This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.
Does the Prime Minister concur with the view that low wages are conducive to increased job opportunities? If she takes that view, could she possibly explain to the House why, in areas with comparatively low wage rates such as the west midlands, the north-east of England, and Scotland—
The hon. Gentleman is aware that, although, alas, it does not apply to Scotland, unemployment is coming down—[HON. MEMBERS: "Oh."] I indicated that a moment ago. Although this month it has not—[Interruption.]
This is partly because Scotland has quite a number of Christmas school leavers. Unemployment is coming down in Wales, the north-west and the west midlands more rapidly than elsewhere. The hon. Gentleman is well aware that there are occasions when jobs are available at lower wages, and if higher wages are asked that leads to the extinction of those jobs and people becoming unemployed. So the price of jobs does matter.
I am relating my question to the direction of Government policy and No. 10's attitude to these matters. If my right hon. Friend has had time to see these remarks, will she remind the Americans that the Europeans know as much if not more about disarmament and arms control?
I am not certain that I am familiar with the remarks. I shall read them with interest and with a view to maintaining a firm alliance between this side and the other side of the Atlantic on arms control matters.
Will the Prime Minister take the opportunity of Question Time to announce that the tax change policies ascribed to her in this morning's newspapers are a falsehood? Because such changes would mean at the very least the doubling of VAT, with devastating consequences on price levels, pensioners, families on low income, employment and industrial costs, will she say that she does not want them?
I read this morning's papers with surprise and with absolutely no knowledge of what would be in them. I point out to the right hon. Gentleman that this Government have brought down income tax from the rates beloved of Labour of 98 per cent. on savings and 83 per cent. on earnings, and at the same time have increased the amount spent on the social services.
Given her astonishment at this morning's news, will the Prime Minister give us an assurance that such ideas will not be visited on us, certainly this side of the general election? We clearly remember, in common with the rest of the country, the undertaking before the last election not to increase VAT by 100 per cent. yet within six weeks of the election she increased VAT by 80 per cent. Despite the fact that she was elected as a tax-cutting Prime Minister she has since increased the tax burden on families by 10 per cent.
I give the right hon. Gentleman the assurance that the Government will continue into the next Parliament with their prudent and cautious financial policy, which has resulted in six years of growth, lower income tax rates, a higher standard of living than we ever had before and a higher standard of social services. I hope to be at this Dispatch Box in four or five years' time making the same point.
The Prime Minister will not be doing any of that, not least because she is "high-taxer Thatcher."
That is an absurd comment coming from a supporter of a Government who loved having a tax of 98 per cent. on savings, who loved to decimate the savings of pensioners by high inflation and who loved having tax on earnings of 83 per cent. and put income tax rates up to 35p in the pound. In fact, since 1979, income tax has been cut by £8 billion, the equivalent of £7 per week for the average family.
Referring to the pledges at the last election, does my right hon. Friend recall that our party gave a pledge to pensioners to keep the pension ahead of inflation, which pledge has been kept? Is the House aware that there are now more than 1 million additional state pensioners? Does my right hon. Friend agree that inflated promises will be no guarantee to future pensioners? Does she further agree with me that pensioners would be absolutely right to fear the possibility of a Government coming in who could not control inflation and could not keep pensions ahead of inflation?
My hon. Friend is absolutely right. This Government's policies have led to six years' growth, to cutting taxes and to paying pensions, as my hon. Friend said, to 1 million more pensioners than there were when we came in. Our policies have all along protected savings and the value of pensions. It is an excellent record and the Labour party hates it.
In view of the fact that, since 1980, this country has lost in scientists, engineers and technologists on average 1,000 people a year to the United States of America, how does the Prime Minister justify the UGC cuts in the universities, and especially the cuts at the London Business School and the Manchester Business School at a time when practically everyone thinks there should be increased investment in management education?
In view of the first part of the right hon. Gentleman's question to the effect that there have been some losses of scientists, engineers and technologists, it seems to me that he is asking for lower taxation of the top income groups to prevent that drain. We are absolutely delighted to have that endorsement from him. There is something in what he says. With regard to university funding, the recurrent grant to the universities has increased overall by 7 per cent. between 1986–87 and 1987–88. That is a very generous increase. Further, £150 million will he allocated to universities later in the year. The University Grants Committee decides the allocations on the basis of student load and selective judgment of research quality at universities. Because of that, some universities inevitably did better than others.
—manage the security aspects of the BBC? Does she further agree, therefore, that it is essential that the BBC board of governors, which is meeting today to draw up a shortlist of candidates for the director generalship, should choose as candidates only those who have the independence and the Herculean qualities to enable the Augean stables at the BBC to be cleaned up, and finally—
As my hon. Friend is aware, the choice of a director general is a matter for the chairman and governors of the BBC. I am sure that his remarks will have been noted in the appropriate quarters.
Will the Prime Minister reconsider the answers that she gives in the House and outside about the increase in real jobs since the slump bottomed in June 1983? In view of the statistical evidence now available, does she recognise that since June 1983 there has been a reduction of 350,000 jobs in manufacturing and that in terms of real jobs, which means full-time employment, the numbers on a comparable basis with June 1983 are exactly the same now as they were then, at just over 21 million?
The hon. Gentleman concentrates his remarks upon manufacturing industry. Jobs in manufacturing industry have been down since the 1960s for reasons that he well knows—because of the technological revolution, and because of the investment which he always urges us to undertake. Since 1983, taking supluses into account as well, 1 million new jobs have been created. That is very good news. Jobs in the service sector are equally important as those in the manufacturing sector. Indeed, they depend upon one another.
Is the Prime Minister aware that there appears to be no relationship between low wages and employment, as epitomised in the south-west of England? [Interruption.] Is she further aware that unemployment in Devon and Cornwall is higher than the national average, while wages and earnings are far below the national average, and that a solution to that problem would be the acceptance by the Government tomorrow of my Bill to establish a south-west development agency? Despite the opposition to that Bill of her hon. Friends who represent that area, the Liberals and the SDP, will the Government give the Bill a fair wind?
I thought for one moment that the hon. Gentleman was actually going to represent his constituents. I was disappointed. I ask the hon. Gentleman to look back at what a Labour Chancellor of the Exchequer said. He will find that his Chancellor pointed out that there was a relationship between wages and jobs and sometimes, when wages were too high, it meant that jobs were stillborn.