asked the Secretary of State for Northern Ireland whether he will make a statement about the public relations of the security forces.

Public relations for the Army are handled by Army information services at Headquarters Northern Ireland and are the responsibility of my right hon. Friend the Secretary of State for Defence. Public relations for the RUC are a matter for the Chief Constable. I know that he attaches great importance to this work, and the force is engaged in an extensive programme with a view to increasing public support for the maintenance of law and order.

Is the Secretary of State aware that the Opposition applaud the fillip that the right hon. Gentleman has personally given to the Ulster Defence Regiment at a time when it has been bearing terrible casualties, coincident with vile slanders from certain politicians? Should not all who hold or aspire to responsibility in Northern Ireland back the security forces and encourage recruitment from across the community instead of exaggerating the faults of a few?

I am much obliged for what the hon. Gentleman has said. It is tragic that in recent months the UDR has been coming under attack, especially in off-duty hours. This is the most callous and most discriminate form of killing that the Provisional IRA in particular has embarked upon in recent weeks. It is up to us all, on both sides of the House and on both sides of the sectarian divide in Northern Ireland, to give the UDR all the support and recognition it requires.

Will the right hon. Gentleman, in conjunction with his right hon. Friend the Secretary of State for Defence, urgently correct the unfortunate false report in the Press in Northern Ireland which attributed offences committed on duty to members of the UDR—a most damaging and false statement?

I am obliged to the right hon. Gentleman for raising that matter. It should be quickly rectified. I felt some sympathy for the operations of the UDR in recent weeks and I went out on patrol with its members one night in order to give them some recognition of the difficult task they are having to perform. There are thousands of members now. Though, occasionally, one may slip through the screening process, by far the majority are good, honest men, who are doing their best for the security of Northern Ireland.

On the subject of publicising the names of individual officers and men who render safe bombs and explosives in Northern Ireland, did the Secretary of State for Defence discuss this with the right hon. Gentleman, as he promised me he would? If so, what was decided?

From my previous responsibility, I am aware of the difficulties here as, I am sure, is the hon. and gallant Gentleman. It would be difficult quickly to name those members, especially of the ATO force, which is responsible for bomb disposal, even when they get gallantry awards, because of the risk of those names being listed and earmarked for assassination in Northern Ireland.

Is the Secretary of State aware that certain members of the SDLP have made a vicious and wicked propaganda campaign against the UDR? Will he agree that a good Government public relations exercise is essential to counteract such statements? Is the Secretary of of State also aware that political maggots, namely Canavan, Mallon and Cooper, are responsible for the deaths of UDR men in Northern Ireland?

Public information and propaganda are extremely important in Northern Ireland, as the hon. Gentleman will recognise. Very often, of course, the propaganda war takes higher priority than some of the killings that take place there. But I hope that the hon. Member will not start chastising members of political parties on that score. He will recognise, I am sure, that in the Press on Monday my hon. Friend the Member for Belfast. West (Mr. Fitt), very courageously, viciously attacked the Provisional IRA for its killings against its own Catholic people in Northern Ireland.

Will my right hon. Friend deprecate the outlandish and slanderous language that has just been used by the hon. Member for Belfast, North (Mr. Carson), in which he sought to lay the blame and the responsibility for the deaths of the UDR men on the shoulders of the SDLP? Does my right hon. Friend agree that the full responsibility for those deaths can be laid at the feet of the Provisional IRA, and that every member of the SDLP, including those mentioned by the hon. Member for Belfast, North, has openly condemned the IRA for every one of those killings? Does my right hon. Friend also agree—this is most important—that over a number of years certain factions, namely the UVF and other Loyalist para-military organisations, have been able to infiltrate the UDR, bringing no praise on that regiment?

I would not want to start, in this House, an argument along the political front and the sectarian divide in Northern Ireland. Suffice it for me to say that the Provisional IRA has itself been responsible for many bombings, assassinations and, I believe, sectarian killings. But I believe that the UVF assassination squads are equally guilty. Most of the senior and responsible politicians in Northern Ireland, however, are keeping well away from both of them.

I allowed longer on that Question than will be possible for others.

asked the Secretary of State for Northern Ireland if he will make a statement about the security situation.

The main features of the security situation since last reported to the House have been some particularly brutal sectarian murders, a number of attacks on the security forces, a high success rate in bringing the gunmen and criminals to justice, and the further decline in popular support for the Provisional IRA.

I welcome the robust tribute that the Secretary of State paid earlier to the Ulster Defence Regiment, but does he recall that his predecessor told us on 2nd July that there would be a substantial increase in the full-time element of the regiment? Can he now tell us how many new full-time UDR men are being recruited?

No. I am sorry, but I cannot oblige the hon. Gentleman and the House at this moment. The increase of "conrates"—that is, the full-time UDR—is certainly under urgent consideration, and I hope that when I ask the House for the renewal of the emergency provisions I shall be able to say something useful.

When the right hon. Gentleman use the word "sectarian" in the technical and specialised sense in which we in this House understand that he is using it in that kind of answer, will he make clear to the general public that there is no question of great masses of people in Northern Ireland, whose religions differ, being hostile to one another or clashing with one another, but that both lie under the terror of a small number of gunmen and that of the two religious communities, the Roman Catholics suffer more from the terror?

I am afraid the right hon. Gentleman is correct. I concur with what he says. There are a few gangsters—callous murderers—in the ranks of the UVF, the UFF and the Provisional IRA who are responsible for these sectarian killings. The vast majority of Northern Ireland people are not involved and do not have that hatred and emnity for each other.

Will my right hon. Friend accept that the Government's policies in Northern Ireland have failed abysmally and that they fail every day that people hear on the news that someone has been murdered or is in trouble? Will he not seek help from the United Nations in solving the problems of Northern Ireland? Is he aware that as long as he keeps British troops in Northern Ireland there will be no solving the problems there, and that he may as well admit it sooner rather than later and not allow the situation constantly to deteriorate as he, the Government and the appalling consensus in this British House of Commons do at present?

I am sorry, but I absolutely and fundamentally disagree with my hon. Friends analysis of the Northern Ireland situation. Now that we have ended detention, every assassin who is caught and charged for murder, attempted murder or the handling of explosives is going behind bars. He is going into gaol and being taken out of society for a long time. I have given the figures this afternoon to prove that this policy is working.

asked the Secretary of State for Northern Ireland what evidence he has about the source of arms, ammunition and explosives which arrive in the Province unlawfully; and if he will make a statement.

It would not be in the interests of security to reveal the full nature of evidence available to us. I can, however, say that we have reason to believe that the flow of arms across the Atlantic has been reduced. As for weapons of East European origin, there is no evidence to suggest that terrorists obtain more than a small proportion of their weapons from that source.

As the story of violence and terror continues unabated in Northern Ireland, will the Minister confirm that the Government are taking all the diplomatic steps open to them to impress upon foreign Governments that the supply of money as well as of arms and ammunition, although illegal, is causing increasing concern to Her Majesty's Government?

I can give the assurance that the hon. Gentleman seeks. We are seeking in every avenue to discuss these matters in great detail with those countries which may be able to help us.

Is it true that since the emergence of the Peace People movement and their trips abroad there seems to be a greater awareness and understanding of the threat to decent people in Northern Ireland as a result of money and arms being sent from abroad to the Provisional IRA in Northern Ireland? Has the Minister any evidence to show that there is a drying-up as a result of this, and can the Government help further to stop up the sources?

I think that what the peace movement has been able to achieve is of great significance to Northern Ireland. I have no evidence to suggest that through the work that it has performed and the opportunities that it has given in the Province it has been instrumental in stopping the flow of arms. I wish to goodness that I could say that it had.

What proportion of explosions recently have taken place as a result of the laying of commercial gelignite, and what proportion through improvised explosives? What steps is the Minister taking to try to seal the border against the import of such explosives?

On the first two questions that the hon. Gentleman asked, I cannot give him the statistical evidence that he is seeking. With regard to the border, every effort is being made to police what crossings remain open and we are keeping a careful watch with vehicle checkpoints and patrols. More than this we cannot do at the moment.

Would the Minister consider using the public relations department in the United States to impress upon the people of the United States the total lack of glamour which is inherent in providing aid to Northern Ireland, or Ireland as a whole, because, at this moment—especially with regard to what Mr. President-elect Carter has announced—there are still appeals for money which people think will do good, rather than the incredible harm that it does?

I am pleased to tell the House and the hon. Gentleman that we have received good co-operation from the United States as well as from Canada and North America.

asked the Secretary of State for Northern Ireland what changes he intends to make in the electoral law in Northern Ireland.

An Order in Council will shortly be presented to make provision for the 1977 and subsequent local government elections. It will provide for them to be conducted under the same system of proportional representation as was used in 1973, but for restricted postal voting on the same criteria as apply to local elections in England and Wales. The Order will also make provision for the same limits on candidates' expenses as apply in local government elections in England and Wales. The right of candidates to send election addresses post-free, which they enjoyed in 1973, will be retained.

Is the Secretary of State aware of the need for early clarification of all the rules and regulations concerning the local government elections? Is he aware that we on the United Ulster Unionist Bench fully support the restriction on postal voting and that we agree that it should be restricted to those categories named in the Representation of the People Act? Will he ensure that the limitation of candidates' expenses is imposed on an individual basis and not upon groups of candidates?

I shall give consideration to what the hon. Gentleman says about getting out more information. I may be able to make a lengthier statement for the Press so that people in Northern Ireland can understand the changes that are taking place regarding the future local government elections. Candidates' expenses were £300 in the last election. Under the new system, they will be increased, and joint candidates' expenses will be improved, too.

On the wider question of election, what initiative is the Secretary of State taking to increase the Northern Ireland representation in this House?

My priority would be to encourage the politicians in Northern Ireland to go for a devolved Government first.

Will the right hon. Gentleman change the electoral law to ensure that, irrespective of what happens in Great Britain, there will be no delay in having direct elections to the Common Market by making the Province a single constituency which returns three or four Members to the EEC Parliament? This would provide greater democracy in the Province than now exists.

That is an entirely different question from the one on the Order Paper. Perhaps we should wait until the Bill on this subject has been published.

Will the right hon. Gentleman enlarge on his remarks about fuller representation in this House? Does he not think that it would be fairer if, when proposals for devolved government for Northern Ireland are being discussed in this House, the Northern Ireland people had proper numerical representation in the House?

Since I came into this office I have always recognised—and I have said it more than once—that Northern Ireland is under-represented in the House of Commons. At present, if representation for Northern Ireland were equated to the division of electorates in the rest of the country, Northern Ireland would be entitled to at least four more seats, but I do not think that it is either appropriate or the most opportune time to go into the question of increased parliamentary representation. I hope that the politicians in Northern Ireland in particular will start thinking seriously about how best they can agree upon a devolved form of government. We may then be able to settle the question of parliamentary representation in the House of Commons.

In a speech by my right hon. Friend in Northern Ireland recently, he called upon local politicians in Northern Ireland to try to get together to find out whether there is a basis for the formation of a devolved Government. Does he not think that the time is now opportune to use the agencies of his office to determine whether it would be possible to call a conference of elected representatives in Northern Ireland, with the intention of bringing about devolved institutions there? Those who attended would then be seen as seeking a solution to the problem; those who refused to go, except on their own terms, would be seen for the destructive sector which they now are.

In view of what my hon. Friend said in the latter part of his supplementary question, I do not know whether it would be helpful. He wanted really to highlight those who had been obstructive rather than those who wanted to be helpful. I am always willing to listen to suggestions. As the Convention failed, I would have thought that the local politicians themselves should be prepared to consider the reasons why the Convention did not succeed and why we could not have moved on to a form of devolved government in which we could have achieved acquiescence by the major sections of the community in Northern Ireland. If they can do that, I am prepared to listen.

asked the Secretary of State for Northern Ireland if he will publish the completed reviews of the present legislation on persons and property compensation, and bring legislation before the House by the end of 1976.

No, Sir. My right hon. Friend will inform the House of his intentions as soon as he is ready to do so.

Does the Minister appreciate that soldiers who have served and who are serving in Northern Ireland rightly regard the present shilly-shallying over these complicated matters by Whitehall as unforgivable? Secondly, will the Minister at least promise the House that in future those convicted of acts of terrorism will not be entitled to free hand-outs at the taxpayers' expense? Finally, does the Minister appreciate that crippled soldiers are waiting years for compensation? What will he do about it?

On the accusation of shilly-shallying, as the hon. Gentleman said, these matters are complicated. They certainly are not easy. I know what I should like to see out of this, but all I can say to the hon. Gentleman is that he must be patient a little longer. We intend to put this right as soon as we possibly can.

Is the hon. Gentleman aware of the grave disquiet that there is that this has not been brought forward sooner? Is he aware, for example, that a young woman who was left widowed with two young children as a result of the Bessbrook killing less than a year ago received compensation of less than £5,000 for herself and her two young children, and that this is hard to reconcile with the £11,000 and £16,000 paid out to living terrorists?

On the last point, I should say that this has nothing to do with the two pieces of legislation that will be coming before the House. This is something that happened in 1971 and is among the last of these incidents. Sometimes I wonder why the other 12 were not so furiously followed in this argument.

asked the Secretary of State for Northern Ireland what further consideration he has given to the publication of a phased provisional programme for future drainage works which are in contemplation.

This suggestion has been given consideration, as my right hon. Friend the then Secretary of State for Northern Ireland promised on 1st July 1976. Provisional proposals can be misinterpreted to mean actual commitments, and my view is that the disadvantages of publishing even a provisional plan for the drainage of Northern Ireland would outweigh the advantages.

Is the hon. Member aware that while I recognise the close interest which he personally has taken in this matter—including my own constituency— I shall continue to press him to find a method of indicating to those interested, particularly in agriculture, broadly what are the prospects and intentions during the coming years, and to persuade him that this will be advantageous to the Government and to representatives of Northern Ireland as a matter of public relations and public opinion?

As the right hon. Gentleman has recognised, and as I have said many times, I am more than willing to see hon. Members concerned with drainage problems in their constituency or, indeed, the organisations already existing in Northern Ireland, such as the Farmers' Union. However, one of the disadvantages would be that any provisional proposals would automatically cause controversy in the order of priorities and the times spent in undertaking surveys, because the representations made by deputations would really stop the drainage programme as we now know it.

Is the Minister aware of the great problems which arise as the result of minor watercourses and which can be successfully tackled only by Government action? Will he give an undertaking that the programme on the minor watercourses will not only be continued, but will, in fact, be expanded?

I give the hon. Gentleman the assurance that we shall continue wherever possible to deal with minor watercourses. However, that in itself causes problems, because those riparians on either side of the watercourses often hold negotiations to a point where serious delay is involved. If I were to follow absolutely what the hon. Gentleman has requested, criticism would fall upon me for inaction.

asked the Secretary of State for Northern Ireland if he will make a statement on future housing policy in Northern Ireland.

I have been reviewing, in the light of the latest forecasts about population changes, housing conditions and the new powers in the Housing (Northern Ireland) Order 1976, how more effective action can be taken to tackle Northern Ireland's grave housing problems. The new building programme for the next five years is being re-examined and is likely to show lower targets for many districts.

My hon. Friend will recognise that his statement indicates that there is to be a departure from previously recognised housing policy in Northern Ireland. In implementing his new policy, will the Secretary of State bear in mind at all times that this is not only a question of bricks and mortar, finance and economy, that housing is a very human problem in Northern Ireland, and that no person should be forced to live in any part of Northern Ireland against his wishes, particularly in view of the sectarian problems that exist there at present?

I can give my hon. Friend that assurance. We seek to do everything in this area in a purely voluntary way, but the one thing that we must do is to make an impact on the Belfast housing problem. It is certainly the worst in the United Kingdom—and probably the worst in Western Europe.

Is the Minister aware that we on the United Ulster Unionist Bench fully support his general intention to switch resources to the restoration of existing housing stock in preference to development of vast new housing estates? Regarding the consultation to which he referred, will the Minister give an assurance that he will give priority to the elected representatives, namely, the local district councils, in preference to all others—certainly in preference to self-appointed community groups?

It is certainly my intention to consult everybody, but particularly the elected representatives, including Members of Parliament and councillors But in this change of direction we hope to carry everybody with us—the Housing Executive, the local authorities and reputable tenant and resident associations.

Is my hon. Friend satisfied with the level of cost of public housing in Northern Ireland? Will he comment on allegations that there may have been excessive profiteering at public expense?

Investigations are continuing in that area and allegations are con- tinually being made, but if my hon. Friend has evidence of any malpractice, or believed malpractice, and will pass it to me I shall be only too pleased to look into it.

asked the Secretary of State for Northern Ireland how many violent deaths there have been in Northern Ireland to date in the current year; and in how many of these the persons responsible have been brought to trial.

So far this year there have been 285 deaths attributable to the security situation in Northern Ireland, and 91 persons have so far been charged in respect of 49 of these.

Does the Minister recognise that the first part of his answer gives a totally appalling figure, and that it shows that there has been no improvement in the security situation in all the time that British troops have been in Northern Ireland? Does he not recognise that there is a limit to how far this country can go on pursuing a policy that gives no hope of success?

Which country?

I would point out to the hon. Gentleman that of the 285 deaths, 119 were sectarian and interfactional killings, which are not the responsibility of the security forces. These deaths were caused by Irish people themselves killing their own kinfolk, crossing the sectarian divide for sectarian reasons. The security forces have great difficulty in trying to control that sort of situation. I hope that the hon. Gentleman is not giving hope, succour and aid to the "Troops Out" movement, when he utters those sorts of words in the Chamber.

Does my right hon. Friend agree with me that the number of killings in Northern Ireland over a period is not entirely due to the stability, or lack of it, in the security situation, but is due to the political situation in Northern Ireland? Does my right hon. Friend agree that the fact that these deaths continue on an ever-increasing scale seems to indicate that our political line on this situation at least needs further and deeper exploration? Will my right hon. Friend therefore take into account that some type of conference must be called at some stage, involving all the groupings involved, in order to establish a new political alignment and prevent these deaths, no matter what the security situation happens to be at that moment?

I think that there is some substance in what my hon. Friend says about the importance of the social problem in Northern Ireland—with so many people out of work, the school leaver problem and young people not being able to find a job and therefore being fodder for para-military organisations. There is a major social problem, and it is my intention, while I am responsible for governing the Province, to bring the economic and social problems to the fore, to force the politicians and the unions to spend more time on them, and to try to tackle, partly in that way, the security problem that is inherent in Northern Ireland.

Is the Secretary of State aware that the withdrawal of the British Army at the present time would lead to a far more terrible situation than exists today? Will he make his position clear on that once again? We will give him our full support, as we have done in the past. Is it not true that the level of violence in Northern Ireland is intolerable, and that it will not be stopped until the Secretary of State is able to take steps to put out of circulation for a long time the people who are organising it? Will he, in particular, say what steps he is taking to deal with the high level of juvenile crime, which is causing very great concern to the Royal Ulster Constabulary and others at the present time?

I am obliged to the hon. Gentleman for what he says. The Army, which now numbers 14,500 in Northern Ireland, will stay there as long as the security situation warrants it.

asked the Secretary of State for Northern Ireland if he will introduce legislation to ensure that public funds are not made available for compensation to terrorists or those closely associated with terrorists or with violent or illegal organisations.

I must ask the hon. Member to await the detailed proposals for amending generally the law on compensation for criminal injuries to persons in Northern Ireland, which my right hon. Friend hopes to publish as soon as possible.

Does the hon. Gentleman agree that there is much public disquiet about awards made to suspected terrorists? At least two recent cases have shown the need to give the courts geater discretion in assessing the extent to which payments are involved with terrorist organisations.

Under the present law, the courts have such discretion now. But it is, and has been, a very complicated affair. We have had reports on both criminal personal injuries and property injuries, and we are acting as speedily as we can.

Does the Minister agree that the basis of assessment of compensation under the Criminal Injuries to Persons (Compensation) (Northern Ireland) Act is grossly unfair, not only to terrorists but to the widows of British soldiers killed in the Province? Will he please ensure that in any future legislation on this subject less account is taken of the pure financial loss to the victims and their families, and that the very large differences that exist under the present legislation will no longer be tolerated?

The hon. Gentleman and his hon. Friends will have to wait a little longer. It is a very complicated affair, as is obvious from the way that the hon. Member started his question, when he said that the system is unfair to terrorists as well as to soldiers and others. We have to be very careful what we do in this respect, so that in cutting out one we do not cut out all the others.

Is the Minister of State aware that the Chairman of the Criminal Injuries Compensation Board in Britain, Mr. Ogden, has stated that in future he will make no awards to persons convicted of terrorist activities? Is not this the legislation which should be amended to bring Northern Ireland into line with that principle? Does the Minister agree that compensation awards should be made on the same basis throughout the United Kingdom?

Again, I can go no further. I am aware of Mr. Ogden's statement, with which I, personally, concur, but I still ask the hon. Gentleman to wait a little longer, until the proposals have been prepared.

asked the Secretary of State for Northern Ireland if he will define the term nearest suitable school with regard to primary school education in Northern Ireland.

The "nearest suitable school" is not a term defined in the education statutes. However, in a Northern Ireland Department of Education circular of 8th August 1969 on school transport the "nearest appropriate school" is the one nearest to the home of the pupil which is educationally apropriate to the pupil's age, aptitudes and abilities.

Is the Under-Secretary aware that the education boards are taking the nearest suitable school to mean the school which is suitable on religious grounds? Is he aware that some Roman Catholic parents who believe that separate education has contributed to the present division in Northern Ireland wish to send their children to State schools but are being refused transport for those children to the nearest State school because a church school is within the statutory walking distance? Will the hon. Gentleman undertake to see that all children in Northern Ireland, if their parents so wish, have the right to attend a State school and be provided with transport to it?

My noble Friend is aware of the problems that the hon. Member raises. The hon. Member has instanced a particular case in his own constituency which my noble Friend is looking into while at the same time considering the general point involved.

asked the Secretary of State for Northern Ireland if he will make a statement on the working of the Criminal Jurisdiction Act 1975.

The Criminal Jurisdiction Act 1975 and its counterpart in the Republic of Ireland, the Criminal Law (Jurisdiction) Act 1976, have been in operation since 1st June 1976. The Acts relate only to persons arrested in connection with offences committed after that date. No prosecutions have yet been brought.

Can the Secretary of State inform the House how many members of terrorist organisations who committed crimes after that date and who should be subject to this law are at present in sanctuary in the Republic? What steps is he taking to see that the Act is now implemented?

The Act is in operation. I am sorry to say that there has not been sufficient evidence against anybody who has been apprehended since 1st June in the Republic whereby they could have been dealt with under the Act. Prior to 1st June, and therefore not coming under the recent legislation, 59 persons who were in the Republic were wanted for interview by the RUC.

asked the Secretary of State for Northern Ireland what is the area of land that has been afforested in Northern Ireland; and what is the annual output of home-grown timber.

To date, the Department of Agriculture for Northern Ireland has acquired a total plantable area of 54,609 hectares, of which 49,218 hectares have been planted. Approximately 12,500 hectares of forestry are privately owned. Most of the plantations have not yet reached maturity, so output of timber is restricted. Over the past five years an average of 55,000 cubic metres of timber have been produced annually, but this figure is expected to increase to around 400,000 cubic metres by the end of the century.

How many jobs have been provided in Northern Ireland through the processing of home-grown timber? What increase in this employment, if any, is expected in future? Do adequate facilities for training in forestry techniques exist in Northern Ireland?

Approximately 600 persons are engaged in sawmilling, chipboard manufacture and the processing of homegrown timber. It is expected that by the end of the century, when plantations mature and timber output increases, about 4,000 jobs will be created. During the year ending March 1976 roughtly one-sixth of the Department of Agriculture's industrial labour force had specialist training.

Can the Minister say what attempt has been made to grow coppice timber in Northern Ireland, which is particularly suitable for that purpose, for use in the paper industry? It also has the advantage of being a much more frequently cropped timber than the usual slower-growing timber.

I cannot answer that without notice because I am not an expert on forestry in Northern Ireland. However, I shall write to the hon. Gentleman.

asked the Prime Minister if he will review the terms of reference of the Scrutiny Committee which examines proposals for political honours.

I have at present no changes to propose in the terms of reference of the Political Honours Scrutiny Committee. It is customary for the Committee to be reconstituted on the appointment of a new Prime Minister. The following members of the Privy Council have kindly agreed to serve: Lord Shackleton (Chairman), Lord Carr of Hadley and Lord Franks.

I thank the Prime Minister for that reply. In the case of life peerages, would these distinguished members of the Scrutiny Committee be able to inquire, in the nicest possible way, whether the person concerned was actually proposing to perform the duties that go with the honour? Is it not rather absurd that, whereas the voting strength of the Government in the other place has been about 90 lately, the right hon. Member for Huyton (Sir H. Wilson), alone and single handed, created 215 life peers?

It is not the responsibility of the Political Honours Scrutiny Committee to inquire whether those who are honoured in this way intend to attend regularly in another place, and indeed it should not be its responsibility. Its terms of reference are clearly laid out and do not embrace this matter. I am glad that the hon. Gentleman was not attacking the system of political honours, especially in view of the honour which he himself received in the resignation honours of the right hon. Member for Sidcup (Mr. Heath).

Do the Prime Minister and his predecessor, the right hon. Member for Huyton (Sir H. Wilson), agree with their predecessor Lord Melbourne, who said

"I like the Garter; there is no damned merit in it"?

There is a certain amount of truth in that, and I would not want to disagree with it. I am reminded of the Conservative Prime Minister, Mr. Disraeli—Lord Beaconsfield —who, I am told, when asked whether he could give someone an ivory pass to go through Horse Guards, said "No. You may have a dukedom but not an ivory pass."

While the Prime Minister will no doubt agree that the honours system has been abused in the past, will he also accept that it would be wrong to exclude from the honours list people who have given voluntary service—or, in some cases, professional service—to politics, and therefore to the maintenance of our democracy, while other people who support other worthy causes are automatically included?

Yes. I know that the hon. Gentleman's party has an interesting history on the matter of the abuse of political honours. As far as I am concerned, to judge from my correspondence from both sides of the House, the conferment of honours is something which gives a great deal of innocent pleasure and is felt to be a satisfying reward by many people who give a lot of voluntary service.

asked the Prime Minister if he will pay an official visit to Hong Kong.

I have at present no plans to do so.

Does my right hon. Friend agree that we still need to make progress in improving wages and labour conditions and in rooting out corrupt practices in both private and public organisations in Hong Kong? Will he take up the plans that he had as Foreign Secretary to visit the colony? Does he still hold the view that Britain has serious responsibilities towards Hong Kong, which we must do better at fulfilling, or does he agree with my hon. Friend the Member for Ilkeston (Mr. Fletcher) that the best course for Britain is for us to become a colony of Hong Kong?

I know my hon. Friend's interest in Hong Kong since his visit. That was intended as a compliment, if I may say so, and I want to congratulate him on the assiduity with which he follows up these matters. Indeed, if I may be quite serious, it is one of the advantages of hon. Members visiting such territories that there is a continuing interest that often lasts through the lifetime of a Member's membership of this House.

Meanwhile, would the Prime Minister care to put into perspective the relative average standard of living in Hong Kong as compared with the whole of the rest of Asia, with the possible exception of Singapore?

I would if I were given notice of the question, but I do not carry all those figures in my head.

asked the Prime Minister when he next intends to take the chair at the NEDC.

I refer my hon. Friend to the reply which my right hon. Friend the Lord President of the Council gave on my behalf to the hon. Member for Surrey, North-West (Mr. Grylls) on 30th November.

Does my right hon. Friend agree that in the very difficult economic decisions facing the Government the problem is how to restore confidence in sterling and to ensure a steady reduction in the public sector borrowing requirement without at the same time deflating further an already deflated economy? Would he also accept, however, that, whatever the difficulties of the decision, it is vital for this country that the right balance be struck?

My hon. Friend has stated in a most pithy form the problem that confronts not only the Government but the country—how to ensure as he properly says, that there is confidence overseas among holders of sterling without, at the same time, the country being driven into a downward spiral. That is a problem engaging the attention not only of the Cabinet but of many others, and I hope that we shall come up with the right solution as between those two elements.

How does the Prime Minister equate his encouragement to industry to invest with the fact that he is about to load upon industry an additional £1,000 million of payroll tax and when the minimum lending rate stands at a record level?

The hon. Gentleman is giving only a partial account of the liquidity and taxation position of industry. As I pointed out in my rather long, and perhaps, boring speech in reply to the Queen's Speech last Wednesday— [HON. MEMBERS: "NO."]—I thank the House. I paused slightly, hoping for that. I pointed out that there were many ways in which the Government had actively assisted liquidity and profitability in relation to the company sector, and it is our desire to continue to do so and it is clearly a great advantage to it that, in the present year, very few companies will be paying mainstream corporation tax. But that does not mean that that sector can be totally exempt from burdens. I know that the hon. Gentleman appreciates that.

Does not my right hon. Friend agree that there is no solution ahead for our massive unemployment situation in the absence of a substantial reduction in the working week? If that is the case, would my right hon. Friend give the House an assurance that, whatever he is now discussing with our creditors overseas, nothing will be said to prevent the steady reduction of the working week so that we can bring about job creation of the kind now demanded in our industry?

The problem of unemployment is clearly affected both by the recession in world trade, which has not yet been overcome, and by our own policies of trying to divert resources into exports and into investment first and restraining consumer demand. But I agree with my hon. Friend and believe—though not everyone accepts this—that there is a growing structural problem that affects not only this country but the whole of the Western world. When we are in the position, as I believe we shall be, that we are not asking for any additional support because we shall have a balance in our payments, that may well be the time when we shall have to turn to the kind of measures that my hon. Friend is suggesting, and other countries may find that they need to do the same.

May I return to the question asked by my hon. Friend the Member for Macclesfield (Mr. Winter- ton)? Would not the Prime Minister agree that recent levels of public expenditure have been an important reason for our poor industrial performance? If that is so, when does he propose to take steps to reduce them?

No, Sir, I do not think that the two have any relationship at all. The reason that companies do not invest are many and manifold, as was discovered by the right hon. Lady's predecessor when he made his famous lament to the Institute of Directors three or four years ago. I believe that the reasons go far beyond the level of the public sector borrowing requirement. I know that it is something on which attention is focused at the present time, but we seem to have a habit of singling out one item from our national economy and focusing on that to the exclusion of everything else. There are many elements which affect it.

But if the Prime Minister does not agree that there is any relation between the two, his Chief Secretary certainly does. I took some of the words from a speech he delivered last Friday which indicated that the Chief Secretary thought that the levels of public expenditure were an important reason for poor industrial performance. I thought, too, that the Prime Minister believed that industry should have absolute priority. Does he now go back on that too?

The right hon. Lady should not try to put words either into my mouth or into the Chief Secretary's. These quotations extracted from speeches must be looked at against their background. I feel that strongly because I sympathised so much with the right hon. Lady when the accent was drawn on the difference between, as I understand it, "I will never speak to the right hon. Member for Sidcup (Mr. Heath) again," and, "I will not speak to that man ever again." Of course there is a distinction when one considers these quotations. [Interruption.] I was just trying to get some counsel from my right hon. Friend the Leader of the House, who so devastated the right hon. Lady on Monday night. He tells me that I have nearly got the quotation right, just as the right hon. Lady nearly got the quotation right.

Has the Prime Minister seen the comments of the Director-General of NEDO, following his report on the nationalised industries, to the effect that he knew that the way we run the industries was pretty bad, but that he had not realised that it was that bad? Does not the Prime Minister think that we ought to do something to improve the way in which we run our existing nationalised industries before we take on more?

No, Sir. I do not think that the last part of the hon. Gentleman's question applies, although it is true that we need constantly to be improving the performance of all our industry, not just the nationalised industries, but private industry as well. That is the Government's policy.

I agree with much of what my right hon. Friend has said, but would he not agree that one of the biggest charges on public expenditure today is unemployment benefit? Will he say what he is doing to ensure that investment takes place in labour-intensive industries rather than in capital-intensive industries in order to deal with unemployment? Investment and employment are not necessarily related.

There is no specific Government preference for labour-intensive industries as opposed to capital-intensive industries, although I agree with my hon. Friend—this is the burden of the previous question—that investment in capital-intensive industries does not necessarily produce more jobs. This is one of the problems that we have to face. Of course an increase in unemployment affects the public sector borrowing requirement and that is why we need both to overcome inflation and to get back to steady and sustainable growth.

I have a brief statement to make.