PRIME MINISTER (ENGAGEMENTS) (Hansard, 4 November 1980)

§ Q2. Mr. Pawsey
asked the Prime Minister if she will list her official engagements for 4 November.

§ The Prime Minister
This morning I welcomed President Stevens of Sierra Leone and later 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. This evening I hope to have an audience of Her Majesty the Queen.

§ Mr. Pawsey
During the course of my right hon. Friend's busy day, will she take time to reflect on the call by British Leyland shop stewards for an all-out strike against the company's offer of 6.8 per cent.? Will she say what effect that may have on future public funding for British Leyland?

§ The Prime Minister
Since British Leyland was taken into the public sector the British taxpayer has provided more than £1,000 million to the company to enable it to get on its feet again. Of the £300 million that my right hon. Friend the Secretary of State said last December was available for this financial year, £275 million has already been drawn. It will be a tragedy if a strike at British Leyland takes place—a tragedy for those who work there, for the company and for Britain. Many overseas people will say that, just as Britain gets a super car, she goes on strike. That will be very damaging to Britain. In the meantime, we must leave Sir Michael Edwardes in charge, and allow him to do any negotiating that needs to be done.

§ Mr. Foot
In view of the reports of Cabinet discussions on the rapidly intensifying economic crisis facing the nation, will the right hon. Lady tell us when the Chancellor of the Exchequer intends to introduce his next Budget? Will it be just before the Queen's Speech or just after?

§ The Prime Minister
I thought that the right hon. Gentleman was about to ask a really worthwhile question. As is customary at this time of year, the Cabinet is discussing public expenditure with the objective of keeping the total of public spending next year within the amount which has already been published. The right hon. Gentleman will be aware that these things take quite a time so he will be able to ask the same question for quite a number of Tuesdays or Thursdays hence.

§ Mr. Foot
I thought for a moment that the right hon. Lady was about to give us an informative answer. Will she now tell us whether any fresh proposals about Government action on economic matters will be included in the Queen's Speech and in the statements that she and the Chancellor will make at the time of the Queen's Speech?

§ The Prime Minister
The Queen's Speech will take its customary form. I expect that the right hon. Gentleman will be taking a part—perhaps a very prominent part—in the debate.

§ Mr. William Shelton
Does my right hon. Friend agree that past inflation bears a heavy responsibility for present 1099 unemployment, that the Government cannot reflate their way out of inflation and, therefore, that interest rates should remain at their present level until they can be reduced without being inflationary?

§ The Prime Minister
I agree that we cannot possibly deal with unemployment on a long-term basis—indeed, no Government can—until we have thoroughly tackled the question of inflation. Until that is reduced, there is no basis for confidence in the future on the part of industry, which is vital for restoring what we need in order to expand. No one wants interest rates reduced more than I do, but as right hon. and hon. Members will be aware, interest rates would have been higher but for a certain amount of intervention to keep them where they are at present.

§ Mr. David Steel
Will the Prime Minister say whether the Government are stumbling into an incomes policy in the public sector only?

§ The Prime Minister
No. The right hon. Gentleman must not confuse cash limits with a rigid incomes policy for the public sector. It is always a mystery to me that most women and most small businesses know how to budget within a certain amount of money whereas many Liberal Members do not.

§ Mr. Wilkinson
In view of my right hon. Friend's deliberations this morning can she say whether it is still her expectation that the defence expenditure in real terms this financial year will meet an outturn of 3 per cent. increase, and whether that is still the full objective of the Government in the next financial year?

§ The Prime Minister
We met that target last year. We are not able to say what the precise outturn this year will be. Of course, we are considering the outturn next year along with all the other programmes. The outturn next year will result in an increase in expenditure over this year.