HC Deb 08 February 1979 vol 962 cc549-52
Q1. Mr. Tebbit

asked the Prime Minister when he expects next to meet the Trades Union Congress.

The Prime Minister (Mr. James Callaghan)

I met representatives of the TUC at a meeting of the National Economic Development Council yesterday and further meetings will be arranged as necessary.

Mr. Tebbit

Is the Prime Minister aware that in his dealings with the TUC, if he stands by his brave words of last night that present pay offers in the public sector disputes are pretty well the limit, he will have the support of all Opposition Members, even if he cannot command the support of members of his own party? Will he further remind the TUC, on the subject of reform of the law on picketing and the closed shop, that opinion polls show that it is my right hon. Friend the Leader of the Opposition, and not the TUC, who speaks for the trade unionists in this country?

The Prime Minister

I am very glad to have from the hon. Gentleman the official statement of the Opposition's position on pay claims. I am sure that he has been to the fountainhead in order to derive the authoritative exposition that he gave us.

As for the TUC and the question of picketing and the other very controversial matters, discussions are going on now. I hope that they will succeed and will result in a better code than we have at present.

Mr. Faulds

When my right hon. Friend next meets the TUC, will he con- vey to it that, since the motivation of the Labour movement is concern for the less fortunate in our society, and since Conservatism is a belief in grabbing for oneself, is it not perhaps time that some of the more powerful and self-concerned unions, with their belief in free collective bargaining, became affiliated to the Tory Party?

The Prime Minister

I am constantly reminded by the Opposition that there are a large number of Tory trade unionists, some of whom are at the moment on strike or leading the strikes.

My hon. Friend was absolutely correct as to the concern that is expressed about the origins of the trade union movement. The movement was born out of a desire that there should be justice for those who singly or individually were not able to command justice for themselves. That should be true now in the trade union movement, not only for its own members but also in its concern for all the community.

Mrs. Thatcher

Will the Prime Minister discuss with the trade union movement today's rise in interest rates? Is he not aware that an increase in interest rates to 14 per cent. is a potential disaster for home buyers? Is it not the case that mortgage rates are already higher than at any time before 1974 and that it is the home buyer and the small business who are having to pay the price for the Government's economic failure?

The Prime Minister

I am grateful to the right hon. Lady for spelling out some of the consequences of the policy she has been advocating. Perhaps she will now give me greater support in the Government's determination to keep inflation down and to achieve moderate wage settlements as a means of so doing and to ensure that the degree of uncertainty about the level of wage settlements, which is partly responsible for the increase in the minimum lending rate, is put at an end. I would be very happy to have her support on those matters.

Mrs. Thatcher

Is the Prime Minister aware that if he wishes genuinely to get down inflation, he must get down Government borrowing? The real reason for the increase to 14 per cent. is the high amount of borrowing which this Chancellor has been doing and his declared intention to increase that borrowing by a further 2½ per cent. next year.

The Prime Minister

The right hon. Lady is, as so often, partly right. The level of Government borrowing clearly influences the level of interest rates. The level of Government borrowing in this country is about on a par with that of a number of other major industrial countries as a proportion of our gross domestic product. It would be helpful if we could reduce it, but I prefer that it should be done not by cutting public expenditure but by increasing economic growth, which would give us additional revenue.

Mrs. Thatcher

If the Prime Minister is so anxious to reduce Government borrowing, will he withdraw the present White Paper on public expenditure?

The Prime Minister

The present White Paper, which provided for a modest increase of 2 per cent., was generally regarded as a sensible approach to these matters. The right hon. Lady has no need to adopt a hectoring tone about this. But the uncertainties of the present pay situation, including the high additional cost that would result from meeting some of the claims being put forward in the public sector and in the public services—whether in the local authorities or the Civil Service—or some of the other claims, would mean, if carried through, that we would have to review total Government expenditure and the borrowing requirement. There can be no escape from that.

Mr. David Steel

When the Prime Minister and his colleagues meet the TUC in these discussions, are they equipped with up-to-date figures on the present level of wage settlements? Can he give the House any figure for the level over the last month or so?

The Prime Minister

Yes. We are equipped with the notifications which are made. I believe they are not complete. I have not charged my memory, and I hope that the hon. Gentleman will not hold me too closely to what I say. But my recollection is that up to about a month ago, they were running at a little under 10 per cent. One or two of the most recent large settlements, including the lorry drivers' settlement, which the House will remember was 22 per cent., are now nudging the level above 10 per cent. This is the Government's concern. We should avoid getting on to this escalator which, four or five years ago, carried us up to 30 per cent. by the end of the round. Therefore, the Government must, and intend to, stand firm in their own area. If the country has to suffer a certain amount of disruption, I shall regret it. But that disruption will be less significant in the long run than it would be if we gave way to all these claims.