PRIME MINISTER
Engagements
Q1. Mr. Foulkes
asked the Prime Minister if she will list her official engagements for Tuesday 8 March.
The Prime Minister (Mrs. Margaret Thatcher)
This morning I had meetings with ministerial colleagues and others, including one with the Deputy Prime Minister of Hungary. I also unveiled a sculpture of my noble Friend the Lord Home in another place. In addition to my duties in the House I shall be having further meetings later today.
Mr. Foulkes
Will the Prime Minister confirm that her vacillation over the appointment of a new chairman for the coal board is because Lazard Freàres is demanding yet [column 702]another transfer fee of £1.8 million, a sum it would take a miner 250 years to earn? What a reflection on British management that the Government think that the only person capable of running the coal board is this superannuated superman from the United States.
The Prime Minister
I have nothing further to add to what I said last week about the chairmanship of the National Coal Board. I remind the hon. Gentleman that the gentleman of whom he is speaking is a distinguished Scotsman who has done well for the coal industry.
Sir Neil Marten
Has the Prime Minister read, and I see no reason why she should have, the speech of Mr. Gaston Thorn, President of the European Commission, on 8 February, in which he said that it was time to shelve the Luxembourg compromise? While I do not necessarily expect my right hon. Friend to reply straight away, could she study the speech and let me know what she thinks?
The Prime Minister
My right hon. Friend's surmise that I have not read that speech by Mr. Thorn, is correct, although I seem to have read quite a number. I do not believe that the Luxembourg compromise should be shelved.
Mr. David Steel
Is the Prime Minister aware that we all hope that the miners will not be provoked into voting for strike action? Is she also aware that despite the Gentleman's considerable ability, what the coal board needs is not a temporary chairman but somebody who has a long-term commitment to the future of the industry and is involved in it?
The Prime Minister
The gentleman to whom I believe the right hon. Member refers has an excellent record in the coal industry——
Mr. Foulkes
Rubbish.
The Prime Minister
—which I described last week. One is not thinking in terms of a short-term chairman.
Mr. James Callaghan
I ask the Prime Minister a simple statistical question. Will she confirm that the Chancellor of the Exchequer will need to reduce the standard rate of income tax by 9p in the pound in the Budget next week if the real level of total taxation on the average family is to be reduced to the point at which it stood when I left office?
The Prime Minister
That figure, which I understand has been given in a parliamentary answer, takes no account whatsoever of increases in earnings over the period. If those are taken into account, even for those at lower income levels, real take-home pay is now higher than it was in 1978–79.
Mr. Myles
Is my right hon. Friend aware that the distilleries in my constituency could substantially cut their energy costs by 25 per cent. and get a 25 per cent. grant for doing so, but they do not do it because of Scargillism?
The Prime Minister
I hope that the distilleries in my hon. Friend's constituency will continue to flourish and that they will choose the fuel that makes their costs most efficient.
Mr. Foot
As we are approaching Budget time, will the Prime Minister take the opportunity to answer the question of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)? Will she tell us how much extra [column 703]revenue in 1982–83, compared with 1978–79, in tax and national insurance the Government are receiving as a result of the tax changes introduced by the Government?
The Prime Minister
I cannot give precise figures, nor would the right hon. Gentleman expect me to. He can find them perfectly well through tabling written questions, so that the figures can be absolutely precise. The yield in income tax plus national insurance contributions is greater. If his promises to the old-age pensioners were to be added, the cost in income tax and national insurance contributions would be enormous. Although he has been careful about the costs of his programme, in so far as it is equal to what the pensioners asked for it would cost an extra £17.5 billion.
Mr. Foot
Is the right hon. Lady aware that the answer to the question, which she said she could not give, is £9 billion a year? [Hon. Members: “Why ask?” ] That is the answer to the question. That figure confirms my right hon. Friend's figure. Will the right hon. Lady confirm, a week before the Budget, that her Government have raised £9 billion more in taxation and national insurance than did my right hon. Friend in his last year of office?
The Prime Minister
Yes, but of course pensions have gone up considerably in real terms. They have gone up more than the increase in the cost of living. Is the right hon. Gentleman suggesting that in order to cut the national insurance contribution one should cut old-age pensions?
Q2. Mr. Cunliffe
asked the Prime Minister if she will list her official engagements for 8 March.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Cunliffe
Has the right hon. Lady seen the report by the independent low-pay unit, which discloses that poor families in Britain are taxed twice as heavily as similar families in any other country in Europe? Is she aware that the report shows that since the Government came into office the number of families in the poverty trap has doubled? Is she not ashamed of that state of affairs? Does it not amply prove that her Government's suicidal fiscal policies have militated against the interests of the poor sections of the community by rewarding the richer sections, which her party represents?
The Prime Minister
The hon. Gentleman is right, I believe, in one thing, which is that taxation starts at lower levels of income here than overseas, and that it starts at a higher level of standard rate of income tax. What the hon. Gentleman has ignored is that the United Kingdom has a much longer basic rate of tax compared with other EC countries. In other words, that basic rate of tax goes on for a longer time before it is increased than in other countries. The hon. Gentleman also ignores the fact that, even for those at lower income levels, real take-home pay is now higher than it was during the last year of the Labour Government.
Q3. Mr. Pawsey
asked the Prime Minister if she will list her official engagements for 8 March.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Pawsey
Is my right hon. Friend aware that since she came to office the number of owner-occupiers has increased by over 1 million? Does she agree that lowering [column 704]interest rates will accelerate that process? Does she also agree that it is far better that homes should be owned by individuals than by the state?
The Prime Minister
Yes, Sir. Thanks to the Government's policies a record number of dwellings are in owner-occupation. If a number of councils were quicker in replying to applications to purchase council houses, the number would be greater. It is also true that there has been a considerable increase in home improvement grants, particularly last year. The figures have almost reached those of 1972–73.
Q4. Mr. Norman Atkinson
asked the Prime Minister if she will list her official engagements for Tuesday 8 March.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Atkinson
Now that it has been authentically leaked that the National Health Service's policy study group is considering the possibility of recommending raising prescription charges to £2 per item, will the Prime Minister assure the House that never, so long as she is Prime Minister, will she allow prescription charges to rise to 10 times the amount that they were when she came to office?
The Prime Minister
From time to time prescription charges have to be raised. The hon. Gentleman will be aware of the number of exemptions that there are from prescription charges, including the elderly and children. The very considerable number of exemptions means that those who really need prescriptions because they are chronically sick get them free.
Inflation
Q5. Mr. Kenneth Carlisle
asked the Prime Minister whether she will make a statement on the current rate of inflation.
The Prime Minister
Inflation at 4.9 per cent. is now at its lowest level since early 1970.
Mr. Carlisle
Does my right hon. Friend agree that it is good news for this country that the rate of inflation is at its lowest for 13 years and is at half the rate it was when the Government took office? Is it not also good news for the pensioners and those on fixed incomes, because the value of their savings will be protected? Will it not boost jobs, because interest rates will follow inflation and give confidence to business to plan for the future?
The Prime Minister
Yes, Sir, it is very good news that inflation is down as low as it is. We still have to get it down further so that we can compete with some of our most efficient competitors. I agree with my hon. Friend that that will have a good effect on interest rates and therefore on confidence for the future. I also especially agree with my hon. Friend that savings will keep their value. Had we not had the level of inflation that we have had over the past 20 years, many pensioners would have savings that would be worth more in real terms today than they are. The money that they saved many years ago would still be able to buy goods to the same value as when the money was earned.
Mr. John Morris
Has the Prime Minister given further thought to the dual control of cruise missiles——
[column 705]Mr. Speaker
Order. This is not an open question. It is about the current rate of inflation.
Mr. Woodall
Has the Prime Minister received a letter from Mr. James Nicolson of Tadcaster, as most right hon. and hon. Members have, about his mother's intention to put up for auction her late husband's Victoria Cross in order to——
Mr. Speaker
Order. We give a good run on open questions, but this one must be on inflation.
Mr. Woodall
On pensions, Sir.
Mr. Speaker
No, it is on inflation.
Mr. Woodall
On a point of order, Mr. Speaker. It is the same intention. This arises because of inflation.
Mr. Speaker
Order. The hon. Gentleman is quite right now.
[column 706]Mr. Woodall
Mr. Nicolson's mother wants to draw the Prime Minister's attention to the circumstances of pre-1974 war widows. Will the Prime Minister please give an unequivocal assurance that the anomalies that apply to pre-1974 war widows because of inflation will be removed as soon as possible?
The Prime Minister
The Government have reduced inflation to a lower level than that to which the Labour Government reduced it. Moreover, the Government have been especially meticulous to increase war widows' pensions way beyond others and to give extra age allowances for war widows' pensions. Further, war widows' pensions have been completely relieved of tax. I am grateful to the hon. Gentleman for allowing me to draw the House's attention to the Government's excellent record on war widows' pensions.