PRIME MINISTER
Engagements
Q1. Mr. Barry Jones
asked the Prime Minister if she will list her official engagements for 26 March.
The Prime Minister (Mrs. Margaret Thatcher)
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. This evening I shall give a dinner for the Commonwealth Heads of Government and others who will be attending tomorrow's special meeting of the Privy Council.
Mr. Jones
What urgent action will the Prime Minister take to push new industries into areas of steel and textile closures, which are suffering from heavy unemployment? Is she taking an interest in the Nissan-Datsun project? Could it not be located in an area of heavy unemployment?
The Prime Minister
It would be wrong for us to attempt to influence the location of the Nissan project, assuming that it comes here after the feasibility study is completed. We hope that it will go to a development area, but there are rival claims and the decision must remain with Nissan.
Mr. Marlow
Is my right hon. Friend aware that from today there are three parties of the Left, equally divided; one between the Solidarity and Tribune groups, one between the hon. Member for Rochdale (Mr. Smith) and the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), and one with the right hon. Member for Stockton (Mr. Rodgers), who, in Northamptonshire last week, was in a stand-up fight with other members of the group, which cannot even agree at this stage? Does she agree that there is only one party of the centre with the leadership, unity, determination and policies to solve the very difficult problems that face the country?
The Prime Minister
There may be three parties, but they are all divisions of Socialism.
Mr. Foot
Will the right hon. Lady accept that, if she believes that the so-called Social Democratic Party has much to do with Socialism, she is the only one in the kingdom who does so? May I ask her a serious question? Will she explain what is meant by the “natural rate of [column 1074]unemployment” that Treasury spokesmen mentioned to a Select Committee? Is it not wrong to introduce the idea that there is a natural rate of unemployment of about 5 per cent.? Even though her Government have increased unemployment by 1 million, does she agree that there is no reason for accepting a permanent pool of unemployment at that level?
The Prime Minister
It is not a Treasury concept. It is an academic concept, invented some time ago. I have never agreed with it or thought it sound. The Treasury was asked to make assumptions, and it gave the figures that it was required to give, but that does not mean that the Treasury agrees with the concept.
Mr. Foot
In that case, will the right hon. Lady give instructions to the Treasury not to present this kind of nonsense to the country as it can give rise to very wide misconceptions? Will she issue those instructions today?
The Prime Minister
The request came from the Treasury and Civil Service Select Committee. Surely the right hon. Gentleman is not asking me to tell the Treasury to issue instructions to the Treasury and Civil Service Select Committee about what it may or may not ask.
Mr. Foot
Will the right hon. Lady now tell us who invented the phrase the “natural rate of unemployment” ?
The Prime Minister
The phrase was invented by academics. I cannot tell the right hon. Gentleman which academic invented it, but if he goes back to the academic literature on economics for a change he will surely find it.
Dr. Mawhinney
Has my right hon. Friend seen the article in The Times today, which reports that Civil Service union leaders are crowing that, as a result of their damaging action against the rest of the country, they have tripled State borrowing? Will she assure the House that if it is necessary to recoup that extra State borrowing it will be done at the expense of the Civil Service cash limit, and not at the expense of the rest of the people of this country?
The Prime Minister
If we cannot get in all the money that we require, it will, of course, put up State borrowing. In the short term, that could have quite damaging consequences for the rest of industry. I therefore hope that civil servants, who, like most of us in the House, rely on a prosperous industry, will think of that before they continue the strike. The more that civil servants demand over and above the 7 per cent., the less there will be for the capital investment that industry sorely needs.
Mr. Mike Thomas
Far be it from me to intrude on this private quarrel, but will the right hon. Lady ponder on the fact that the emergence of the Social Democratic Party has less to do with her theories of monetarism or the right hon. Gentleman's theories of Socialism than with the future of the country?
The Prime Minister
I recall hearing a comment on the radio this morning about the Social Democratic Party being a new centre party. I heard someone say that such a centre party would be a party with no roots, no principles, no philosophy and no values. That sounded about right, and it was Shirley Williams who said it.
Q2. Mr. Lang
asked the Prime Minister if she will list her official engagements for Thursday 26 March.
The Prime Minister
I refer my hon. Friend to the reply which I gave some moments ago.
[column 1075]Mr. Lang
Will my right hon. Friend find time in her busy day to consider the cost of meeting in full the pay claim of our excellent Civil Service? Does she agree that, at £700 million, it is equivalent to 7p on a point of beer or 20p on a packet of cigarettes, and is more than the people of this country should be asked to pay?
The Prime Minister
To meet the claim in full would cost about £700 million. I think that the figures given by my hon. Friend are about right. It would also put an intolerable increasing burden on the retail price index, and is really out of the question. As I have said before, I hope that civil servants will bear in mind that we rely on industry to finance us and that they will give some thought to those people, some of whom have no jobs, and many of whom have received far less than a 7 per cent. wage increase this year.
Mr. Meacher
Is the Prime Minister aware that the tax burden as a percentage of gross national product was 40 per cent. when the Labour Government left office, that it rose last year to 44½ per cent., and that following the Budget it is officially forecast to rise to 47½ per cent. next year? How is that consistent with the chief pledge by which she got herself elected, namely, to cut taxes?
The Prime Minister
If public expenditure levels were where the hon. Gentleman wishes them to be, the tax burden would be even greater.
Mr. Eggar
In view of the decision today to withdraw the Petroleum and Continental Shelf Bill, will my right hon. Friend confirm that when it is reintroduced it will contain a definite decision to sell the equity in the BNOC, rather than just power to do so?
The Prime Minister
It is not that the Bill has been withdrawn. We do not think that we could necessarily complete it during this parliamentary Session. We shall attempt to pass it as soon as we can. We think that the form in which the Bill is drafted is about right.
Mr. Donald Stewart
How does the Prime Minister expect freedom from strife in the country when the Government have broken a solemn promise made to the Civil Service?
The Prime Minister
I assume that the right hon. Gentleman is referring to the withdrawal for the time being of the pay agreement. Yes, it has been withdrawn. The Labour Government also withdrew it. We have already given civil servants pay increases that mean that this year they are paid 50 per cent. more than two years ago. On top of that, there is a 7 per cent. increase. I think that on any measure of judgment that is good treatment for our public servants.
Mr. Kilfedder
How vehement a protest did the Prime Minister deliver to the Eire Prime Minister when she met him two days ago, following the statement by his Foreign Minister that the Anglo-Eire Study Group would lead to a united Ireland within five to 10 years? Will she suspend those talks until we have a debate in the House, when she can make a full and detailed statement on what was agreed between her and Mr. Haughey?
The Prime Minister
I made it perfectly clear that we disagreed totally with the relevant interview and were very distressed that it had occurred and that the former understanding that there should be no discussion of the [column 1076]constitutional status of Northern Ireland was the one on which we were proceeding, and shall continue to proceed, and which stands.
Mr. Flannery
Will the Prime Minister turn her mind for a moment away from the fairy tales of Milton Friedman to the serious situation in El Salvador? Although Conservative Members seem to think that this is a joke, will she use her waning influence with President Reagan, who is twirling his atomic pistols in front of the world, and tell him that the last time that the Americans intervened in a small country, by the name of Vietnam, they got a bloody nose, and that the whole world hopes that they will not intervene in El Salvador but will leave the people of that country to determine their own fate, as they are eminently capable of doing if they are left to their own devices, against the brutal tyranny that exists there at the moment?
The Prime Minister
I do not think that the way in which the hon. Gentleman puts his comments is a classic example of how to win friends or influence anyone.
Q3. Mr. Michael Spicer
asked the Prime Minister if she will list her official engagements for 26 March.
The Prime Minister
I refer my hon. Friend to the reply which I gave some moments ago.
Mr. Spicer
Will my right hon. Friend put the full weight of her authority in office behind the hon. Member for Rochdale (Mr. Smith), who is reported to have said yesterday that he was sickened by the credibility given to the fourth party, and that the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) really ought to do something about it?
The Prime Minister
As the hon. Gentleman to whom my hon. Friend refers is not present—there is just a rather large gap on the Bench—I think that I shall not comment.
Mr. Hooley
As the Treasury, presumably on behalf of the Government, has given evidence to a Select Committee of the House and said that 5 per cent. unemployment is regarded as normal, why has the Treasury, in preparing the public expenditure document—again, presumably on behalf of the Government—put in a figure of 2.7 million for unemployment, which is 10 per cent. in 1982–83 and 1983–84?
The Prime Minister
What the hon. Gentleman says is just not true. The Treasury was asked to give figures on certain assumptions on certain concepts. It neither agreed nor disagreed with those concepts, but it responded by trying to give the figures which, on those parameters, would be fed into the Treasury model.
Mr. McQuarrie
Has my right hon. Friend's attention been drawn to the decision by certain petrol companies to increase pump prices by 2p and 4p? In view of the devastating effect that my right hon. and learned Friend's Budget had on rural areas, does she accept that this latest increase is to be deplored?
The Prime Minister
The Budget would have contained far fewer increases in indirect taxes had we agreed much lower public spending. That is a fundamental fact. Secondly, I understand why my hon. Friend does not wish there to any any further increase in petrol prices, but [column 1077]a considerable price war is going on between the petrol companies, and it seems that people will not have to pay the full increases.