HC Deb 20 March 1979 vol 964 cc1299-300
Ql. Mr. Terry Walker

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

The Prime Minister (Mr. James Callaghan)

I meet representatives of the TUC from time to time at the National Economic Development Council and on other occasions. Further meetings will be arranged as necessary.

Mr. Walker

When my right hon. Friend next meets the TUC, will he discuss the importance of the Government's trade deal with the Chinese? Will he seek to allay the fears of the TUC about the supply of Harrier jets to China which, we understand, is an integral part of the deal. Will he say when the deal is to be finalised?

The Prime Minister

I shall be happy to discuss this matter with representatives of the TUC if they so wish. As I understand it, negotiations are continuing on many matters, including railway equipment, steel mills, and other areas, as a result of the visit by my right hon. Friend the Secretary of State for Industry. If agreements on those important orders are concluded—I expect them to be—I expect that negotiations and the prospects for the Harrier will look very fair.

Mrs. Thatcher

The Prime Minister will doubtless wish to discuss with the TUC the rising rate of inflation. How does he explain the fact that even before this year's pay increases have been able to work through into prices, the rate of inflation, on the Chancellor's chosen basis, has already risen to 13.3 per cent?

The Prime Minister

I would regard that as a piece of Tory disinformation. The right hon. Lady is bearing me out. As wages work through into the rate of inflation, which they have done since last July and the start of the new wage year, in August, the rate of inflation is likely to increase. I am sure that the right hon. Lady will be happy to know that it will not go back to the levels that existed when she was last in office.

Wage settlements during the last couple of months seem to be settling down at a reasonable level. Certainly they are much less than looked likely after the Ford and the lorry drivers' settlements. As they seem to be settling down, we can expect that although the rate of inflation will go up it will be in the region, I hope, of about 10 per cent., or thereabouts. The right hon. Lady asks whether I shall discuss this matter with the TUC. I assure her that we are already doing so, with the object of reducing inflation over the next three years to under 5 per cent. That is absolutely necessary.

Mrs. Thatcher

May I make two quick points? The figure of 13.3 per cent. is a piece of Treasury information that was given in a written answer yesterday. As for the inflation rate for the next three years, will the right hon. Gentleman stop making pledges on my behalf?

The Prime Minister

As the right hon. Lady knows—but would not care to quote—the official retail price index published last Friday revealed the figure of 9.6 per cent. I wonder why she does not quote that figure instead of the response to a carefully planted question designed to produce a certain answer. The right hon. Lady may propose, but I suggest that the electorate disposes.

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