Skip to main content

Commons Chamber

Volume 115: debated on Thursday 30 April 1987

The text on this page has been created from Hansard archive content, it may contain typographical errors.

House Of Commons

Thursday 30 April 1987

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business

Masonic Trust For Girls And Boys Bill

Associated British Ports Bill

Read the Third time, and passed.

London Regional Transport Bill (By Order)

Order for consideration, as amended, read.

To be considered upon Tuesday 5 May.

York City Council Bill Lords (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday 7 May.

City Of Westminster Bill (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday 7 May at Seven o'clock.

Teignmouth Quay Company Bill (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday 7 May.

London Docklands Railway (Beckton) Bill (By Order)

Order for Second Reading read.

To be read a Second time upon Tuesday 5 May.

Oral Answers To Questions

National Finance

Family Taxation


asked the Chancellor of the Exchequer how the tax position of a couple with two children, receiving half average earnings, has changed since 1979; and if he will make a statement.

Their real take-home pay is up by 17½ per cent., but despite that they pay almost £1 a week less in income tax and national insurance contributions than they would have if Labour's 1979 tax regime had simply been adjusted in line with inflation.

I asked a question about the Tories' tax position, not Labours' tax position. Why does the Minister not at least repeat the answer given in Hansard on 27 March this year—that the real position for a couple, with two children, on half average earnings is that in 1979 they paid 12 per cent. of their income in direct tax while today they pay 16·5, per cent. a real rise of over a third in direct taxation? At the same time, yuppy employees in the City of London on 2,000 times average earnings pay 25 per cent. less in direct taxation. The Prime Minister said before the 1979 and 1983 general elections that taxes should be cut. Taxes were not cut then, so why should we believe her today?

I repeat, for the hon. Gentleman's benefit, that the take-home pay of a person on half average earnings is up by 17½per cent. That is a very substantial increase. As the hon. Gentleman is so indignant about the burden of taxation, perhaps he could say what the effect will be of Labour's policies.

If national insurance conributions are included in assessing the take-home pay of a person on half average industrial earnings, as my hon. Friend the Financial Secretary said in his first answer, does he agree that, although great progress has been made in reducing the overall taxation and increasing the amount of take-home pay of such a person, it is still about a quarter of his total gross pay? Therefore, does he agree that it must remain a high priority to reduce taxation levels further for such people?

Of course. We are very firmly of the view that taxes ought to be reduced, and we keep on saying that. It remains the Government's objective to reduce further the burden of taxation. As my hon. Friend said, this is particularly important for the lower paid.

Why will Ministers not come clean about this issue? Tax and national insurance contributions for those on half average earnings have gone up, as my hon. Friend the Member for Coventry, South-East (Mr. Nellist) stated, from 12 to 16 per cent. According to the Government's answer, even 2p off the standard rate has made no difference in the proportion of tax paid. Is the Financial Secretary not aware that the post-tax pay increases for the top earners have been at double the rate of increase of those on half average earnings? Since this question refers to the total burden of tax, will he admit that indirect taxes, including VAT, cost the very poorest almost a quarter of their income but the richest merely one sixth? When will Ministers come clean about their distribution of the burden of taxation?

If the hon. Lady is so indignant about the burden of taxation on the poor, why did she vote against reducing it yesterday?

Profit-Related Pay


asked the Chancellor of the Exchequer what response he has received to the proposals for profit-related pay announced in his Budget.


asked the Chancellor of the Exchequer what response he has received to the proposals for profit-related pay announced in his Budget.

I am glad to say that over 3,500 employers have registered their interest in profit-related pay with the Inland Revenue.

Is not the attraction of profit-related pay much the same as privatisation to those who work in the industries? It gives them a share in the industries and a share in the profitability of the industry in which they work.

Yes, I believe that my hon. Friend is right. Indeed, I would go further and say that there are two distinct benefits that arise from profit-related pay. The first is the greater interest that employees have in the profitability of their company and the better labour relations that stem from that. The second is the greater degree of flexibility that is introduced into the pay system. One of the big problems in this country has been an excessively rigid pay system. Therefore, I am particularly glad that as many as 3,500 employers, many of them large employers, have already registered their interest in profit-related pay with the Inland Revenue.

Ever present.

Now that the Chancellor seems to be in full stride regarding profit-related pay, will he answer the question that has been put to us continually by the lobbies of the nurses and the other Health Service workers? How could the nurses, ill-paid as they are, obtain any benefit from the profit-related pay system that the Chancellor keeps bandying about?

Nurses should benefit considerably from the reduction in the basic rate of income tax by 2p in the pound, which the hon. Gentleman and his hon. Friends voted against yesterday.



asked the Chancellor of the Exchequer what estimate he has made of the impact on the economy of the level of local authority rates and spending now announced for 1987–88.

Local authorities in Great Britain are planning to increase their current expenditure by more than 8 per cent. this year over last, well above inflation and what the Government believe to be necessary. The excess will be met from the reserve, and will not add to the planning total, but this inevitably means less is available for other services. The result of this overspending is rate increases averaging nearly 7 per cent., so it also means a higher than necessary additional impost on businesses.

Does my right hon. Friend agree that the Audit Commission has established that there are potentially £2 million-worth of savings that could be made within local government, particularly if places such as Cleveland cut out the £250,000 being spent this year on political advertising at the ratepayers' expense?

I agree with my hon. Friend. By a slip of the tongue I think that my hon. Friend said £2 million-worth of savings. In fact, just to get it clear, the Audit Commission believes that £2 billion-worth of savings are available. He is absolutely right about Cleveland. I understand that that Labour-controlled council is increasing its total expenditure by over 13 per cent. this year, which is the third highest increase for the counties. It is no wonder, therefore, that Cleveland has the second highest county council rate in England, and that is bound to have a heavy adverse effect on businesses there. My hon. Friend is entirely right.

Before the right hon. Gentleman quotes the Audit Commission too much, he should recall that the head of the Audit Commission, John Banham, now the head of the Confederation of British Industry, has gone on record as saying that local government is more efficient than central Government. Should the right hon. Gentleman not be looking to his own areas of expenditure rather than berating those local authorities?

The right hon. Gentleman, who is always fair in these matters, will know that we have done a great deal in that respect. We have got the numbers of civil servants in central Government down substantially without reductions in the effectiveness of services. In many other ways, and through many initiatives, we are making substantial savings in administration and in the cost of the programmes. I entirely agree with the right hon. Gentleman that it is important to achieve efficiency in central Government as well as local government, and we devote a great deal of our time to doing that.

Does my right hon. Friend agree that, although most Conservative local authorities have increased rates by 5·5 per cent., Labour, alliance and hung councils have increased their rates by about II per cent.? Will he also consider what the alliance leader of Derbyshire county council said? She said that she supported the Labour party on most matters but could not support it on its rate increases. Is that not gross hypocrisy on the part of the alliance? Is the alliance trying to have it both ways by supporting extra spending without considering the consequences of such spending? Will he acknowledge that Derbyshire is the highest rated council in the country?

On the latter points, my hon. Friend is entirely right. Indeed, I listened with interest to what he said about the alliance leader in his county. It rather mirrors what the Liberal and Social Democratic Members do in the House. They urge a good deal more expenditure, vote against tax cuts and then do not know where to go from there. I agree also with what my hon. Friend said at the beginning of his question. It is significant that rate increases in Conservative councils this year are 5·4 per cent., whereas in Labour councils, other than rate-capped councils, they are 12·4 per cent. That speaks for itself. The burden on domestic ratepayers and businesses is clear.

Is it not true that the new rating system—the community charge—will have a dreadful, catastrophic impact on many industrial towns and their economies in the northern region? Have the Government measured the impact that the new tax will have in so far as it will wipe out tens of thousands, hundreds of thousands, indeed millions, of pounds from spending power in such communities?

When the hon. Gentleman talks about business, he is talking, not about the community charge, but about the new non-domestic national business rate that we shall introduce. He will discover that many businesses in his area will find that it is more beneficial to them than the present system.

Will my right hon. Friend comment on the effect on people in Ealing, and my constituents in particular, of the rate increase of 65 per cent. that was imposed by Ealing council? That will represent an average increase of £5 or £6 per week, and some people will have to pay £12 a week. It will hurt the elderly, the disabled, industrialists, jobs, prices and everything else. Is it not wicked and disgraceful? Is it not typical of members of the modern Labour party? That is just what they would be like in government, and that is why they must be strongly rejected.

I entirely agree with my hon. Friend. He has clearly made the point about the impact of a Labour council in Ealing. Bearing in mind the rate increases in Conservative-controlled councils, I am sure that many ratepayers in Ealing will wish that they lived under a Conservative administration at local level and therefore benefited from the much lower rate increases that are happening elsewhere.

When the Minister replied to the hon. Member for Langburgh (Mr. Holt) about the amount of money spent on political advertising, why did he not admit to the House that £42 million — [Interruption.] If the Chancellor would keep quiet, the Minister could hear me. The sum of £42 million was spent on the sale of British Gas. Hundreds of millions of pounds have been spent by the Government on political advertising of Rolls-Royce, British Telecom and the rest. The Minister prays in aid the Government's record on the Civil Service and the spending by central Government. If the Government are so clever, why are thousands of civil servants in Coventry and elsewhere out on strike this week because of pay cuts over the past seven years?

The hon. Gentleman is only envious that our policies on privatisation are so hugely successful and of great benefit to the economy and are being copied around the world. It is just a pity that he does not understand the significance of them.



asked the Chancellor of the Exchequer what representations he has received seeking changes to the taxation treatment of charities.

Charities have enthusiastically acknowledged the very substantial measures on the tax treatment of charitable giving and other aspects of charitable work introduced by the present Government.

Is my hon. Friend aware that charities have been and are conducting political campaigns? Oxfam has been conducting one, and War on Want is in the process of doing another. Indeed, the director of Oxfam has conducted a campaign in The Times today. Does my hon. Friend agree that for four charities to conduct these campaigns is a fraud on those who subscribe to them and endangers the taxation advantages that the charities enjoy?

Like my hon. Friend, I agree that the abuse of charitable funds in the way that he has described is deeply to be deplored and that that is not the basis on which tax relief is given. I shall draw my hon. Friend's remarks to the attention of my right hon. Friend the Home Secretary, because the Charity Commission has responsibilities for seeing that charities do not abuse the funds that are entrusted to them.

But is it not true that public schools enjoy charitable status, and have they not been turning out apparatchiks and Lobby fodder for the Conservative Benches for a century? What does the Minister intend to do about that?

I am sorry that the hon. Gentleman does not regard education as a suitable matter for charitable support.

Opposition Parties' Policies (Costs)


asked the Chancellor of the Exchequer whether he will prepare estimates of the cost of the programmes announced by the Opposition parties.

I have already costed the Labour party's commitments, which would amount to an additional £34,000 million in a full year. The SDP and Liberal parties' pledges are so vague and confused that they cannot be costed.

I thank my right hon. Friend for that reply. I assume that the £34 billion figure that he has mentioned has been calculated by assessing the cost of various items of policy to which the Labour party is pledged. Can he tell the House whether he has received any representations or objections about specific items that he has costed? If he has not, does he agree that, if the Labour party does not object to the parts, it can hardly object to the whole?

I have often made clear exactly what items are in the £34 billion commitment and how it has been costed. I have made the costings available to the Labour party and have said that, if it will point out a single one that is not official Labour party policy, I will withdraw it. The Labour party has not done so. Almost weekly, Opposition Front Bench spokesmen for social security, education, overseas aid and health keep confirming the pledges. I again ask the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) when he is going to repudiate them. It is perfectly clear that we would have the same situation as the one that we had under the last Labour Government, because if a Labour Government carried out their spending programme they would be back to the International Monetary Fund in no time.

As regards costing programmes, would the Chief Secretary be good enough to tell the House and the country how much extra the average household would have to pay if VAT were to be charged on children's clothing and other essential items, including food? Is it not perfectly clear that what is now being planned by the Tories, should they return, is precisely to levy VAT on such items?

It is quite extraordinary that the hon. Gentleman can come forward with suggestions like that, when he must know that, in order to pay for the kind of programme to which his party is committed, VAT would have to go up very substantially. The cost of his party's programme would be the equivalent of a VAT rate of just under 50p in the pound. The hon. Gentleman puts that point because he is so desperately anxious to find a smokescreen for the cost of Labour's programmes and their tax implications for ordinary people.

In view of the pledge made recently by the hon. Member for Stockton, South (Mr. Wrigglesworth) that the alliance would publish the costings of its policies before the election, purely in the interests of open government would my right hon. Friend agree to run the alliance programme through his Treasury computer? Will he also get his Treasury experts to cost the alliance programmes? Or are they so vague that it would be impossible to tell what they cost?

Indeed, there is nothing as vague as the alliance programme. I have been through the entire document "The Time Has Come", and it is impossible to cost its contents because the Liberals and the SDP do not pledge themselves specifically to anything. Whenever they do, they immediately have to go back to the drawing board, either because they are incapable of agreeing on the policies, or because they have not thought them through.

First, might I ask the Chief Secretary, who precisely is paying for those costings? Is he using public money to do his own costings for the benefit of his colleagues and to prepare election ammunition? Secondly, if he is using public money for that purpose, will he note that some of us take strong exception to that? Thirdly, if the civil servants have got it massively wrong, where has that money been coming from and who is paying for the costings?

Life Funds (Capital Gains)


asked the Chancellor of the Exchequer if he has received representations concerning his plans to change the treatment of capital gains in the life funds.

A number of representations have been received and are being considered. I have also discussed the matter with the Association of British Insurers. There will be an opportunity for detailed debate in Committee on the Finance Bill.

Is my right hon. Friend aware that the life industry is concerned that his proposed changes in the capital gains of life funds will be at the expense of the savings of existing policyholders, who will as a result be put at some disadvantage against other forms of collective savings such as unit trusts?

I note what my hon. Friend has said. Obviously, there will be further discussions about this. I do not necessarily accept that life policy holders will be disadvantaged compared with unit trust holders, because there are advantages for them too. For example, a unit trust holder will pay income tax up to his marginal rate and will pay capital gains above the threshold. We believe that the impact of the changes will be minimal, but, of course, we shall listen to what is said.

Is the Financial Secretary aware that this is of critical importance to mortgage holders? Is he also aware that 50 per cent. of new mortgages last year were endowment mortgages? Can he confirm that more than £1,500 will be lost on the payout from an ordinary £30,000 endowment mortgage if the Government's proposals go through? Why are the Government hitting millions of small investors with higher rates of tax, while leaving their friends in the City untouched?

The impact on particular policies will vary according to different companies. I do not accept the figure that the hon. Gentleman mentioned. Some companies have said that there will be practically no effect. We estimate that the extra tax that would have been paid in 1985 on those policies would have been less than £20 million. That compares with the policyholders' funds of some £70 billion, so the impact will be very small.

Payroll Giving


asked the Chancellor of the Exchequer what information he has about the response to the new payroll giving schemes.


asked the Chancellor of the Exchequer whether he will make a further statement about the implementation of payroll giving schemes.

The new payroll giving scheme has made an encouraging start. The Inland Revenue has approved 11 agencies to run the scheme and 300 employers have already signed contracts to participate. I expect many more to follow.

Does my hon. Friend agree that in the figures that he has given those 300 employers represent nealy 1 million employees, and that those figures mark a most auspicious start for the payroll giving scheme? Will he confirm that, since this Government came to power, giving to the 280 charities has already doubled? Does he expect that, with the payroll giving scheme, we shall see a further large increase of charitable giving to charities great and small? Will he also confirm that the administrative costs to employers of operating the schemes will be an expense allowable against tax?

I welcome my hon. Friend's support for the payroll giving scheme. As he said, it has made a most encouraging start. I understand that information about new employers who will be taking part is coming in every day. The scheme will clearly involve a big increase in charitable giving, which has already doubled since the Government came to power in 1979. Already, tax relief of about £500 million is given by the Revenue in respect of charitable giving and we shall be only too pleased if the scheme greatly increases that. So far as I can comment on my hon. Friend's last point, I believe that to be the case, but if there is any problem I shall let him know.

Does my hon. Friend agree that the vast majority of charities do extremely valuable work, which fully deserves the introduction of tax concessions such as the payroll giving scheme, but that organisations such as War on Want, which have used their funds to finance overtly political advertisements, are abusing not only their charitable status but the tax concessions that that status bestows?

I deplore the abuse of charitable status of the sort that my hon. Friend has described. My hon. Friend the Member for Dorset, North (Mr. Baker) made heroic efforts to be in the Chamber to raise the matter earlier, and I know that it is one of widespread concern.

Does the Minister accept that it is an appalling indictment of the Government's policies that an increasing number of well-respected charities, such as Oxfam, along with other well-respected bodies such as the Archbishop of Canterbury's commission on urban priority areas, have felt the need to criticise the Government's policies?

Political behaviour by those involved in charitable work is always to be regretted. However, that does not invalidate the wish of all those in the House to support genuine charitable activities, and I hope that we will be able to continue to do so.

Does not the much increased level of charitable giving give the lie to those who claim that Britain is much less generous under this Government?

The public have been increasingly generous to charitable causes since 1979. As I have said, charitable giving has about doubled. That is one of the beneficial consequences of the strong increase in standards of living and take-home pay, that have been enjoyed at all levels of the population since 1979.

Does the extent of charitable giving show that the people are more compassionate than the Government?

In measures that we have been discussing and in many other ways; the Government are encouraging charitable giving. In this sense I am sure that the Government are entirely with the grain of the population.

Does my hon. Friend accept that the payroll giving scheme has been widely welcomed by many charities, and even by those which are evidently involved in political activities? Will my hon. Friend accept also, however, that the view is gaining ground that some of the giving is almost irrevocable and is difficult to cancel by employees, while some employers regard the scheme as being unduly bureaucratic? Will my hon. Friend take this opportunity to reassure charities, employers and employees that the scheme is easy to administer?

I think that I can give the assurance that my hon. Friend seeks. We went to great lengths to try to ensure that the operation of the scheme would not be unduly onerous or bureaucratic for employers. That is why we insisted on having independent agencies. The excellent start that the scheme has made suggests that it cannot be too off-putting to employers, otherwise there would not be so many of them either already contracted or wishing so to be.

Value Added Tax


asked the Chancellor of the Exchequer if he has any plans to extend the scope of value added tax.

Is it not becoming increasingly clear to the House and to the country that the Conservative party intends to fight the next general election on two manifestos — [Interruption.] — one that will be published openly, and a secret document in which there are to be proposals to increase the rate of VAT and to extend its scope to food and other products? Despite the fact that the Minister has answered no to my main question, the Prime Minister is not prepared to deny the assertion categorically? When will the Government be honest with the House and the people?

We shall certainly fight the next election on two manifestos, ours and yours.

Order. I shall be standing at the next general election, but I shall not have a manifesto.

Our manifesto, Mr. Speaker, will be of great assistance to us, but I think that the Opposition parties' manifestos will be of even greater advantage to us.

Does my hon. Friend agree that if any of the Opposition's pledges are put into effect VAT will have to be increased to about 49p in the pound? Will my hon. Friend accept also that the collection costs of VAT, given the thresholds that apply on the turnover of a small business, which is roughtly twice the national average wage, are extremely high? Does he agree that the administrative burden on small businesses is onerous and, despite the EEC, would it not be a good idea to have a threshold of about £50,000 a year to assist small businesses?

I note what my hon. Friend said about the threshold. I hope that he and my other hon. Friends will recognise that the measures we are introducing this year for cash accounting and annual accounting should greatly reduce the burden of income tax for small businesses.

Why have papers concerning the extension of VAT in Britain been withdrawn from the May meeting of Common Market Finance Ministers?

The hon. Gentleman can ask whatever questions of the Commission he likes. The Government's policy is to reduce taxation; the Labour party's is to increase it. I am sorry that Labour Members have to resort to repeated smears to cover up the fact that they are the party of high taxation and we are the party which has reduced taxation.

May I draw attention to the report of the Treasury Select Committee entitled "The Defence of VAT Zero-Rating" which contains clear evidence that the Government are determined to fight the case in the European Court, where the European Commission is seeking to extend the base of VAT? Is that not a very clear indication of the Government's views on the subject?

I thank my right hon. Friend for making that clear to the House. The actions of the Government are well known and have the support of the House.

Does the Minister's answer mean that he is saying to the House what up to now the Prime Minister has not been prepared to say, that when the EEC recommends that Britain imposes VAT on food, fuel, children's clothing and new building, the Government will veto it?

Exchange Rates


asked the Chancellor of the Exchequer if he will make a statement regarding the current level of exchange rates.

Does the Chancellor realise how much damage the present high rate of the pound is doing to our manufacturing industries? Is it the Government's policy to keep an artificially high pound as their only means of controlling inflation?

My impression, from a number of visits to manufacturing industries during the Easter recess and from reading very carefully the CBI survey of industrial trends for manufacturing industry, is that manufacturing industry is very well satisfied with the economic conditions at present. It is doing very well and I am very glad that it is. The one thing it dreads and fears is the possibility of a change of Government.

It is well known that the Labour party—this came out from the report to the Treasury Select Committee of the hon. Member for Great Grimsby (Mr. Mitchell), who is a member of the Opposition Front-bench — is in favour of putting up corporation tax to 52 per cent. and of having a dramatic devaluation of the pound, as a result of which inflation would rocket back to the 27 per cent. it was when a Labour Government were last in office. That would be the worst possible thing for manufacturing industry.

Does my right hon. Friend agree that one of the main causes of the strength of sterling at present is the fact that the world financial markets are convinced that the Government will be re-elected? If there were to be a change in polls, with the possibility of a Labour Government or, even worse, a hung Parliament, is it not likely that there would be immediate pressure on sterling?

It is true, as my hon. Friend has said, that if there were to be a change of Government it would be an economic disaster for Britain. The massive confidence that there is worldwide in the British economy, which is demonstrated by the strength of the pound in the foreign exchange market and in a number of other ways, would evaporate overnight. Fortunately, that nightmare will not turn into a reality.

Can the Chancellor tell us whether he is now endeavouring to pursue the same exchange rate policy that he would if we were a full member of the EMS, and, if so, what is the advantage of doing that from outside?

I am happy to answer the right hon. Gentleman's question. As he will be aware, six of the seven Finance Ministers of the Group of Seven met in Paris in February, when we agreed that, having achieved a substantial realignment of currencies following the Plaza meeting in September 1985, it was now right to try to keep the major exchange rates roughly stable. That is what we are seeking to do, and the British Government's policy is in line with that agreement, which was reaffirmed in Washington when we had a meeting of the G7 at the spring meeting of the IMF. That is not only part of an international agreement which would be beneficial worldwide, but it is in the interests of British industry that that should be maintained.

Is it not clear that the recent co-ordinated efforts by my right hon. Friend and other Finance Ministers of the Group of Six have had considerable success in bringing exchange rate stability in recent times through the agreements to which he referred, and has that not been excellent not only for output in Britain but for exports and import substitution?

It has been, and, as I mentioned in the House yesterday in the course of the Finance Bill Committee stage debates—which the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was, unfortunately, unable to attend because he was busy expelling a black activist from the Labour party, but it is good to have him back today — yesterday's Financial Times headed its leading article about the United Kingdom "An island of success". However, despite the indications that we are successful, there are problems in the rest of the world which have to be addressed and it is of first importance that there should be a successful outcome of the meeting today between President Reagan and Prime Minister Nakasone of Japan.



asked the Chancellor of the Exchequer what recent representations he has received about the Budget.

Is the Chancellor aware that there has been little evidence of any improvement, or potential improvement, of the economy of the northern region as a result of the Budget proposals, that there is little evidence of the standard of living being improved there, and that, in fact, wage levels there are decreasing and the north-south divide is becoming even more evident since the Budget proposals? What is he prepared to do about it?

I am glad to be able to inform the hon. Gentleman that he is misinformed. The most recent report from the Association of British Chambers of Commerce made a particular point of saying how big an improvement there has been in the prosperity of business and industry in the north of England. The whole point of the policies that we are pursuing is that they benefit the whole country.

May I say to my right hon. Friend that the Budget has been welcomed by the people of Harlow because, thanks to the success of the Government's economic policies, Harlow is now a boom town with one of the lowest rates of unemployment in the south of England. Does he not find it ironic that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) had the nerve to come to my constituency and unveil a plan — after lunch — for a thousand new jobs to be created, the majority of which would have been created by the local authority, which is Labour-controlled and is crippling my local industry?

I should like to take this opportunity to congratulate my hon. Frend on the manful efforts that he has made throughout the time that he has represented his constituency — which will ensure his continued representation of that constituency — against the activities of the local council, which have been consistently anti-business and anti-industry, as, indeed, have so many Labour councils up and down the country.

Building Societies (Interest-Only Loans)


asked the Chancellor of the Exchequer if he has any plans to permit derogation from the prohibition on building societies making interest-only loans.

The Building Societies Act gives those societies which have total commercial assets of over £100 million the power to lend money to individuals regardless of whether interest is charged on the loan.

Is the Minister aware that building societies believe that that helpful facility, which enables elderly people to liberate the capital in their own homes to make necessary repairs, has not been stopped by the Building Societies Act? Am I right in believing that that was never the Government's intention, and will the Minister make it clear that the facility is still widely available?

Certainly the Building Societies Act does not stop building societies from making such loans. In fact, some societies have shown reluctance to conform with the requirements of the Consumer Credit Act 1974, but other lenders are coping without difficulty. I hope that building societies will not mislead borrowers of the kind that the hon. Gentleman describes by implying that such loans cannot be made.

Prime Minister



asked the Prime Minister if she will list her official engagements for Thursday 30 April.

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

Does my right hon. Friend agree that in implementing promptly and in full the recommended 9·5 per cent. pay increase for nurses the Government have demonstrated their continuing commitment to improving the lot of the nursing profession, which has grown by 30,000 under the present Government? Does she also agree that there is no justification for the lightning teachers' strikes, such as those that are happening in my constituency at present, when the Government have awarded teachers a 25 per cent. average increase? That is far more than my constituents in manufacturing industry have been able to obtain.

I agree with my hon. Friend. Under the last Labour Government nurses' pay actually fell in terms of what it would purchase. Under the present Government it has gone up by 30 per cent. over and above the rate of inflation. As my hon. Friend says teachers have also done very well. Their pay will have increased by 27 per cent. over and above the rate of inflation. That shows that, under this Government, the growth that we have experienced has been put to very good use, not only in reducing taxation, but in bringing an enhanced standard of living to those who work in education and the social services.

On the basis of the information now available to her, will the Prime Minister admit that the Government's poll tax scheme, when combined with the so-called social security reform, will result in most families in this country on joint incomes of less than £21,000 a year being worse off than they are now, before the two schemes are implemented?

The right hon. Gentleman is aware of some of the tables that have been published. He will now have to wait until we see what net incomes are and how much Labour authorities in particular spend and charge in rates.

The Prime Minister is trying to deny a fact that she either knows to be true or ought to know to be true. Such conduct only confirms that the Government are ruthlessly determined not to tell the truth about the financial consequences of their re-election. I put the question to the Prime Minister again. It is a matter of fact on which work has been done and has been published. Is it not true that the majority of families with joint incomes of £21,000 or less will be worse off, regardless of whether their local authority is Labour, Conservative or anything else?

What people will have to pay in rates, or later in community charge, will depend upon some of the expenditure of local authorities. Now I understand why the Leader of the Opposition is not present. It is because Ealing has increased its rate by about 62 per cent.

The Prime Minister is devious and disingenuous at the same time. The whole country will understand that she is determined not to tell the truth about the financial consequences of the re-election of her Government. It is all part of the secret manifesto, and we shall expose the lot.

Perhaps the right hon. Gentleman would give a list of the high rates of Left-wing Labour-authorities and the catastrophe, not only of the high rating of ILEA, but of the appalling education.

Will my right hon. Friend confound the dismal Jimmies and agree with me that Scotland's economic performance is one of the success stories of this Government and that that success story will continue if a Conservative Government are re-elected?

Yes. The CBI survey relating to England, Wales and Scotland was very optimistic. It showed a level of optimism that we have not seen for a very long time. The reports of the top 50 companies in Scotland are excellent and unemployment is now falling.

Order. I know that we may be getting close to an exciting time, but—Mr. Jenkins.

I recognise that the Prime Minister is bound to attach considerable importance to the views of the right hon. Member for Cardiff, South and Penarth (Sir J. Callaghan) on the subject of an MI5 inquiry, but will she none the less repudiate, on reflection, the extraordinary constitutional doctrine that she appeared to be propounding on Tuesday, namely, that the activities of a permanent Government agency, however monstrous they may be alleged to be, cannot be inquired into once there has been a change of Government?

I have nothing to add to the replies that I have given before and to what I said on Tuesday.

Order. When I call the hon. Member for Bolsover (Mr. Skinner) he may say what he wants to say., but I have not yet called him.

Order. If the hon. Gentleman goes on like this, it will be a long time before I call him.

Will my right hon. Friend find time today to assure the House that the Government have no plans to raise the rate of VAT to the 25 per cent. that was reached under the last Labour Government?

"World In Action"


asked the Prime Minister if she will acquire for the library of No. 10 Downing street a video recording of the Granada TV programme "World in Action" on the Law Officers' letter in the Westland affair, broadcast between 8 and 9 pm on Monday 30 March.

May I ask the Prime Minister a question of fact which has not been put to her and which she has had no opportunity to answer? Is it, or is it not, true, as the programme suggests, that her Attorney-General summoned her Cabinet Secretary to confront him with the prospect of the New Scotland Yard police at No. 10 Downing street with the Department of Trade and Industry unless she agreed to an inquiry? Is the programme telling the truth, or is it not?

I have nothing to add to the many, many answers that I have given in statements and in reply to questions. I recognise that the hon. Gentleman will go on asking questions, but nothing can conceal the poverty of his policy.

Is the Prime Minister aware that I am one of the 8 million viewers who heard that most respected reporter, James Naughtie, say—[Laughter.] He went to the same school as I did. James Naughtie confirmed that the centre of operations for releasing the Solicitor-General's letter was No. 10 Downing street. Can the Prime Minister tell us, therefore, why only selected parts of that letter were released? Was it because 10 Downing street considered Chris Moncrieff's shorthand not good enough to take down all of it?

The hon. Member's source did not go to the same school as I did, and I am not responsible for the press.



asked the Prime Minister if she will list her official engagements for Thursday 30 April.

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

In view of Government policy on local government expenditure, will my right hon. Friend reflect on the fact that Derbyshire county council recently announced a programme of massive spending increases in line with Labour pledges, but has suddently and without explanation withdrawn the programme that it had submitted? Can my right hon. Friend think of any possible reason or any event in the near future, that might have influenced the county council's decision?

I understand that Derbyshire is the highest-rated county in England. This is very damaging to business in an area that needs more jobs, and it is highly damaging to domestic ratepayers. The county council may have had that in mind in considering future matters and events which will come about in the next 15 or so months.

In view of the overwhelming evidence that unemployment affects the health of those without a job, confirmed in yet another medical report issued last week, will the Prime Minister say whether she feels any personal responsibility for the ill-health, some of it very serious, of thousands of people in this country, arising directly from her economic policies?

Overall, health in the United Kingdom has been improving steadily. Life expectancy continues to rise. Infant mortality has fallen by one third since 1979. When we came to power in 1979, only £7¾ billion was spent on the National Health Service. This financial year we shall spend about £20 billion, which shows the priority that we have given to the health of the people.


asked the Prime Minister if she will list her official engagements for Thursday 30 April.

With regard to disarmament negotiations, is it not clear that this hopeful situation which we now have has come about because of my right hon. Friend's robust attitude and her refusal unilaterally to throw away our armaments before negotiations begin? Are there not hopeful attitudes in this negotiation which we are about to start?

Yes. I do not believe that the Soviet Union would be thinking of taking out the majority of her SS20s unless we had stood firm and deployed the cruise missiles and Pershings, something that the Labour, Liberal and Social Democratic parties voted against in this House when the decision was made. We would prefer the Soviet Union to agree to a global zero-zero on intermediate nuclear weapons. So far it has been unwilling to do that, but that is what we shall continue to ask for.

Before repeating her usual assertion that there is no connection between the 20 per cent. increase in youth unemployment in Merseyside since 1979 and the 40 per cent. increase in crime on Merseyside over which her Government has ministered since 1979, will the Prime Minister tell the House what she thinks about that well-known Victorian saying, oft repeated in Finchley, that the Devil finds work for idle hands?

I am sure that the hon. Gentleman has heard references several times to studies which show that there is no direct relationship between unemployment and crime. I am sure that he is very much aware that there are countries which have lower unemployment than we have but which have higher rates of crime. I further refer him to an article in the Daily Mail on Wednesday 22 April by Dr. Alice Coleman, who said:

"Historically, there is no evidence that joblessness is the major stimulus to crime."
She went on to say:
"The runaway growth in offences began in the post-war period of full employment, and it was then often suggested that young delinquents were the spoilt products of affluence."
The hon. Gentleman is aware that the peak age for crime is 15. That is not related to unemployment.


asked the Prime Minister if she will list her official engagements for Thursday 30 April.

Is my right hon. Friend aware that many of my constituents in the west midlands are trade unionists, many of whom are supporters of mine? Is she aware of the tremendous change in attitude that has taken place on the shop floor in recent months as a result of Government legislation, with such things as no strike agreements, the end of the closed shop and a generally much healthier and more realistic attitude among the workers? Is she aware that many of them are now capitalists, owning their houses, and shares too?

I agree with my hon. Friend. Our trade union reforms have helped to transform the climate for business. We now have the lowest number of days lost through disputes for 20 years. It is our reforms, and the way in which trade unions have responded, that are in part responsible for the excellent optimistic business survey that we have seen this week. I am delighted that under this Government far more trade unionists own their own homes and shares and have more savings than ever would have happened under Labour.

Business Of The House

3.31 pm

May I ask the Leader of the House to state the business for next week?

Yes, Sir. The business for next week will be as follows:—

TUESDAY 5 MAY—Proceedings on the Chevening Estate Bill (Lords).

Remaining stages of the Landlord and Tenant (No. 2) Bill.

Motion on the Rate Support Grant Supplementary Report (England) (No. 1) 1987–88 (HC 330).

Followed by motion on the Welsh Rate Support Grant Supplementary Report 1987–88 (HC 325).

Motion relating to the Education (School Teachers' Pay and Conditions of Employment) Order.

WEDNESDAY 6 MAY—Debate on the security situation in Northern Ireland, on a motion for the Adjournment of the House.

Motion on the Police (Northern Ireland) Order.

Motion on the Industrial Relations (Northern Ireland) Order.

THURSDAY 7 MAY—Commons consideration of Lords amendments to the Banking Bill.

Remaining stages of the Fire Safety and Safety of Places of Sport Bill (Lords).

Motions on financial services orders. Details will be given in the Official Report.

The Chairman of Ways and Means has named opposed private business for consideration at Seven o'clock.

FRIDAY 8 MAY—Private Members' Bills.

MONDAY II MAY—Private Members' motions.

Debate on nuclear power and the Government's decision on the CEGB's application to construct the Sizewell "B" power station, on a Government motion.

[Debate on Thursday 7 May

  • 1. Financial Services Act 1986 ( Delegation) Order 1987.
  • 2. Financial Services (Transfer of functions Relating to Friendly Societies) Order ( Northern Ireland) 1987.
  • 3. Financial Services (Transfer of functions Relating to Friendly Societies) Order 1987.]
  • The House will want to thank the right hon. Gentleman for honouring so promptly his promise to find time for a debate on security in Northern Ireland and the renewed Provisionals' campaign of murder and terror there. May I ask four questions? First, will the right hon. Gentleman consider again the timing of the debate on the Industrial Relations (Nothern Ireland) Order? It is an important and controversial measure which should not be smuggled away from the public gaze in a late night debate. Secondly, will he consider relocating on Tuesday the Education (School Teachers' Pay and Conditions of Employment) Order? This measure, too, should be debated in the light of day. We would like it to come on before the rate support grant motions. Thirdly, when will those rate support grant supplementary reports be tabled?

    Finally, will the right hon. Gentleman note our continued frustration at not having a debate on the run-down of the Merchant Navy? Early-day motion 515 is now supported by no fewer than 270 right hon. and hon. Members on both sides of the House.

    [That this House notes with anxiety the continuing rapid reduction in the size of the United-Kingdom-owned and registered merchant fleet; notes that this reduction is only partly offset by the increase in the number of United Kingdom-owned ships on overseas registers; expresses its concern at the adverse impact of these developments on the United Kingdom's and North Atlantic Treaty Organisation's defence capability and the United Kingdom economy, including shipbuilding, employment and the balance of payments account of the United Kingdom, notes the dearth of new investment in British-owned ships, whether new or secondhand, which alone can remedy the situation; and calls on Her Majesty's Government to take urgent steps in the forthcoming Budget to encourage such investment and to initiate action in the European Community to adopt domestic policies which will restore the profitability of ship owning and international policies to scrap surplus ships and unfair practices in shipbuilding and trading.]

    Can the right hon. Gentleman think of any reason why we should not have a clear promise of a debate in the week beginning 11 or 18 May?

    What a provocative way for the right hon. Gentleman to end his questions. As to the hon. Gentleman's final point concerning a debate on the Merchant Navy, this matter was put to me last week and I indicated my views then. I shall take into account what the right hon. Gentleman has said, but for the moment I shall have to rest my reply where it was a week ago.

    The right hon. Gentleman asked when the rate support grant reports would be tabled. I am told that they have gone down already today.

    I take note of what the right hon. Gentleman said about the placing of the education order in the business for Tuesday. I cannot hold out hope that that matter can easily be rearranged, but, none the less, it can be considered through the usual channels.

    I take note of what the right hon. Gentleman said about the Northern Ireland industrial relations order, which is scheduled to come on late at night. That is something that we can consider again through the usual channels.

    Has my right hon. Friend had a chance to consider early-day motion 602 relating to the difficulties of British pensioners living in Canada?

    [That this House urges Her Majesty's Government to provide retirement pensioners living in Canada with pension increases as and when they become due in Britain, with or without a social security agreement with Canada.]

    As that early-day motion has been signed by more than 150 right hon. and hon. Members expressing their concern, is the House likely in the next few weeks to get some idea of the Government's attitude towards this matter?

    I thank my hon. Friend for the constructive way in which he put his point about early-day motion 602 concerning British pensioners living in Canada. I would have thought it might first be ventilated to see whether it could be debated within the context of the Finance Bill, and I shall make inquiries to that end.

    Will the Leader of the House say, before the Wednesday debate on Irish affairs, whether there will be a statement on the creation of the promised Anglo-Irish parliamentary tier? Will he also say whether he expects the Government, before dissolution, to complete their existing business? Does he agree that the public would regard it as an incredible waste of parliamentary time and money if the Criminal Justice Bill, which has had 36 sittings, were to be lost? In those circumstances, will the Leader of the House say whether he has come round to the idea of fixed-term Parliaments?

    I note the hon. Gentleman's second point. I am sure that the whole House noted the views that he expressed. I think that any comment upon them could be construed as revealing more than it was able to conceal, so I shall leave the matter there. As to the hon. Gentleman's first point, I can confidently say that there will not be a statement about the possibility of an Anglo-Irish parliamentary tier ahead of the debate that we plan for Wednesday.

    Has my right hon. Friend observed that the Secretary of State for Defence and the Secretary-General of NATO have now added their powerful voices to the anxiety that has been expressed by an overwhelming number of Members in the motion on the Merchant Navy, to which the right hon. Member for Bethnal Green and Stepney (Mr. Shore) referred? In those circumstances, does my right hon. Friend agree that the suggestion made, not for the first time by the right hon. Gentleman, about the good sense of having a debate on the Merchant Navy should be accepted by the Government, in the general national, economic and defence interest?

    I very much understand and sympathise with the points made by my right hon. Friend, but he also knows that I am, as it were, the guardian of the agenda at a time of the year when there is great pressure for committed Government business. That is a fact of which I have to take account, but I shall bear in mind what my right hon. Friend said.

    Will the Leader of the House remind the Home Secretary and the Foreign Secretary that the American Department of Justice and the American State Department, jointly, have received information from a unit, which I think works for the Department of Justice, called the Anti-Nazi Tracking Unit, which has made allegations, as a result of which the President of Austria, Dr. Waldheim, will not be allowed to go to the United States unless he goes there as the President of Austria? This information is important. It is available in the United States. It is relevant to activities in this country. Will the right hon. Gentleman ask for that information to be provided to us so that we can make our judgment on it?

    When the right hon. Gentleman asked for the information to be made available so that we can make our judgment, he rightly underlined the fact that we are talking about allegations and not about proof. Of course, I shall relay the right hon. Gentleman's request to my right hon. Friend the Home Secretary.

    Following the question asked by the right hon. Member for Morley and Leeds, South (Mr. Rees) concerning President Waldheim, is my right hon. Friend aware that I have seen the documents relating to this case and that there is a difference between allegations that have never been tried in court — there is an interesting story why they were never brought to court — and proof, but it is incontestible that President Waldheim has lied consistently about his war record and that he has proved himself by these lies to be totally unfit to hold public office? Although that is a matter for the people of Austria, surely the Government of this country can recognise the outrage that has been felt, and surely we should follow the lead given by others.

    My hon. Friend, who clearly speaks with known experience and authority on these matters, claims that there are certain self-evident situations. I say to him in all friendliness that these are matters for individual judgment. I am being asked to find out whether there can be a ministerial responsibility for making certain documents available, and I have said that I shall look into that.

    Will the Leader of the House ask the Secretary of State for Trade and Industry to make a statement on the A330 and A340 Airbus project? Is he aware that more than 400 A320s have been sold, but we guess that 200 sales were lost because of delays? It looks as though we have lost some sales of A330 and A340 aircraft including sales to Alitalia. Will the right hon. Gentleman please urgently consider this matter?

    I shall certainly pass those points on to my right hon. Friend the Secretary of State for Trade and Industry.

    Has my right hon. Friend noted the progress made in another place with the Irish Sailors and Soldiers Land Trust Bill, which in its present form has been welcomed by the Royal British Legion? On its arrival in this place, will the Government seek to expedite a measure which should not take too much time but which would bring comfort to former members of Her Majesty's forces and their dependants living across the Irish sea?

    I am sure that once the legislation has completed its stages in another place and comes to the House of Commons the usual channels will do their utmost to see that it is dispatched with appropriate regard for the susceptibilities of the House.

    Can the Leader of the House tell us whether, and when, he expects there to be a debate on the Control of Pollution (Landed Ships Waste) Regulations 1987, which came into force on 6 April, which were laid before Parliament on 16 March and which were prayed against by the Leader of the Opposition, when I gather that there were six days remaining? Will the regulations be debated? What will happen if Parliament is dissolved? Will the regulations be in force?

    May I also press the right hon. Gentleman — [Interruption.] This is an important matter in my pocket of the country. May I press the right hon. Gentleman on the issue of the parliamentary tier of the Anglo-Irish Agreement? My hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) was dead right about that. It is an initiative that Parliament should take on board.

    I shall look into the hon. Gentleman's first request. I am afraid that I cannot give him an authoritative answer, but I shall see that he is given an answer.

    As to the hon. Gentleman's second point, I do not think that I can reasonably add to what I have already said. I know that no statement will be made, but that does not mean that, subject to the views of the Chair, reference may not at least be made to it in the debates that will follow.

    Has the Leader of the House, as a member of the Government, read the astonishing written answer issued late last night, but not yet published in Hansard, by the Minister of Transport rescinding the letter of instruction to British Rail that it should not make advance payments to the Channel tunnel project? In view of the implications of this for that project and its viability, and also in view of the implications for the general public travelling on British Rail having to pay a virtual levy to give advance payments for the construction of a tunnel, may we at least have a statement, if not a debate, on the implications of this astonishing change of policy, which appears to throw aside the assurances given in the past about public or quasi-public funding of the tunnel?

    I take note of the point that my hon. Friend has raised. Clearly it is one that commands much interest in the House. I shall see that the point is put to my right hon. Friend the Secretary of State for Transport.

    Reverting to the matter of President Waldheim, it is certainly the responsibility of the Home Secretary whether this very evil man is allowed into the United Kingdom——

    Order. I must remind the hon. and learned Gentleman and the whole House that we should not cast reflections upon the presidents of countries with which we have friendly relations.

    It is the responsibility of the Home Secretary to decide whether President Waldheim or any other such person should be allowed into the United Kingdom. May we have a statement on that?

    Will there be time, before the House rises, for a debate on the shortage of resources for hospitals in Leicestershire? This is a matter upon which hon. Members on both sides of the House were agreed, and I discovered that at the Groby road heart hospital people are waiting six months for open-heart surgery because of the lack of one doctor, one anaesthetist and two beds. [Interruption.] Conservative Members find this a laughing matter, but it is a matter of life or death for my constituents.

    With regard to the first point raised by the hon. and learned Gentleman, I have already said that I shall refer the matter to my right hon. Friend the Home Secretary. In so doing, I shall refer him to the points that the hon. and learned Gentleman has raised.

    As to the second point, the hon. and learned Gentleman will know that the matter was debated in the recent Adjournment debate. My hon. Friends then put the case for health care in Leicestershire all the more effectively because it was put that much more moderately.

    My hon. Friend is aware that the House has spent quite a lot of time and travail putting through the Criminal Justice Bill, which is at present proceeding in another place. Can he assure me that the Government will do everything that they can to get the Bill—I am prepared to give up some of my extended summer holiday, which I may not get for another 30 years — through in this Parliament? It is important that some deals be done in the House of Lords so that, even if it means that the election is delayed for a week, we get that Bill through and thus save a lot of bother in the next Parliament.

    I note the fullhearted concern of my hon. Friend that the Criminal Justice Bill should receive Royal Assent, and I know that because of all the hard work that has gone into the drafting and debating of the Bill it is a view that must be echoed throughout this Chamber.

    Is it not extraordinary—I am sensitive to the legal position, Mr. Speaker—that, while the Attorney-General was willing to bring actions against the London Daily News, The London Evening Standard and The Independent newspapers, he failed to bring an action against ITN news, which repeated all the allegations in The Independent during the course of three bulletins on Monday, at 1 o'clock, 6 o'clock and 10 o'clock? Will the Leader of the House deny that Ministers met and, with the Attorney-General, took a decision that they would bring no action against ITN news because they were worried that they would have to stand the criticism of the British people that this was an attempt to censor ITN news?

    I shall draw to the attention of my right hon. and learned Friend the Attorney-General the clear dissatisfaction that the hon. Gentleman entertains about his conduct.

    Can my right hon. Friend tell us when we might have a debate on the workings of the Child Care Act 1980? Is he aware of the Alice in Wonderland situation that obtains in Leicestershire over the workings of the Act, where, in 1983, as a result of the Lib-Lab pact, a secure house for unruly children was closed? Since then the local authority has laid down its own criteria, which, incredibly, means that the suspicion that somebody is likely to abscond is insufficient evidence for that person to be incarcerated? This has given rise to great concern by the courts and the police and has lead to unruly behaviour in other children's homes. May we have an early debate on this intolerable state of affairs?

    I understand the point that my hon. and learned Friend raises and the considerable local significance and topicality that it possesses. In the nearest future there is no prospect of such a debate in Government time, but I wish him every success in whatever other route he chooses to try to have the matter raised.

    Since it has now become clear that the Prime Minister allowed the use of the Lakenheath base for the F111s to bomb Libya with the excuse that precision bombing was needed, was she aware that it was President Reagan's intention to kill Colonel Gaddafi? Since it has also now become clear from the evidence of the West German police that the bombing of the Berlin disco was not done by Libyan agents, when can we debate the Prime Minister's massive misjudgments before she leaves office?

    I say at once that I do not accept as a premise practically anything that the hon. Gentleman has said. As he requires a debate before the Prime Minister leaves office, that gives us plenty of time to consider his request.

    Will my right hon. Friend please advise me what would be the best course of action if I explain to him that recently in my constituency a leaflet circulated by the alliance stated that the alliance team was pressing the Minister of Transport for urgent correspondence on the Ashbourne bypass? I asked a question of the Secretay of State for Transport some few weeks ago, in reply to which he said that six weeks after the alliance has put out this leaflet no representations had been made. It is more serious than that, because I challenged——

    Order. This is not the object of business questions. The hon. Member must ask for a statement, if not a debate.

    Mr. Speaker, I am coming to the important part. I got in touch with the Department of Transport about this very serious item and was told that no correspondence had been received. However, Mr. Speaker, after I wrote——

    Order. That has nothing to do with me. The hon. Gentleman must address his question to the Leader of the House and make it relevant to next week's business.

    I should like the Leader of the House to investigate my claim that I asked the Minister about this and that he responded that no correspondence had been received. After I had raised the item locally, a letter arrived at the Department of Transport dated 13 April, but postmarked 28 April. Will the Leader of the House investigate how this letter got lost in the Department for two weeks?

    My hon. Friend has asked me a question that implies a responsibility that I am sure I do not possess. There is only a modest ministerial responsibility on any point in this matter. My hon. Friend has to remember that when confronted by this unseemly and unwholesome performance of his political opponents in West Derbyshire he played the dirtiest trick of all time when he won the by-election, when they were so confident that they would win it.

    In view of the no less unwholesome performance of the Prime Minister over the question of the Law Officers' letter on Westland, and in the light of the fact that question 2 to the Prime Minister has been on the Order Paper for over three weeks and that I had the courtesy on 12 April to set out a whole range of questions that might be asked, if the Prime Minister will not answer, will the Leader of the House ask the Attorney-General to come and tell us whether it is true that he confronted the Cabinet Secretary, Sir Robert Armstrong, saying that he would bring the police from New Scotland Yard to No. 10 if the Prime Minister did not agree to an inquiry? It is a question of fact, nothing else. It is simply a factual question that has been on the Order Paper for more than three weeks. In view of the seriousness of the television programme, does that not deserve an answer?

    Will the Leader of the House go and commune, or whatever he does, with the Lord Privy Seal, and ask the Secretary of State for Scotland to answer the question that I put on Monday, which the Lord Privy Seal said he would refer to the Scottish Office, about his knowledge of the raid on the BBC in Glasgow?

    On the first point, the hon. Gentleman argues that he has tabled a question and is not entirely happy with the answer. That is hardly surprising, as he puts down a great many questions. Even those of us who are far less devoted to Question Time frequently have the experience of not being entirely satisfied with an answer. As a consequence of that, the hon. Gentleman asks whether I will see that a question is put to my right hon. and learned Friend the Attorney-General. The hon. Gentleman has made the request, and I shall see what can be done. However, it is perfectly within the hon. Gentleman's competence—he is not exactly a novice in these matters — to table a question to the Attorney-General.

    On the hon. Gentleman's second point concerning the Scottish Office and the answer that I gave on Monday, I shall look into the matter.

    Was my right hon. Friend present earlier when the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) did not make the slightest effort to refute, either in whole or in part, the figure of £36 billion as the cost of implementing Labour party pledges? Does he not think that the time is fast becoming ripe for a debate on the implications to the individual ordinary taxpayer of that figure? Would not such a debate also provide an opportunity for the Liberal party and the Social Democratic party to tell us what their policies are and what the cost of them would be?

    My hon. Friend makes a valid political point. My only regret is-that I have to be rather sparing in my response because of the problem of Government time. However, there are some hours ahead of us today devoted to the Finance Bill. I hope that my hon. Friend will be able to make some of those points at greater length during that time.

    I am sure that everybody in the House is concerned about the terrible pictures coming out of Mozambique showing men, women and children dying in their thousands. There ought to be a statement on the situation in Mozambique, including what further assistance can he given by the Government, particularly towards implementing sanctions against South Africa to stop it attacking its neighbours in that terrible way.

    The hon. Lady has made a request that there should be a statement on what is undoubtedly a great human tragedy in Mozambique, and I shall convey that request to my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs.

    Can my right hon. Friend say whether he has received any request from the right hon. Member for Cardiff, South and Penarth (Sir J. Callaghan) to make a statement about his answer in 1977 relating to the allegations in the Peter Wright book?

    Does the Leader of the House not recognise that there is a great deal of pressure and a wish, certainly from Opposition Members, that a statement should be made on the allegation that up to 30 MI5 officers were involved in subversion and treachery? If a Government profess themselves to be in favour of the rule of law and parliamentary democracy, how can they take such a dismissive attitude about such allegations? Will there be a statement next week?

    On the matter regarding Waldheim, has the Leader of the House seen my early-day motion 921—

    [That this House welcomes the decision by the United States and Canadian authorities that Kurt Waldheim will not be permitted to visit privately their countries; trusts that the same decision will be reached by the United Kingdom Government; believes that all those held responsible for participating in Nazi crimes against humanity should continue to be brought to justice; and expresses its sorrow that someone with Waldheim's war-time record should actually he President of Austria.]

    —regarding this scoundrel?

    Order. The hon. Gentleman must withdraw that word. It is not in accordance with our conventions. He took the right course yesterday in putting down a motion. That is the right way of dealing with such matters.

    I always obey your wishes, Mr. Speaker. I believe that the man is a scoundrel. If I am not allowed to say so in the House because of the rules, obviously I shall withdraw the word, but only in so far as the Chamber is concerned.

    As to the first point that the hon. Gentleman raised, the Government's position has been made clear, not least by my right hon. Friend the Prime Minister. I have nothing further to say. As to the second point, I cannot helpfully add to what I have said to other hon. Members on the matter of Mr. Waldheim and the newspaper reports. I shall refer the matter to my right hon. Friend the Home Secretary.

    Despite the entreaties of my hon. Friend the Member for Stamford and Spalding (Sir K. Lewis) that the House should be kept sitting well into the summer to deal with the Criminal Justice Bill, does my right hon. Friend agree with me and many others that this Parliament has virtually reached the end of its natural life? In view of the abysmal attendance last night and, no doubt, tonight on the Finance Bill, and the early rising of the House, will he convey to our right hon. Friend the Prime Minister the feeling of hon. Members on both sides that the time has come to go to the country and secure a third term for the Government?

    That question does not helpfully require a reply. I have heard what my hon. Friend has said.

    I am not so sure that the Leader of the House is anxious to have an early election, in view of what was stated in one of the newspapers recently, that if the right hon. Member for Finchley (Mrs. Thatcher) got back into power one of the first people to get the chop will be the Leader of the House, apparently because some time ago he made a statement about a balanced programme.

    Order. Again I say that this is not the purpose of business questions. The purpose is to deal with business for next week.

    It was just a preamble to what I am about to say, Mr. Speaker.

    Picking up the debate as it went along, will the Leader of the House consider the possibility of having a debate, at this fairly late stage, on the MI5 destabilisation allegations of the Wilson and Callaghan Governments? Perhaps it will provide a wonderful opportunity for my right hon. Friend the Prime Minister at the time, the hon. Member for Cardiff, South and Penarth (Sir J. Callaghan) to come to the Chamber and take part in the debate and tell us who was protected and why.

    First, in respect of the preamble to the hon. Gentleman's remarks, I am grateful for the character reference. As to the second and more substantial point that he made, I cannot do more than refer the hon. Gentleman to what I said to the hon. Member for Walsall, North (Mr. Winnick).

    In view of events yesterday in Walworth road and the almost certainty that, after any election, some hon. Members will seek to represent sections of the community rather than the community and constituents as a whole, will my right hon. Friend arrange for a debate next week to discuss the procedures of the House in the future, and particularly how individual Opposition Members can be protected against their own leader, in case what happened at Walworth road yesterday is repeated?

    The relationship between Walworth road and the procedures of the House is absolutely fascinating. I do not wish to make any comment that would add to the difficulties. Therefore, my hon. Friend should release us all from the difficulties by rendering his advice direct to the Procedure Committee.

    Order. It might be good for the House if we get on to the Finance Bill quite soon. I shall call hon. Members who have been rising. Questions should relate to the business for next week.

    Will my right hon. Friend find time next week for a debate in view of the distorted statements made last Saturday at the Nottinghamshire Federation of British Coal Tenants conference by the hon. Member for Bassetlaw (Mr. Ashton) against Conservative Members, British Coal and the Government?

    It is an extremely good subject. With all my heart I wish that I could offer Government time next week, but I fear that pressures are such that I cannot do so, I shall certainly bear it in mind for the future.

    As part of the Labour party's smear-a-day campaign, apparently the right hon. Member for Chesterfield (Mr. Benn) is putting it about that Airey Neave plotted with MI5 to bump him off. The right hon. Gentleman is useful to us. Is the right hon. Gentleman not of more use to us alive than dead?

    I was not aware of such exotic developments in the national debate. Therefore, I do not think that I can make an adequate reply, except that I suppose that if I hang around I shall hear much more of the same.

    May we have a debate on the Abortion Act 1967, which celebrates its 19th birthday this week, under which 2.5 million innocents have lost their lives? In particular, may we have a debate on clause 1 of the Infant Life (Preservation) Act 1929, which makes it an offence to kill any child who is capable of being born alive? In the light of recent research, which shows that about 70 per cent. of foetuses of 22 weeks gestational age are survivors, the whole country would welcome such a debate.

    I note what my hon. Friend said. I note that my hon. Friend the Member for Leicester, East (Mr. Bruinvels), said that he has a Bill that will aid in this matter. The topic is possibly more appropriate for private Members' initiatives than those of the Government. In any case, Government time in the near future is simply not available. I shall, as ever, look with benevolence upon what my hon. Friend requires.

    Will my right hon. Friend consider having a debate on the report by Sir Gordon Downey, the Auditor-General, on the £87 million overpayment of benefit? Does he agree that it is totally unacceptable at this time for so much money to be paid out? Perhaps it might be understandable when many civil servants are putting their own financial interests ahead of national interests by going on strike and taking industrial action, particularly members of the Civil and Public Services Association and the Society of Civil and Public Servants? Is he aware that my constituents in Leicester, East will suffer on 11 May unless the strike is ended quickly? People in need of important benefit will certainly not get it because, unfortunately, civil servants care more about their own money than about my constituents.

    I note what my hon. Friend has said. I was not absolutely clear, but I got the impression that he referred to evidence contained in the Public Accounts Committee report. I assure him that plans are afoot to have the Public Accounts Committee's report debated in the reasonably near future.

    Is my right hon. Friend aware that the United States Patent Office has recently authorised the patenting of animal genetic engineering? Is he further aware that an official within that department acknowledged that it would he likely to, or could, lead to human genetic engineering? It represents a severe danger to the future of mankind of a nature equivalent to the nuclear debate that has been going on for the past 30 years. Will my right hon. Friend be good enough to ask the appropriate Minister to authorise a debate on the matter to ensure that we do not go down this line, particularly as during the last week the European Patent Office has received two animal genetic engineering patent applications, which is an inevitable first step towards moving the goalposts down such an extremely dangerous and slippery path?

    My hon. Friend, in a compelling way, requests a debate that would widen a little further the request that I have already had for debates on the topic of abortion and like matters. I have explained why I do not think that such matters are particularly suitable for Government initiatives. I shall bear in mind what he had to say. I recognise that there is a real desire in the House that such matters should be debated, particularly ahead of any legislation that might eventually be brought before it.


    On a point of order, Mr. Speaker. A short time ago the hon. Member for Sherwood (Mr. Stewart) made a comment to the Leader of the House. His comment would not stand up in a court of law. The hon. Member was not even there. I was there and I am defending my hon. Friend the Member for Bassetlaw (Mr. Ashton). The hon. Member for Sherwood made comments, but he was not even there. It was pure supposition on his part. [Interruption.]

    Order. I think that both hon. Members have now had fair shares. It is a pity that the hon. Member for Ashfield (Mr. Haynes) did not raise that point with the Leader of the House. I am afraid that I was not there either.

    Members (Medical Checks)

    4.9 pm

    On a point of order, Mr. Speaker. As you know, an exhibition has been taking place this week in the Upper Waiting Hall and it has been organised by the Family Heart Association. It has been providing a useful service checking Members' cholesterol levels, some of which have worried some hon. Members. I am sure that you will agree that, while that proves the point, made several times in the House, that there ought to be more frequent mobile screening of this kind available in the House, not only for Members but for others who work in the House, the results obtained ought to be confidential medical information.

    I have some evidence that a Lobby correspondent has been compiling a list of Members' cholesterol levels. I do not know what he intends to do with that list but it is a serious matter, particularly as Lobby correspondents are able to move freely about the House. That Lobby correspondents should be standing by the screen and checking Members' cholestoral levels as an hon. Member is sitting in a chair waiting for the result is extremely undesirable. Will you inquire into this matter Mr. Speaker?

    The Lobby correspondent concerned is a Mr. Mike Steele and I saw him with a list. The hon. Member for Leicestershire, North-West (Mr. Ashby) spoke to him yesterday about the list and asked him what use he meant to make of it. That kind of information ought to be private to hon. Members and ought not to be used now or in the future by Lobby correspondents. There is a possibility that the information has already been used, but I ask you to inquire into this matter and to report to the House.

    I thank the hon. Lady for raising that matter. I shall certainly look into it.

    Parliamentary Conduct

    4.12 pm

    On a point of order, Mr. Speaker. My concern is for the honour of hon. Members and for the way in which our business is conducted. For that reason I turn to you, Mr. Speaker, as the protector and custodian in such matters. I should like to raise the matter of an occurrence during business questions.

    You will know, Mr. Speaker, that the microphones are switched on in specific locations, depending on the hon. Member who is on his feet. Within the immediate location of a live microphone an hon. Member from a sedentary position used the first name of a very prominent and internationally known member of a party of which I am not a member, and was heard to attribute to that name the epithet "mass murderer". Is such a practice in order? That remark might be broadcast on newscasts later today. If that is in order, can you tell me, Mr. Speaker, whether I am allowed to use the first name of the Member who made the allegation and call him a liar?

    I do not know whether the hon. Member for Stockton, North (Mr. Cook) is referring to the episode about the President of Austria.

    No. If it was a reference to an hon. Member of this House, it was totally out of order. These microphones are tuned into my Chair. I hear clearly the hon. Member who has been called to speak, because that is the object of the microphones. I frequently do not hear things that are said at the far end of the Chamber, and perhaps that is just as well. I certainly deprecate any epithet of that kind from any hon. Member.

    Further to that point of order, Mr. Speaker. Would it be right for me to ask you, as custodian and protector of the honour of the House, to ask the hon. Member to withdraw that statement? [Interruption.]

    Order. I can hardly believe that an hon. Member would use a phrase of that kind.

    Statutory Instruments &C


    That the Teesside Development Corporation (Area and Constitution) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c. — [Mr. Lightbown.]

    Orders Of The Day

    Finance Bill

    (Clauses 11, 18, 20 To 23, 33, 45, 147 And 160 And Schedule 4)

    Considered in Committee. [Progress 29 April.]

    [MR. ERNEST ARMSTRONG in the Chair]

    Clause 11

    Accounting For And Payment Of Tax

    Question proposed, That the clause stand part of the Bill.

    4.18 pm

    The story that leads to this clause begins most directly with the VAT small business review that was published on 24 October last year. The proposals in the consultation document followed a wide-ranging view of the VAT policy towards small businesses to see whether special arrangements could be provided for them. The review was announced in the White Paper entitled "Building Businesses … not Barriers".

    A major concern expressed by small businesses and often expressed to me directly in letters from hon. Members enclosing correspondence from constituents, is that they often have to pay VAT to Customs and Excise before they are paid by their customers, who frequently take long periods of credit. A further concern was that they were obliged to complete and pay four VAT returns a year and would prefer a system more akin to that for other bills, such as the rates, with regular advance payments.

    The changes proposed will overcome these problems by helping with cash flow and budgeting, and thus ease the VAT burden on small businesses. The consultation exercise that the Government asked Customs and Excise to conduct last October was wide-ranging. Not only were responses received to the consultative document from 192 trade bodies and individuals, but the views of small business were canvassed directly. A question and answer leaflet was sent to 5,000 randomly selected small businesses and 1,256 were completed and returned. The consultative document and leaflet contained a package of proposals targeted specifically at assisting the small business and included a scheme for cash accounting and a scheme for annual accounting.

    The overwhelming majority of respondents welcomed the small business review and, in particular, the proposals for these schemes. There were, and this is the purpose of consultation, suggestions for change to the proposals for both schemes. The most important of these was about the higher limit to allow more businesses to use the scheme and that in itself was a commendation for the principle of the schemes. Other suggestions concerned the detailed operation of the schemes. All these suggestions were carefully considered by the Government and many have been accepted in whole or in part. The result was the Chancellor's announcement in his Budget statement about the introduction of schemes for cash accounting and annual accounting.

    Clause 11 provides the enabling provision for regulations to be made covering the cash accounting and annual accounting schemes. The scheme for cash accounting will give a small business the option of accounting for VAT when it receives payment rather than when it issues a tax invoice. This will give automatic bad debt relief to businesses using the scheme. Similarly, it will be able to reclaim the VAT that it has incurred on its purchases only when it make payment rather than when it receives a tax invoice. Under annual accounting a small business will have the further option of making one VAT return a year rather than four as at present. Businesses choosing to use that option would make nine payments by direct debit on account and a tenth balancing payment would be made with the annual return.

    This enabling clause tells the House little about how the scheme will work, and the conditions for their use. Those details will be contained in the regulations. As I said on 8 April in a reply to my hon. Friend the Member for Berkshire, East (Mr. MacKay), the regulations for cash accounting will not be made until the necessary Community derogation has been approved. A draft of -.he proposed regulations has been placed in the Library and copies have been sent to trade bodies. The regulations for annual accounting will not be made until next spring and again a draft will be sent to trade bodies before they are made.

    As the Chancellor announced in his Budget statement, the schemes will be open to businesses with an annual turnover not exceeding £250,000. That represents a considerable advance on the £100,000 which was originally proposed in the consultative document last October, and covers over half of all the businesses that are registered for VAT. Once admitted to use either scheme, a business will not normally be required to leave until its turnover has exceeded the limit by 25 per cent. to a figure of £312,500 in a year.

    Cash accounting will be available to businesses registering for VAT, as well as for existing registered businesses, but for annual accounting a business must have been registered for at least one year. The regulations will also detail the other conditions to be satisfied for Customs and Excise to give approval to use the schemes and the circumstances in which use of the schemes may be withdrawn. Refusal to use a scheme, or the withdrawal of an approval, would be appealable to the independent value added tax tribunal. The regulations will state the procedures to be used by a business on entry, while using, and on ceasing to use, a scheme, and will be framed to take account, in whole or part, of many of the representations received. Those for cash accounting especially meet the points that have been made about leaving the scheme and receipted invoices.

    Subject to the necessary derogation from the Community, cash accounting will start on 1 October 1987. Annual accounting will start in the summer of 1988 when the necessary computer reprogramming has been completed. Broad details of the scheme will be available from local VAT offices at the end of May. Further information will be contained in a leaflet that will be sent to all businesses with the July, August and September VAT returns.