Prime Minister
Engagements
Q1. Mr. Arthur Davidson
asked the Prime Minister if she will list her official engagements for 18 December.
The Prime Minister (Mrs. Margaret Thatcher)
This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be having further meetings with ministerial colleagues and others.
Mr. Davidson
Since monetary policy is clearly in ruins, as the Treasury Select Committee points out today, why is the right hon. Lady taking on, at £50,000 a year, one of the most extreme monetarists to advise her on economic policy? Does this mean that we are to have an even bigger and more disastrous dose of monetarism in the years to come?
The Prime Minister
If the hon. and learned Gentleman's supposition, with which I do not wholly agree, is that the monetary policy is in ruins, it seems to me to be very advisable to take on a person who is an expert in putting it right again.
Mr. Hill
Is not my right hon. Friend as concerned as I am that, as First Lord of the Treasury, she is perhaps presiding over an era in which the Department of Industry, in particular, is not supporting her monetary stringency? As a result of the Industry Bill, money will be pouring out. On the one hand, we are asking local government to control its expenditure. On the other hand, we are asking, in the Industry Bill, for the expenditure of another £4 billion for the National Enterprise Board.
[column 547]The Prime Minister
I can quite see my hon. Friend's point that a large amount of money is being poured out to help the nationalised industries. That money has to be found by an efficient private sector. Nationalised industries are not nearly such a good bargain for the consumer as the private sector, and the sooner we can reduce the monopoly and increase competition, the better it will be for the people of this country.
Mr. Foot
Does not the right hon. Lady think that the Select Committee's report describes an extremely serious situation, especially when it underlines the collapse of manufacturing output in the last year and the projected further decline of manufacturing output in the coming year, which it describes as being as bad a collapse as anything we have known in this country since 1929? For how long does she think that this will go on?
The Prime Minister
If we had not taken so much money out of the private sector for the public sector, private manufacturing industry would be in a much healthier position than it is.
Mr. Foot
We know that the right hon. Lady and a few of her supporters do not want to discuss the Select Committee's report, but the rest of the country will want to discuss it. Is she aware that after the Chancellor of the Exchequer had appeared before the Committee many of her distinguished colleagues who were on that Committee signed the report saying that they had not the foggiest notion what the right hon. and learned Gentleman meant?
The Prime Minister
I am very well aware that the Select Committee's report was highly critical of the amount of public spending above the forecast expenditure, of the amount of public borrowing and of the interest rates to which that led. The remedy for that is precisely what the right hon. Gentleman rejects.
Mr. Foot
rose——
Hon. Members
Sit down.
Mr. Foot
Will the right hon. Lady understand that, especially in the face of reports of this nature signed by many of her hon. Friends, the House and the country will not be fobbed off much longer with such answers by her on these questions?
The Prime Minister
Nor will the House be fobbed off with the totally inadequate questioning by the right hon. Gentleman.
Mr. Alan Clark
During the day, will my right hon. Friend devote her mind to the question of the economies which are being forced on the Ministry of Defence and their industrial implications? Does she agree that the net effect of some of these economies now appears to be that of finding and dispersing the research and development teams at the sharp end of British industry and giving the money in subsidies to British Rail and British Leyland?
The Prime Minister
There is certainly quite a lot of money going in subsidies to British Leyland, British Steel and British Rail. Last year there was an increase in real terms of 3 per cent. in defence expenditure. This year it will be at least 2½ per cent., and it may reach 3 per cent. We must look to the distribution of that extra expenditure among the many areas in defence—pay, numbers and equipment. I understand that my hon. Friend wants a good deal of it to be spent on equipment.
[column 548]Mr. David Steel
Is the Prime Minister confirming the reports of her new adviser at £50,000 a year? If so, is there any precedent for doubling the salary of a civil servant out of party funds? Is she aware that there is good economic advice available free from the people who are trying to run industry in this country against the policies of the Government?
The Prime Minister
The salary of Mr. Alan Walters will be that of a second permanent secretary.
Mr. William Hamilton
Topped up.
The Prime Minister
Topped up privately. There is nothing unusual about the salary of a civil servant being topped up privately to a far greater extent than is being done in this case. It so happens that from public funds Mr. Alan Walters will be paid £89 a year more than the Leader of the Opposition. I know which I think is the best bargain.
Q2. Mr. Barry Jones
asked the Prime Minister what are her official engagements for 18 December.
The Prime Minister
I refer the hon. Member to the reply which I gave some time ago.
Mr. Jones
In order to help the British Steel Corporation, will the Prime Minister sanction energy subsidies and urge British car makers to purchase British-made steel strip? Will the right hon. Lady carefully scrutinise the proposed 1,000 extra redundancies at the BSC works at Shotton, which has already suffered 7,000 job losses this year? Does she accept that on this issue constituents feel that they have been betrayed? We have already made our sacrifice. In Flint, unemployment now stands at 32 per cent.
The Prime Minister
I quite understand the hon. Gentleman's concern. We made Shotton a special development area and allocated an extra £20 million to the Welsh Development Agency to spend on the Shotton area during the next three years so that extra jobs might be brought in to replace those which have gone.
One of the difficulties about electricity prices is that 50 per cent. of the cost of electricity comes from the price of coal—another monopoly. Coal could in many cases be obtained more cheaply if it were imported. We are not suggesting that it should all be imported. But the sooner productivity in the coal industry goes up, the sooner unit costs of coal will come down and the sooner electricity will be more competitive.
I entirely agree that if more people bought British cars they would at the same time be helping to purchase British steel.
Mr. David Atkinson
Does my right hon. Friend accept the strong possibility that, in the event of suicide by one of the IRA hunger strikers, all hell may break loose in both Ulster and elsewhere in the United Kingdom? Will she assure the House that all possible contingency plans have been made, in particular those appertaining to the security of the Palace of Westminster?
The Prime Minister
Automatically, all possible contingency plans have been made in so far as events can be foreseen. I just hope that, while there is still a chance, those on hunger strike may take the course of life rather than the course of death.
Mr. Molyneaux
Is the Prime Minister aware that the people of Northern Ireland have been greatly reassured by [column 549]her refusal to surrender on the Maze prison issue? Is she further aware that her determination will reap rich rewards in security terms in 1981?
The Prime Minister
I believe that will be so. If we were ever to give in—to give political status to people who have committed murder and other terrible crimes—we should put at risk the lives of many innocent men, women and children. That is why we shall never do it. In so far as the hunger strike had that objective, it has totally and utterly failed. We have already gone a very long way on humanitarian grounds with regard to all prisoners in Northern Ireland. We can go no further.
Q3. Mr. Alton
asked the Prime Minister if she will list her official engagements for 18 December.
The Prime Minister
I refer the hon. Member to the reply which I gave some time ago.
Mr. Alton
Has the Prime Minister yet had a chance to read the Shelter report which was published earlier this week? Is she aware that that report states that more than 3 million people in this country are living in bad housing conditions? What hope can she hold out this Christmas to people who are living in homes which have been unimproved, are on the waiting list or are living in overcrowded conditions? Does she accept that no moratorium can be imposed on leaking roofs or rotting joists?
The Prime Minister
Many of us would like to spend more money on improving houses, but it would mean spending less money elsewhere. The hon. Gentleman is always asking for more money to be spent. That can be gained only by printing money, which would be futile and would increase inflation, by taxing more, by putting up rates, by borrowing more or, alternatively, by shifting expenditure from one Department to another.
Mr. Lyell
Does my right hon. Friend agree that, looking ahead to the coming year, if we are to have money available for general spending on capital and investment projects and projects which may assist with unemployment, it is essential that we keep our overall spending under firm control?
The Prime Minister
I entirely agree about overall spending, but it is also important that we distinguish between revenue and capital spending and that we cut down revenue spending to leave sufficient for capital spending, which is, after all, roads, construction and equipment. Opposition Members will not agree to the concept of cutting down revenue spending sufficiently to allow enough capital spending.
Mr. Wigley
Will the Prime Minister find time today to consider the fact that 1981 will be the international year of disabled persons? Can she assure the House that the [column 550]Government will do more than pay lip service to that very noble cause and will bring forward specific proposals to assist disabled people?
The Prime Minister
We have tried to demonstrate how very much we think of that particular cause by, for example, increasing the mobility allowances for the disabled and by doing everything that we can to support Motability, which provides cars for those who could not otherwise have them. I assure the hon. Gentleman that we have the cause very much at heart and in mind.
Mr. Churchill
Bearing in mind the slack in the steel and shipbuilding industries at present and the vast level of taxpayers' support to those industries, is it not highly regrettable that the Royal Navy will not be in a position for the first three years of the lifetime of this Government to place an order for a major vessel, given the level of threat that exists from abroad? Will my right hon. Friend consider the desirability of passing the money to the shipbuilding and steel industries in the form of orders for ships for the Royal Navy rather than in the form of handouts?
The Prime Minister
My hon. Friend will already have heard the figures that I gave: a 3 per cent. increase in the defence budget last year and at least 2½ per cent. and possibly 3 per cent. this year. How that is allocated between the Army, the Air Force and the Royal Navy and between equipment and pay must be a matter for my right hon. Friend Francis Pymthe Secretary of State for Defence. In so far as the shipbuilding intervention fund is concerned, many of us would wish that more of it would go to building ships for the Royal Navy, but sometimes one has to keep work going at rather different shipbuilding yards and assist the building of other ships.