PRIME MINISTER
Engagements
Q1. Mr. Needham
asked the Prime Minister if she will list her official engagements for Tuesday 9 June.
The Prime Minister (Mrs. Margaret Thatcher)
This morning I had meetings with ministerial colleagues and others. I was also present when Her Majesty the Queen welcomed King Khalid of Saudi Arabia. In addition to my duties in the House, I shall be having further meetings later today, and this evening I shall attend a State banquet given by the Queen in honour of King Khalid.
Mr. Needham
Is my right hon. Friend aware that many, if not most, building societies insist that house insurances are channelled through them? Is she further aware that those insurance rates are often 50 per cent. higher than rates in the open market and that such societies take commission premiums of 35 per cent? Does not she think that that is an absolute scandal that should be dealt with?
The Prime Minister
I was aware that the point raised by my hon. Friend had been a problem. I had thought that the arrangements made by the Director General of Fair Trading in 1978 had dealt with it. Clearly they have not. Therefore, the Director General of Fair Trading is now considering whether further action needs to be taken.
Mr. Foot
Will the right hon. Lady take this opportunity to express what I am sure must be the feelings of the House about the serious implications of the Israeli raid on Iraq? Does not she think that, apart from anything else, that makes even more urgent the necessity to take action on the non-proliferation treaty? Will she tell the House and the country what steps she and the Government have taken and are taking in the light of that latest, terrible, event so that something is done about it?
The Prime Minister
The Government have already made plain their view that that armed attack in such circumstances cannot be justified. It represents a grave [column 262]breach of international law. Had there been such an attack on Israel, I would have similarly condemned it. Such an attack as we have seen will add to the increasing tension in the area. With regard to the non-proliferation agreement, Iraq was a signatory to that agreement. The installation had been inspected as recently as January.
Mr. Foot
What steps have the Government already taken to try properly to implement the non-proliferation treaty? Can she tell us how many countries now have the ability to manufacture nuclear weapons, how many are open to inspection by the international authority and whether, in the light of this event, she and her Government will take fresh, urgent steps to try to ensure that that treaty operates properly?
The Prime Minister
The Government firmly support the non-proliferation treaty and wish that more countries would become signatories. It so happens that Iraq was such a signatory. We do not believe that she had the capacity to manufacture fissile material for nuclear weapons. In any event, that installation had recently been inspected by the international agency.
Mr. Walters
Bearing in mind that Iraq had signed the non-proliferation treaty, is not the unprovoked attack absolutely intolerable? Does my right hon. Friend agree that the time has come when Mr. Begin 's international gangsterism should be stopped, before his actions threaten peace not only in the Middle East but in the world?
The Prime Minister
We have, indeed, condemned the attack, which is a grave breach of international law. Any such act must be condemned wheresoever it occurs and by whomsoever it is carried out.
Mr. David Steel
Is the incident not a lesson that Western democracies should be less cavalier in exporting nuclear technology? For example, are the Prime Minister and the Government concerned about the report that South Africa is asking the United States for supplies of enriched uranium? Is there not urgent need to press for greater inspection and control through the International Atomic Energy Authority?
The Prime Minister
Yes. A tragedy of this case was that Iraq was a signatory to the agreement and had been inspected, but neither of those facts protected her. It was an unprovoked attack, which we must condemn. Just because a country is trying to manufacture energy from nuclear sources, it must not be believed that she is doing something totally wrong.
Q2. Mr. Jessel
asked the Prime Minister if she will list her official engagements for 9 June.
The Prime Minister
I refer my hon. Friend to the reply which I gave some moments ago.
Mr. Jessel
Is my right hon. Friend aware of the widespread support in the country and on the Government Benches for the Government's policy on Civil Service pay? As they cannot increase the offer beyond 7 per cent., is not continued industrial action futile? Will she take the opportunity to praise the majority of civil servants who continue to carry on with their duties?
The Prime Minister
I gladly take advantage of my hon. Friend's offer and praise the vast majority of civil servants who have carried on with their duties in the best traditions of the service. The Government believe that [column 263]under present circumstances the 7 per cent. pay offer is fair and reasonable. As a number of civil servants are concerned about future pay arrangements, the Government have agreed to negotiate next year before a cash limit is fixed, and are also anxious to have in operation as soon as possible a totally independent inquiry about future Civil Service pay arrangements.
Mr. Speaker
Mr. David Steel—sorry, Mr. David Owen.
Dr. Owen
I am glad to have such official endorsement for the alliance.
Is the Prime Minister aware that the signatories to the non-proliferation treaty, including the nuclear weapons States, pledged themselves to curb the growth of nuclear arms, and that the other signatories are expecting the nuclear weapons States to demonstrate their resolve? Will she reassess her animosity to a comprehensive test ban and take a much more positive role in negotiations with the Soviet Union and the United States to ensure that the comprehensive test ban treaty, which was very nearly successful in 1978, is now endorsed?
The Prime Minister
The United Kingdom adheres firmly to the nuclear non-proliferation treaty. As the right hon. Gentleman knows, the comprehensive test ban treaty was a long way from being signed, as far as the United Kingdom was concerned, because of the tremendous number of places that the Soviet Union was insisting on to monitor the treaty.
Q3. Mr. Sainsbury
asked the Prime Minister whether she will list her official engagements for Tuesday 9 June.
The Prime Minister
I refer my hon. Friend to the reply which I gave some moments ago.
Mr. Sainsbury
Will my right hon. Friend find time today to study the achievements of our exporting industries? Does she accept that those achievements are partly attribute to our willingness to promote the greatest possible freedom in international trade? Does she further accept that protection is not only always damaging to the consumer but, because it reduces the efficiency of British industry, usually also destroys jobs?
The Prime Minister
I totally agree that an exporting country such as ours needs freedom in international trade. Where we do not find it, we should attempt to open it up. I saw a Japanese representative this morning, and was the first to tell him that we should like as free access to the Japanese market as Japan has to our market. Our export record is excellent. Japan exports only 12 per cent. of her gross national product, France 24 per cent. and West Germany 28 per cent. For Britain the figure is 33 per cent.
Mr. Greville Janner
Reverting to the sad state of the Middle East, would not Iraq have had a nuclear weapon potential that it would have used against Israel?
[column 264]Mr. Faulds
Israel has, and she has not signed the treaty.
Mr. Speaker
Order. The hon. and learned Gentleman must be allowed to put his question.
Mr. Janner
Does the Prime Minister not feel a certain sense of relief that the Iraqi regime will not have a nuclear weapon potential for some further time to come?
The Prime Minister
Had there been an attack on Israel of the kind that there has just been on Iraq, I should totally and utterly have condemned it. I, therefore, totally and utterly condemn the attack on Iraq.
Sir Hugh Fraser
Although she condemns the use of force, does my right hon. Friend recall that over the past year many hon. Members have drawn attention to the danger and threat to peace of the previous French Government's export to Iraq of enhanced uranium, which has now come about? Although not condoning the use of force, will the Foreign Secretary take the opportunity to prevent, as Anthony Eden did, the sale of offensive weapons to an area that is already vastly over-supplied with such weapons?
The Prime Minister
I join my right hon. Friend in condemning the use of force, which will only add to the tensions in an area that is already unstable. The uranium supplied to Iraq was a high grade of enriched uranium necessary for the research reactor constructed. I agree that we should be very careful over the countries to which we supply such uranium.
Q4. Mr. Newens
asked the Prime Minister if she will list her official engagements for Tuesday 9 June.
The Prime Minister
I refer the hon. Gentleman to the reply which I gave some moments ago.
Mr. Newens
Has the Prime Minister seen the reports that raw material prices are rising rapidly, thus jeopardising the possibility of achieving her objectives on inflation? In view of escalating unemployment and all the other economic problems, what does she see as the successes of her economic policies, and how have they benefited people other than the wealthy minority?
The Prime Minister
I note that raw material prices have risen. Anything invoiced in dollars is bound to rise. I did not know that the hon. Gentleman was a great supporter of a high pound-dollar exchange rate. What a pity he did not appreciate it while we had it and support the lower raw material prices that it brought for the country.
With regard to economic policies, it makes it even more important that this country should be competitive both to get orders over here in competition with goods from overseas and orders overseas in competition with other countries which are themselves highly efficient and competitive.
[column 265]Mr. Tapsell
Would my right hon. Friend agree that, at present, it is interest rate factors which are primarily influencing the world's currency markets, rather than fundamental economic considerations, so that there is an exceptional opportunity now for constructive international co-operation by Governments in the economic sphere, if they are prepared to seize it?
The Prime Minister
High dollar interest rates have undoubtedly contributed to the deterioration in value of all [column 266]European currencies against the dollar, but the relationship has by no means been a simple one. As we know, there was a time when our pound rode very high on international markets, although there was a very substantial gap between the United States' interest rates and ours. Therefore, although I agree in general that high dollar interest rates are having an effect upon European currencies, the relationship is not a straightforward or simple one.