Q2. Mr. Chapman askedthe Prime Minister if she will list her official engagements for Thursday 2 July.
§ The Prime MinisterThis morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today, including one with a delegation of Members of the Indian Parliament led by their Speaker.
§ Mr. ChapmanWill my right hon. Friend spend a little time considering the plight of those ratepayers in the Metropolis who will shortly receive supplementary demands? Is it not grossly iniquitous that London ratepayers should be required to subsidise the public transporting of millions of tourists who visit the City each year as well as hundreds of thousands of commuters from outside London who earn their living in the City? If the Government do not have the powers to stop these supplementary demands, will my right hon. Friend try to expedite alternatives to the rating system, which is a rotten iniquitous system?
§ The Prime MinisterI agree with my hon. Friend that it is absolutely wrong that London ratepayers should have to subsidise tours taken on London Transport by tourists or many other people who come into London but who do not belong to London. There is already a grant of about £105 million from the Government, and in addition a large grant from the GLC is financed through the rates. I believe that most people will strongly object to paying large increased amounts for people who come from outside the Metropolis.
As to finding an alternative system to the rates, my right hon. Friend the Secretary of State for the Environment will, I hope, be producing a consultative document before the end of the year.
§ Mr. FootHas the right hon. Lady yet had a chance to study the speech of the right hon. Member for Sidcup (Mr. Heath) and his suggestions that the policies of mass unemployment over which the Prime Minister presides help to breed crime and racial tensions? What does she think of that speech?
§ The Prime MinisterI did, of course, see reports of my right hon. Friend's speech. I note that most of my fellow Heads of Government at the European Council agree with the policies that we are pursuing. [Interruption.] It is extraordinary that Opposition Members should interrupt, because they were not present. Many of the Heads of Government are pursuing the same policies, and most of them agree that lower inflation will lead to more jobs. The question is not about the scourge of unemployment—we all agree that unemployment is a scourge—but rather what effective remedies can be found. We believe that we are going the right way to finding them.
§ Mr. FootHow does the right hon. Lady think that her colleagues in Europe can understand a policy which the right hon. Member for Sidcup describes as "incomprehensible"? Does not the Prime Minister understand that she must answer to this House? What does she think of the right hon. Gentleman's statement? Following what the right hon. Gentleman and others have said on this subject, do the Government intend to proceed later this year with further public expenditure cuts which will lead to further unemployment, further racial hatred and further crime?
§ The Prime MinisterThe Heads of Government in Europe understand the policy, because many of them are 1004 pursuing identical policies. In other words, their top priority is to reduce inflation as a means not only of getting inflation down but of establishing a firm base to secure competitive industry and good jobs in the future.
I also note that the chairman of the IMF made a speech about policies similar to those that we are following in which he referred to the importance of monetary policy and the correct balance between monetary and budgetary policy. That speech very much approved the kind of policy that we are following.
§ The Prime MinisterThe right hon. Gentleman may say "Not enough", but we are trying to reduce public expenditure——[Interruption.]—so that more finance is available for the private sector—[Interruption.]
§ Mr. SpeakerOrder. I cannot hear the Prime Minister's reply, and, as I said earlier, we must try to maintain parliamentary standards.
§ The Prime MinisterThat is precisely why Opposition Members find the policy incomprehensible—because they will not listen.
§ The Prime MinisterPresident Mitterrand was the one person who was out of step—[Interruption.] The right hon. Gentleman may not like it, but that is the case. As I reminded the right hon. Gentleman yesterday, President Mitterrand proposes to increase his deficit to an amount equal to 3 per cent. of GDP. Most of us, who already have deficits beyond that amount, could not possibly consider that policy. Our deficit is already 4½ per cent. of GDP.
§ Mr. DykesDoes my right hon. Friend agree that the parliamentary rabble opposite have no recipes for Britain's economic revival? However, bearing in mind that we have an unprecedentedly large margin of spare capacity in men and material generally, and especially in the construction industry, is it not now possible to consider certain non-inflationary measures to revive the economy that would not lead to an increase in inflation?
§ The Prime MinisterI would dearly like to increase the proportion of public spending on public investment. Many of us would, because we think that that would be a far better way of spending some of the money than putting a good deal of it into increased pay. The fact is that the more that goes into increased pay without increased output the less there is to spend on public investment and the less there is available for more jobs. More pay without more output means more unemployment.
§ Dr. OwenIs the Prime Minister aware that the selective expansionary proposals of the right hon. Member for Sidcup (Mr. Heath) are recommended by many people in many parts of Britain, not least by the electors of Warrington—[Interruption.] If some hon. Members spent some time on the doorsteps of Warrington, they would discover that fact—[Interruption.]
§ Mr. SpeakerOrder. The House must listen to points of view that it does not like. That is what it is all about in this place.
§ Dr. OwenDoes the Prime Minister accept that many people believe that there is an alternative and that there is a case for selective expansionary investment in Britain that 1005 has nothing to do with the hotch-potch of extravagant inflationary expansion peddled from the Opposition Benches?
§ The Prime MinisterUnlike the right hon. Gentleman and others who propose the creation of inflation on top of inflation, I happen to agree with John Maynard Keynes, when he said—[Interruption.]
§ Mr. SpeakerOrder. I do not know why the House is so excited this afternoon. I remind hon. Members that the clock is moving on.
§ The Prime MinisterI happen to agree with Keynes. He said:
There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose".