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Prime Minister (Engagements)

Volume 958: debated on Tuesday 14 November 1978

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asked the Prime Minister if he will list his public engagements for 14th November.

This morning I accompanied Her Majesty The Queen when she greeted President Eanes of Portugal at the beginning of his State visit to this country.

In addition to my duties in this House, I shall be holding meetings with ministerial colleagues and others, including one with the leader of the opposition in the Lok Sabha. Mr. C. M. Stephen, and the former Prime Minister of India, Mrs. Gandhi.

This evening I hope to attend a dinner given by The Queen in honour of President Eanes.

I am glad that my right hon. Friend was able to meet the President of Portugal, because Portugal is one of the countries which has a current application to join the Common Market. Perhaps he would make to the President of Portugal the ponts that he made in his Guildhall speech last night about the shortcomings of the financial structure of the Common Market, and particularly its system of agricultural suppor.

Yes, Sir. I dare-say that the President will wish to discuss with me the prospects for his application, which I believe is now proceeding satisfactorily. As I said at the Guildhall last night, it is clear that what is needed is a broad balance between all the interests of the members of the Community if its long-term objectives are to be fulfilled, and not the unbalance that exists today.

Will the Prime Minister today take time to explain to the typical home buyer, who is faced with a bill of£16a month for mortgage rate increases, why the Prime Minister's own Government have a worse record for mortgage rates than any previous British Government?

I think that the increase is£16 before tax deductions, so the figure is lower than that suggested by the right hon. Lady. The Leader of the Opposition is taking the first opportunity that she has had to claim that the mortgage rate today is higher than it was when she left office in 1974. I am not surprised that she has taken that opportunity.

The plain truth is that the British people would prefer to see inflation conquered whatever short-term steps are necessary. This is one of the steps that we intend to take in order to achieve that.

Has the Prime Minister forgotten that under one of his own previous rulings the mortgage rate went up to 12½ per cent. in 1976? Therefore, he has held the worst record on two occasions. Will he explain how an increase of nearly£16 a month less tax helps the home buyer in his personal battle against inflation?

It does not help the personal home buyer at all. But, as the right hon. Lady might acknowledge at some time, all of us are part of the national interest. It is in the national interest that these rates are increased so that inflation is kept under control. Perhaps the Leader of the Opposition will explain to the country how she would keep inflation under control if she did not adopt these methods.

Will my right hon. Friend agree to consider what he said in the City of London last night with a view to appointing a Minister for Europe, not only to co-ordinate the activities of Ministers and officials in Brussels but to explain to the British people some of the advantages and some of the disadvantages of our membership of the Common Market?

My hon. Friend has always taken an enlightened view of these matters.

My hon. Friend the Member for Bolsover (Mr. Skinner) certainly knows about regretting things that are said.

As I said in my speech at the Guildhall last night, there is no doubt that there is a balance of advantage to be drawn from membership of the Common Market. This balance is certainly on the plus side in respect of political co-operation and certain of the decisions that have been taken on steel, textiles and other matters. I doubt whether we could have taken them on our own. However—and I do not wish to be used by the antimarketeers on this matter—that does not destroy the need for getting a proper balance in the financial contributions that we are making.

Is it not clear from the answer that the Prime Minister gave to my right hon. Friend the Leader of the Opposition that the increase in the mortgage rate is due exclusively to the excessive borrowing by this Government? Should not the Prime Minister admit frankly that his Government's borrowing policies have led to the increase in the mortgage rate?

No. That is certainly untrue. The borrowing requirement of this Government is not out of line with the borrowing requirement of other similar Governments and is, indeed, far lower than that of a number of comparable countries. The borrowing requirement is not doing this. There are a number of factors which the Chancellor of the Exchequer enunciated at great length last week. This was to the satisfaction of the House because we had a majority at the end of the day on the Queen's Speech.