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1992 - PMQT 20th October 1992

Below is the text of Prime Minister's Question Time from 20th October 1992.

PRIME MINISTER:

Engagements

Q1. Mr. Jacques Arnold : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

The Prime Minister (Mr. John Major) : This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Arnold : Bearing in mind my right hon. Friend's commitment to putting Britain first, will he confirm that the Government attach priority to getting this country out of recession and creating jobs?

The Prime Minister : All across Europe and beyond, economic circumstances are very difficult and in recent months have worsened noticeably in a number of countries. We are seeking the right policies to bring back not just recovery to this country but recovery with low inflation. The interest rate reductions that we have been able to make and the increasing competitiveness of the exchange rate will enable us to lead this country back to recovery with the low inflation and sustained growth that we need.

Mr. Bell : In the light of the statements made by the president of the Bundesbank and by the chairman of the Italian central bank that a general realignment was available to the British Government prior to Black Wednesday, will the Prime Minister answer the question that his Chancellor of the Exchequer failed to answer when he appeared before the Treasury and Civil Service Select Committee or at the Dispatch Box? Was there or was there not a general realignment--either formal or informal--on the table?

The Prime Minister : I am happy to answer that categorically. No, there was not--formal or informal.


Q2. Mr. Adley : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

The Prime Minister : I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Adley : Referring to matters that are in the minds of right hon. and hon. Members, does my right hon. Friend accept that there is some linkage between electricity privatisation and the current problems in the coal industry? This morning I heard from British Rail that if the proposed mine closures go through, British Rail will face a bill in excess of £200 million in terms of lost revenue and redundancy payments. Will my right hon. Friend please give a clear assurance that if there are to be any further privatisations, either of industry or of the nation's transport infrastructure, a full cost-benefit analysis will be provided to the House so that it may assess the full national implications?

The Prime Minister : Many of the problems faced by the coal industry -- those that it faces at present and those that it has faced over many years--preceded privatisation. They have far more to do with the demand for coal and the changing energy market in this country. It is for that reason that there has been a severe contraction of the coal industry, not only in this country but in France, Belgium and Germany, and elsewhere.

As for my hon. Friend's specific question about the railways, the White Paper published in July was preceded by a great deal of thought, discussion and consultation inside government, and consultation continues on all matters.

Mr. Ashdown : Having been found out seeking to close down the coal industry quickly by rigging the market, are not the Government now asking to be allowed to close down the coal industry slowly by rigging a review? Is that not the proposition that their Back Benchers are being asked to swallow?

The Prime Minister : No, that is not an accurate reflection of the policy that the Government are following--as yesterday's statement by my right hon. Friend the President of the Board of Trade made perfectly clear. No one doubts, and no one has disputed, that over many years, under all Governments, there has been a continuing and severe contraction of the coal industry, owing to factors that were unavoidable.

The Government now face the fact that, even at existing coal prices--which we are now aware will be noticeably lower in future--the market is contracting, and coal stocks are growing daily. The Government cannot ignore that problem. The sooner they deal with it, the sooner we shall be able comprehensively to establish assistance measures that will provide alternative employment and alternative security in areas where people know that existing jobs have at best only a limited life.


Q3. Dr. Spink : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

The Prime Minister : I refer my hon. Friend to the reply that I gave some moments ago.

Dr. Spink : Will the Prime Minister join me in welcoming the 1 per cent. cut in interest rates that was made on Friday, which will do so much to help all the people who have to repay mortgages and to help businesses, large and small? Does he agree that the key to resolving our unemployment difficulties and taking us out of the teeth of the world recession is low inflation, which we are achieving?

The Prime Minister : We have now achieved low inflation in terms of both the retail prices index and the underlying inflation rate, at a level that we have not seen for many years. It is undoubtedly helpful to British industry that it has been possible to reduce interest rates to 8 per cent. I was particularly pleased by the consequential mortgage rate reductions that were announced today.

As my hon. Friend suggested, however, we must bear it in mind that it is not simply a question of low interest rates. It is also vitally important for our future prosperity to restrain any reinflationary surge that may follow. My right hon. Friend the Chancellor of the Exchequer has made it clear that keeping inflation low--one of the essential ingredients for the sustained encouragement of jobs, prosperity and growth--remains central to the Government's policy.

Mr. John Smith : It is crystal clear that, whatever else he did yesterday, the President of the Board of Trade did not announce a review of the pit closure programme. Will the Prime Minister now agree to establish a genuine and independent review before any pit is closed for ever?

The Prime Minister : So that there is no dispute or misunderstanding anywhere in the House, let me make clear the position of the 10 pits identified by my right hon. Friend, and that of the others that he mentioned in his statement. In our judgment, the 10 pits that he specifically named have no sustainable economic future, but the full statutory review procedure will take place. I have no doubt that, during the moratorium on the other pits, the Select Committee on Trade and Industry will wish to hold its own inquiry, and the Government will give that their fullest co-operation.

During the moratorium, the President of the Board of Trade will himself take views and evidence to consider alongside the information already available to him on all matters. In due course he will publish that material, in time for consideration by the House and before any future debate in the House. His statement will be set in the context of the Government's energy policy and will set out the consequences of that policy for British Coal, the implications for individual pits and the employment prospects for the industry. It is after that debate that future decisions will be made.

Mr. Smith : I remind the Prime Minister of the question that I asked him, which was whether he would establish a genuine and independent review. If the Prime Minister really believes that he has a strong case, what has he to lose from an independent inquiry? What is he afraid of?

The Prime Minister : Let me refer the right hon. and learned Gentleman to the answer that I gave. When we have completed the consultation and the examination--which, I repeat, will be made public and which, I repeat, will also be laid before this House--there will be every opportunity for every view to be taken into account before matters proceed.

Mr. Smith : Is it not now clear that the only satisfactory alternative to constantly shifting statements from the Prime Minister and the President of the Board of Trade, and to the unseemly Dutch auction which is going on among Conservative Back Benchers, is for this House tomorrow night to vote to refer the whole matter to our own Select Committee and for that to be the responsibility of Members in all parts of the House?

The Prime Minister : It is clear that the right hon. and learned Gentleman was not listening, for I said that it was an assumption of the Government that the Select Committee on Trade and Industry would wish to consider this matter and that we would provide whatever evidence was necessary to the Committee. Notwithstanding the tremendous emotions that have arisen about this whole affair, it is bogus of the right hon. and learned Gentleman not to recall the vast number of mines that were closed by the Labour Government, the large number of miners who were put out of work by his Government and the activities of his Government in recent years that played a significant part in reducing employment in the mining industry from 700,000 down to the present level.

Sir Patrick McNair-Wilson : Is my right hon. Friend aware that the concern that is being expressed about the closure programme is very much bound up with the wider concern about the direction of our economy, post-ERM? Does he not agree that with a low value for sterling it really is essential that we have a policy of import substitution, of "Buy British", and that we should not build gas-fired power stations when we have already got 50 per cent. too much gas generating capacity? If my right hon. Friend were to put those facts into the review, he would find that he had the enthusiastic support of people like myself, who are deeply concerned about what is being proposed.

The Prime Minister : I agree entirely with my hon. Friend that the changing level of the exchange rate offers the most remarkable opportunities for British exporters and also offers a better incentive for import substitution than we have seen for many years. My hon. Friend also needs to remember that we are by instinct a trading nation and that we must bear that in mind in all the policies that we follow. As I made clear a few moments ago, what the Government are seeking to do and will continue to do in the period up to and including the public expenditure round is to look at the difficulties that this economy faces and at the right possibilities and the right policies, in order to build on present economic circumstances a proper level of growth for the British economy and for British industry.


Q4. Mr. Andrew Smith : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

The Prime Minister : I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Smith : Can the Prime Minister understand that it is my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) who has spoken for Britain? Can the Prime Minister name one independent expert who is prepared to say that gas will produce cheaper electricity than coal? The President of the Board of Trade could not name one yesterday. Can the Prime Minister name one this afternoon--yes or no?

The Prime Minister : If that were not the case, perhaps the hon. Gentleman could explain to the House why the demand for gas among consumers across the country is rising dramatically and shows signs of rising even further.

Mr. Rathbone : Despite all the difficulties being faced at this moment by this country and by other countries, will the Prime Minister give the House and the nation reassurance that we shall continue our efforts to aid countries in the developing world which suffer even greater difficulties than we do?

The Prime Minister : We have a very proud record indeed in that respect, in terms of the quantum of aid that we provide, in terms of the quality of aid that we provide, and in terms of keeping open markets in this country for the exports of those countries which, in many ways, is the greatest assistance that we can provide to the developing world. In my statement in a few moments on the European Council, I shall also set out some extra help to other countries which face particular needs at present.