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Commons Chamber

Volume 113: debated on Tuesday 26 May 1987

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House Of Commons

Thursday 26 March 1987

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business





Orders for Second Reading read.

To be read a Second time upon Thursday 2 April.

Oral Answers To Questions

National Finance

Interest Rates


asked the Chancellor of the Exchequer what representations he has received about interest rates; and whether he will make a statement.


asked the Chancellor of the Exchequer what representations he has received about interest rates; and whether he will make a statement.


asked the Chancellor of the Exchequer what representations he has received about interest rates; and whether he will make a statement.

Bank base rates are now 10 per cent. and a 1 per cent. reduction in most mortgage rates has been announced.

I congratulate my right hon. Friend on his Budget and on the consequences of it. As each percentage point change in interest rates represents about £80 million to the British agriculture industry, does my right hon. Friend accept that farmers and other small business men would welcome the further fall in interest rates that would be likely to flow from membership of the European monetary system?

I note my hon. Friend's support for British entry into the exchange rate mechanism of the EMS. I am sure that farmers and small business men will widely welcome the fall in interest rates that has taken place, as home owners will welcome the fall in mortgage rate announced from 1 May. I am sorry that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) is not here to learn the good news. He has certainly not apologised or informed me that he will be back late from one of his well-known lunches.

Does my right hon. Friend agree that the Budget was especially welcome because a large reduction in borrowing led to lower interest rates and lower mortgage rates? Is he aware that the average family with a mortgage will be £5 per week better off, in stark contrast with Opposition policy, which would penalise that family through higher taxes and higher mortgage rates?

My hon. Friend is right. A contributory factor which has enabled interest rates to come down has been that we have managed to bring the public sector borrowing rate down to 1 per cent. of GDP, a figure reached only twice previously since 1950. Another major influence has been the enormous increase in world confidence in the British economy. As soon as the right hon. Member for Sparkbrook forecasts a crisis, the markets know that everything will come right.

Is my right hon. Friend aware of how well his Budget has been received in the City, where there is still confidence and considered optimism even a week later? Does he agree that the fall in interest rates before and after the Budget are the consequence of the prudent measures that he has taken in reducing Government borrowing to 1 per cent. of GDP?

I am grateful to my hon. Friend for his remarks about the Budget, which has been well received not just in the City, but throughout the country. I noticed that the MORI poll in The Sunday Times gave it the most favourable rating of any Budget since 1979. Even more important, as a result of the successive Budgets that I and my predecessors have introduced since 1979 the British economy is more sound than it has been at any time since the war.

Why has the cut in interest rates taken so long? Is the Chancellor aware that it will not be lost on the British people that he and his predecessors have presided over double figure interest rates for the entire seven-anda-half-year period? That has not been true of any other Government since the second world war. Is the Chancellor aware that the British people also recall that when the Government managed to bring interest rates down temporarily in 1983 they put them up again as soon as the election was over?

Interest rates today are lower than they were when we took over from the Labour Government in 1979. However, if by any mischance Labour were returned to office, interest rates and inflation would go sky-high again.

Does my right hon. Friend accept that it is considered, not only by those on the Government Benches, but by many other informed people, that his Budget is the best since 1979? Does he also accept that many of us think that his important action was to help interest rates to come down and that the Bank of England should follow his excellent lead, particularly bearing in mind today's trade figures?

For as long as I have known him, my hon. Friend has consistently stressed the importance of interest rates. I am glad that he now welcomes the fact that they have come down a bit. He is also right to point to today's excellent current account of the balance of payments figures, which shows a surplus so far this year of £½billion.

As the explosion in private sector borrowing, which is now running at more than 10 per cent. of GDP, was identified in the Chancellor's Red Book as the major upward pressure on interest rates, why is the Chancellor doing nothing to restrain that, and succumbing instead to his obsession with the public sector borrowing requirement? Is that not another example of political prejudice overriding the needs of the economy?

As usual, the hon. Gentleman is entirely mistaken. The chart in the Red Book shows that, while public sector borrowing has declined as a proportion of GDP, private sector borrowing has indeed increased. The totality of borrowing has, however, declined slightly. The big increase in private sector borrowing is a result of the tremendous increase in people buying their own homes on mortgage. We all know that Labour Members are opposed to home ownership, as that last intervention showed.

Glasshouses (Expenditure)


asked the Chancellor of the Exchequer if he will estimate the cost to the revenue in a full year of treating expenditure on glasshouses as plant and machinery rather than agricultural buildings.

I regret that a precise figure is not available, but the cost is likely to be small.

I accept that it is reasonable to write off normal agricultural buildings over 25 years, but does my right hon. Friend accept that to remain competitive with overseas growers—especially the Dutch—British growers must replace their glasshouses every seven to 10 years? As so much of the cost of a modern glasshouse could be decribed as plant and machinery, will my right hon. Friend consider changing the tax rules so that glasshouses can be dealt with as plant and machinery?

Equipment within glasshouses can qualify for the 25 per cent. allowance. Moreover, because of the balancing adjustment system introduced in 1986, if the building itself is demolished or disposed of, the rest of the value that has not been written off can be written off. My hon. Friend made a comparison with Holland. The rate of tax for small companies here is 27 per cent., compared with 42 per cent. in that country. I am not convinced that all the advantages are against the British producers.

Value Added Tax


asked the Chancellor of the Exchequer what recent representations he has received about Her Majesty's Customs and Excise consultation paper "Value Added Tax: Small Business Review".

The consultation paper on VAT was widely welcomed. My right hon. Friend announced in his Budget statement that most of the proposals would be implemented, including cash accounting, with the turnover limit raised from £100,000 to £250,000.

Is my hon. Friend aware of the delight in the small business community at the changes in accounting which the Chancellor of the Exchequer introduced in the Budget and which will improve the tax position of about half of all registered traders? Does he agree that this will lead to the further promotion of more small businesses and more jobs in this vital sector?

I agree that this is a most important measure for small businesses. As my hon. and learned Friend rightly said, the £250,000 threshold for cash accounting covers about 840,000 traders — more than half of all traders who are registered for VAT. It was interesting to note that when the Budget resolutions were voted upon, on a Liberal and SDP initiative, the Opposition parties voted against the very resolution which enables cash accounting to be introduced.

Does my hon. Friend accept that the prompt action on the Customs and Excise review has been well received by all those who want to encourage small firms and the self-employed? Does he also accept that the change to a cash accounting basis will give a welcome boost to cash flows, which in the past have often caused great problems to such firms? Will my hon. Friend address himself to another aspect—raising the VAT threshold for smaller firms from £21,000 to £50,000? Will he continue working to get European agreement on that, because that would also be a great help?

I note what my hon. Friend says about the threshold for registration. As he will know, we have raised that in the Budget in accordance with inflation. There is a proposal in the European Community for 35,000 ecu, which is the equivalent of £26,000. In addition, the cash flow for small companies will be benefited not only by the measures that my right hon. Friend has announced in respect of VAT, but by the 27 per cent. corporation tax for small companies. That will be helpful to their investment.

When can we hope for VAT to return to the 8 per cent. that it was under Labour?

The Labour Government also had a 12½ per cent. rate for VAT. I should have thought that the fact that the Labour party is complaining about excessive consumer expenditure is hardly an argument for reducing the VAT rate.

Living Standards


asked the Chancellor of the Exchequer what information he has on the rise in living standards of (a) a married man on average earnings and (b) pensioners since 1979.


asked the Chancellor of the Exchequer what is the latest information he has on the change in living standards of a married man on average earnings and of pensioners since 1979.

The real take-home pay of a married man on average earnings will have risen by 2·2 per cent. a year between 1978–79 and 1987–88. The latest available information is that the average net income of pensioners rose by 2·7 per cent. a year in real terms between 1979 and 1985. The Budget will help to maintain that improvement.

I thank my right hon. Friend for that reply. Does he agree that it is good news that under this Government pensioners' incomes have risen at an even faster rate than those of the working population? Will he contrast that with what happened during the Liberal-Labour hung Parliament of the old days, when pensioners' living standards and incomes were destroyed by hyper inflation?

My hon. Friend is right. Pensioners' incomes under the Labour Government grew by 0·6 per cent. per annum. That is a sorry contrast with what has happened under this Government. I am sure that pensioners will welcome the reduction in basic rate, which will be worth £1·85 to the average pensioner couple. In addition, 2·8 million pensioners over the age of 65 will have the benefit of tax cuts in the Budget. I am sure that they will also welcome the increase in the age allowance which will bring it to its highest ever level in real terms.

Is my hon. Friend aware that the average married pensioner now has a weekly income of more than twice the value of the state pension? Is he worried that that message has not come across as widely as it should have done? Does he agree that if any additional benefits are to be given they should be concentrated on those who are most in need?

My hon. Friend makes an extremely important point. Some 51 per cent. of pensioners have an occupational pension and 71 per cent. have some investment income, which is why the taxation policies and the policies that would encourage a rise in the rate of inflation — the policies espoused by the Opposition — would be damaging to the interests of pensioners.

Before the Minister and his hon. Friends boast about these rather niggardly improvements in the pension arrangements, may I ask whether he accepts that Britain's pensioners are far worse off and receive much lower pensions than pensioners in all the other EEC states?

I do not accept that. As has been pointed out in the House before, the proportion of gross national product that is spent on pensions in Britain compares well with most countries in the EEC. The point made by my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) about the income of pensioners coming from several different sources — increasingly from occupational pensions and the state pension—representing 40 per cent. of the average pension income is an important fact that the Opposition still have to take on board.

Given that such a high proportion of pensioners now have an increase in income which is liable to tax, is not the introduction in the Budget of an increased age allowance for the over-80s a particularly welcome measure?

My hon. and learned Friend is right. Pensioners have also benefited from the considerable increases in the basic thresholds, which have taken more and more people out of tax. That has benefited a lot of pensioners as well.

Is the Minister proud of the fact that those on the highest incomes in the country have had the highest increase in wealth and income in the last eight years, while the poorest, whom he failed to mention — pensioners and the unemployed — have enjoyed a tiny increase in income? Will he also confirm that the overall burden of family taxation is up significantly on the levels of 1979?

The hon. Gentleman says that the poorest —the pensioners and the unemployed—have enjoyed a tiny inrease in living standards. As I have already demonstrated, living standards are considerably in excess of those that they enjoyed under the Labour Government. What has happened to people on higher incomes is irrelevant to that point. What matters is the absolute increase in the living standards of the pensioners and the poor, and they have been much better under this Government than under the Labour Government.

Order. The hon. Member for Bolsover (Mr. Skinner) must not have private conversations. It is difficult to hear at this end of the Chamber.



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


asked the Chancellor of the Exchequer what representations he has received about his Budget; and if he will make a statement.


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


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

Will my right hon. Friend note the accurate headline in The Economist of 21 March, which simply said.:

"Luck had nothing to do with it."?
Does my right hon. Friend recall that when the Labour party was in power the only time that it cut taxation was when the IMF demanded it? Furthermore, does he recall that the alliance would impose penal taxation for increased pay, which would take away people's negotiating rights to wages and salaries, including those of the teachers?

My hon. Friend makes a number of good points. As to luck, I would not wish to quarrel with the verdict of The Economist on this occasion.

It is perfectly true that of the three or four parties which are chiefly represented in the House, one party, on this side of the House, is in favour of bringing taxes down and is doing so, and the three parties on the other side of the House are in favour of putting taxes up.

Recalling the budgets of former Socialist Chancellors, such as the absent right hon. Member for Glasgow, Hillhead, (Mr. Jenkins) and the absent right hon. Member for Leeds, East (Mr. Healey), is not a measure of the Government's success that their Budgets were approached with trepidation, fear of higher taxation and cuts in public expenditure, while the Budget of my right hon. Friend has been welcomed and centres on the debate on the distribution of increased national wealth?

Having said that, is my right hon. Friend not being unfair to the Opposition parties? Is it not dreadful to give them so little to criticise that they have to threaten to increase taxation at the same time as unemployment is falling and the initials "IMF" have gone out of general circulation in the language of the country? Does my right hon. Friend think that he is being fair to the Opposition parties?

I always do my best to he fair, as my hon. Friend knows, but I am grateful to him for trying to keep me up to the mark in that respect. It is perfectly true that one of the problems that I had in advance of the Budget was that expectations of a good Budget ran so high that there was a great danger of disappointing people. There were never such expectations when Labour Chancellors were in office.

It is also perfectly true that the only short breathing space of sound finance in which the Labour Government ever indulged was when they were under the iron heel of the International Monetary Fund.

Is my right hon. Friend aware of the warm welcome that his Budget has received, in particular from small business men? Does he agree that small business men are an important force in job creation? Does he also agree that if the Government are really serious about curing unemployment, everything possible should be done to secure the future of small businesses?

My hon. Friend is right. Indeed, that has been the Government's consistent policy. The net growth in the formation of new businesses, even after deducting those which have shut down, has been running at about 500 a week, which is far more than in any previous postwar period. That is a very hopeful note for the future. That is one reason why not only have the number of people in work risen by about 1 million since the general election, but unemployment is now falling and has fallen for the past seven months and will continue to fall.

Does my right hon. Friend agree that the decision of the Labour, Liberal and Social Democratic parties to vote against tax cuts is likely to prove as popular as the similar stand by American presidential candidate Walter Mondale, who subsequently just carried only one state.

If the Opposition parties choose to wear the mantle of Mondale, that is their business. Far more important than the Opposition parties is what is happening to British business and industry. We saw only this week the most optimistic survey from the CBI on manufacturing industry since the figures were first collected in the latest form.

The Chancellor of the Exchequer seems to be going round the country telling all the people of his economic success. If he is so successful, why has he done nothing about retirement pensions, and why has he done nothing about family poverty by increasing child benefit? Why have we between 3 million and 4 million unemployed, and why is there a division between north and south? What sort of success is that?

The right hon. Gentleman is slightly mistaken. It is not me who goes round the country speaking of the economic success; it is the country that is telling me of the economic success. The CBI report on Monday or Tuesday of this week is merely the latest manifestation of that.

The right hon. Gentleman talked about the division between north and south. I was particularly interested in an important speech made by my hon. Friend the Member for Darlington (Mr. Fallon) on the economy in the northeast earlier this week, when he pointed out how many new businesses have now been set up in the north-east. He quoted from the Northern Echo, which recently published a survey entitled, "North on way back."

The Government have played fair with the pensioners, which the Labour party never did when it was in office. The answers of my hon. Friend the Economic Secretary to questions earlier today have supplied chapter and verse.

Does the Chancellor really believe that spending a third of public expenditure this year—over £40 billion—on social security, in many cases to keep people out of work, is a sensible way to invest public expenditure? Would it not be better, for very little more money, to create more opportunities for work and to put into work some of the 40 per cent. who have been in the dole queue for over a year who are now long-term unemployed? Does he not recognise that public opinion is in favour of spending more money to create jobs for the unemployed, of doing something about the less prosperous parts of the country and for those on fixed incomes, and not giving the resources away in tax cuts?

The hon. Gentleman has asked a bizarre question and is suggesting that all the money spent on social security is paid to keep people out of work. The vast majority is going on pensioners. I have just been asked about that. There is a need for public expenditure in particular areas. In the autumn statement for 1987–88 I announced an increase in public expenditure on the priority areas of £4¾ billion. On top of that I announced in the Budget a reduction in taxation of over £2½ billion and a reduction in public sector borrowing requirement, above what was set out in the medium term financial strategy, of £3 billion. I believe that even the hon. Gentleman should applaud that balance.

What response has the Chancellor had to the Budget proposals from our nurses? As the right hon. Gentleman is claiming such a success for the policies of the past seven years, will he give an assurance that the Government will accept, without qualification and in full, the recommendations of the pay review body on nurses' pay when it reports to the Government in the next week or so?

I am not quite sure what that has to do with the question, but that matter will be addressed in due course. In any event, it has not come before the Cabinet yet. As for the question of nurses and the Budget, if the hon. Gentleman wants a link, nurses will benefit considerably from the reduction of 2p in the basic rate of income tax.

Has my right hon. Friend received any representations since the announcement that the Government will not proceed immediately with the Green Paper proposals on the reform of personal taxation? Does my right hon. Friend accept that one of the main reasons for the low level of response is that the main beneficiaries of transferable allowances are married women and they do not have a pressure group to represent them?

I believe that my hon. Friend makes a valid point. It has always been difficult with such consultation exercises introduced by Green Papers, because one gets responses from various pressure groups and lobbies, but remarkably few from the public. However, very often it is the opinion of the public that is of great importance in such matters, rather than the views of particular interest groups. I have noted what my hon. Friend said.

If the post-Budget prospects for employment are as good as the Chancellor makes out, why did the Government write to the EEC to say that, on present strategies, there will be no serious inroads into the level of unemployment in Great Britain?

Manufacturing Industry


asked the Chancellor of the Exchequer if he will estimate the effect of his Budget on manufacturing industry.

Manufacturing industry will continue to benefit from the Government's policies, which have seen inflation fall to levels not experienced in this country for almost two decades and created a stable and encouraging environment in which businesses can plan and invest. The Budget continues them and we expect manufacturing output to increase by a further 4 per cent. this coming year.

Does the Chief Secretary share the widespread concern, felt on both sides of the House, about the effect of trade barriers in Japan that are operating with great discrimination against British manufacturing industry and to which there has been no reference whatsoever in the Budget debates? If the right hon. Gentleman shares our concern, can he say what action the Government intend to take to deal with Japan, other than bleating about unanswered letters?

Yes, I share that concern. Yesterday my hon. Friend the Minister for Trade made clear what action the Government were taking.

Does my right hon. Friend agree that the one thing that manufacturing needs is certainty? The Budget has given the certainty of low inflation, and therefore businesses can plan ahead without devastating effects on their cash flow. Therefore, their plans have the chance of coming to fruition.

I agree with my hon. Friend. It is not only the Budget, but the certainty and stability of the economic policies of the past seven years that have produced results. Since the last election manufacturing industry output has gone up by 10 per cent., productivity by nearly 16 per cent., export volume by nearly 30 per cent., investment by 21 per cent., and profitability in manufacturing industry is the highest since 1973. I believe that the continuation of those policies is best for industry and, indeed, industry has recognised that.

Will the Chief Secretary elaborate on the action which he says has been taken about Japan? Those of us who listened to the Minister for Trade yesterday gained the impression that nothing was happening except that letters had been written to the Prime Minister of Japan to which he had not even bothered to reply.

The Government will continue to pursue the issue that was dealt with in the letters. The Government continue to take action on the problem, within the EEC and in other ways.

Has my right hon. Friend received any representations from the hon. Member for Dagenham (Mr. Gould)? If so, have the representations shed any light on the fact that the hon. Gentleman is now apparently against tax cuts, whereas in 1983, in a Fabian tract or pamphlet, he was calling for a Labour Government to implement such cuts so that

"we can buy our way back into full employment?"

I have received no representations from the hon. Gentleman apart from his contribution to the Budget debate, to which I listened. It is clear that the policies that he is putting forward to the country include higher interest rates, higher taxation and higher inflation that are the reverse of what manufacturing industry now requires.

Is the Minister aware that the problem of Japanese trade is not entirely new, and that in November 1986 the Prime Minister was saying that what happened in Japan should happen in Britain and vice versa, and that competition was a two-way street? When the Prime Minister of Japan does not even reply to the right hon. Lady's letters, what action will the right hon. Gentleman take to translate the Government's rhetoric into reality?

I am sure that if the hon. Gentleman cares to put the question about my right hon. Friend"s letters to my right hon. Friend he will get a clear answer.

Budget Proposals


asked the Chancellor of the Exchequer if he will estimate the effect of his Budget on the balance of payments.


asked the Chancellor of the Exchequer what assessement he has made of the implications for the balance of trade for 1987–88 of his Budget proposals.

The current account may show a modest deficit this year as the full effects of last year's exchange rate adjustment take time to work through. But export volumes are already growing strongly and in the three months to February, excluding oil and erratics, they were 11 per cent. higher than a year earlier.

The Chief Secretary will be aware that the £2 billion forecast deterioration in the balance of trade is vulnerable to further movements in the exchange rate. Is the assumption that the exchange rate will remain broadly at its present level an adequate assurance to industry, which has to make plans for the future? What will the Chancellor of the Exchequer do if the exchange rate deviates?

My right hon. Friend the Chancellor of the Exchequer has made it clear that he believes that the current exchange rate is broadly satisfactory. Obviously he will bear the matter in mind as the year progresses. I am sure the hon. Gentleman has observed that we have had extremely good trade it figures for February, which have just been announced. I am sure he will be pleased that the manufacturing trade deficit is down by nearly £800 million in the three months to February compared with the previous three months.

Is the Minister saying that the forecast deficit in manufactured goods of £8 billion will be less in the event of the figure that we have been given? In any event, is he happy about the size that it will be? He seems to be unduly complacent today.

It is too early to say what the position will be for the remainder of the year, and I would not wish to change the forecast now. I hope the hon. Gentleman will agree that there has been a good start to the year. He will know that since 1981 the United Kingdom's volume share of developed country's exports of manufactured goods has held steady after decades of decline. The past three months figures are extremely encouraging.

The question refers to the balance of payments. Does my right hon. Friend agree that one of the positive factors of our balance of payments, as a consequence of the Government's policies, is that it has been possible to secure considerable earnings from overseas assets? Is it not likely that this will continue as North sea oil declines?

My hon. Friend is entirely right. There has been a large increase in overseas assets and we expect about £110 billion at the end of 1986. These assets have grown up very much over the past seven years, and, as my hon. Friend has said, they make a major contribution to our overseas earnings, and a permanent one. The current figure is about £4 billion.

Does my right hon. Friend agree that criticism of the prospects for our balance of payments comes from a rather extraordinary quarter—from parties whose policies are likely to increase substantially any deficit that will occur?

I entirely agree. I shall pick up one example from the many that I could choose. It is a near certainty that the Opposition's policies would greatly increase inflation. That would most seriously and adversely affect Britain's competitiveness, and, therefore, have a serious impact on the trade figures.

Does the right hon. Gentleman agree with the annual EC economic report, which the Government have accepted, which states that the modest recovery in investment in manufacturing is insufficient to reverse the continuing decline in manufacturing jobs and the fact that we always have more manufactured imports than exports?

I wish to make it quite clear that the report to which the hon. Lady refers is the Commission's report.

I am sure that she will be as pleased as anyone to recognise that manufacturing investment is expected to rise this year and that we have an exremely good CBI March survey on that score. Manufacturing investment has been well up since 1983, and we want that to continue.

Does the right hon. Gentleman agree that one way in which British exports and manufacturing industry could be helped would be immediately to enter the European monetary system exchange rate mechanism? That would help by stimulating lower interest rates and bringing the continuity to the exchange rate that is so badly lacking, as is demonstrated by the present fluctuations.

The prudence shown in the Budget is clearly helping with lower interest rates. There are many other aspects of the Budget, including reductions in basic rate tax, which will help by putting downward pressure on wage increases, which will help industry's competitiveness and costs as well. Those measures are the best way in which to help manufacturing industry.

As regards the European monetary system, I have nothing to add to what my right hon. Friend the Chancellor has often said in the House.

Gross Domestic Product


asked the Chancellor of the Exchequer what is the latest information he has about growth of gross domestic product in the United Kingdom compared with the rest of the European Economic Community during the 1960s, 1970s and 1980s.

During the 1960s, and again during the 1970s, the United Kingdom rate of economic growth was the slowest of all the major EEC economies. During the 1980s we have had the fastest rate of economic growth of all the major EEC economies.

Will my right hon. Friend confirm that, as far as growth and productivity in manufacturing industry are concerned, Britain's performance in the 1980s has outstripped even that of Japan? Does that, perhaps, account for the reluctance of the Japanese to allow British exporters access to their market on fair terms?

On the first point, it is true that during the 1980s as a whole our manufacturing productivity has grown fastest of all the G7 countries — the major industrialised countries that go to the annual economic summit. In the 1960s and 1970s, however, our rate of growth of manufacturing productivity was the lowest.

As for the most recent Japanese conduct in particular, we have yet to get a final decision, but the apparent shutting out of Cable and Wireless from an important contract in Japan is unacceptable.

Consumer Spending


asked the Chancellor of the Exchequer if he will make a statement concerning the current level of consumer spending.

Consumers' expenditure is forecast to grow at around 4 per cent. in real terms in 1987.

Bearing in mind that the increase in consumer expenditure has been boosted by an increase in the use of credit cards, what is the precise relationship between that increase and the velocity of circulation?

That is a topic which the hon. Gentleman might raise in the Treasury and Civil Service Select Committee rather than at Question Time.

As Opposition Members are always grumbling, and as many of us are concerned about unemployment, why on earth are they concerned about consumer spending, which reduces unemployment?

My hon. Friend is absolutely right, but it is only one of many contradictions in the Opposition's approach to economic policy at present.

Public Sector Borrowing Requirement


asked the Chancellor of the Exchequer what is his latest estimate of the public sector borrowing requirement for 1986–87.

My latest estimate for the public sector borrowing requirement in 1986–87 is £4·1 billion, which is around 1 per cent. of gross domestic product. This represents the lowest that the PSBR has been as a percentage of GDP for 17 years.

Does my right hon. Friend agree that it is a very remarkable achievement to have cut the borrowing requirement to this extent in a year in which there have also been substantial cuts in taxation, and, in the autumn statement, a very substantial increase in public spending? Is this not just the kind of triple crown which, unfortunately, has eluded the English rugby team this year?

My hon. Friend is right, and, of course, this is the result of sound policies consistently pursued over a number of years, which have strengthened the economy to the point where this is possible. That, indeed, is what would be jeopardised were there to be any change, by any mischance, in the policies that have been pursued.

Prime Minister



asked the Prime Minister if she will list her official engagements for Thursday 26 March 1987.

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 attend a state banquet given by King Fand of Saudi Arabia.

Is my right hon. Friend aware that when she goes to Moscow next week and raises human rights issues, with all-party support in this House, Britain's case will not have been helped by the extraordinary article in the Soviet press attacking Britian's record on human rights written by the right hon. Member for Chesterfield (Mr. Benn)? Would it not help if those remarks were immediately disowned by the Deputy Leader of the Opposition?

I agree that it would, but if the right hon. Gentleman, who has used so extensively the liberties of this country over many years, finds that he can no longer tolerate them, I should be delighted to ask Mr. Gorbachev, on his behalf, for a resident's permit in the Soviet Union.

When did the Prme Minister first become aware of the Health Education Council's report — [Interruption.] —"The Health Divide: Inequalities in Health in the 1980s", which the chairman of that council attempted to suppress on Tuesday?

I first became aware of it when I read the newspapers this morning. As the right hon. Gentleman is aware, the report has not yet been endorsed by the chairman of the Health Education Council or by its members. The Government have not attempted in any way to prevent publication. The chairman of the council has emphasised that at no time did Ministers intervene.

I should have realised that the Prime Minister would be more interested in the political machinations than in the content of the report. Let me ask her about that. How does she justify the fact that, during her eight years in office, health inequalities have so increased and the health of the lower paid and unemployed has so deteriorated that the life expectancy of these people has been reduced?

I have indicated to the right hon. Gentleman that at no time did Ministers intervene to prevent the publication of that report. I do not know whether he has read it in full. I have not read it in full, but in view of what is in the newspapers this morning I had a quick look at it. Overall, health in the United Kingdom has improved steadily. Life expectancy continues to rise, infant mortality has fallen by one third since 1979, and the study found that every country experiences to a greater or lesser extent differences in health between regional, occupational and income groups.

I am not suggesting that Ministers wrote or even read the report. I am suggesting that they are responsible for the circumstances that the report reveals. Does the right hon. Lady understand that that report proves conclusively that there is a lower life expectation for men and women in the lower income groups than there was eight years ago, and that is the result of their deteriorating health prospects? In the light of that report, how can the right hon. Lady justify a system that does not concentrate resources on pensioners, on child benefit and on reducing unemployment? In the light of that report, how does the right hon. Lady justify a policy which, over eight years, has cut taxes by £50 a day for the best paid and will not provide £5 a week for the pensioners?

The Government have vastly increased support for the National Health Service—the right hon. Gentleman chooses to ignore this—from £7½ billion in the year when I went into No. 10 Downing street to £20 billion next year. Moreover, this Government have attempted to deal with regional health problems by a policy which was started by the last Government—the policy of re-allocation of National Health Service resources to those areas in greatest need. We London Members have occasion to learn that what we have given up has benefited the other regions.

Has my right hon. Friend seen the renewed reports that the Japanese Government intend to squeeze Cable and Wireless out of its planned investment in the Japanese telecommunications industry? What do the Government intend to do about that deplorable situation?

As my hon. Friend is aware, I wrote to Mr. Nakasone, the Prime Minister of Japan, on 4 March to express our interest in the Cable and Wireless bid. I have not yet had a reply—[Interruption.]

Order. Those hon. Members who were in the House yesterday will know that this is a matter of grave concern.

We see this as a test case of how open the Japanese market really is. I remind the House that we shall shortly have more powers. When, for example, the powers under the Financial Services Act 1986 and the Banking Bill become available, we shall be able to take action in cases where other countries do not offer the same full access to financial services as we do.

Will the right hon. Lady, on her visit to Moscow, on which we wish her well, raise three questions? First, on the comprehensive test ban treaty, in which we are a direct participant in the negotiations, will she explore the possibility of an interim agreement for a reduced number of tests at a much lower threshold? Secondly, on the 1977 treaty on the prevention of accidental use of nuclear weapons, will she build on article 4 and improve the direct communications between Downing street and Moscow? Thirdly, will the right hon. Lady raise with the Soviet Union the serious problems of the danger to shipping in the Straits of Hormuz, on which there should be united action and on which Soviet assistance in saying that the Iranian threat to shipping will be reduced internationally would be very helpful?

On the first matter, I have already made clear our view that there should be a step-by-step approach. I do not think that there is anything further to report. With regard to the 1977 treaty, it is possible that my right hon. and learned Friend the Foreign Secretary will deal with that matter with the Soviet Foreign Minister. On shipping, we are already very active in the Security Council of the United Nations. There must be no question ever of closing that sea highway to international shipping. We are already very much concerned to see what we can do. As for the other matters, I think that the right hon. Gentleman realises that there are even more important matters to raise in Moscow than those to which he has referred.

I wish my right hon. Friend well on her visit to the Soviet Union. If she raises the issue of human rights with Mr. Gorbachev, she will undoubtedly be told that that is an internal matter for the Soviet Union. Will the Prime Minister then make it clear to Mr. Gorbachev that to us in the West matters of human rights are the foundations of democracy, and that if he wants to deal with us he must understand that once and for all?

Yes. We will raise matters of human rights. I have had a tremendous number of names and personal cases submitted to me, but it is not only an internal matter. Ever since the Helsinki accords were signed we have had standing to inquire into these matters. If we are to get the reductions in nuclear weapons and other weapons that we seek and would wish to have, we will be able to have full confidence and trust in the Soviet Union only if we feel that the she treats her people more like we treat ours than is the case now.


asked the Prime Minister if she will list her official engagements for Thursday 26 March.

Was the Prime Minister consulted before Austin Rover was instructed to hand over confidential information to Ford during the abortive merger last year, or did the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) feel confident that he already knew the Prime Minister's attitude to this act of industrial sabotage?

I believe that matters were handed over between the two companies on a reciprocal basis.

Burnham Grammar School


asked the Prime Minister if she will pay an official visit to Burnham grammar school.

Is my right hon. Friend aware that Burnham grammar school is a school of proven worth and excellence, which is widely supported by the local community and industry? Does she agree that the fact that there are only 150 grammar schools remaining in the country is a matter for considerable regret? Will she, therefore, ask the Secretary of State to think long and hard before approving any further closures?

I agree with my hon. Friend that grammar schools have served our country very well. Hon. Members on both sides of the House have great cause to be very grateful for the education that grammar schools have provided. For many of us they have provided the ladder from the bottom to the top. I will pass on my hon. Friend's views to my right hon. Friend the Secretary of State for Education, but I understand that my right hon. Friend will not approve the closure of a school of quality unless he is satisfied that it is unlikely to be able to sustain that quality or that the alternative is likely to be better.



asked the Prime Minister if she will list her official engagements for Thursday 26 March.

I refer the hon. Gentleman to the reply I gave some moments ago.

Will you be telling Mr. Gorvachev that you are totally wedded to cruise and Trident missiles—

Will the Prime Minister be telling Mr. Gorbachev that she regards cruise and Trident missiles as inevitable in this country and that she wants to see Britain as a permanent nuclear weapons state? Will not her commitments on this issue hinder the disarmament process? What will be broken—her commitments or the disarmament process?

I will be making it perfectly clear that the nuclear deterrent has deterred not only conventional war but nuclear war. I think it vital that this country retains its independent nuclear deterrent, which is but a very small percentage of the enormous number of intercontinental ballistic missiles that the Soviet Union possesses.

When my right hon. Friend meets Mr. Gorbachev, will she express her utter condemnation of the bombing raids launched from Afghanistan on Pakistan territory this week, which resulted in the death of many innocent civilians, including Afghan refugees? Will she urge him to use his influence to bring a halt to these murderous missions?

Yes, of course the subject of Afghanistan must be raised. Afghanistan is an occupied country, and the only satisfactory conclusion is for the Soviets fully to withdraw their occupying forces and leave Afghanistan to determine her own future and to choose her own Government. The matter will be raised with the Secretary General.


asked the Prime Minister if she will list her official engagements for Thursday, 26 March.

Will the Prime Minister reconsider the announcement on Monday that "Lord UB 40" intends to introduce economic conscription on to YTS? Will she also accept the answer given to me on the same day by her Employment Minister, which shows that allowances on YTS have been cut by £18·50 compared with the rise of average earnings over the last nine years? Will she finally recognise that today's lunchtime demonstration of hundreds of London school students will spread like wildfire over the next 10 days unless these proposals for conscription are dropped?

No. We have successfully met our guarantee each year of a place on YTS for all 16-year-olds, and we have extended the guarantee this year to 17-year-olds. We believe that there is no need for anyone under 18 to be unemployed, because everyone has the choice of a place at school, college or on YTS, or a job. I would have hoped that the hon. Gentleman would also recognise that YTS gives an excellent training for young people who would not otherwise have it and will help them to get jobs. I hope that he will welcome that.


asked the Prime Minister if she will list her official engagements for Thursday 26 March.

Has my right hon. Friend had a chance to study the international employment figures, which show a general and continuing decline in traditional manufacturing jobs, balanced by increases in other sectors? Does she agree that the constant denigration of service jobs by Opposition Members is resented by the millions of employees in distribution and transport, communications, health and research, who make a vital contribution to the national economy and whose numbers have gone up by well over 1 million since my right hon. Friend took office in 1979?

I agree with my hon. Friend that international figures show that a smaller proportion of working people are employed in manufacturing industry, which, nevertheless, is producing far more in output because of advances in technology. That is a characteristic of all Western industrialised countries. A further characteristic, as my hon. Friend says, is that an increasing number of people are employed in services, which also make a tremendous contribution to our balance of payments surplus. Services are a valuable supplier of jobs in this country and others. I agree with my hon. Friend that the prospects for the future in this country are very healthy, both in manufacturing and in service jobs.

Business Of The House

3.30 pm

May I ask the Patronage Secretary to state the business for next week?

I have been asked to reply.

The business for next week will be as follows:

MONDAY 30 MARCH—Second Readings of the Landlord and Tenant (No. 2) Bill, the Fire Safety and Safety of Places of Sport Bill [Lords] and the Pilotage Bill [Lords].

TUESDAY 31 MARCH—Progress on remaining stages of the Criminal Justice Bill.

WEDNESDAY 1 APRIL—Completion of remaining stages of the Criminal Justice Bill.

THURSDAY 2 APRIL—Motions on supplementary and social security benefit orders and regulations. Details will be given in the Official Report.

Motion for the Easter Adjournment.

FRIDAY 3 APRIL—Private Members' Bills.

MONDAY 6 APRIL — Opposition Day (11th Allotted Day), subject for debate to be announced.

Motions relating to Scottish Legal Aid and Advice Regulations. Details will be given in the Official Report. [Debate on Thursday 2 April:

Draft Supplementary Benefit ( Resources) Amendment Regulations 1987

Child Benefit (General) Amendment Regulations 1987 (SI 1987 No. 357)

Social Security Benefit ( Dependency) (Amendment) Regulations 1987 ( SI 1987 No. 355)

Supplementary Benefit (Conditions of Entitlement) (Amendment) Regulations 1987 (SI 1987 No. 358)

Draft Social Security (Class 1 Contributions — Contracted-out Percentages) Order 1987

Draft State Scheme Premiums (Actuarial Tables) Regulations 1987

Draft State Scheme Premiums (Actuarial Tables — Transitional Provisions) Regulations 1987

Draft Supplementary Benefit (Requirements and Resources) Amendment and Uprating Regulations 1987

Social Security (Unemployment, Sickness and Invalidity Benefit) (Amendment) Regulations 1987 (SI 1987 No. 317

Social Fund ( Maternity and Funeral Expenses) General Regulations 1987 ( SI 1987 No. 481)

Debate on Monday 6 April:

Criminal Legal Aid (Scotland) (Fees) Regulations 1987 (SI 1987 No. 365)

Civil Legal Aid (Scotland) (Fees) Regulations 1987 (SI 1987 No. 366)

Civil Legal Aid (Scotland) Regulations 1987 (SI 1987 No. 381)

Advice and Assistance (Scotland) Regulations 1987 (SI 1987 No. 382)

Legal Aid (Scotland) (Children) Regulations 1987 (SI 1987 No. 384).]

I am grateful to the Patronage Secretary.

Can the right hon. Gentleman tell the House when the Finance Bill is likely to be published? Secondly, he will know that there are several issues that should be debated in Government time. Almost the most important among them is the report of the Health Education Council. Can such a debate be arranged at the first opportunity? Thirdly, there are hon. Members on both sides of the House who are anxious for a debate on trade with Japan. I do not think that there is any disposition in any quarter to wait for the post. May we have a debate in the immediate future? Finally, I take it for granted that the Prime Minister will make a statement on her return from Moscow. Can the right hon. Gentleman confirm that absolutely?

My right hon. Friend the Prime Minister has already said that she will make a statement on her return from Moscow, probably next Thursday.

Ministers saw the Health Education Council report only this morning. They need to consider it before they decide what to do, but I shall refer the matter to my right hon. Friend the Secretary of State for Social Services. I shall refer to the Secretary of State the right hon. Gentleman's concern about trade with Japan. We hope that the Finance Bill will be published before Easter.

Is my right hon. Friend aware of the strong feeling in the House that was referred to earlier at Prime Minister's Question Time about the stubborn refusal of the Japanese Government to allow Cable and Wireless to play a full part in the international digital communications consortium? Is he also aware of an Early-day motion that has been signed by hon. Members of all parties? Will he do his best to arrange a debate at the earliest possible opportunity so that we can discuss the matter and make it quite clear to the Japanese Government how strongly we feel about it?

The Government are well aware of the concern in the House. I shall immediately refer the matter to my right hon. Friend the Leader of the House to see what can be done.

Has the Patronage Secretary had a chance to study early-day motion 762, which deals with free ports in the United Kingdom?

[That this House notes the recent Report: The Free Solution', by Timothy F. Bayer Helm, detailing the problems facing the six United Kingdom free zones situated in: Belfast, Birmingham, Cardiff Liverpool, Prestwick and Southampton; calls for, in particular, changes in the regulations governing value-added tax in United Kingdom free zones; urges a constructive change in Treasury attitudes to boost the free zones potential; further urges that representatives of the British free zone operators be allowed to sit on the Free Port Steering Committee; feels that the relaxation of regulations in these areas would have no significant adverse impact on Government revenues; and calls on the Government to accept its responsibility as the creator of the British free zone experiment and all that it entails.]

Has he noticed that it has enjoyed the support of all hon. Members and that many hon. Members are worried about the constraints that have been imposed on free ports? Will he give the House a chance to debate this important motion? In joining with other hon. Members who wish the Prime Minister well during her visit to Moscow, may I ask the right hon. Gentleman to say whether it is customary, or indeed whether it is within his long recollection of politics, for a general election campaign to be launched simultaneously in the Kremlin and in the oval office?

I am not sure whether the last part of the hon. Gentleman's question falls within my responsibility. I have certainly seen early-day motion 762. I realise that it refers to important matters. I cannot see a way of having an early debate on the subject. There are occasions such as during the debates on the Easter Adjournment when such important points can be raised.

Will my right hon. Friend use this occasion to announce a unique innovation so that the Leader of the Opposition can make a statement on his visit to Washington?

Will the right hon. Gentleman find time to ensure that there is a debate on Rolls-Royce, especially in view of the imminence of privatisation and the rumours that are flying around that the Rolls-Royce plant in my constituency may be used for some ridiculous purpose?

I realise that that is an important matter, but it is difficult to find Government time for it at the moment. I have just announced an Opposition day for Monday 6 April. The hon. Gentleman might have a word with his right hon. Friends to see what they want to debate.

Other than the passage of seven days, can my right hon. Friend say whether we have made any progress towards having a debate on the environment in the countryside, which my right hon. Friend the Leader of the House has been promising for some weeks?

I agree that that is an important matter. My right hon. Friend the Leader of the House hopes that there will be a debate on agriculture and the rural economy very soon after the Easter recess.

Will the right hon. Gentleman give an assurance that the Government will make a statement before Easter on the recommendations of the pay review board on nurses' pay and that the Prime Minister will promptly accept such recommendations in the same way as she promptly accepted the recommendations of the Top Salaries Review Body some while ago?

This may be the first time that I have done this job, but I shall not accept what the hon. Gentleman has asked me to do. I will refer the matter to my right hon. Friend.

Is my right hon. Friend aware that the patience of midlands industrialists has been sorely tried over the past 10 years or so about the imbalance of trade between ourselves and Japan? Their concern was crystallised yesterday. Representations have already been made. I urge him to allow a debate on the subject as it is extremely relevant.

I certainly recognise the importance of the matter, but I do not think that I can add to what I have already said.

The Government's response to the Select Committee's report on the prison medical service was published today. It is a matter about which there is massive concern and on which the Select Committee took a wide range of worrying evidence. Can the right hon. Gentleman undertake to provide an opportunity to debate the report at the earliest opportunity in view of the massive concern about it?

Such reports are important. I recognise that there is concern about the matter. I shall certainly refer it to my right hon. Friend.

My right hon. Friend will doubtless be aware of the concern about support for science, and particularly the gulf between the reality of the Government's policy, the pattern which some of us would like to emerge, and the perception of both aspects among the public, particularly the scientific community. Is he aware of our considerable anxiety about the matter and our wish to have a full-scale debate on the matter?

I agree that that is another very important subject. I cannot promise an early debate upon it but I shall refer the matter to my right hon. Friend the Leader of the House.

I welcome the right hon. Gentleman's apparance at the Dispatch Box. Now may I ask him a favour? Will he have a word with the Secretary of State for Energy, who is shortly to present a new White Paper, and ask him to include in it what I am asking for in my Bill, which deals with the unfairness of compensation for repairs in mining constituencies after damage to property? If the Secretary of State for Energy were prepared to do that, I should withdraw my Bill.

I appreciate the hon. Gentleman's long experience of these matters, and I shall certainly ensure that the Secretary of State for Trade and Industry recognises the points that he has made.

Since it has been widely reported in the newspapers that a White Paper will be published soon on the future of higher education, does my right hon. Friend believe that he will be able to find time soon after the Easter recess for an extensive debate on this important subject, which is of great concern not only to scientists but to those in all disciplines?

I think that we shall have to see how we get on. First, the White Paper has to be published. Then we shall see where we go from there.

Will the right hon. Gentleman find time next week to discuss the atrocious and unforgivable closure of the Caterpillar Tractor Company in my constituency? Bearing in mind that the situation is becoming very serious indeed, it is important to have a debate in the House, in Government time if possible.

I cannot comment on the court's decision, or anything of that kind, but I shall certainly refer the matter to my right hon. and learned Friend the Secretary of State for Scotland.

Will my right hon. Friend have a word with his right hon. Friend the Chief Whip before he returns to his cloistered existence and ask him to make the business during the week after Easter somewhat light?

I shall certainly do that. I can answer for the Patronage Secretary and say that it is his constant concern to keep business as light as possible.

Will the right hon. Gentleman arrange for a statement to be made by a Government spokesman on the bailing out of the South African banking system? Is he aware that it owes £23 billion and that British banks, such as Standard Chartered and Barclays, are heavily involved in bailing out the South African regime? In view of the furore this time last year, what steps will the Government be taking to tell these British banks not to get involved, especially as any bad debts that are incurred by British banks are set off against tax in other respects, which means that the British taxpayer is having to foot the bill for any bad debts that are incurred by the South African regime? Is it not important, therefore, for a statement to be made and to ensure that British banks are not involved?

I cannot accept the premise upon which the question was asked, but I shall certainly refer the matter to my right hon. Friend the Chancellor of the Exchequer.

Appreciating the national concern that if a man on a charge of murder in England had not been released on bail PC Blakelock might still be alive, will my right hon. Friend seek ways of using the Criminal Justice Bill for England, which comes before the House next Tuesday, to amend the Bail Act for England? Had the law of Scotland applied, Silcott could never have been released and PC Blakelock would still be alive.

I am sure that everybody in the House will be concerned about those events, and I shall certainly refer what my hon. and learned Friend has said to my right hon. Friend the Home Secretary. I do not think that I can go any further than that.

Reverting to the disgraceful cancellation of the press conference by the Health Education Council, may I ask the right hon. Gentleman whether we are to have a full scale debate on the resourcing of the Health Service, because concern all over the country, not least in the city of Leicester, is growing over the lack of resources for hospitals, the closure of hospitals, the low level of nurses' pay, and the time that people are having to wait for essential operations if they are to live their lives without pain?

I certainly cannot accept the premise on which the hon. and learned Gentleman put his question. I cannot add to what I have already said.

In view of the difference of opinion between the Office of Fair Trading and the Securities and Investments Board about what has become known as polarisation under the Financial Services Act 1986, can my right hon. Friend tell me whether it remains the intention of the Secretary of State for Trade and Industry to present before Easter the orders that we have been promised?

As I understand it, the Act requires the Secretary of State to consult before he lays the orders. I cannot go any further than that, other than saying that he has consulted.

Who will answer the allegations of Mr. James Miller about the activities of the security services during the course of the Ulster workers' strike in 1974? Has the right hon. Gentleman seen last week's statement by a former Prime Minister in which he said that he would co-operate with the Prime Minister in helping her to take a decision about whether there should be an inquiry, and who has also asked for a monitoring role for the security services to be set up?

I know one person who will not answer those allegations, and that is me. I can add nothing to what my right hon. Friend the Prime Minister said recently in the House.

Is there any point in making progress next week on any Bills or any regulations following the astonishing and unprecedented decision by the Court of Appeal yesterday to disregard entirely a law passed by this Parliament on equal pay and instead to make its interpretation of a clause of the treaty of Rome in coming to a decision? Would it not be better if, instead of having such debates next week, we had a debate on the implications for the sovereignty of this House of that judgment, particularly as the judgment will destroy a lot of jobs and drive a coach and horses through established pay bargaining procedures in Britain?

I am sure that the business that I announced for next week is duller than the debate that my hon. Friend has suggested, but it would be better to pursue the business that I have announced.

Is the Patronage Secretary aware that another week has gone by without the announcement on helicopter procurement and orders for Westland that was promised for the end of last year or at the very latest during the first few weeks of this year? Does he realise that that is another week for dangerous speculation about the company's future, another week in which the company cannot plan its future, and another week during which jobs have been endangered? When will this announcement be made?

I appreciate the concern not only in the hon. Gentleman's constituency but in many other parts of the country. I am sure that my right hon. Friend the Secretary of State wants to make an announcement as soon as possible, but it is better to get the right answer than to give a premature answer.

Is my right hon. Friend aware that the reason why many Members on both sides of the House are calling for an urgent debate on trade with Japan is that we would like to express the view that M r. Nakasone's policy on free trade is an absolute sham in the light of the Cable and Wireless experience? There seems to be one rule for exports to Japan and a completely different rule for Japan's own exports.

I am well aware of the strength of feeling and the reasons given by my hon. Friend. I do not think that I can add to what I have already said, except to say that my hon. Friend the Member for Arundel (Mr. Marshall) has an Adjournment debate next Thursday on this subject and I am sure that the Minister replying to that debate will be as helpful as he can.

The Government have today published their White Paper on legal aid and, although there is not yet a copy in the Library for hon. Members, I have managed to secure one from a journalist. Will we be given an opportunity to debate the Government's proposals on the Floor of the House, or is it the Government's intention that the debate should take place upstairs on next week's legal aid statutory instruments?

I have no plans to announce any debate. It is obviously a very important matter, and the first thing that we must do is consider the White Paper and then see how we may proceed from there.

My question is not about the Royal Military School of Music or Army bands; there are other subjects. Can my right hon. Friend find time to debate the proposal by the Department of the Environment to classify bees as pests? This is a matter of concern not only to beekeepers but to lovers of honey.

I congratulate my hon. Friend on the successful outcome of his previous campaign. I hope that he does not have to wait so long for a successful outcome to this one. The matter is of great concern to beekeepers and I shall certainly refer it to my right hon. Friend the Secretary of State.

Will the right hon. Gentleman find time for the Secretary of State for Education and Science to announce that money has been found to enable the research councils to resume funding of essential new science research applications?

I am sure that my right hon. Friend the Secretary of State will find a way to publicise that, if and when it happens, but I shall certainly refer the matter to him.

Order. I will call those hon. Members who have been rising in their places. If the Government Chief Whip finds it more comfortable to remain standing, I am sure that we shall all understand.

Will my right hon. Friend help the House by telling us whether in the past year or so Liberal and SDP Members have tended to vote more often with the Conservative party or with the Labour party and whether alliance Members have sometimes voted in different Lobbies from one another?

I am most grateful to you, Mr. Speaker, for your kind suggestion, but I prefer to remain a moving target if that is all right with you.

I have enough difficulty keeping track of the voting habits of some of my hon. Friends without wasting too much time on those of the minor parties, although I follow early-day motions with some interest and am learning things that I had not realised before.

As part of that process, I draw my right hon. Friend's attention to early-day motion 802:

[That this House congratulates the Leader of the Liberal Party .for his honesty in saying that he is "only faintly attracted to principles without power"; notes that he is speedily providing evidence for this statement by disassociating himself from every part of the official 1986Liberal Party publication "These are Liberal Policies" that he finds temporarily inconvenient; concludes that he is prepared to do anything and say anything that seems politically opportune and disavow it later on the ground that it is "superseded"; and has no doubt that this abandonment of principles means that he now has no chance at all of winning the power that he craves.]

and to early-day motion 812:

[That this House notes that according to the official 1986 Liberal Party publication, These Are Liberal Policies, the Liberal Party's priorities .for Government include the reduction of maximum sentences and the increasing of remission of prison sentences from one third to one half; notes the strange reluctance of the Leader of the Liberal Party to mention this pledge in his recent book, The Time Has Come; and calls on him to reveal whether this is another Liberal Party policy that he has ditched in his scramble for political advantage.]

In their different ways, those motions highlight the contradictions and inconsistencies between "These are Liberal Policies" in 1986 and "The Time has Come" in 1987. Does my right hon. Friend agree that we should have a debate to try to sort out those inconsistencies and to see whether the 1986 declaration in favour of political control of police forces has been superseded by the ambiguity of the 1987 statement? Does he agree that it would save time in the long run if the debate took place now as the longer we leave it the more inconsistencies we shall have to investigate?

I am always suspicious of any suggestion that is supposed to save time. These are interesting matters, but I do not see any time for them next week.

Does my right hon. Friend recall that when we last voted on capital punishment, in 1983, the Conservative party was divided roughly two thirds in favour and one third against, which is not surprising as that broadly represents public opinion, but the Opposition voted almost unanimously against capital punishment? Will my right hon. Friend use his particular facilities through the usual channels to ensure that this week's vote is a free vote for the Opposition and not what is euphemistically known as a light three-line Whip?

These are mysteries which I do not think are best aired on the Floor of the House. It may be helpful, however, if I tell the House that if there is a debate on capital punishment—that will depend on your selection, Mr. Speaker—I believe that it should be carried out in a properly structured way. I have therefore had discussions through the usual channels and it will be the Government's intention to table a motion providing for a full day's debate on the subject on Wednesday and allowing the House to vote on the motion at a reasonable time.

My right hon. Friend rightly has a reputation for fairness. Will he extend that fairness to the Leader of the Opposition on his return from the United States? Is he aware that The Wall Street Journal this week reported that the reaction to the right hon. Gentleman's previous visit was one of incredulity and derision? Will my right hon. Friend therefore allow adequate time for the Leader of the Opposition to explain what he believes the reaction of our friends and allies to have been to his latest visit and for us to express our views?

[That this House notes that during the Parliamentary Session 1985–86 Right honourable and honourable Members belonging to the Liberal and Social Democratic Parties voted as follows:
Constituencywith Labourwith GovernmentRatio
Mossley Hill136236:1
Berwick upon Tweed108186:1
North East Cambridgeshire97176:1
Ceredigion and Pembroke North109254:1
Inverness, Nairn & Lochaber64154:1
Roxburgh and Berwickshire135216:1
Brecon and Radnor106235:1
Leeds West117167:1
Isle of Wight74165:1
Tweeddale, Ettrick and Lauderdale104244:1
Orkney and Shetland128285:1
Colne Valley76108:1
Glasgow, Hillhead55511:1
Ross, Cromarty and Skye112206:1
Caithness and Sutherland5878:1
Stockton South91910:1
Portsmouth South105157:1
Plymouth, Devonport6797:1]
When my right hon. Friend the Patronage Secretary next summons a Conservative Member for a dressing down for missing one of the hundreds of Divisions that take place in Parliament, will he put matters into perspective by reminding himself that the hon. Member for Rochdale (Mr. Smith) has bothered to vote in only 46 Divisions in this entire Parliament?

Perhaps I should gently remind my hon. Friend that one of the irksome aspects of being in Government is the necessity to turn up at the House and support the Government. That is something to which Conservative Members have become accustomed, and to which others, I fear, are growing unaccustomed.

Is my right hon. Friend confident that enough time has been allocated to the 130 clauses and 18 new clauses of the Criminal Justice Bill, bearing in mind that there is a new clause providing for bail not to be allowed to those accused of rape or murder, a clause to try to overturn lenient sentences and, most important, a clause on the death penalty? If, when we vote on the death penalty, the Opposition impose a three-line Whip, will my right hon. Friend publicise the fact after the vote so that it is known that Conservative Members voted with their consciences and Labour Members were whipped?

It is tempting, but I wonder whether my hon. Friend wants more or less than 20 minutes to be allowed for the Leader of the Opposition. We shall have to see about that.

I remind my right hon. Friend of early-day motion 797.

We shall have to see how we get on. We have allocated two days for that debate. While I appreciate that there is a good deal for us to get through, it is an important Bill, and we want to get it to the other place as soon as possible.

I appreciate my hon. Friend's interest in the matter, and I only regret that we shall hear rather fewer of his speeches in two days than we would have heard in three days.

Will my right hon. Friend arrange an early statement on the siege of Ealing, which is becoming more serious every day? About 40 schools are now closed, some of them until after Easter. Ealing's citizens are facing a rate increase of no less than 65 per cent. They are also obtaining no services, because of the strike inspired by the council's failure to honour a promise made to its workforce. As a result, old people in sheltered accommodation cannot get to the laundries, telephones and common rooms, and are suffering considerably. A statement on those events is urgently needed.

I appreciate how hard my hon. Friend works for all his constituents in Ealing, to whatever party they belong. Unfortunately, I cannot promise him either a statement or a debate next week. However, he could try his luck in the Easter Adjournment debates.

Has my right hon. Friend seen early-day motion No. 690?

[That this House views with concern the proposal of the Minister of Sport to merge the function and role of Playboard with that of the Sports Council; and, in view of the negative responses to this proposal from many interested organisations, urges him to postpone a final decision on this matter in order to allow a full debate to take place on the alternatives.]

Although we had a three-hour debate on sport earlier this week, we are anxious to have a debate in Government time so that we can persuade the Minister with responsibility for sport—who is also responsible for children's play—that child's play has not much to do with sport, and that many hon. Members on both sides of the House consider its independence from the Sports Council very important?

I appreciate my hon. Friend's concern. I am pleased to tell him that he has been successful in the ballot for the Adjournment, so he can initiate a debate on Monday 6 April. I shall ensure that the Minister is asked to give him the fullest possible reply.

Parliamentary Papers

3.59 pm

On a point of order, Mr. Speaker. I wish to discuss the status of documents made available to the House.

During the Budget debate, a document, entitled "Explanatory Memorandum on European Community Documents" was placed upon the Table, along with the document itself. The document itself was endorsed and specifically signed by the Minister of State, Department of Trade and Industry. The explanatory memorandum which accompanied it was endorsed and explicitly signed by the Minister of State, Treasury.

The main document contained the words that I quoted to the Chancellor of the Exchequer earlier today. He replied that no so such document existed—or that no such document had been endorsed by the Government.

The House is put in an intolerable position—as are you, Mr. Speaker —if documents submitted by the Government appear on the Table and then, when hon. Gentlemen quote from them, senior members of the Government deny that such documents exist. I need your ruling, Mr. Speaker, either today or at your convenience, on how hon. Members can protect themselves against denials by the Government of the existence of opinions and documents that they have endorsed and submitted through you to the House.

It seems that the Chancellor was correct in laying the document on the Table. My recollection is that he referred to a letter, but it is not for me to become involved. The Chief Whip will have heard the remarks of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), and I am sure that they will be taken up.

On a point of order, Mr. Speaker. Is it in order for the Government to give copies of their White Paper on legal aid to the press but not to make copies available to right hon. and hon. Members?

That problem is often raised with me, and I repeat what I always say—that if copies of Government papers are given to the press, presumably embargoed, hon. Members should be informed at the same time.


On a point of order, Mr. Speaker. During prayers at the beginning of each day's business the noise from outside the Chamber seems to be on the increase. Perhaps you could ask hon. Members waiting to come into the Chamber to keep the noise down because it is disturbing if one is praying.

I have not noticed the noise, perhaps because I am at the opposite end of the Chamber. I shall ensure that the House authorities look into the problem to see what can be done about it.

Orders Of The Day

Immigration (Carriers' Liability) Bill

Considered in Committee.

[SIR PAUL DEAN in the Chair]

Clause 1

Liability Of Carriers For Passengers Withoutproper Documents

4.2 pm

I beg to move amendment

No. 2, in page 1, line 16, at end insert—
'(1A) No liability shall be incurred under subsection (1) above in respect of any person, who after arriving in the United Kingdom and applying for asylum, is given exceptional leave to remain.'.

With this it will be convenient to discuss the following amendments: No. 5, in page 1, line 16, at end insert—

'(1A) No liability shall be incurred under subsection (1) above in respect of any person, who after arriving in the United Kingdom is given leave to remain.'.
No. 6, in page 1, line 16, at end insert—
'(1A) No liability shall be incurred under subsection (1) above in respect of any person, while that person is in the United Kingdom.'.
No. 1, in page 1, line 16, at end insert—
'(1A) No liability shall be incurred under subsection (1) above in respect of a person who arrives from a country with a military government or a country subject to reporting by the Special Rapporteur of the Human Rights Commission of the United Nations.'.
No. 10, in page 1, line 21, at end insert—
'(3) No liability shall be incurred under subsection (1) above in respect of any person transported from a country which is not a signatory to the 1951 United Nations Convention on Refugees.'.
No. 11, in page 1, line 21, at end insert—
'(3) No liability shall be incurred under subsection (1) above in respect of any person subsequently granted refugee status under the 1951 United Nations Convention on Refugees.'.
No. 12, in page 1, line 21, at end insert—
'(3) No liability shall be incurred under subsection (1) where a carrier reasonably assumes that to refuse to carry would thereby place the intended passenger in danger.'.
No. 13, in page 1, line 21, at end insert—
'(3) No liability shall be incurred under subsection (1) in respect of any person whom a carrier could reasonably expect to be entitled to refugee status under the 1951 United Nations Convention on Refugees.'.

Amendment No. 2 deals with the right of asylum and goes to the heart of the criticisms of the Bill. If the amendment were accepted, airlines and other carriers would have at least some incentive to carry to this country somebody who does not have the required documentation if the airline or other carrier has good reason to believe that that person, on arriving here and applying for asylum, would be given exceptional leave to remain.

Even if the Minister accepts the amendment, it will not turn an undesirable Bill into one which is all right. All that I seek to do is to make the Bill slightly less bad. The heart of the argument is that asylum should be possible. The amendment is one way in which the United Kingdom's obligations under the United Nations convention can be met. Failing that, I believe that we shall be in breach of the convention and therefore of our international agreements.

Without the amendment I do not understand how the majority of asylum seekers can get to this country to claim asylum. I appreciate that on Second Reading the Minister said that there was the possibility of applying for asylum from a country other than the one from which the asylum seeker originates and that, even in the country of origin, it is possible for asylum seekers to apply to enter on grounds of hardship. He said that, having obtained a visa and travelled here, the asylum seeker could apply to be considered as a refugee. The Minister said that five hardship cases had been granted visas in Sri Lanka, but the opportunities for people to come here by that means are limited. The amendment is worth considering because it will be of benefit.

The issue arose as the result of 64 Tamils arriving here some weeks ago. The Home Secretary tried to remove them immediately without giving them the chance to put their case. Investigations show that at least some of the Tamils were beaten and tortured in Sri Lanka. I have not heard a denial from the Minister, and I should be surprised if one were forthcoming. I understand that in the view of the United Nations High Commissioner for Refugees one or more of the Tamils would be mandatory refugees under the United Nations convention.

If the measure had been in force before the 64 Tamils arrived, not one of them would have been allowed on these shores. Therefore, not one of them would have been able to attempt to apply for political asylum. By passing the Bill we are likely to be in breach of the United Nations convention.

The Minister and other hon. Members will have seen in today's press a reference to a Ugandan citizen, who, having been refused political asylum by the Home Office and having attempted to commit suicide at Gatwick airport, hanged himself in Pentonville prison. That individual was in fear of his life in Uganda. The Minister will be more familiar with the background details than the press. It is a sad and tragic story of someone who was so convinced of the dangers if he were forced to return to his own country, so dismayed at the Home Office refusal to allow him to stay here, that he felt he had no option but to commit suicide. It is indeed a tragic case.

Amendment No. 5 differs in one respect from amendment No. 2 in that it does not address itself specifically to asylum seekers or refugees. It provides that if anyone is given leave to remain here, even if that person arrives without a visa or other documentation, that should not be a reason for fining the airline or other carrier.

I can give an example of how that could happen. From time to time children, say, from West Africa, are in the care of a grandparent. The grandparent becomes ill or dies and other relatives put the child on a plane to London without organising the necessary documentation. When that child arrives there is usually an argument and hon. Members make representations that the child be allowed to stay with its parents rather than be sent back to the country of origin to obtain the documentation and return here.

An airline might be aware of the human tragedy of such a case. If the amendment were accepted, it would be possible to argue with the airline that it would possibly, or probably, avoid a fine. Without such an amendment, someone with a desperate, urgent or compassionate reason for coming here quickly would never get here. Perhaps in the end the documentation would be sorted out, but that could be agonising. Some cases are so exceptional that an airline, under the pressure of such an amendment, might be willing to bring such a person here.

Amendment No. 6 provides a safeguard and ensures that, while a discussion or argument is taking place between the individual or his or her representatives and the Home Office, the airline will not be fined until the matter has been resolved. Otherwise there may be a temptation for the Home Office to impose the fine quickly. The Government probably would have done that in the case of the Tamils. In the circumstances in which the Tamils arrived, the Home Office would probably have been tempted to impose a fine. In the event, it would not have been appropriate. The amendment is worth thinking about.

Amendment No. 1, in the name of my right hon. Friend the Member for Clydesdale (Dame J. Hart), is interesting and important. It is concerned with people who arrive from a country which has a military Government. Presumably it is intended to refer particularly to the most oppressive regimes, from which people may have to flee without any of the necessary documentation and who would therefore warrant being treated exceptionally. Amendments Nos. 10 to 13 relate to different ways of dealing with asylum and people who are in danger in those countries.

These amendments make valid points which, if accepted, would prevent this country being in breach of the United Nations convention. Therefore, I commend them to the Committee.

I want to support the amendment moved by my hon. Friend and to speak to my amendment, No. 1, which is on a separate point. As far as I can see, all the amendments relate to the liability of the carrier when somebody has arrived in this country. My amendment is concerned with how people may acquire the documents specified in clause 1(1)(a)—a valid passport with photograph or some other such document—to satisfy the carrier that it would not be exposed to liability if it brought that person into this country.

I believe that the amendment is important. It stems from a practical experience of my own. I recognise that the Home Secretary is concerned to limit—in a way with which I do not agree—the influx of economic refugees, with whom we are familiar. The Bill is the wrong way to deal with that. However, the judgment on people, under the Bill, can be made only when they have arrived. If they are genuine refugees, in the circumstances that I have tried to encompass in my brief amendment, it is unlikely that they will have satisfactory documentation. I will explore that briefly in a moment.

I do not believe that the Home Secretary, who is attempting to deal with a problem that he has perceived, has the slightest intention of abandoning the concept of the United Kingdom as a place of refuge for genuine refugees from atrocious regimes. I do not believe that he has that in mind at all, but, given that, he must change the wording of the Bill. As drafted, the Bill takes no practical account of how to get out of a country that is doing vicious things. My amendment seeks to introduce the means whereby the Home Secretary could do that. It is fairly limited; it does not include everyone. It specifies the countries to which we would be making reference. Obviously, it will include military Governments, whether they be of the East or West. Countries which have been the subject of reports from the special rapporteurs of the Commission of Human Rights of the United Nations Economic and Social Council are Afghanistan, Chile, El Salvador and Guatemala. In addition, reports have been sponsored, which are not the subject of special rapporteurs, on South Africa and Poland. There is not an extensive number of countries.

My amendment is unsatisfactory in that by the time a country comes to the attention, through ECOSOC, of the Commission of Human Rights, which can then request a special rapporteur and a special report, one year or 18 months have already gone by, in which time dreadful things may have been happening. Even my amendment is not totally satisfactory, but it has drawn the attention of the Home Secretary to those factors.

4.15 pm

I can best explain what is in my mind as follows. The Home Secretary will know that, under his new rules on the representations of hon. Members and hon. Members with special interests, he has tended, tacitly, to let me have a special interest in refugees from Latin America and, in particular, from Chile. He has been kind to me on any specific cases that I have raised with him, even though they did not concern my constituents. The trouble is that when a refugee arrives, he or she is nobody's constituent until settled somewhere.

I shall be brief, but I should like the Home Secretary to listen to the first test case of a Chilean refugee who came to this country. It was Christmas 1973; a coup had taken place in Chile in September. I received a telephone call from a teacher—whose name I have never known, although I wish I did—to say that he had travelled across the Channel to Dover with a couple who had a tiny child. He suggested that they should get in touch with me, which he did on their behalf. The couple were called Enrico and Angelica Rodriguez. They have now settled in Costa Rica. They wanted to come to this country because Enrico, who had been working as a journalist on a newspaper in Chile, used English as his second language. He was arrested at the time of the coup. He had been in the notorious stadium and been tortured. He escaped, went to a friend, and managed not to be caught. Enrico was about 25, his wife was 21 and they had a tiny child just under one year old. They had arranged to meet in the middle of the night outside the Venezuelan embassy. At that time our embassy was not taking any refugees, but one or two were, and the Venezuelan embassy was one. They threw the baby over the wall and got into the Venezuelan embassy. then—the Venezuelans were taking care of a lot of people—they managed to get some temporary travel documents which finally got them across the Channel to Dover, where they arrived with no proper travel documents.

They were accepted as the first test case Chilean refugees, but under the Bill they could not have gone to the British embassy in Santiago. Had Enrico gone to the embassy in Santiago, the military police would have arrested him and he would have been taken back to the stadium.

I should like to quote from The Guardian. The quotation is not totally relevant to the Bill, but it relates to Mr. Almeyda who was a Foreign Minister in Chile. I remember attending a lunch which was given by the former Foreign Secretary, then Sir Alec Douglas Home, for Mr. Almeyda in 1972. Almeyda has been in Europe for many years, but he has just gone back to Chile and has been banished, under the Chilean banishment rules, to a remote region of southern Chile. I shall quote a small piece of the article by Malcolm Coad, the correspondent of The Guardian in Santiago:
"Friends said Mr. Almeyda had crossed into Chile on foot over a northern mountain pass from Argentina a few days earlier, and made his way to Santiago."
That is what happens when people are trying to get out and to enter this country. There is no way, when crossing mountains and making one's way out of a country which has a military regime, where torture and all sorts of atrocities are practised, in which one can set oneself up with a proper visa and travel documents by going to the British embassy to get them. Without them, the carrier will say, "I am sorry, I cannot take you, because I will be liable to a fine when I reach Britain."

The point at issue is that such people do not have the opportunity to seek political asylum. They cannot travel because they do not have proper documents and the carrier will not take them unless they have.

The sort of countries with which we might have been concerned within the past two years are Argentina, Turkey and Cambodia. I dealt with several refugees from Argentina under Galtieri who would not have reached Britain if they had had to have proper travel documents. I have also dealt with people from Turkey and Cambodia at various points.

I think that all of us will have received a paper, as I did this morning, from the Medical Foundation for the Care of Victims of Torture, and it reinforces the point of my amendment. In one paragraph it says:
"If this Bill is passed it may cause many asylum seekers fleeing from torture and other persecution to be refused safe passage to the UK, on the grounds that they do not have the required travel documents."
The Home Secretary would be well advised to consider the point in my amendment and possibly to take account of it when the Bill reaches the other place. I do not believe that it is the right hon. Gentleman's intention to say that Britain can no longer be a refuge for people fleeing from nasty regimes. I know that the same point has been taken into account by the right hon. Member for Aylesbury (Mr. Raison) in his amendment. However, I assure the Home Secretary that his officials have not taken account of the practicalities and the desperation of people fleeing from such regimes, where it is just not possible to take a taxi to the British embassy, get out, ask for a visa, go away, come back a couple of weeks later when it is ready and then travel very properly in a way that will satisfy the carrier that he will not incur a liability. Life is not like that in these nasty countries, of which there are far too many all over the world.

I do most seriously ask the Secretary of State to take that into account and to look at the Bill again to see whether he can introduce either the precise words of my amendment or something that will satisfy the real and valid point that I am making and with which he should have no cause to disagree.

On Second Reading I made it clear that I was not completely opposed to the principle of the Bill. It is reasonable to introduce a visa system and, having done so, it is right to try to find ways of enforcing it. On the other hand, I tried to make it clear that my view of the Bill is affected not simply by its contents but by the administrative arrangements which coexist with it. My view of the amendments that are now under discussion is obviously coloured by the same concern.

I want not to reiterate all that I said on Second Reading but simply to remind my right hon. Friend the Minister that I said that it seemed to me regrettable that we should be moving away from arrangements set up in 1983 to make sure that people who came to Britain who were refused entry by the immigration service nevertheless had a right to some kind of review. I was not asking for a full-scale appeal system because I recognise that that could take a long time and there are good reasons for saying that this is something with which we must get on. On the other hand, to put it mildly, it would be rather a pity to lose the sort of referral mechanism that was set up in 1983. Once the Bill is enacted the number of people who might reach the point of being able to invoke such a referral system would be pretty small. Therefore, my right hon. Friend's fears about large numbers of people coming and causing considerable problems will, in reality, be unlikely to arise.

I asked for some sort of referral system, and I suggested that before somebody who has managed to reach our shores is sent away they should have the right not only to the normal interview with the immigration officer but to a quick referral either to the representative of the United Nations High Commissioner for Refugees or to UKIAS.

In approaching the Committee stage I tried to translate what I said on Second Reading into an amendment. It was no surprise, Sir Paul, that you declined to select it. I appreciate that it is somewhat outside the terms of the Bill's long title. However, as I say, my attitude to the various amendments that we are discussing is inevitably coloured by the sort of approach that we shall take to the parallel administrative arrangements.

Therefore, my purpose in intervening is simply to remind my right hon. Friend the Home Secretary and my right hon. and learned Friend the Minister of State, both of whom I am glad to see on the Front Bench, that there are good grounds for saying that we in Britain should do all that we can to remain not only within the letter of the convention on refugees, which we do, but to remain in agreement with the United Nations High Commissioner for Refugees on the acceptability of the kind of informal system of review that we have. As I said on Second Reading, when my right hon. Friend the Home Secretary spoke about the matter on 3 March, he raised the possibility that we would move away from something that was acceptable.

In my amendment, which was not selected and which, therefore, we are not discussing, I set out what seems to me to be a reasonable mechanism. I ask my right hon. and learned Friend the Minister of State whether he is yet in a position to tell the House whether the discussions which he said he would get under way with the UKIAS and the United Nations High Commissioner for Refugees have yet reached a stage when he can tell us exactly what sort of arrangements he envisages will replace those that were put forward in 1983. I hope that my right hon. and learned Friend will be able to give us that answer today and I hope that it will be generally acceptable. Therefore, I very much look forward to my right hon. and learned Fr