asked the Chancellor of the Exchequer what estimate he has made of the net receipts from the privatisation of public assets during the next two years.

The 1985 public expenditure White Paper assumed that net receipts from special sales of assets would amount to £4·5 billion over the next two years. Receipts from council house sales would add about a further £4 billion.

Will the Financial Secretary confirm that those substantial sums will be devoted largely to the relief of income tax, providing significent benefit only to a minority of the population and small parts of the country? Does he accept that that destruction of capital assets should best be described as treasonably feckless?

As opposed to the hon. Gentleman's comments, he will know that the privatisation programme sees as its main goal an attempt both to improve the efficiency of the economy and to benefit the consumers and the workers in those enterprises from the increased profitability and efficiency of the structures for which they work.

Does my hon. Friend agree that the privatisation measure that has most dramatically affected more than 750,000 people has been the opportunity to buy one's own home, which has been offered to council house and other tenants by the Government?

My hon. Friend is right, and I should like to update her on the figures, which are better than she thought. As at March 1985, 850,000 council houses have been sold, and that number of people are happily the owners of their own homes.

When the Minister has sold off the royal ordnance factories, and paid back all the money owed in pensions, will anything be left for tax relief?

What we have instead are enterprises which serve consumers, employees and the nation more efficiently. I wonder what the hon. Gentleman will do at the general election when, I assume, he presents the Labour party's wholesale commitment to the re-nationalisation of all those prime industries, which will be the best imaginable boon for the Conservative party.

Is my hon. Friend aware that, contrary to what the hon. Member for Wentworth (Mr. Hardy) claims, in an average constituency, such as Brecon and Radnor, no fewer than 3,000 householders will have benefited from the sale of British Telecom shares, 1,000 householders will have benefited from the sale of council homes, and many hundreds from the sale of nationalised industries, which we have brought back to real public control?

I am delighted that my hon. Friend, in an electoral sense, brings us back to the realities of Brecon and Radnor. Beyond his specific points, the consumer, the nation and the workers will all benefit from privatisation.

Do the Financial Secretary's figures include the money that will be raised by the sale of British Gas? Is it not the case that for the Government to retain the last vestiges of their economic credibility they propose to flog off British Gas as a private monopoly to bump up prices and to fund the tax cuts before the election? Is it not, therefore, right that in the Government's eyes privatisation is no longer a virtue, but a necessity?

The figures are precisely as I referred to them — those in the 1985 public expenditure White Paper. I am intrigued that so far the official Opposition have not yet referred in the House to their policy on the re-nationalisation of British Gas. The only reference that I can find is in the overseas service of the British Broadcasting Corporation, when the right hon. Member for Salford, East (Mr. Orme) committed the Opposition to re-nationalisation. To the extent that the Opposition seem unwilling to admit their policy, the Government's policy on the issue is clear.

asked the Chancellor of the Exchequer what effects on share ownership he expects from the phasing out of the state earnings-related pensions scheme.

The emphasis given to wider share ownership in the Government's privatisation programme, coupled with changes in the tax system, have already probably doubled the number of individual shareholders in Britain since we first took office in 1979. The proposals to phase out the state earnings-related pension scheme will encourage the spread of personal pensions and give many more people the opportunity to take a direct interest in the way their pension savings are invested.

Do I understand from my right hon. Friend's answer that he considers that the phasing-out of the scheme will help him in his drive to create a property-owning democracy, and that this goes a long way to explaining the Labour party's opposition to it?

My hon. Friend is right. It is all part of the policy which my hon. Friend the Financial Secretary outlined in answer to the previous question, and which I set out at some length in the Maurice Macmillan memorial lecture a few days ago. It is striking to note that all that the Opposition can do is to say that they will grab back all the shares that the employees of the nationalised industries have taken. Moreover, they will do so at a confiscatory price.

Is it not true that the effect on shares of the ending of SERPS is trivial compared with the effect on the real economy? Do the Government intend that pensioners in the next century should have the same share of financial resources, but financed by private funding, in which case it will be unfairly distributed, or will our pensioners have a smaller share of financial resources?

Whichever way pensions are provided, those resources must be provided by the growth of the economy. There is a big difference between people making their own provision over and above the basic state pension and a funded scheme which will guarantee them a pension in the years ahead, and those who rely on the good will of the taxpayers of the day. Contrary to what the Leader of the Opposition appears to believe, SERPS is not a funded scheme.

Does my right hon. Friend agree that the attitude of the Opposition to wider share ownership now is rather curious, given that when the scheme of wider share ownership was formed it was supported by Labour Members, especially by Lord Lever, who believed passionately that it was important to turn earners into owners? Why has their attitude changed since his day?

That is a good question. My hon. Friend is right, but the difference goes deeper than on this issue. The Labour party today is very different from the Labour party of Lord Lever's time. It is now the party of extremism and mayhem.

rose—

Order. This may be an appropriate moment to say that the Chancellor of the Exchequer can answer only for those matters for which he is directly responsible.

asked the Chancellor of the exchequer if he will make a statement on the present level of inflation.

Over the 12 months to May 1985, the retail prices index increased by 7 per cent.

Does the Chancellor agree that his answer proves that the Government's only claimed achievement is purely ephemeral? Will he admit that his strategy is in jeopardy because of high interest rates and the pressure that they will put upon wage demands this autumn? Will he give a categorical assurance that, given the Government's track record in doctoring figures, he will not take mortgage interest payments out of the retail prices index?

On the latter point, there is no question of the Government taking out mortgage interest payments. I imagine that the hon. Gentleman is referring to the announcement made to the House more than a year ago by my right hon. Friend the Secretary of State for Employment, who said that he was reconvening the independent Retail Prices Index Advisory Committee to re-examine the treatment of housing costs in the RPI. Obviously, we must await what that independent committee recommends. As it is, only the United Kingdom and Canada retain the mortgage interest rate in their indexes. However, we shall abide by what the independent committee suggests.

In the interests of reducing inflation by cutting the mortgage rate, will my right hon. Friend assure us that he will not unduly resist benign market forces if they wish to push interest rates down?

I do not fix mortgage rates. They are fixed by the building societies. My hon. Friend may be assured that I shall not interfere in any way with their decisions. I have said on a number of occasions that the general level of interest rates will be maintained at whatever level is necessary to ensure monetary conditions that will bring inflation down.

As the Government have been successful in funding their borrowing requirement without recourse to the banks, why is inflation going up again?

Inflation is affected by a number of things, and not least by the sharp rise in the value of the dollar against sterling during the latter part of last year. That has been reflected in prices this year. I am glad to say that since then the dollar exchange rate has improved in sterling's favour. That is why the right hon. Gentleman can be assured that inflation will continue to come down.

Is my right hon. Friend worried about the continued high level of personal borrowing and the effect that that might be having on interest rates and inflation?

My hon. Friend is right to raise that issue. I believe that it lay behind the question by the right hon. Member for South Down (Mr. Powell). Bank lending is, of course, only a part of the total credit conditions in the economy that affect the inflation rate. I am not worried that monetary conditions at present are too lax. I do not believe that they are.

Is it the Chancellor's intention as reported in an article by Sam Brittan in the FinancialTimes today, to keep the pound as high as can be got away with to bring pressure to bear on prices and wages? Does the right hon. Gentleman recall that the last time that that policy was pursued it had disastrous effects on the levels of imports and exports and caused problems for manufacturing industry?

Mr. Speaker pointed out to me a moment ago that I must be careful to answer only on matters for which I am responsible. I am not responsible for the articles of Mr. Samuel Brittan.

Does my right hon. Friend agree with the elder statesmen of the Labour party, the right hon. Members for Cardiff, South and Penarth (Mr. Callaghan) and for Leeds, East (Mr. Healey) that inflation is the "father and mother of unemployment"? Does he further agree that the pre-condition for controlling inflation is to keep a tight grip on public expenditure and that those who care about unemployment are misguided if they urge him to adopt a more relaxed approach to public expenditure?

My hon. Friend put the point well. That is the central truth. I am sure that he will be as glad as I am to note that during the two years or so since the last general elction the number of people in work has risen by about 600,000. That is more than in the whole of the rest of the European Economic Community.

Will the Chancellor impose even higher rates of interest and even more cuts in public spending in an effort to squeeze inflation out of the system? Is he aware that such methods could force unemployment up nationally by 17 per cent., which is the current rate of increase in joblessness in Brecon and Radnor?

I am glad that the hon. Lady was able to mention Brecon and Radnor. I hope that it makes her feel a great deal better. The rest of what she said was absolute nonsense.

Does the Chancellor realise that his mismanagement of interest rates this year has so greatly increased inflationary expectations that the threatening warnings about higher pay settlements which he addressed to the CBI this week should have been addressed to himself?

I disagree. There has been no rise in inflationary expectations. The forecasts of every independent forecasting institution show that inflation will fall steadily in the second half of this year and into 1986.

asked the Chancellor of the Exchequer if he will now publish the Price Waterhouse report on the collapse of Johnson Matthey Bankers: and if he will make a statement.

I refer the hon. Gentleman to the statement made by my right hon. Friend the Chancellor on 20 June.

Are the Minister and his friend the Chancellor afraid to publish the truth?

Where was the hon. Gentleman?

I was in Brecon and Radnor getting in Labour votes. [Interruption.]

Order. Let the hon. Gentleman ask his question.

Will the Minister confirm that one of the biggest borrowers from Johnson Matthey Bankers is a friend of the Prime Minister and the Secretary of State for Trade and Industry? Will he also confirm that that man borrowed more than £15 million and employed the son of one of the directors of Johnson Matthey Bankers? Is that why the Government are not prepared to let people know what is in the Price Waterhouse report? Is it not a fact that, on a day when Lambeth is being covered and crawled over by accountants, there is one law for people prepared to carry out the mandate of the people, but no scrutiny from the Bank of England for a company which has lost £248 million? Is there not one law for the bankers and another for Labour councillors in Lambeth, Edinburgh and Liverpool?

No, Sir.

Why did my hon. Friend not refer the hon. Member for Bolsover (Mr. Skinner) to the Bank of England annual report now published and lodged in the Vote Office, documents Nos. 104 and 105, giving a blow-by-blow account of the rescue operation and an inter-round summary, the main thrust of which clearly shows that if the rescue operation had not taken place there would probably have been no danger to the United Kingdom bullion and gold market, but that, due to misunderstandings throughout the world, we might have been at risk? Why does my hon. Friend not give the hon. Gentleman the facts?

rose—

Answer.

Order. Give the Minister a chance.

I could indeed have referred the hon. Member for Bolsover (Mr. Skinner) to the information contained in that report, but as he asked such a concise question I was anxious to give him a concise reply.

If the Select Committee on the Treasury and Civil Service decides to hold an inquiry into the collapse of Johnson Matthey Bankers, may we have an assurance that the Chancellor will appear at the inquiry and that the Price Waterhouse report will be made available, at least on a confidential basis?

I cannot possibly answer questions about hypothetical decisions of the Select Committee on the Treasury and Civil Service.

asked the Chancellor of the Exchequer what plans he has for an extension of the payment date for value added tax to Her Majesty's Customs and Excise.

We have no plans to extend the due date for payment of VAT.

Does my hon. Friend realise that many small businesses in my constituency of Basildon and throughout the country are under increasing pressure to meet VAT payments, while larger firms seem to be extending their line of credit? Will he assist by introducing a flexible payment system? Does he agree that many of those small firms are the life blood of our country and that it would be a mistake to kill the goose which might possibly lay the golden egg?

I am not sure exactly what my hon. Friend has in mind in terms of a flexible payment system, but I shall certainly bring the point to the attention of my right hon. Friend the Minister of State, who is responsible for Customs and Excise matters. As for larger companies which are slow in making payments to small businesses in Basildon and many other parts of the country, I hope that those who behave in that way will note my hon. Friend's comments.

Is the Economic Secretary aware of the extra-statutory concession that was introduced in 1981, which was not debated in Parliament, which extended to barristers the right to defer payment of VAT until they had received payment from their clients? Will he examine the amendment that I have tabled for the Report stage of the Finance Bill, which would extend that notable right to 121 further categories of traders? May we have equality in the tax system? Will the Economic Secretary ensure that the Whips instruct his Back Benchers to vote for my amendment if Mr. Speaker wishes to select it?

I shall look at the wording of the amendment that the hon. Gentleman has tabled.

asked the Chancellor of the Exchequer whether the exports of manufactured goods over the past year give evidence of economic recovery.

Yes. The monthly trade figures for May 1985, published this morning, show that manufacturing exports in the three months to May are up by 13 per cent. on a year earlier.

I welcome that encouraging performance, but has that success been matched by a growth in manufacturing investment, as is required if we are to maintain this performance in the future?

Yes. I am happy to tell my hon. Friend that the figures for 1984 show an increase in manufacturing investment of 14 per cent., which I hope will provide the basis for a sustained improvement in manufacturing exports.

Would not the Chief Secretary be more encouraged by the trade figures if they were the result of an increase in exports rather than a fall in imports? Is he not a little concerned about whether the fall in imports means that we have reached an incipient fall-off in the rate of growth, if not a recession?

There is no evidence that we are heading for a recession. All the indications are that we are in the fifth year of growth since the trough of the recession.

Does my right hon. and learned Friend agree that while the performance of British exports is excellent, the real problem facing manufacturing industry is the penetration of the home market? Can the Government provide help?

Yes we can, by creating the right climate for an improvement in our economic performance, to which the Government's economic policies have been devoted. The figures show that British industry is becoming more competitive and that it will be able to retain a share of the home market.

Surely the Chief Secretary appreciates that it is the balance of trade in manufactured goods, not the level of exports, that is most important. If the Chief Secretary is so pleased with the level of exports, will he explain why our balance of trade in manufactured goods is heading for a further deterioration—indeed, the fifth deterioration?

It is more important to recognise the overall performance, which shows that so far this year there is a current account surplus of £724 million. The forecast for this year is an increase of £3 billion.

asked the Chancellor of the Exchequer what further evidence he has of the strength of the economic recovery.

Gross domestic product grew by an underlying 3½ per cent. between the first quarters of 1984 and 1985. This year the United Kingdom is likely to have the fastest growing economy in the European Community, and in all probability it will grow faster than that of the United States, too.

Does my right hon. Friend agree that this good news will produce an effect that will result in even better news, namely, a reduction in unemployment? Does he broadly agree with a recent CBI study which illustrated this effect by predicting that 1 million new jobs would be created by the end of this year?

My hon. Friend is right to draw attention to the CBI study, which was extremely encouraging both about manufacturing in general and about employment. I referred earlier to the growth in employment during the last two years. That is expected to continue. The level of unemployment will be assisted by the measures which I took in this year's Budget, which will not have an effect until next year. It will also be affected by the level of pay increases, which is still running at too high a level if we are to price sufficient numbers of people back into work.

Does the Chancellor agree that, if interest rates remain at their present high levels, that will severely damage the prospects for economic growth as they will increase the level of inflation, give rise to inflationary expectations by wage bargainers and result in a higher value for the pound, which will make it more difficult for manufacturing and service industries to export? In the light of that, will he reconsider his condemnation of the call by the CBI to reduce interest rates, and will he take action to do so?

No, but the House will have noted that the SDP representative is in favour of measures which would undoubtedly lead to faster inflation.

Does my right hon. Friend accept that his renewed commitment to tax cuts as the path to recovery, higher employment and enterprise is very welcome? Will he also confirm that his right hon. Friend the Secretary of State for the Environment has authorised greater capital spending by local authorities from capital receipts? Will that not also make a great contribution to economic recovery, and is that not consistent with the Government's financial strategy?

On the first half of my right hon. Friend's question, I am indeed glad to have his endorsement of the importance of further reductions in the burden of income tax on the people as a whole as a means of ensuring a sound, healthy and growing economy. I also believe that that is what the people want. As for local authority capital expenditure, it appears that there is some overspend on the figures originally allowed for. This is catered for by the reserve, but at this stage it is difficult to say precisely what the overspend will be.

Will the Chancellor now answer the question which he declined to answer a few minutes ago? Is it the Government's intention to keep the value of the pound as high as they can get away with to keep up pressure on prices and wages?

I do not determine the rate of exchange, as I have made clear to the House on a number of occasions, but I have noted that the Opposition are always complaining that the pound is either too high or too low.

Does my right hon. Friend accept that there are very real signs of a recovery in manufacturing industry, as shown by the recent unemployment figures in the midlands, which dropped while those for the nation as a whole went up? Does he also accept, since a review is now taking place into export credit guarantees, that we have lost some contracts to overseas business whose terms have been more generous? Will he urge on the Department of Trade the importance of making sure that financing is available on equal terms with our competitors?

The Export Credits Guarantee Department does an excellent job, as I am sure my hon. Friend will concede. The whole question of export credit and aid and trade provision is constantly under review. I am sure my hon. Friend will agree that there is little point in extending credit to countries beyond their capacity to repay. As for the recovery in the midlands, since I represent a midlands constituency, as does my hon. Friend, I find that particularly welcome. I am sure that my hon. Friend will also warmly welcome the recent announcement that non-North sea profits during the first quarter of this year are 25 per cent. up on the first quarter of last year.

If the recovery is so well established, why did the index of manufacturing output fall by 1·3 per cent. in one month? Indeed, why is manufacturing output still substantially lower than it was in the spring of 1979?

Manufacturing output is steadily rising. Last year's increase of 3·5 per cent. was the highest in any year since 1973. The right hon. Gentleman may not be aware of it, but the shape of the economy is changing, and many manufacturing industries here, just as in many other countries, are now a smaller part of the total economy, whereas other sectors are growing very rapidly. The overall economy is growing fast, and I would hope that the right hon. Gentleman would be the first to welcome that.

With regard to local councils spending the receipts from council house sales on further housebuilding, will my right hon. Friend accept that this is not import-intensive but it is labour-intensive; it increases labour mobility and is likely to encourage greater employment?

I am glad to say that the numbers of total housebuilding starts are looking very encouraging. I believe that it is more desirable to encourage the growth of private sector housing than a further extension of municipal ownership.

asked the Chancellor of the Exchequer if he will make a statement about the likely cost to the Exchequer over the next five years of extra tax concessions to pension funds that will result from the proposals for the phasing out of the state earnings-related pension scheme.

No extra tax concessions are envisaged. The proposed arrangements would be subject to the same tax treatment as existing superannuation arrangements.

Is not the position that the phasing out of SERPS will mean an overall cost to the Treasury? Is this one of the reasons why there was such a severe clash between the Chancellor and the Secretary of State for Social Services, which the Prime Minister tried to resolve?

No, in so far as the last apocalyptic aspects of the hon. Gentleman's questions are concerned, that is not accurate. He is right to remind us of what my right hon. Friend the Secretary of State for Social Services said on 19 June in the Select Committee on Social Services, when he estimated that the proposals could reduce tax revenues by somewhere in the region of £300 million.

asked the Chancellor of the Exchequer if he will make a statement on the implications for tax policy of the proposals for housing benefit for pensioners in the Green Paper on the reform of social security.

The implications of all the proposals in the social security Green Paper for tax policy will be kept under review.

Will my hon. Friend accept that it is ludicrous that some people who are receiving housing benefit are also paying tax? Will he further accept that many pensioners in receipt of housing benefit have had the purchasing value of their non-inflation proof occupational pensions reduced by 86 per cent. in the last 12 years? Is it not true that housing benefit is some small compensation for that section of the community?

With regard to the specific tax aspects of the question, my hon. Friend is right to say that the inability of Governments in the past properly to raise the tax threshold has created problems; and I know that he will welcome the Government's moves in the last few years to raise real thresholds by 20 per cent. He is also right to say that the prime victims, among the many victims of the evil of inflation, are those who are elderly and those who are seeking to live on the thrift that has produced a modest amount of capital for their old age. I know that he will join me in supporting the Chancellor to make sure that we eradicate inflation, which affects such people more than any other section of the community.

asked the Chancellor of the Exchequer what proportion of limited liability companies operate below the value added tax threshold; and if he will estimate how much revenue would be lost if it was raised (a) to £20,000 and (b) to £25,000.

The proportion of VAT registered traders with turnover below the threshold is about 20 per cent. of the total VAT registered trader population. To increase the threshold to £20,000 would have a negligible revenue cost, and to £25,000, about £30 million.

In thanking my right hon. and learned Friend for that helpful reply, may I ask him to comment on the small business lobby, which has said that it would be good for business energy and good for employment to raise the threshold to £50,000?

I have noted those comments, but equally my hon. Friend and the House will have noticed that there have been representations from other quarters suggesting that to increase substantially the threshold would result in a distortion of competition. Indeed, during consideration of the Finance Bill my hon. Friend the Member for Enfield, North (Mr. Eggar) suggested in an amendment which was not selected, that the threshold should be reduced for the construction industry.

Is my right hon. and learned Friend aware, however, that many small businesses in Suffolk and throughout the country would regard a substantial increase in the threshold at which they became liable to register for VAT as the single most useful step that the Government could take to try to assist their development, and that they regard such a move as long overdue?

I note the comments of my hon. Friend regarding East Anglia, but he and the House may be aware that there are already 300,000 traders who are trading at below the threshold but who have not chosen to de-register. This may indicate some evidence the other way, in that it does not quite reflect the hardship that my hon. Friend's question indicates.

asked the Chancellor of the Exchequer how many representations he has received from professional association football clubs about the betting tax levy.

Representations have been received from the Football League and about two dozen clubs.

Will my hon. Friend confirm that it remains his policy to take a sympathetic attitude towards third and fourth division football clubs faced with large bills for safety and security measures if it becomes necessary for them to appeal to him for help?

I note what my hon. Friend says and compliment him on the interest that he is taking in those clubs. I am sure that it would be best, as my right hon. Friend the Prime Minister has said, to conduct a thorough inquiry into the whole question before deciding what is needed.

Why is it that, when it comes to law and order on the picket lines, the Government will pick up a bill of £900 million for policing during the miners' strike, yet when it comes to law and order at football matches and providing safety at football ground, they rip off over £200 million from the betting tax and give nothing back? Why will the Government not set up a betting levy board for football as has been done for horse racing?

The hon. Gentleman may have overlooked the fact that, for racing, both betting duty and levy apply.

asked the Chancellor of the Exchequer if he will make a statement about the funding of the public sector borrowing requirement.

The Government's practice is to finance their borrowing requirement in a non-inflationary way.

Will the Government, in pursuance of their monetarist policies and their desire to contain the PSBR, make further cuts in public expenditure, or will they sell more public assets?

The Government's policy has always been to maintain firm control over the level of public spending and to maintain it at a broadly constant level in real terms.

Does my right hon. and learned Friend agree that under the last Labour Government the public sector borrowing requirement as a percentage of GDP increased to 9·2 per cent., while today it is 2 per cent.? Even at 2 per cent. of GDP it is costing the taxpayer £18 billion to service the national debt. Is that not high enough? Would it not be folly to increase the PSBR?

I entirely agree with my hon. Friend's conclusions. As a consequence of the profligate policies of the last Labour Government, the IMF had to intervene to restore us to solvency.

Does the right hon. and learned Gentleman not understand that the Government's policy of persistently overfunding and borrowing substantially more than public borrowing requires makes nonsense of their claim to the Opposition parties that more borrowing would lead to even higher interest rates?

I think that the hon. Gentleman misunderstands our position. Overfunding is not expansionary. Like previous Governments, we use a mixture of interest rates and funding policy to maintain monetary control.

asked the Chancellor of the Exchequer what recent representations he has received about the level of the ceiling for depositors with building societies; and if he will make a statement.

Following discussion with the Building Societies Association, abolition of the limit on building society investments under the composite rate arrangements was announced on Budget day and took effect from 6 April 1985.

I welcome the abolition of the ceiling on the amount that depositors can invest in building societies. What effect has this had on the level of deposits? Will it lead in due course to a reduction in interest rates for mortgagees? Does my hon. Friend have any other plans for different roles for building societies?

It is too early to say whether the abolition of the ceiling on deposits will have a material effect on the inflow of funds into building societies. Those funds determine the building societies' ability to lend at a particular rate. I draw my hon. Friend's attention to the speech that I made on 6 June in Eastbourne confirming many of the proposals in the Green Paper, which will enable the building societies to compete more effectively in the market place, especially on an equivalent basis to the banks.

Does my hon. Friend accept that the proposals that he put forward to the building society movement at that conference were widely accepted and that they will benefit the depositor and the home-owner alike? Will he ensure that the legislation which he will, perhaps, introduce next Session preserves the integrity of the building society movement, which is widely respected? Will he ensure also that building societies do not fall prey to overseas financial institutions?

I am glad to know of the welcome that my hon. Friend gives the proposals for reform of the building societies. Although I believe that it is a good thing for the building societies to have wider powers, in relation to both their balance sheets and their other functions, I am conscious that it is important to maintain the principal characteristics of building societies, which have ensured their reputation for such a long period as a safe home for savings and as a means of providing home ownership.

asked the Chancellor of the Exchequer if he has made a calculation of the effect on income to the Treasury of more liberal licensing laws.

No, Sir.

Does my hon. Friend accept that if we were to have more liberalised licensing laws that would have an effect on the income that the Treasury would receive, because to the additional number of foreign tourists who would come to this country to drink under laws as civilised in England as they are in Scotland?

I can see the surface attraction to the Treasury in terms of revenue, but my hon. Friend will know that licensing hours policy and related issues are matters for my right hon. Friend the Home Secretary.

asked the Prime Minister if she will list her official engagements for Thursday 27 June.

This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. This evening I shall be travelling to Milan for a meeting of the European Council.

Will the Prime Minister take an opportunity now to say where she stands in the row between the Chancellor of the Exchequer and the Leader of the House over future income tax cuts? If she is in favour of further income tax cuts, will she explain to the 3·25 million unemployed, all those with bad housing, the parents who want better education in the schools, and many others, why the revenue from North sea oil and from the massive sale of public assets is not being reinvested in the crumbling fabric in this country instead of being given away in election bribes and income tax cuts?

With regard to the speech by my right hon. Friend the Leader of the House, he pointed out very vigorously that expanding welfare policy could be financed only by the proceeds of profitable industry and commerce. My right hon. Friend the Chancellor of the Exchequer pointed out that company profitability last year was the highest ever and that investment reached an all-time high. It seems to me that the two speeches fit together admirably.

Would my right hon. Friend like to confirm firmly that it is not Her Majesty's Government's policy to re-rate agricultural land? Is she aware that hon. Members from both the Social Democratic and the Liberal parties in the so-called alliance are for once in unison in the sense that they have recently shown an intention in the House to re-rate agricultural land?

I gladly confirm once again that it is not this Conservative Government's policy to re-rate agricultural land. I am grateful to my hon. Friend for emphasising that.

Does the Prime Minister recall the activities of Admiral Cochrane, who stood for Parliament in Honiton in 1806—

Order. Before we get too far down that historical line, does the question relate to the Prime Minister's responsibilities?

Admiral Cochrane reneged on his promise to pay 10 guineas a head to those who voted for him and never returned to Honiton again. Does the right hon. Lady think that "Field-Marshal" Heseltine will ever go back to Brecon and Radnor?

I should have thought that the right hon. Gentleman would be pleased with the decision to use Crickhowell barracks as a training camp and a Territorial Army centre, following extensive representations, including the delegation to my right hon. Friend from Lord Hooson. I would also have thought that the right hon. Gentleman would have noted that as long ago as 12 December 1984, long before there was any thought of a by-election in Brecon, it was announced by the Parliamentary Under-Secretary of State for the Armed Forces that the Ministry of Defence, following inquiries, was looking for alternative military uses and was identifying possibilities.

asked the Prime Minister if she will list her official engagements for Thursday 27 June.

I refer the hon. gentleman to the reply that I gave some moments ago.

Will the right hon. Lady accept that the action yesterday by the Secretary of State for Defence conforms brilliantly to the rule that elections work wonders? May we, in the next six days, have an extension of that rule to cover special credit facilities for newcomers to fanning — [HON. MEMBERS: "Reading."] — for increased expenditure on high schools in Powys—[HON. MEMBERS: "Reading."] — for the withdrawal of the Transport Bill to rescue rural buses—[HON. MEMBERS: "Reading."]—an assurance that there will be no nuclear dumping in Wales—[HON. MEMBERS: "Reading."]—and—

Order. No reading of supplementary questions, please.

To facilitate matters, Mr. Speaker, I shall send the right hon. Lady the list.

I thought that the hon. Gentleman's king had been trumped previously. Along with the Crickhowell decision, there was also announced the retention of the Gordon barracks near Aberdeen, a constituency now held by a Liberal. I know of no impending by-election there, unless the hon. Member for Gordon (Mr. Bruce) is so dissatisfied with the Liberal party that he intends to apply for the Chiltern Hundreds.

Is my right hon. Friend aware that a business, Oak Publications, newly set up in Lincoln to publish a free newspaper, has been blacked by the NGA because it refuses to impose a closed shop after the employees, in a free vote, rejected a closed shop? [HON. MEMBERS: "Reading."] Is she aware that that action has, in this new enterprise, frustrated nine jobs — [HON. MEMBERS: "Reading."]—at the hands of the NGA? Will my right hon. Friend agree that in the English language we have a clear word for action of that sort, "tyranny"?

I agree with my hon. Friend that it is a disgraceful act of intimidation and attempted coercion to try to put a small man out of business by saying that there will be a closed shop unless that small business man does as others say. It is an act of tyranny and I hope that he will take up his rights in law.

Now that the retail prices index has risen to 7 per cent., will the Prime Minister repeat and confirm the forecast of 3 per cent. inflation by the end of this Parliament, which she made somewhere in south-east Asia two and a half months ago?

Before I refer to the figure of 3 per cent., I would point out to the right hon. Gentleman that although the retail prices index is at 7 per cent., which is bad for this Government, we have a better record than anything achieved under Labour. The answer to the last part of his supplementary question is that 3 per cent. is an attainable target.

I leave aside the retreat from forecast to target, which is backing away in quite spectacular terms. As the Prime Minister is into comparisons as well as forecasts, will she also confirm that unemployment, real interest rates, company liquidations, the manufacturing trade deficit and mortgage rates are not only higher now than during any month of the Labour Government's history, but are higher than at any time during the history of Great Britain as a whole? And since, as well as making comparisons, the right hon. Lady is making forecasts, will she say by polling day whether unemployment, mortgage rates and interest rates will have come down and whether there will be any improvement in any of the other disasters?

Had the right hon. Gentleman been in Government, the position would have been far worse and we should have gone to the IMF again and joined the list of those who are trying to get help from the IMF, instead of, under this Government, being in the list of those who are giving help through the IMF.

Instead of irrelevant hectoring, will the Prime Minister answer the question? Is it not a fact that all the indicators that I just described are now worse than at any time in our history? Does the right hon. Lady expect any improvement in one of them before polling day?

As I said, the position would have been far worse had the right hon. Gentleman been in power. I do not dismiss as lightly as he does the record of Labour in going to the IMF. It was the worst disgrace Britain suffered. His Administration borrowed money and we are still having to repay what they borrowed.

asked the Prime Minister if she will list her official engagements for Thursday 27 June.

I refer my hon. Friend to the reply that I gave some moments ago.

Will the Prime Minister take this opportunity of confirming to the House the Government's resolve to enhance the status of women in Britain and abroad? In view of the recent agreement to ratify the convention on equality for women from the United Nations, will my right hon. Friend take this opportunity to tell the women of Britain of the Government's excellent record in promoting them in education, the sciences and work?

I am grateful to my hon. Friend. This country has the second highest proportion of women in the labour force in the European Community. The long-term trend is towards an increase in the number of women at work. In the past four years the number of young women entering higher education rose by 17 per cent. In 1982–83 nearly half the new medical students were women, and the number of women studying engineering and technology has doubled in less than 10 years. Those are new opportunities for women under this Government.

What are the Prime Minister's comments on the snide and widely condemned remarks earlier this week by the Secretary of State for Wales, in which he made clear his contempt for mentally handicapped people? Has he been reprimanded?

My right hon. Friend the Secretary of State would do no such thing. The right hon. Gentleman has grossly misinterpreted what was said.

Will the Prime Minister ensure at the Milan summit, for which she is departing this evening, that the problems of famine in Africa are high on the agenda, and particularly that there will be a positive and adequate response to the tragedy of Sudan?

I believe that that matter will almost certainly come up during our discussions, but probably in the separate meetings, not the main meeting, which is on the European Community. On the last occasion when we were at Brussels we asked for a report, in particular on the difficulty of distributing the stocks of food, which is one reason why they do not always reach those who are suffering from famine.

asked the Prime Minister if she will list her official engagements for Thursday 27 June.

I refer my hon. Friend to the reply that I gave some moments ago.

Now that the great majority of rate-capped local authorities have set a rate, has my right hon. Friend noticed the scenes of violence, intimidation and disruption at council meetings, and will she seek broad agreement that there is no place for such behaviour in local democracy and that it should be condemned on all sides?

I entirely agree with my hon. Friend. Some of the scenes, in places such as Southwark, Brent and Hackney have been the face of Socialism in power—a face of violence and intimidation. I hope that when Lambeth sets a legal rate—if it does so—we shall see no more of those scenes, because they are totally undemocratic. They are scenes of the Fascist Left.

Will the Prime Minister give more profound thought to and review the answer that she gave to me several months ago about the economic consequences for women who have had a breast amputated and undergo chemotherapy? Does she realise that, since she made her statement at the 1983 Conservative conference, a woman who has chemotherapy has to pay £2 every three weeks, or £31.50 a year? Will she ask the Secretary of State for Social Services to add a ninth category to the British Medical Association's list of eight scheduled diseases—mastectomy?

I think that the hon. Gentleman is asking about what diseases are scheduled for the purpose of receiving free treatment. I believe that that is the point of the question that he is asking.

No.

In that case, perhaps the hon. Gentleman will put it to me in writing. As he knows, it has not been possible to review that schedule to include the diseases in which he is interested.

asked the Prime Minister if she will list her official engagements for Thursday 27 June.

I refer my hon. Friend to the reply that I gave some moments ago.

Will my right hon. Friend confirm her support for my right hon. Friend the Chancellor of the Exchequer in his determination to reduce the high levels of personal taxation? Is this not in direct contrast with the policies of the Leader of the Opposition, which are basically the same as the policies of his predecessor—high taxation and high inflation?

Yes, the policies of the Labour party when it was in power resulted in 2 million more people being in the income tax bracket when it left office than there were when it entered office. We have taken people out of tax. The Labour party introduced new taxes, such as the national insurance surcharge, and we have abolished taxes. We have increased thresholds—that is the tax-free allowance—which are now 20 per cent. higher than they were when the Labour Government were in power.

asked the Prime Minister if she will list her official engagements for Thursday 27 June.

I refer my hon. Friend to the reply that I gave some moments ago.

Will my right hon. Friend bear in mind that not everybody welcomes with open arms the implications of the ratification of the United Nations convention on discrimination against women? Can my right hon. Friend protect this country from the trap that has been discovered in other countries when they have ratified, which is that 50 per cent. of all the work force in certain firms, no matter how heavy or unsuitable the jobs, have to be women?

I know my hon. Friend's views on this, and I know that she will understand that when we ratified the convention we entered a number of reservations about it, which were made as a result of insistent representations from my hon. Friend.

On a point of order, Mr. Speaker.

Order. Is it directly arisng out of questions?

Yes, it is, Mr. Speaker. I seek your guidance to find out how it is possible for us to have a clear understanding from the Prime Minister when a question is asked about one of her Ministers who made a statement, which was publicly announced in most of the national and local press. The Prime Minister denied that that statement was made, although it was released by the Secretary of State for Wales to the Press Association. How do Back Benchers pursue the matter—when a question is asked and a reply such as we had today is given—to ensure that they get a truthful and a proper reply from the Prime Minister?

I said earlier, and I think that the hon. Gentleman will accept it, that the Prime Minister, or any other Minister, can only answer questions about her direct responsibilities. I suggest that the hon. Gentleman's correct course, if he is concerned about the statement made by another Minister, is to put that question direct to the Minister.

Further to that point of order, Mr. Speaker.

We shall be delayed.

This point of order arises from the point made by my hon. Friend the Member for Ogmore (Mr. Powell). The Prime Minister has denied that the Secretary of State made that statement, when the Minister has agreed to withdraw it and apologise. Will—

Order. I know nothing about such statements.