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1991 - PMQT 2nd July 1991

Below is the text of Prime Minister's Question Time from 2nd July 1991.

PRIME MINISTER

Engagements

Q1. Mr. Harry Ewing : To ask the Prime Minister if he will list his official engagements for Tuesday 2 July.

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. Ewing : Is the Prime Minister aware that the prospectuses for PowerGen and other privatised industries say that Her Majesty's Government do not expect to use their shareholding to vote on resolutions before the annual general meetings of those companies, but--this is the important point--that they reserve the right to do so? Will the Prime Minister, for once, act decisively, do as he did in the case of the chairmen of the banks and call in the chairmen and chief executives of all the privatised industries and make it clear to them that he will use the power given to him in the prospectus to intervene and stop the obscene salary increases that they are granting to themselves--or is this yet another example of all talk, all dither and no action?

The Prime Minister : I have made clear my view on the large increases on a number of occasions. I have also made it clear that the freedom given in the prospectus is not to be used in that fashion. The hon. Gentleman has been told that before and I reiterate it now.

Mrs. Roe : Will my right hon. Friend take time today to look into the effect on the employment of women of implementing the provisions in the social charter which relate to part-time work? Will not the social charter, which is fully supported by the Labour party, destroy job opportunities for women and restrict the flexibility of part-time work from which so many women benefit?

The Prime Minister : I agree with my hon. Friend. We are able to support parts of the social charter, but the draft directions on part-time work would add substantially to the cost to British industry and, in so doing, cost the jobs of many people.

Mr. Kinnock : Is the Prime Minister still certain that, as he promised just two weeks ago, Britain will come out of recession in the second half of this year?

The Prime Minister : Yes, I still believe that we will see the economy move out of recession during the second half of this year. That view is echoed by a number of independent commentators and I see no reason to revise our previous forecasts.

Mr. Kinnock : The engineering employers, steel makers, car manufacturers and retailers are all telling the Government in clear terms that the serious losses of jobs, output and capacity will continue for the rest of this year and even into 1992 and beyond. What evidence does the Prime Minister have to demonstrate that those people, who certainly live in the real world, are wrong?

The Prime Minister : As the right hon. Gentleman knows, the latest CBI survey is precisely in line with the Red Book forecasts, which show that the economy will come out of recession in the second half of this year. The right hon. Gentleman will have seen that the G7 Finance Ministers agreed that the world economy was moving out of recession and back into growth. The impact of that will certainly assist our recovery in the second half of this year.

Mr. Kinnock : As for the forecasts of recovery from the world recession, can the right hon. Gentleman tell us which other major industrial country has had a zero-minus-growth rate this year-- [Interruption.] Under the policies of this Government-- [Interruption.]

Mr. Speaker : Order. Interruptions take a lot of time.

Mr. Kinnock : Under the policies of this Government, a zero growth rate would be an improvement.

Can the Prime Minister tell us which other major industrialised country has has a growth rate of minus 2 per cent. this year? What sort of recovery can the right hon. Gentleman look forward to, when every manufacturer in Britain clearly records a loss of capacity and of confidence that have eroded the British manufacturing base for the second time in 10 years?

The Prime Minister : As for the long-term strength of British industry, the right hon. Gentleman should read the recent comment by the director general of the CBI. He said :

"Virtually everything associated with our manufacturing base is better today than it was in the so-called golden era'"

to which so many people look back fondly. The director general was right-- that was the era of strikes, loss of delivery, lost market shares and Labour.

Sir Ian Lloyd : My right hon. Friend will doubtless have had reported to him the serious news that the Japanese research and development total exceeded £9 billion for the first time last month. Of that sum, £1.5 billion is spent by the five largest semiconductor firms in Japan, exceeding the total research and development expenditure on semiconductors of the United States and western Europe. Had this matter been considered by the Advisory Committee on Science and Technology, which my right hon. Friend chairs? If it has, does that committee share the views of the congressional committee on semiconductor dependency about the serious implications that that has for the defence and the industrial base of the western world?

The Prime Minister : My hon. Friend rightly makes the point that the huge research and development in the private sector has brought about the remarkable improvement in Japanese productivity in recent years. I shall chair a meeting of ACOST in the near future and I expect that that is one of the matters that we shall discuss.


Q2. Mr. Nellist : To ask the Prime Minister if he will list his official engagements for Tuesday 2 July.

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

Mr. Nellist : Is the Prime Minister aware that 16-year-olds on youth training have had their allowance frozen at £29.50 for several years and that, had their allowance risen since 1978 in line with average earnings, it would be £68.60 today? How does the Prime Minister think that those youngsters feel when they again read reports in the press that the heads of newly privatised industries such as PowerGen are awarding themselves pay rises of up to 163 per cent? Does the right hon. Gentleman think that those youngsters are worth so much less than Mr. Wallis?

The Prime Minister : As I said a few moments ago, I have made my opinion on these large increases perfectly clear. As the hon. Gentleman will be aware, we have a more substantial employment package for young people than this country has ever had and it was added to just a fortnight ago by my right hon. and learned Friend the Secretary of State for Employment.


European Single Currency

Q3. Mr. Janman : To ask the Prime Minister what assessment he has made of the benefits accruing from a single currency in the European Community to the United Kingdom and other European Community countries either now or in the future.

The Prime Minister : Theoretically, a single currency within a single trading area can save industry the risks and costs of exchange rate transactions. It also saves ordinary travellers cost and inconvenience. Of course, all those advantages apply to a common currency such as that which the United Kingdom has proposed. But the economic benefits of a single currency can be exaggerated and they carry economic risks with them. If widely divergent economies are forced into the straitjacket of a single currency, the strains in the system may be unsustainable.

Mr. Janman : I am grateful to my right hon. Friend for that reply. Was he in the Chamber last week to hear the critical but interesting observation that a federal state bears three distinguishing marks? One of those marks is the existence of a single currency and of a central bank. Does my right hon. Friend agree that the sentiments behind that observation, made by the right hon. Member for Bethnal Green and Stepney (Mr. Shore), fly in the face of the Labour party's policy on Europe?

The Prime Minister : I entirely agree with my hon. Friend. It is clear that the Labour party is split on the question of Europe.

Sir Russell Johnston : If the Prime Minister is saying that he agrees that a single currency is acceptable in principle, is not it also logical that a European central bank should control European-wide interest rates?

The Prime Minister : What I have said repeatedly about a single currency is that if it is market driven and if it is required, it is acceptable to us in principle. However, as the hon. Gentleman will have heard me say yesterday, we have maintained our reserve on the prescriptive single currency which is at present before the Community.

Mr. Favell : With my right hon. Friend's successful Luxembourg conference behind him, will he reject any new proposals to interfere with the Government's right to tax, to spend and to fix interest rates, as otherwise the non-imposition of a single currency could be but a hollow victory?

The Prime Minister : We are still at the very early stage of negotiations on economic and monetary union. I have already made it clear that I am as jealous as any other hon. Member of the rights of the House.

Mr. Spearing : Is the Prime Minister aware that last Friday I asked the Financial Secretary to the Treasury what studies had been made into the benefits for the United Kingdom of economic and monetary union? He answered by referring in column 541 to a written answer that he had given to me on 7 December at column 216. Both answers showed that no study had been made of the benefits. As the First Lord of the Treasury, will the Prime Minister tell us why that is so?

The Prime Minister : I set out in my original answer to my hon. Friend a few moments ago what the theoretical advantages of a single currency would be. The hon. Gentleman may care to read that answer.


Engagements

Q4. Mr. Hayward : To ask the Prime Minister if he will list his official engagements for Tuesday 2 July.

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

Mr. Hayward : Will my right hon. Friend take time to consider the impact on income tax of a massive increase in public spending? Will he in particular say whether he has received any detailed written response to the analysis of the Labour party's programme which was issued by the Chief Secretary to the Treasury about a fortnight ago?

The Prime Minister : My right hon. Friend makes a telling point. I can confirm that I have received no such written response. The Opposition are remarkably coy about their spending plans. These days they set great store by the Financial Times, but, as that newspaper said recently :

"Any Labour Government would face clear choices : either unsustainable borrowing, or significantly higher taxation, or a great many disappointed hopes for higher public spending"--

or, of course, all three.


Q5. Mr. Eadie : To ask the Prime Minister if he will list his official engagements for Tuesday 2 July.

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

Mr. Eadie : In view of the Government-inspired vendetta against the miners and their union, which is now in disrepute, will the right hon. Gentleman give us an assurance that we are not on the verge of another scandal? As the Government have authorised Rothschild bank, Touche Ross and Geoffrey Chancer to advise the Government on the privatisation of the coal industry, will the Prime Minister give us an assurance today that the £6.5 billion miners pension fund will not be used as bait to sell off our coal industry?

The Prime Minister : There is no vendetta against the miners. If the hon. Gentleman had listened to Question Time a few days ago, he would have heard of the number of miners in Nottinghamshire, for example, who now earn well over £20,000 a year, so little is the vendetta of the Government.


Q6. Mr. Barry Field : To ask the Prime Minister if he will list his official engagements for Tuesday 2 July.

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

Mr. Field : May I refer my right hon. Friend to my ten-minute Bill on 29 June 1988, at column 399 of the Official Report, when I proposed financial penalties on parents of perpetual truants? In the process of introducing the Bill, I referred to the 1985 Home Office report on parental supervision and delinquency. Has not the case been proved that if parents are careless of the whereabouts of their children, the children are more likely to offend? Is not it high time that we tightened up the rules on truancy? As my old friend, ex-prison governor and Isle of Wight broadcaster C. A. Joyce used to say, "I never met a criminal from a loving and caring home."

The Prime Minister : My hon. Friend raises an important issue. It is vital that parents fulfil their duty to secure their children's education. As my hon. Friend will know, under the provisions of the Criminal Justice Bill, the maximum fine for the parents of truants will rise to £1,000. We are very concerned to bring an end to truancy and, through that and other policies, we will seek to do so.