Economic Affairs (Prime Minister's Speech)

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 6th May 1976.

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Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames 12:00 am, 6th May 1976

asked the Prime Minister whether he will place in the Library a copy of his public speech on economic policy at Cardiff on 9th April.

Photo of Mr Wyn Roberts Mr Wyn Roberts , Conway

asked the Prime Minister if he will place in the Library a copy of his public speech on economic policy at Cardiff on 9th April.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Has the Prime Minister studied the article by his son-in-law in this morning's edition of The Times, in which he states that whatever the short-term advantages of the Government's package, in the longer term there is no hope of reconciling full employment with stable prices unless the Government cut public spending by £3,000 million this year? As the Prime Minister presumably would not accuse his own son-in-law of lack of patriotism, will he at least clearly understand why the rapture on the Opposition side of the House is so modified?

Photo of Mr James Callaghan Mr James Callaghan The Prime Minister, Leader of the Labour Party, Member, Labour Party National Executive Committee

The Government's views on the question of public expenditure are well known. Clearly public expenditure must be kept within bounds—as we have done by our recent decisions. There is a question that appeals to all of us on the Government side of the House—and, I hope, to some on the Opposition side—namely, that there must be priorities in public expenditure. That is what we are actively endeavouring to ensure in the policies that we are following.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Haringey Tottenham

Will my right hon. Friend reconsider the statement that he has just made—that public expenditure must remain within bounds? What on earth does he mean by that, when the country is now faced with mounting unemployment and we all know that the only way in which the Government will get a quick return to a full employment strategy is by making much more of our public resources available for this purpose?

Photo of Mr Wyn Roberts Mr Wyn Roberts , Conway

As the Prime Minister has referred to the trade unions' co-operative attitude over pay policy, does he agree that the current pay settlement is at risk while the Government are continuing to borrow £1 out of every £5 that they spend.

Photo of Mr James Callaghan Mr James Callaghan The Prime Minister, Leader of the Labour Party, Member, Labour Party National Executive Committee

No, Sir. I do not think that that analysis is correct, either. I look to neither the extreme Right nor the extreme Left in order to get a fair appreciation of these matters. What is happening at present is that Government expenditure, which is, of course, to a large extent—

Photo of Mr James Callaghan Mr James Callaghan The Prime Minister, Leader of the Labour Party, Member, Labour Party National Executive Committee

That was not quite what I was about to say. I was about to say that it is based on the need to provide the necessary social infrastructure upon which our industrial system can depend. Because of that, I think it would be foolish to talk about large-scale cuts in public expenditure. What is much more important is that we should increase the rate of gross domestic production so that we can finance these needs out of the increase.

Photo of Mr Doug Hoyle Mr Doug Hoyle , Nelson and Colne

Does my right hon. Friend agree that when he is considering economic policy—and much has been said this week about the TUC and its responsibilities—he ought also to take into account the demands of the TUC for selective import controls, which would give a boost to employment in Britain?

Photo of Mr James Callaghan Mr James Callaghan The Prime Minister, Leader of the Labour Party, Member, Labour Party National Executive Committee

I have discovered in about six weeks—or is it five weeks?—that there is no limit to the number of repetitive replies that a Prime Minister is expected to make.

Photo of Mr Doug Hoyle Mr Doug Hoyle , Nelson and Colne

I am talking about action.

Photo of Mr James Callaghan Mr James Callaghan The Prime Minister, Leader of the Labour Party, Member, Labour Party National Executive Committee

I shall try once again. The Government have no ideological objection to selective import controls if they will rescue an industry from a situation in which it would be closed down, when in other circumstances it could be viable. However, in the case of general import controls, to which my hon. Friend did not refer, we do not believe that this is the best way to expand world trade, especially as Britain is such a large trader.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher Leader of Her Majesty's Official Opposition, Leader of the Conservative Party

Is the Prime Minister aware that we welcome the fact that both he and the TUC have now recognised that the economic policies on which he fought the last two General Elections have proved disastrous for Britain? When will he learn the second lesson of the last two years—that borrowing must be cut and incentives must be restored if we are to stop getting poorer and start getting richer?

Photo of Mr James Callaghan Mr James Callaghan The Prime Minister, Leader of the Labour Party, Member, Labour Party National Executive Committee

I find those remarks a little hard to take, when I remember that we came to power in the middle of a three-clay working week, which was brought about by the total incapacity of the Conservative Party to understand how industrial relations in Britain should be run, although the Conservatives were warned time after time, both publicly and privately, of their folly and of the catastrophe to which their policies would lead them. We reversed that policy. That is why, for two years running, we have secured the strongest bastion of all against inflation—that is a voluntary pay policy. [Interruption.] The House has got very bad tempered since the days when I used to listen to replies. I do not complain, but I must say that I should have thought that on the whole it was better to listen to answers.

In conclusion, I want to say that the overcoming of inflation is a national interest, and that it is something in which, now and again, I look to the Leader of the Opposition to support me.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher Leader of Her Majesty's Official Opposition, Leader of the Conservative Party

If the Prime Minister is so complacent, will he take the advice of his right hon. Friend the Leader of the House and name the day for a General Election now? June is a very good month for the Tories, as doubtless he will recollect.

Photo of Mr James Callaghan Mr James Callaghan The Prime Minister, Leader of the Labour Party, Member, Labour Party National Executive Committee

I can well understand that the Leader of the Opposition prefers to divert attention from the reality of the situation. This country has this week won a battle against inflation, but we have not yet won the war. I hope that the right hon. Lady will cease to think about General Elections until that war is won.

Later

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

On a point of order, Mr. Speaker. I seek your guidance. The hon. Member for Kingston-upon-Thames (Mr. Lamont), in his supplementary question, referred to my right hon. Friend's relative. I hope that that habit will be deplored. Most hon. Members have relatives who play independent rôles in public life. I suggest that it is an infringement of their liberty, as well as of ours, to refer to them. If this habit is not against the rules of the House, it is certainly to be deplored and, I hope, avoided.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

I am obliged to the hon. Gentleman for raising this matter. It is not the normal custom for us to refer to each other's families here—and it is just as well.