HC Deb 24 April 1980 vol 983 cc692-7
Ql. Mr. Freud

asked the Prime Minister if she will list her official engagements for 24 April.

The Prime Minister (Mrs. Margaret Thatcher)

This morning I presided at a meeting of the Cabinet and later met Mrs. Louisa Kennedy, the wife of one of the American hostages in Tehran. In addition to my duties in this House, I shall be having further meetings with ministerial colleagues and others, including one with a delegation from the city of Hull.

Mr. Freud

While the Prime Minister pursues her busy schedule, will she bear in mind that an extra 5p tax on a packet of cigarettes would have enabled the Government to increase child benefit by £1 instead of 75p? Will she accept that any loss of revenue caused by a diminution in smoking would easily have been compensated for by savings in the National Health Service?

The Prime Minister

Extra indirect tax works through straight away to the retail price index. Because so many social security benefits are linked to that index, that would put up public expenditure next year by a multiplier factor. That is one of the aspects that we must take into account when deciding the balance of the Budget.

Mr Ian Lloyd

Will my right hon. Friend comment on the deplorable example of bath-plug economics, to which our attention was drawn in the press articles on the Isle of Grain power station closure yesterday and today? Can any industrial society survive a system in which 27 men can force the squandering of nearly £400 million of hard-earned public capital in this way? Does not this he at the heart of the discontent which some of us feel, in that the initiative that she is showing in this area has not been sufficiently robustly supported on the Benches next to her?

The Prime Minister

I agree that industrial relations on the Isle of Grain site for the new power station have been a disgrace, when some 27 laggers can virtually bring the whole place to a dead slow and then a stop and are being paid £4.60 bonus an hour. I agree that we need to look into industrial relations on this site and other sites of the same kind. We must also look into the economics of the construction of future power stations which can be so delayed and overrun like this one.

Mr. Arthur Lewis

The Prime Minister referred to her discussions with Mrs. Kennedy, to whom we all give our sympathetic understanding. Is she aware that Mrs. Kennedy spoke on radio before she met the Prime Minister and made a statement to the effect that in no circumstances would those poor hostages support any military undertaking? In her discussions with Mrs. Kennedy, did the Prime Minister give her a similar impression, and will the right hon. Lady and her Government bear it in mind?

The Prime Minister

I saw Mrs. Kennedy this morning, and I think that she is a wonderful and remarkable person. It is clear that both she and her husband, who is being held hostage, have considerable inner resources of strength that are seeing them through. I made it clear that we are anxious to support our friends, the United States, in what we are now being asked to do—to take further political action, and later economic action. We shall continue to support them in those endeavours.

Mr. Body

If, in the course of today, my right hon. Friend considers the tactics that she will employ this weekend in Luxembourg, will she bear in mind that the essence of any genuine community must be the willingness of those who are strong and well off to help those who are less well off? Does she agree that at present we should be net beneficiaries and not net contributors? If my right hon. Friend cannot reach any such agreement, there is no Euro-fanatic in this country who will be able to persuade the British people that we belong to a genuine community.

The Prime Minister

The essence of partnership in any community is that all partners are entitled to an equitable deal. We are not getting an equitable deal at the moment. Because of that, we are requiring back large sums of the net contribution that we make. I still do not underestimate the difficulties of the task, but we must stick to our objective absolutely clearly.

Mr. James Callaghan

While we wish the Prime Minister success in her endeavours at Luxembourg to recover this large sum of money—and we have given her steady support in this matter—will she, in view of the statement by President Giscard d'Estaing yesterday that this issue could not be settled in the absence of an agreement to increase farm prices, give an assurance that the position of the Minister of Agriculture, Fisheries and Food will be fully supported and that no increase will be conceded by the British on prices for goods and commodities in surplus?

The Prime Minister

When that statement was made by the President of France and communicated to the meeting of Agriculture Ministers, my right hon. Friend made a pretty robust response—as only he can. He said that the agriculture price agreement would be dealt with, as it always has been, on merit. I have made it abundantly clear that we are certainly prepared to look at the other matters which have to be settled within the same time scale but that each of them must, nevertheless, continue to be considered on merit, and I shall stick to that viewpoint.

Mr. Callaghan

I take it that the Prime Minister wants the House to understand that there is no question of bargaining an increase in the farm price settlement on commodities that are in surplus against the budget.

The Prime Minister

I entirely agree. We are not bartering a settlement in one sphere against settlement in another. We are prepared to look at them all—certainly agricultural prices and sheepmeat—within the same time scale. I think that many of my right hon. and hon. Friends would say that if we expect Community members to help us to sort out our problems, we must equally expect to be ready to help them to sort out theirs. That is what a community is.

Mr. Callaghan

I do not know whether the right hon. Lady was trying to obfuscate the issue, but what she said at the end was not clear. We would like a clear answer from her on this matter. Is it the case that when she goes to Luxembourg—she will, of course, be discussing all these issues separately—she does not intend to yield on what is the common sense of the agricultural situation, namely, that commodities in surplus will not enjoy price increases this year?

Mr. William Hamilton

" Yes " or " No".

The Prime Minister

I had hoped that we were at one on this and that after my last reply we were at one. May I repeat——

Mr. Skinner

The right hon. Lady has thrown the towel in.

The Prime Minister

—that we are not going to barter prices on the agricultural settlement against the budget. The agricultural settlement will be dealt with by the Agriculture Ministers in the ordinary way.

Mr. Callaghan

With all respect to the right hon. Lady, we have not had an answer to the question. The question is a simple one. Are we intending to stand firm on our position that commodities in surplus will not enjoy a price increase during the coming year?

The Prime Minister

The right hon. Gentleman is asking me to achieve something that he never achieved. What I will not do is to barter prices in the Agriculture Council against the budget. With all due respect, I do not think that the right hon. Gentleman can ask for more than that.

Mr. Callaghan

The House and the whole country will draw their own conclusions from that attempt to wriggle. However, the right hon. Lady is wrong, because we did achieve a freeze on surplus commodities. They did not enjoy any price increase. Will the right hon. Lady please withdraw her remarks on that?

The Prime Minister

It was a freeze on surplus commodities last year, negotiated by my right hon. Friend. In almost all years—I do not say in every one—the right hon. Gentleman negotiated increases in prices above those recommended by the Commission. I think——

Mr. Michael Hamilton

On a point of order, Mr. Speaker——

Mr. Speaker

I shall take the point of order later. I know what it is.

The Prime Minister

The country will be well aware that it was the right hon. Gentleman's Administration that left us with a net contribution of £1 billion.

Mr. Whitney

During the course of the day, will my right hon. Friend consider what additional measures her Government, or this House, might take to give British trade unionists the opportunity to have a better level of leadership, the need for which has been exemplified by the performance during recent days of a certain Mr. Mostyn Evans, who signed a national agreement with British Leyland and then advised his membership that he would support action against that agreement, only to find his recommendation rejected in turn?

The Prime Minister

Over and above what we have provided for in the Employment Bill and the new Green Paper which will be coming out, I think that we must look to the trade unions to sort out their own internal problems. What we are trying to do is to give ordinary trade union members a greater say in union matters.