asked the Prime Minister whether the public speech by the Chancellor of the Exchequer in North London on 23rd April on the social contract represents Government policy.

asked the Prime Minister whether the speech by the Chancellor of the Exchequer in London on 23rd April on the economic situation represents Government policy.

I have been asked to reply.

Does the Leader of the House agree that a further reason for fearing cuts in the social services, to which the Chancellor of the Exchequer referred in that speech in relation to excessive wage claims, is the continuing escalation in the public sector borrowing requirement? How does he think that will be financed this year? Would it not be better for the Government to stop regular additions to the spending programmes and the hammering of confidence in which the Secretary of State for Industry has engaged, to protect the social services?

The massive, or the large, cuts announced by the Chancellor are, of course, for next year. I think that the hon. Gentleman and everybody else would agree that to make short-term cuts in the interests of demand management is extremely disruptive and damaging. That is why the cuts are being made next year, and not this year.

Does my right hon. Friend recall that the Chancellor said—I think it was last week—that when the current wage round finishes there must be some tightening up of the guidelines in the social contract? Will my right hon. Friend say when a statement will be made on that subject, and whether the matter will be debatable in the House?

As I have said, when we met the TUC a fortnight ago we agreed absolutely on the need to secure wider acceptance and adherence to the guidelines by negotiators. The need over the next few months is to see that the guidelines are observed. The guidelines are adequate if we can ensure wider observance of them.

Does the right hon. Gentleman have the temerity to risk the disapproval of the Secretary of State for Industry, who I see has now entered the Chamber, and agree with the Secretary of State for Prices in what she said at the NEDC meeting yesterday, that the Government would have a greater degree of success in facing Britain's economic problems if they were to seek a greater degree of all-party consensus?

I have inquired very carefully into what happened at that meeting yesterday. It is quite obvious that my two right hon. Friends were in complete agreement—[Interruption.]—that the worst possible solution would be to have a coalition Government. That would mean that nothing would get done.