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Her Majesty's Government (Opposition Motion)

Part of the debate – in the House of Commons at 12:00 am on 9th June 1976.

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Photo of Mr James Callaghan Mr James Callaghan The Prime Minister, Leader of the Labour Party, Member, Labour Party National Executive Committee 12:00 am, 9th June 1976

I heard the right hon. Lady the Member for Finchley (Mrs. Thatcher) say that the motion of no confidence was not lightly put down. I did not hear her move it, and I do not know whether that was a Freudian slip. [Hon. Members: "She did move it."] Very well, she did. At any rate, having heard her interesting speech, I can quite understand why the motion was not lightly put down.

Whatever the right hon. Lady's motives in insisting on this vote of no confidence, with the support of a unanimous Shadow Cabinet—[Interruption]—I shall perhaps return to her motives a little later —the debate gives the Government an opportunity to restate their objectives and their strategy and political intentions. [Interruption.] If Opposition Members will do me the courtesy of listening to what I have to say instead of interrupting every half-sentence, I shall do my best to answer the right hon. Lady. I have said on many occasions, and I apply it to both sides of the House, that sedentary interruptions do nothing but lower the tone of the House. I say that to everybody.

The Government's economic objective is to overcome inflation. Already, thanks to the economic and financial policies of the Government, bolstered as they have been by the pay agreement made by the TUC, inflation has been reduced. The right hon. Lady complained that it was far too high at 18·9 per cent. I agree with her that it is far too high, but this is a rate which will continue to decline further throughout the rest of the year and our intention and belief is that by the end of 1977, if we continue with the pay policy which the TUC is proposing to its conference next week and if the Government continue with their existing policy on fiscal and monetary control, we shall be able to reduce the rate of inflation to a figure which will be comparable with that of our major competitors—France, Germany, the United States and Japan. That is the Government's first and overriding objective, and I believe that it will secure the support of the whole House.

Our second objective is to make inroads into the unacceptably high level of unemployment, which has been partially caused by inflation as well as by the world recession, and to reduce it by 1979 to 3 per cent. Our third objective, an overall objective which was agreed between the CBI, the TUC and the Government last autumn at Chequers, is to achieve a high-output, high-productivity, high-wage economy based on full employment.

Our next objective is to foster export led expansion—an expansion which has already begun—and to ensure that this expansion, together with the domestic expansion which is now on the point of beginning, will have room to go on without being hampered by excessive—I repeat the word "excessive"—public expenditure demands next year. Nor must industrial expansion be fuelled by a return of inflation. We therefore have the objective of increasing industrial efficiency and enabling the wealth-producing manufacturing industry to earn sufficient surplus so that it may invest in the necessary new plant and machinery.

Another important objective, and here I part from the right hon. Lady, is to use public expenditure as a means of increasing real personal freedoms. [HON. MEMBERS: "Gobbledegook."] It is not gobbledegook. The areas I was referring to are areas such as the provision of housing, the provision of educational opportunities, the provision of hospital treatment and proper health facilities and the provision of pensions in order to provide security in old age.

When hon. Members say "Gobbledegook" they tempt me to rehearse my own personal position, which I shall do. I was brought up in a family where, after my father died, we lived in two furnished rooms. That was a denial of freedom. I was unable to go to university because my parents could not pay for it. That was a denial of freedom. There was an occasion when I should have had hospital treatment and could not because we could not afford it. That was a denial of freedom. I was not alone in my generation. I am one of the older Members of the House: the new generation, thank God, has those freedoms. That is what public expenditure is about.

Among our objectives will be the underpinning of the necessary industrial regeneration of British industry. We shall seek co-operation on planning agreements. We shall support the industrial regions and we shall use the National Enterprise Board to assist in this purpose. The right hon. Lady was quite right to mention that, in addition to the economic aspects on which she criticised us, a vote of no confidence in the Government should cover much wider fields. First let me say that among our objectives—I do not necessarily put these in order of importance, although the one I am about to enumerate is very important—is the preserving of the integrity of the United Kingdom whilst ensuring that Scotland and Wales enjoy the devolution for which they ask.

I notice that the Scottish nationalists complain that we have not yet introduced the Bill. Even if we had done so I do not think they would not be voting with us tonight, because there is no prospect of satisfying them. Their ultimate objective is separation, is it not? No Bill which we could introduce would satisfy the Scottish nationalists. For the majority of the people in Scotland, however—and I emphasise the word "majority"—let me assure them that we shall be proceeding with a Bill in the autumn to achieve devolution in the next Session of Parliament. The Scottish nationalists now intend to vote with a Conservative Opposition who say that they intend to vote against any devolution Bill that we introduce. That is a very strange alliance between the do-nothing Tories and the all-or-nothing Scottish nationalists in order to bring down a Labour Government.