§ The Prime MinisterIn addition to duties in this House I shall have meetings with ministerial colleagues and others, including one with General Rogers, the new Supreme Allied Commander Europe.
§ Mr. DubsWill the right hon. Lady find time today to consider answering a question that she has failed to answer three times in the House in recent weeks, namely, what comfort is there for the many thousands on housing waiting lists in the light of her Government's policy to encourage sales of council housing when those on the waiting lists cannot afford to buy the houses that might be on offer?
§ The Prime MinisterI think that the hon. Gentleman is trying to find a connection between two things that are not connected. There are many, many people in council houses who will be tenants for life, who will never move, and who want to own the homes they will live in for the rest of their lives. They will be given an opportunity, which they would never have had under Labour, to purchase their homes.
§ Mr. Alan ClarkWill my right hon. Friend find time today, or at the earliest opportunity, to deny categorically the reports that are becoming increasingly current that defence is also to have its expenditure cut?
§ The Prime MinisterIf I am to deny or confirm each and every question that is put to me on public expenditure, I shall be in considerable difficulty. We shall, of course, honour our NATO commitments.
Mr. James CallaghanOn the question of the opportunity that is to be given to council house tenants to buy their houses, will the right hon. Lady deny the proposal made by one of her advisers that mortgage interest relief is to be disallowed for tax purposes?
§ The Prime MinisterI am delighted to deny it. One's advisers are not always right, and I often tell them so.
§ Mr. DykesWill my right hon. Friend have the opportunity this afternoon to check whether she has yet received a response from the Transport and General Workers Union to the enormous concern that was expressed in the House a week or more ago that several speakers at its 343 most recent conference who wanted to support the Government's proposals for trade union reform were denied the opportunity of going to the rostrum to speak? If my right hon. Friend has a chance to check to ascertain whether a response has been made, will she take up the matter further with the union? Is she confident that we shall get a fair hearing from trade union leaders, when that sort of thing goes on?
§ The Prime MinisterI shall look into that later today. I am certain that we have the support of many members of the Transport and General Workers Union, and of other unions, in what we are trying to do to reform trade union law.
§ Mr. FreudWill the right hon. Lady consider with care the letter delivered to 10 Downing Street by representatives of 3,500 marchers of Equity, pointing out that the VAT rate of 15 per cent. and the annual contribution of 45p per head compare pretty miserably with £7.80 per head and zero rated VAT in other European countries for the living arts?
§ The Prime MinisterI think the hon. Gentleman will accept that the substantial reductions in direct taxation will enable many private people to contribute to the arts who have not been able to do so before, and that that will be of great benefit to many in Equity.
§ Mr. BidwellWill the right hon. Lady concede that she might have been badly advised about the contemplated changes in the immigration rules, and that if she goes ahead with them after the recess she may be brought before the European Court of Human Rights on the matter of women and families?
§ The Prime MinisterThose changes in the immigration rules were set out in detail in the manifesto. We intend to bring them in after we return from the recess.
§ Q3. Mr. Garel-Jonesasked the Prime Minister if she will list her official engagements for Tuesday 24 July.
§ The Prime MinisterI refer my hon. Friend to the reply that I gave a moment ago.
§ Mr. Garel-JonesIn the course of her busy day, will my right hon. Friend find time to ask her hon. Friend the Minister of State for Housing and Construction to 344 speed up the preparation of the housing Bill? More important, can she give an assurance that the right of council tenants to purchase will be enshrined in that Bill in such a way as to make it impossible for Labour-controlled authorities to deny tenants that right?
§ The Prime MinisterThat is most certainly our objective. We shall need to do that. Otherwise, many Labour authorities would deny tenants that right. We are determined that they shall have it.
§ Mr. AltonWill the right hon. Lady apply the same strictures to the Conservative-controlled authorities that may not wish to sell council houses, especially in the rural areas? Will she reconsider the Government's proposals to make the sale of council houses compulsory? Will she extend to the sale of council dwellings the same logic that she extended in the Education Bill to allowing local authorities the choice of making up their minds about whether they should continue with selective education?
§ The Prime MinisterIf one applied the reasoning behind the hon. Gentleman's question, there would be fundamental laws governing every citizen in the United Kingdom. If one applied his reasoning to education, we should not have a law about the school starting or leaving ages. Some things are so fundamental that they must apply to all citizens regardless of the local authority area in which they live. Others are matters for the local authorities. We believe that the right to buy council houses should belong to everyone, with one or two possible exceptions, such as some houses in national parks and tied houses. In general, the right should apply to everyone. That is the line that we shall follow in the legislation.
§ Mr. William HamiltonWill the Prime Minister reconsider the answer that she gave to the Leader of the Opposition about mortgage interest repayments? How does she square that answer on the favourable treatment given to those people and the slashing of housing subsidies to council houses, which will inevitably put up the rents by about £2 a week?
§ The Prime MinisterAs far as I remember, council house rents meet only about 43 per cent.—it might be a little more; it is well below 50 per cent.—of the cost of council houses.
345 As to mortgage relief, every time tax is reduced the mortgage costs more. The amount upon which the relief is given£25,000—has not been put up for five years.
§ Mr. ChapmanAs to Government spending cuts—announced, proposed, or the figment of many people's imaginations —will my right hon. Friend confirm that this year's total public expenditure will be no less than £11 billion more than it was last year? Should not these so-called cuts be seen for what they are—an attempt to cut back profligate Government spending?
§ The Prime MinisterThe level of planned expenditure of the previous Government would very rapidly have led us back to where we were in 1976 when the IMF had to be called in and when even the previous Government had to impose public expenditure cuts. It is important that we reduce public expenditure as a proportion of the total national income. Our task at the moment is to constrain it.
Mr. James CallaghanIs the right hon. Lady aware that what she said in the first part of her answer was totally untrue? As to the second part, does she not recognise that if there is no growth in the economy the burden of public expenditure will become greater? When will she apply her mind to the present absurdly high interest rates, which require industry to curb its investment and are dragging in foreign money, which itself increases the value of sterling and depresses exports? When will she get round to these fundamental problems of growth?
§ The Prime MinisterIn the autumn of 1976 the right hon. Gentleman said, on the question of cutting public expenditure, that it ought to be reduced over a period as a proportion of GDP. That is exactly what we are trying to do. It was reduced. The IMF comes in later. The IMF letter of intent said that
an essential element of the Government's strategy will be a continuing and substantial reduction over the next few years in the share of resources required for the public sector. It is also essential to reduce the public sector borrowing requirement",and so on. It lies ill in the right hon. Gentleman's mouth to criticise us for doing now what he had to do when the IMF was called in.
Mr. CallaghanWill the Prime Minister now answer my question? When will she deal with these absurdly high interest rates?
§ The Prime MinisterI apologise to the right hon. Gentleman. I forgot the third part of his question.
The right hon. Gentleman knows that interest rates will have to remain high while there is such a tremendous amount for borrowing from both the clearing and other banks. If by any chance it were let go it would have a bad effect on inflation next year. The previous Chancellor was much more of a monetarist than he now cares to admit. I am determined that we shall keep down inflation. Until demand is reduced we cannot reduce interest rates. We shall do so at the first opportunity.
Mr. CallaghanIn view of the consequences of the foreign money now attracted to London by these high interest rates, and the consequential effect on the strength of sterling, how many bankruptcies does the right hon. Lady expect that there will be and how much unemployment must we see before she sees sense on this absurdly high level of interest rates?
§ The Prime MinisterThe level of interest rates is below the record achieved by the right hon. Gentleman in office.
Mr. CallaghanI realise that the right hon. Lady is having a difficult time about this matter, but will she undertake to ensure that the present level of interest rates will last no longer than the level of interest rates to which she referred under the Labour Government?
§ The Prime MinisterThe right hon. Gentleman knows that we can never, never, never give any undertaking on interest rates. If he were at this Dispatch Box he would say exactly the same.