HC Deb 03 July 1980 vol 987 cc1756-9
Q1. Mr. Temple-Morris

asked the Prime Minister if she will list her official engagements for Thursday 3 July.

The Prime Minister (Mrs. Margaret Thatcher)

This morning I presided at a meeting of the Cabinet and had further meetings with ministerial colleagues and others. Later today, I shall leave for a visit to Scotland, and this evening I shall attend a reception given by Her Majesty the Queen at Holyroodhouse to mark the eightieth birthday of the Queen Mother.

Mr. Temple-Morris

Will my right hon. Friend take time today to re-emphasise strongly the recent statement of her Industry Secretary, that as well as pricing themselves out of jobs workers can also price themselves into jobs? Will she congratulate those East Midlands busmen who have sacrificed their overtime pay to preserve the jobs of 50 of their colleagues? Will she agree that if more followed the example of those members of the Transport and General Workers Union, as well as the advice of her right hon. Friend, our economic problems would be more quickly solved?

The Prime Minister

I am grateful to my hon. Friend. I agree that the efforts of those East Midlands bus crews were highly commendable and indicated that, in considering their own pay, they were considering its effect, or possible effect, on the unemployment of others. There is not the slightest shadow of doubt that there is a direct relationship between pay increases that go outside money supply and increasing unemployment. I hope that their example will be followed further. It shows, once again, the wisdom of my right hon. Friend the Secretary of State for Industry.

Mr. Straw

Is the Prime Minister aware that on Tuesday the Chief Secretary to the Treasury told the House that, broadly speaking, pay increases over the last 12 months had had no impact on inflation? Does she agree with her Chief Secretary?

The Prime Minister

I thought that my right hon. Friend the Chief Secretary was in his usual scintillating form. If one reads the speech as a whole, every single part of it can very well be substantiated. The underlying reason for increases in inflation is the money supply in the longer run. In the short run, there are particular reasons for the increase in the retail price index, which is slightly different.

Mr. Bruce-Gardyne

Will my hon. Friend find time, if possible today, to study the latest CBI survey which shows that manufacturers expect to put up their prices by less than at any time during the last seven years? Can she pass a copy to the Leader of the Opposition just in case he might manage to read it?

The Prime Minister

I did, indeed, notice that report in the survey. It augurs well for a falling rate of inflation in the coming months. I noted that it was supported, in some ways, by an article in the Daily Mirror two days ago that pointed out that the cost-plus era was over, and a very good thing too.

Mr. James Callaghan

In view of the fact that we all read and listen to the Chief Secretary with reverential attention, can the Prime Minister say clearly whether increases in wages are a cause of inflation or not?

The Prime Minister

Over a period—[Laughter.] Over a period, the cause of increased inflation is increase in the money supply. Within the money supply, there will be a different distribution both between the public sector and the private sector. Within those sectors, there will be increases in pay within the general money supply well beyond what is warranted and those may come through to an increase in particular products in the RPI. That will not necessarily affect the general price level, which is the inflation level.

Mr. Callaghan

May I thank the Prime Minister for that reply and say that I do not understand a word of it?

The Prime Minister

In that case I must remark, in passing, that I wonder who wrote the right hon. Gentleman's speeches when he was in power.

Mr. Speaker

Mr. Ivor Stanbrook.

Mr. Stanbrook

rose—

Mr. Callaghan

rose—

Mr. Speaker

Order. If the hon. Member does not mind, I should like to hear the Leader of the Opposition.

Mr. Callaghan

I do not answer questions here, of course—I only ask them. Is the right hon. Lady aware that not only did I write my own speeches but that they were understood by everybody who heard them?

The Prime Minister

Then the right hon. Gentleman was fortunate in having intelligent listeners.

Mr. Stanbrook

Will my right hon. Friend find time this afternoon to look again at the wording of clause 17 of the Employment Bill? Is she aware of the growing volume of criticism about the wording of the clause, which is echoed by the president of the Law Society and the leader of the Bar? In those circumstances, what more do the Government require to decide to examine the clause again and to give the House an opportunity to review the wording of the clause?

The Prime Minister

I am aware of the clause. I agree that it is somewhat complex because it is based on immunities. The law on trade unions has been based on immunities for a long time. The Bill is a first step. It is not a last step.

Mr. David Steel

Is the Prime Minister aware that we are not interested in the scintillating form of the Chief Secretary but in what he says? Does she agree with the specific statement that he made on Tuesday that rising wages in the last 12 months made absolutely no contribution to the rise in inflation?

The Prime Minister

With respect, the Chief Secretary did not precisely say that. My right hon. Friend was dealing with the cause of the underlying increase in inflation and some of the short-term causes. If one reads the whole of his speech one will agree that it is not only scintillating but brilliant in content.