HC Deb 04 December 1980 vol 995 cc422-3
Q1. Mr. Renton

asked the Prime Minister when next she plans to take the chair at a meeting of the National Economic Development Council.

The Prime Minister (Mrs. Margaret Thatcher)

On 4 February.

Mr. Renton

What lessons do the members of the NEDC draw from the Japanese, who, in recent years and in the same trading world as us, have had such a consistently better economic and industrial performance? Will my right hon. Friend tell me, as president of the Conservative trade unionists—[Interruption]—what part she thinks the politically impartial trade unions of Japan have played in this success?

The Prime Minister

I think that that record has a number of lessons for us. The first is that pay increases in Japan have gone hand in hand with productivity increases. The second is that they have the minimum of restrictive practices and demarcation disputes. The third is that they have welcomed innovation and technological change, and they regard it as matter of national pride that they should keep their industries ahead of others. Instead of criticising them, we should emulate their performance and resolve to excel it.

Mr. Foot

Is it not a fact that on the day before the meeting of the NEDC yesterday the director-general of the CBI, Sir Terence Beckett, was insisting again that large parts of the British industrial base were going down the plughole? Does the right hon. Lady think that that is a fair description of what is happening? Do she and her Ministers take any responsibility?

The Prime Minister

It was from one of the CBI pamphlets that many of us realised that Japanese pay and productivity had kept absolutely hand in hand and that with ours there had been an enormous gap between the two. [HON. MEMBERS: "Answer."] Had we followed the example of the Japanese, much of our industry would be in very much better fettle than it is now. It is a tragedy that the demand for protectionism in relation to Japanese goods comes because the Japanese industries are more efficient than our industries. I think that the CBI would be the first to understand that.

Mr. Foot

What is the right hon. Lady's answer to the charge from Sir Terence Beckett that large parts of the British industrial base are going down the plughole? Does she accept responsibility for what is happening to great sections of the British industrial base, with hundreds of bankruptcies taking place every month on a scale that we have not known in Britain for generations?

The Prime Minister

I am sorry I did not make myself clear to the right hon. Gentleman. A lot of industries would be in very much better shape than they are if pay and productivity had gone hand in hand, if they had welcomed technological change and if they had had fewer restrictive practices. Sir Terence Beckett was one of the first to know of the effect of restrictive practices on Ford in Great Britain.

Mr. Garel-Jones

When my right hon. Friend next meets the NEDC, will she stress the success that is now being achieved in reducing inflation? Will she emphasise that the six-monthly estimate for inflation in this country is now below that of Japan, West Germany and France?

The Prime Minister

I shall be pleased to do so. The Government have an excellent record of reducing inflation. If it was not coming down so fast, particularly on the six-monthly record, people would be extremely worried about it. I am delighted that my hon. Friend has pointed out the facts to the House.

Mr. Norman Atkinson

Now that the Prime Minister's economic advisers agree that one person's drop in living standards is another person's ticket to the dole queue, will she take down from the Cabinet wall the edict "No one turns till Mother turns"? Will she reconsider the imposition on public sector wage agreements that is taking those agreements below the level of the rise in the cost of living?

The Prime Minister

If the hon. Gentleman wishes to have examples of wage increases below the level of inflation, he has only to look at the early period—the first two or three years—of the previous Government, when there was a substantial drop in the standard of living. With regard to the edict on the Cabinet wall, Mother is rather an important person in the family.