HC Deb 18 March 1980 vol 981 cc206-8
Q3. Mr. Ioan Evans

asked the Prime Minister what discussions she has had with the European Economic Community Heads of Government regarding the increase in unemployment.

The Prime Minister

Unemployment in the Community has been discussed regularly at meetings of the European Council, including the last meeting in Dublin in November. I expect the subject to be raised again at the Council meeting in Brussels later this month.

Mr. Evans

Does the right hon. Lady recall that in the "Weekend World" television broadcast in January she stated that she hoped to get our net contribution to the EEC reduced before the Budget, which is next week? We therefore expect an announcement next week. Will she ensure that our £1 billion contribution is diverted to regenerating British industry in view of the Cambridge group's prediction of 2½ million people being unemployed by next year and even more she following year? Will she also consider diverting the excess from the vast profits made by the banks and oil companies to settle the steel dispute?

The Prime Minister

As the hon. Gentleman knows, it is our policy that the incentives given through tax should assist in increasing output by British industry, particularly in small companies, where the new employment comes from. We shall be discussing in Brussels the budget and probably the employment position. Even though under the previous Government unemployment more than doubled, there are still more people in work today than five years ago.

Mr. Bulmer

Did my right hon. Friend discuss with the West German Chancellor the problems of unemployment in our two countries? If so, did the Chancellor spell out the contribution made to his economy by the framework of industrial relations law, designed in part by British trade unions, and the realistic approach to collective bargaining adopted by West German unions? If the TUC is determined to take an extra day off in May, might it not be profitable for its members to give that time to studying the West German experience?

The Prime Minister

I have discussed that matter with the German Chancellor from time to time. He is the first to recognise that we set up the structure of unions in West Germany after the last war.—[HON. MEMBERS: "We?"]—Great Britain, or should I say the United Kingdom. The West German structure would in many ways be far more convenient, but we cannot go from where we are now to a totally different structure. We shall try to do everything that we can to improve industrial relations, and I believe that the Employment Bill will make a great contribution to that end.

Mr. James Callaghan

Will the right hon. Lady also discuss with Chancellor Schmidt the system of industrial democracy that prevails in West Germany, an area in which so many British firms are still lagging far behind? In view of the rise in unemployment that will occur in this country this year, will the right hon. Lady assure us that the link between unemployment benefit and price rises will not be broken, resulting in the unemployed being worse off?

The Prime Minister

I have discussed many things with Chancellor Schmidt, including the vastly increased output per person in West Germany compared with this country. Increased productivity is one of West Germany's great achievements.

Regarding the other point raised by the right hon. Gentleman, I shall not give any assurance on matters likely to be dealt with in the Budget. The right hon. Gentleman must await the Budget Statement. He will not have long to wait.

Mr. Callaghan

That answer will arouse great suspicion in the minds of many. Does the right hon. Lady accept that it will be a lasting disgrace to her Government if they attempt to save public expenditure at the expense of the unemployed and the sick?

The Prime Minister

The right hon. Gentleman knows that he must await the Budget. But I am hardly likely to take criticism from him when it was he who doubled unemployment during the lifetime of the previous Government.

Mr. Callaghan

Does not the right hon. Lady yet realise that the link between unemployment and the level of benefits is of paramount importance to those who are likely to be put out of work by this Government's financial policy? Will she at least give an undertaking that child benefit will be increased by the relevant amount? Otherwise, does she not realise that, even in accordance with the policy of the Conservative Party, if it is not substantially increased in line with the increase in prices, that will increase the disincentive to work, so-called, for the unemployed?

The Prime Minister

It is the right hon. Gentleman who has the worst unemployment record in the post-war years. [Interruption.] Of course the Opposition do not like my saying that, because it is the truth and they cannot ignore it.

With regard to the subject of child benefit, again the right hon. Gentleman knows that he must await the Budget. He goes on and on, knowing that he must await announcements in the Budget. He has been Chancellor of the Exchequer and Prime Minister, and he knows that.

Mr. Callaghan

The right hon. Lady was very ready recently to give an assurance about payment of Health Service charges. Why cannot she give us a similar assurance now, unless she is proposing to run away—[Interruption.] If she is not, she should not be afraid to answer. It will be a lasting shame to this Government if they interfere with these benefits.

The Prime Minister

The right hon. Gentleman will have to contain his impatience for a few days longer until the Budget.

Several Hon. Members


Mr. Winnick

On a point of order, Mr. Speaker.

Mr. Speaker

Order. I have received notice of three quite distinct points of order that hon. Members wish to raise. They will be called after we have heard the statement by the Secretary of State for Education and Science. I remind the House that we are on timetabled business today and that there is a Ten-Minute Bill as well as the statement, all of which must be borne in mind.