§ The Prime Minister (Mrs. Margaret Thatcher)This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be having further meetings with ministerial colleagues and others.
§ Mr. AdleyWill my right hon. Friend look at the campaign started yesterday by the Evening Standard to highlight the importance to the economic well-being of London of the tourism industry? Will she discuss with her ministerial colleagues the importance of jobs in the service sector, which are in every way as important to employment as jobs in manufacturing industry?
§ The Prime MinisterI gladly pay tribute to the importance of jobs in the service sector, and also to the importance of British tourism both to provide jobs and to provide income to the Exchequer. Last year foreign tourists spent about £2¾ billion in Britain, which was very much more than our tourists spent abroad, and long may that continue.
§ Mr. Ednyfed Hudson DaviesWill the Prime Minister take note that although last year the tourist industry earned in excess of £3½ billion in foreign currency, that figure cannot be continued in the face of the world economic position and foreign competition unless there is a substantial increase in the £31 million allocated by the Government to the British Tourist Authority and the three national tourist boards?
§ The Prime MinisterI would not necessarily say that success in the tourist industry depended upon the height of the Government grant to that industry. The industry has done extremely well, and I trust that it will continue to do so. The net benefit to the balance of payments last year through the tourist industry was about £700 million.
§ Mr. McQuarrieWill my right hon. Friend take time to congratulate her Minister of Agriculture, Fisheries and Food who obtained an increase from 9 per cent. to 14 per cent. in the import tariff on frozen fish and haddock? Is she aware that that has been warmly welcomed by the fishing industry?
§ The Prime MinisterI shall gladly convey my hon. Friend's congratulations, and I shall add my own to them.
§ Mr. Donald StewartWill the Prime Minister take time to study the speech made by Mr. Robin Duthie, the chairman of the Scottish Development Agency, in which he draws attention to the basically sound businesses that are collapsing in Scotland? He said that the social effects were intolerable. Will she accept the responsibility for governing the United Kingdom instead of the south-east corner of England?
§ The Prime MinisterI am quite ready to accept the responsibility for being Prime Minister of the United Kingdom. As the hon. Gentleman is aware, it is our objective to create the conditions 1298 under which more small businesses can expand. If the hon. Gentleman would do me the compliment of reading my last speech in Scotland, he will discover a list of businesses which are expanding and increasing their exports.
§ Q2. Mr. John Townendasked the Prime Minister if she will list her official engagements for 1 July.
§ The Prime MinisterI refer my hon. Friend to the reply which I gave a few moments ago.
§ Mr. TownendFollowing the statement by Mr. David Lane supporting the establishment of a new civil rights organisation, and the subsequent statement by that body advising coloured people to cease co-operating with the police, will my right hon. Friend make it clear to Mr. Lane that his quango was set up to create racial harmony, not disharmony? Will she advise Mr. Lane to be careful about what he says in the future, otherwise she will have to reconsider whether the taxpayer is getting value for money for the £6 million a year which Mr. Lane's quango costs the country?
§ The Prime MinisterIt cannot be in the interests of any group to withhold co-operation from the police. I have noted the report to which my hon. Friend referred, that a number of extremists in a new group which it was proposed to set up advised that course of action. I join him in deploring it. The chairman of the Commission for Racial Equality has worked extremely hard to try to secure better co-operation between the ethnic community and the police. I am sure that he will continue to do so and that the vast majority of the coloured community will reject the advice to which my hon. Friend referred.
§ Mr. David SteelWill the Prime Minister not only read, but circulate to her Cabinet colleagues, the speech made by the chairman of the Scottish Development Agency yesterday, because he is someone whom the Government have just appointed to do a most important job? Will she take on board his point that, although individual companies can lay off people to save overheads, the country cannot?
§ The Prime MinisterWe try not to circulate too much paper to the Cabinet. It is generally a good principle not to do so. But in the end, be it the country or individual companies, we survive only by those companies producing goods which other people, whether here or abroad, will buy. None of us can escape that test.
§ Mr. John CarlisleHas my right hon. Friend had time today to read the reports of the massive losses by Vauxhall Motors because of a strike there in 1978? Is it not now time that the car unions of this country realised that by such action —encouraged by the Opposition—they are in effect bringing this country to the verge of bankruptcy?
§ The Prime MinisterI read about those considerable losses with some concern. Of course, the car industry, not only in this country but in others as well, is in considerable difficulties. I agree with my hon. Friend that the strike at Ellesmere Port was a particularly damaging one to that company. Indeed, I well remember that when I was in the United States people actually referred to that strike as an example of things which were wrong with Britain.
§ Mr. DewarDoes the Prime Minister accept that it is dangerous to shrug off the speech which was made by Mr. Robin Duthie in Scotland yesterday? Does she accept that he is an extremely successful business man who has been appointed to a key economic post by the Government and that his speech amounts to a trenchant attack upon Conservative economic policy, which he described as complacent and positively dangerous to the economy of the West of Scotland? Will she accept that Mr. Duthie's views are evidence of the fact that there is now a consensus across party lines that the tight monetary policy which is being pursued borders on insanity?
§ The Prime MinisterNo. I am never prepared to pursue a policy which adds to the present amount of money which is being printed. To do so would be to provide next year's inflation at a very much higher rate than this year's. Of course, I shall not shrug off that speech. Similarly, I ask the hon. Gentleman not to shrug off the fact that prosperity comes from producing and selling goods at a 1300 price and of a kind which people are prepared to buy.
§ Q3. Mr. Peter Bottomleyasked the Prime Minister if she will list her official engagements for 1 July.
§ The Prime MinisterI refer my hon. Friend to the reply which I gave some minutes ago.
§ Mr. BottomleyIs it not the case that what actually verges on insanity is the action of many employers and trade unions in this country, which agree to pay increases which the country and the firm cannot afford? Given that both the TUC and the Government have set their minds against a formal incomes policy, would not it be a good idea for the unions and the Government to consider what can be done by each to make sure that the general level of pay settlements in the coming year is at least half the general level of that in the past year?
§ The Prime MinisterI agree with my hon. Friend that if the general level of pay claims exceeds by very much the increase in output, the result will be increases in prices as a result of which many people both here and abroad will choose to buy goods produced by other nations. One of the problems which we have faced for some time, and which the previous Government were concerned with as well, is that the increase in unit wage costs in this country has gone ahead of those in other countries. The result of that is to produce jobs overseas rather than here.
§ Mr. Norman AtkinsonDoes not the Prime Minister recognise that no evidence has been produced by any leading economist in this country to support the answer that she has just given? Is she not aware that of the 20 per cent. increase in prices over the last 12 months, economists have now decided that her Government are responsible for 11 per cent., that a further 4 per cent. came about as a result of increases in the cost of raw materials and that only 5 per cent. is directly due to wage increases? Therefore, will she reconsider the answer which she has just given?
§ The Prime MinisterIf the hon. Gentleman looks at increases in unit labour costs, he will find that between 1977 and now the increase in unit labour 1301 costs here has been 25 per cent., in the the United States 13 per cent., in Germany 6 per cent., and that it has remained unchanged in Japan.
§ Mr. RipponOn the subject of incomes policy, does my right hon. Friend agree with the view expressed by the chairman of the Conservative Party in another place, that Clegg is a disaster and the doctrine of comparability of very dubious validity? Will she, there-more, consider saying "Thank you" and "Goodbye" to Clegg and Boyle so that we can have a more realistic incomes policy in the public sector?
§ The Prime MinisterI think that what Professor Clegg was asked to do was to compare things which were basically incomparable, and which would never admit of that analysis. In those circumstances, he did the very best job that he could. In fact, as my right hon. and learned Friend knows, he has tendered his resignation to take effect later this year. I do not think that the life of that commission will be indefinite.
§ Mr. WoolmerWill the Prime Minister take time today to study the letter from the president of the Leeds chamber of commerce and industry, in which he says that Leeds industries across the board—. textiles, clothing, engineering, printing and construction—are facing falling order books and working at 60 per cent. or 70 per cent. of capacity? Does she recognise that her policies are creating a divide in this nation between the industrial areas of the North and the commercial and prosperous areas of the South? When will she reverse her policies, and what will be her reply to the manufacturing industries of the North of England and Leeds in particular?
§ The Prime MinisterProsperous companies can be found both in the North and in the South. In no way is it a division between North and South. It is the way in which companies are run, the unity of purpose between management and labour and the simple test, which I constantly try to get across, of whether people here will buy goods which are produced here. In fact, net disposable income this year is greater than it was last year. The money is there, and consumer expenditure is up. I suggest that the hon. Gentleman should ask himself why so many of his consti- 1302 tuents prefer to buy foreign goods to buy those which his own people produce.
§ Mr. Bill WalkerDuring her busy day, will the Prime Minister have an opportunity to look at the reports coming back from Russia on the comments which have been made about Chancellor Schmidt and what he said about the invasion of Afghanistan? Perhaps she would like to comment.
§ The Prime MinisterI believe that Chancellor Schmidt put the whole case for the West very robustly and said to President Brezhnev in Moscow that he and the whole of the Western world insist that Russian troops be withdrawn from Afghanistan, that the continued occupation is totally unacceptable and that in the meantime he stood, and would stand, wholly by the decision of the NATO Alliance on the modernisation of theatre nuclear forces.