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Prime Minister (Broadcast)

Volume 893: debated on Tuesday 17 June 1975

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asked the Prime Minister whether he will place in the Library a transcript of his interview on the television programme "Weekend World" on Sunday 11th May.

I refer the hon. Member to the reply which I gave to the hon. Member for Blaby (Mr. Lawson) on 10th June.

Is the Prime Minister aware that his criticism of Mr. Sevareid in his all-too-realistic analysis of Britain will seem extraordinarily complacent at a time of national crisis? What distinction does the Prime Minister's labyrinthine mind draw between Mr. Sevareid's description of Britain sleepwalking to disaster and the description by the Secretary of State for the Environment of Britain being on a suicide course—or is the Secretary of State just another wet hen in the cocktail party circuit?

I answered a question last week on the serious speech made by my right hon. Friend the Secretary of State for the Environment. What Mr. Sevareid might have missed—as, indeed, have the Opposition—is the fact that in relation to our overseas balance of payments and the strength of the pound there has been the most remarkable recovery in the last five months in our balance of payments. Over the first five months of this year the deficit—including even oil, of which the Conservative Government never had to take account because it hardly entered into their last quarterly figures—is now 75 per cent. less than the monthly average for the same five months last year, and 50 per cent. less than the average monthly deficit of the last quarter of 1973, even though oil price increases had hardly begun to work through in that quarter. This is a remarkable achievement. It would be nice if the Opposition occasionally paid tribute to the exporters and those who have worked so hard to produce those figures.

My right hon. Friend will be aware that page one of the transcript of the interview referred to the need to keep the country free from strikes, to boost production and exports. I support that view and the work of the Secretary of State for Employment, but will my right hon. Friend tell the House about the latest situation on the proposed strike on British Rail?

My hon. Friend and the House will be aware that there have been developments over the weekend on that topic and that further developments have taken place this morning. In the expectation that discussions will be taking place, I think that probably I should not add to anything that has already been made public on this important issue. The Government have made their position absolutely clear.

Is the Prime Minister of the view that the improved balance of payments position makes it unnecessary for him to take further action to curb inflation?

Not at all. I said that it would be nice if Opposition Members occasionally paid tribute to the remarkable turn-round in our balance of payments. The need to curb the increase in inflation is due to the fact that we do not want to imperil the considerable success in our balance of payments so far achieved. I agree with the hon. Gentleman that if inflation continues at the present rate it will imperil improvements in the balance of payments in the present year.

Has my right hon. Friend received any observations on his important comment in the broadcast. in respect of the desirability of pre-Budget consultations with interested parties?

My hon. Friend will be aware that the idea was welcomed by both the CBI and the TUC during that weekend. He may also like to know that reference was made to this matter in the meeting of NEDC this morning, when we discussed the future role of NEDC and the important paper produced jointly by the TUC and the CBI.

Will the Prime Minister bear in mind that during the last election campaign the Healey figure for inflation was 8·4 per cent., and that after eight months of Socialist Government it is now 53·1 per cent.? Will the Prime Minister now say what action he proposes to take, if any, to arrest the daily decline of the pound?

The right hon. Lady will be aware that this question was answered yesterday by my right hon. Friend the Secretary of State for Prices and Consumer Protection. My right hon. Friend particularly referred to the Budget figures in the last month, but the right hon. Lady will be aware that a very high proportion of the increase in wages in the last year, which she regards as uniquely the cause of this problem, has been due to threshold payments introduced by her Government.

Does the Prime Minister recall that he said frankly in that broadcast that those who took more out of the economy than the nation could afford would face the Chancellor with the proposition either of clawing it back through taxation or of cutting down on social expenditure? Does he agree that the unfairness of that is that it hits people equally, whether they have settled within or outside the social contract?

Yes, Sir. I agree with the right hon. Gentleman's interpretation of what I said. I agree with his judgment of the colossal unfairness between particular groups within the country. I think that my right hon. Friend proved in the Budget what was said, both by the right hon. Gentleman and myself—that because there were some settlements which were consider- ably outside the social contract, he had to do more in the way of taxation in the Budget than he would otherwise have done, at a time when the House would wish, not on cost inflation grounds, but on demand inflation grounds, to do something to increase the level of activity in this country because of the increase in unemployment.