken into account. I note what my hon. Friend says about closures. Let us also remember—because Merseyside gets such a bad reputation—that Schreiber's is making a substantial improvement and hoping to employ several hundred more men. So is GEC Fairchild. There are, therefore, elements on the positive side as well as negative ones.

Mr. Baker

Does the Prime Minister appreciate that if there is a choice between a policy of high money interest rates and reducing Government expenditure, for the Government always to choose to increase money interest rates means that they are sacrificing future growth prospects of the economy? Is it not evident that the Government are embarked on a policy of low growth with the inevitable consequence of low wages?

The Prime Minister

This is a matter of dispute among economists. I do not think that we will clear it up by means of a supplementary question and answer. It would not be right to say that the Government have allowed public expenditure to go ahead untrammelled. Indeed, the complaints of my hon. Friends below the Gangway are that we have restricted it to too great a degree. In terms of the needs to be met, they are right, but the Government, the Chancellor and I always have to consider how we balance those needs. It would be very shortsighted to suggest that we should cut back substantially on public expenditure in a number of areas where needs are so great. Hon. Members should consider what we are hearing now about the National Health Service and other services. It would be very short-sighted to cut back further there, though, as I said earlier, it may be necessary to do something in those areas.

Mr. Ashley

Will the Prime Minister find time to reflect that our low-paid workers require something similar to the Roosevelt New Deal to give them a guarantee that the benefits that they achieve will not be eroded within the next few months? Does he agree that the guarantors of such a new deal cannot be the Government, but must be the better-paid and more powerful groups in our society and that, until those groups pursue productivity and stop leapfrogging, we shall all continue to suffer—low-paid workers and society in general?

The Prime Minister

I am obliged to my hon. Friend for his comments. He has raised one of the most difficult issues which has to be resolved. Clearly, if everyone gets the same increase as the low-paid workers or, as I have heard some claim, twice as much as the low-paid workers, the man on low pay will either remain in the same relative position or fall further behind. The problem has to be resolved. The Government have made an approach and an offer to low-paid workers.

Mr. Skinner

It is not good enough.

The Prime Minister

The hon. Gentleman is not negotiating. He had better leave that to the negotiators. We have proposed for low-paid workers a fixed sum and a study of comparable pay for comparable effort in order to see whether low-paid workers in the public sector get less than low-paid workers in the private sector. That is a matter of much dispute and only an examination will reveal the truth.

Sir Geoffrey Howe

Does not the Prime Minister remember that 12 months ago, the minimum lending rate stood at 6½ per cent? Today it stands at 14 per cent. Does he not accept that that increase in interest rates, which is doing such damage to home buyers and industrial confidence, is the direct result of his Government's plan to increase public spending this year by £4,000 million—more than 6 per cent? Is it not clear that continued increases in interest rates without reductions in public spending are quite inadequate to redress the balance in the economy?

The Prime Minister

I do not accept a great deal of what the right hon. and learned Gentleman says. A combination of internal and external policies has resulted in MLR going to a far higher level than any of us ought to want or desire. Another element that the House must take into account is that it is important to maintain the stability of our currency. The increase in interest rates is, partly, a protection for that purpose. That will help to keep down inflation.