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Oral Answers To Questions

Volume 127: debated on Thursday 11 February 1988

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National Finance

Government Shareholdings

1.

To ask the Chancellor of the Exchequer if he will make a statement on his policy on the disposal of Government-held shareholdings in the light of the National Audit Office report on the sale of the Government's shareholding in Rolls-Royce plc.

The Government will clearly take NAO's observations into account as they press ahead with the privatisation programme.

Will the Minister give the House his opinion on the statement of the National Audit Office about the £63 million put into the company prior to privatisation? Does he agree that, in the Government's besotted efforts to achieve privatisation, business ethics are at stake? Normally, when one takes the assets of a company, one takes its liabilities. That no longer seems to be the fashion. Should we not revert to ethics?

I certainly do not agree with what the hon. Gentleman implies. The capital injection into the company was a decision made as a result of negotiation and on the basis of professional advice. However, we shall he giving evidence to the Public Accounts Committee very shortly and we shall reply to those points in detail.

Is my right hon. Friend aware that last night Rolls-Royce shares closed at 126p, against an issue price of 170p? In the intervening period the price has fluctuated between 96p and 240p. Does my right hon. Friend agree that in those circumstances the conclusion of the National Audit Office, that it is now hard to say whether the share price was set at a level that maximised the proceeds from the sale, is not unreasonable?

My hon. Friend makes a telling point. I only wish that Opposition Members, who are so quick to say that issues are under-priced, would sometimes notice when shares fall to prices below the issue price.

As regards the points made by the National Audit Office, I cannot anticipate what will be in the evidence, but we shall be replying to the points in detail.

When may we expect a statement about the Government's intentions on another very important Government shareholding—the golden share in Britoil?

Is my right hon. Friend aware that many thousands of employees at Rolls-Royce were delighted to buy shares in the company in which they work? In Derby, it is even rumoured that a few Socialists bought shares when the company was sold off. If there is any message to the Government arising from the sale of Rolls-Royce, should it not be, "Carry on the good work."?

I am sure that my hon. Friend's opinion is shared by workers at Rolls-Royce. I cannot comment on whether Socialists bought shares in Rolls-Royce, although perhaps that is what Paul Foot meant when he said:

"I hope bloody Bryan Gould bought millions of shares."

Given that the Government have decided that there should be no specific requirement to deepen or widen share ownership in the Rolls-Royce privatisation, what considerations of the public interest led the Chancellor to disregard the views of the Government's advisers, Samuel Montagu and Co., and concede the £63 million debt write-off? Is it true that the Government were effectively blackmailed by the Rolls-Royce chairman's threat not to support privatisation if he did not get the extra money?

As I have already said, in reaching a decision on the capital structure and the capital injection we took into account the views of our advisers and the company, and we shall be detailing why we did that in our reply to the Public Accounts Committee.

Privatisation

2.

To ask the Chancellor of the Exchequer what is the extent of the state-owned commercial sector which has been transferred to the private sector since 1979.

Since 1979 we have privatised getting on for 40 per cent. of the state-owned sector of industry.

Does my right hon. Friend agree that the history of the state as an employer in the commercial and industrial sectors of the economy has been wholly unprofitable for the state and for its employees? The long-term prospects and prosperity of those enterprises would be enhanced if they were returned to the private sector as quickly as possible.

My hon. Friend is certainly right in saying that privatisation benefits the company, its employees and the economy as a whole. The employees of the companies concerned see this very clearly, as is evidenced by the fact that they are very anxious to acquire shares in the company for which they work as soon as it is privatised, and the great majority of them hold on to them.

Will the Chancellor confirm, or deny, that on 27 January, at a meeting with merchant bankers from the underwriting houses, Treasury Ministers said that public sector corporations were being sold and must be sold at

"20 per cent. less than their real worth to attract investors"?
Did that take place? Was that good husbandry on behalf of taxpayers? Will water, electricity and other forms of public commercial assets be sold in the same way at bargain-basement prices?

I am glad that the hon. Gentleman has asked me that question, because it gives me the opportunity categorically to deny that absurd story. No such statement was made. It is not the Government's policy, and, as usual, The Observer got it wrong. I am surprised that Labour Members believe it.

Is not the success of the Government's privatisation policy evident in the way in which productivity has improved? In some cases profits have doubled or trebled, and in the case of the National Freight Corporation they have increased ninefold.

Almost every company that has been privatised has done signally better since privatisation than it did before. Many chairmen of the companies have made that point at their annual meetings. The National Freight Corporation, to which my hon. Friend rightly alluded, has been an outstanding success.

Nhs Expenditure

4.

To ask the Chancellor of the Exchequer if, in view of recent representations, he will increase planned public expenditure for 1988–89 on (a) National Health Service provision and (b) education and training.

8.

To ask the Chancellor of the Exchequer what representations he has received in relation to his published expenditure plans for (a) the National Health Service and (b) Government expenditure generally.

The White Paper plans for next year already include increased provision for the Health Service, education and training, as part of the £4·6 billion increase in the total for programmes.

The Government's attacks on the National Health Service and on the education service are nothing short of political vandalism. Is the Minister aware that in a recent poll 86 per cent. of the people questioned suggested that it would be better to give money to the National Health Service, even if that meant increasing taxation? If cash is available on Budget day, it should be given to improve the National Health Service and the education system, rather than to line the pockets of the Minister's friends in the City.

The Government are as concerned as the hon. Gentleman about the National Health Service. The public expenditure plans for next year and for the two subsequent years show an increase of over £1 billion for the Health Service. It is the most substantial cash increase over a period that the Health Service has ever received.

Does the Minister agree that, instead of fiddling around with this large sum of money, it would be better to spend some of it, not only on the Health Service, but on increasing rate support grant for local authorities such as ILEA, which will probably have to make 3,000 teachers redundant? My authority will have to make cuts amounting to £45 million this year. Would it not be better for him to use some of the available money to alleviate the suffering and poverty that the Government have caused?

As to the Health Service, I reiterate the point that I made a moment ago: there will be substantial increases in programme expenditure next year amounting to £4½ billion. ILEA, for all the expenditure that it has lavished, has failed to provide a decent education service in London, and I shall be glad to see the end of it.

Does my right hon. Friend agree that the one subject on which Opposition Members are expert is spending other people's money? Does he also agree that throwing public money—taxpayers' money—at, for example, ILEA, with its poor academic record, would be a complete and utter waste of money, just as lavishing taxpayers' money on the National Health Service without cuts — [HON MEMBERS: "Cuts?"] — without improvements in efficiency would be a derogation of the Government's duty?

The Government are certainly keen to see increased efficiency in the National Health Service, and the cost-improvement programmes have provided that to a certain extent. We hope to see more efficiency in the future.

ILEA is a uniquely high-spending authority. Moreover, I doubt whether it gives value for money. It employs two and a half times as many administrators per pupil as the average; twice as many non-teaching staff per pupil as the average; and its spending on the youth service is two and a half times that of even the most generous inner-city partnership. Clearly, it spends far more than it ought, and in the wrong way.

Is my right hon. Friend aware that many of us have noted that in real terms the Government have spent a lot more on the National Health Service, but, all the same, many of us believe that the problems of the NHS are much more complex and cannot be solved just by throwing more taxpayers' money at it? A radical review of the whole service 40 years on would be better than spending extra money willy-nilly.

I entirely agree with my hon. Friend and hope that we shall have such a radical review. I take my hon. Friend's point about the increase over retail prices. The increase in expenditure is well over 30 per cent. since 1979, which far outstrips that provided by any previous Government.

Does the Chief Secretary not recognise that, in real terms, taking the level of price increases in the economy as a whole, the increase for the Health Service this year is only 1·2 per cent., that it is likely to be less than that when the generally higher costs of the Health Service are taken into account, and that it will be nothing at all if the health authorities are expected to fund any part of the nurses' pay review? Why does he not respond to the massive public concern on that matter?

I take the hon. Gentleman's underlying point that "real terms" can be defined in more than one way. We are both aware of that. However, in terms of the normal definition of "real terms", with the income-generation schemes and the cost-improvement schemes, the National Health Service will receive a real terms increase of about 3 per cent. next year.

On the second part of the hon. Gentleman's question, we will, as usual, consider that matter when we have the report of the Nurses Pay Review Body, and we shall then decide whether we can accept it. Other matters will follow from there.

Will my right hon. Friend confirm that the Government's expenditure plans show that spending on social security, health and education alone account for 60 per cent. of total Government expenditure—the highest proportion ever? Does he agree that those areas of massive public expenditure show rises even after the application of the overall GDP deflator?

The figures may be even larger than my hon. Friend suggests, but his underlying premise is entirely correct.

Does the Chief Secretary not find it surprising that no one — the British Medical Association, the National Association of Health Authorities in England and Wales or the Royal College of Nursing — agrees with him that the Health Service is properly funded? Given that he has had to concede that he has a Contingency Fund of £3·5 billion, will he now allay the fears of health authorities throughout the country which are faced with having to budget for cuts and closures? Will he state today that he can and will fully fund the nurses' and health workers' pay settlements?

The provision for the National Health Service for next year has been substantially increased. Those who question the size of the increase simply have not taken into account the enormously increased provisions that have been made. It would be more helpful if the hon. Gentleman would concern himself with reality rather than with fiction.

Cider

5.

To ask the Chancellor of the Exchequer what he anticipates will be the yield from taxation on cider in the year 1987–88.

I am grateful to my right hon. Friend for that reply. Is he aware that since the tax heights of 1984 to 1985 tax revenue has failed to come up to expectation? Since then more than 500 jobs in the cider industry have been lost in Hereford alone and sales are stagnant across the industry despite massively increased promotional efforts. Will my right hon. Friend bear that point in mind in formulating his Budget proposals?

I cannot anticipate my right hon. Friend's Budget, but he is fully aware of the views and the circumstances of the cider makers and will take them into account when he makes his Budget decisions.

Forestry

6.

To ask the Chancellor of the Exchequer what representations he has received over the present taxation status of forestry development.

As is customary at this time of the year, my right hon. Friend has received a number of representations on a wide range of subjects.

I thank the Minister for such a full and helpful answer. Does he accept that there has been widespread criticism of that relief from the Nature Conservancy Council, the Royal Society for the Protection of Birds, the Council for the Protection of Rural England and many others? It is rumoured that Prince Charles is to make a speech in the other place that will be critical of that relief— —

Many others have argued strongly that we should not destroy the natural environment of Britain by the indiscriminate planting of trees. If the Government are not prepared to take away that tax relief and use the money more usefully in the Health Service, will they consider using it for the planting of hedgerows, which would be much more useful environmentally?

The points that the hon. Gentleman has made have been among the representations that we have received. However, the encouragement of forestry is extremely important to the rural economy and it has been Government policy for many years.

I commend the Government for encouraging tree-planting schemes, not least because I am president of the Arboricultural Association. Will my right hon. Friend bear in mind that it is not the tax regime that needs changing to promote forestry development? It is necessary to ensure that trees are planted in the right places, and not in environmentally sensitive areas.

I have noted my hon. Friend's suggestion. There has been some recent criticism along those lines.

Does the Minister accept that the tax regime on trees has not led to any significant increase in planting? Instead, it has provided a tax haven for pop stars and film stars. Does the Minister accept that he has allowed the taxpayer to be ripped off?

I note what the hon. Gentleman has said. I cannot accept that there has been no increase in planting. Indeed, the environmental concern is that there has been too much planting of conifers.

Manufacturing Investment

7.

To ask the Chancellor of the Exchequer what are the latest projections for the growth of manufacturing investment in the United Kingdom.

Manufacturing investment is projected to increase by 11 per cent. in real terms in 1988, according to the Department of Trade and Industry's latest investment intentions survey.

Those figures are just the tonic for those concerned about the growth of manufacturing industry. Does my right hon. Friend agree that the significant increase in industrial productivity since 1981 means that investors should hold their nerve and that their confidence should remain high? Confidence is threatened only by the Jeremiahs on the Opposition Benches.

I entirely agree with my hon. Friend. Since 1979 manufacturing productivity growth has continued at a substantial level, and for the past year at a rate of 6½ per cent.

Has the right hon. Gentleman seen today's quarterly survey from the Manchester chamber of commerce and industry, which represents by far the largest part of industry in the Greater Manchester area? Will he note that expected manufacturing investments are less than they were previously? They all seem to want reductions in interest rates to reverse that trend. As the report was published only after the increase in interest rates, what does the Minister intend to do to restore the expectation of manufacturing investment?

I cannot agree with the right hon. Gentleman that the survey is as pessimistic as he painted it. It paints an optimistic picture, and rightly so. Manufacturing investment is growing strongly. The right hon. Gentleman will recall that the CBI's January quarterly trend survey showed that investment intentions still remain strong. Manufacturing investment is doing exceedingly well at present, and I share the right hon. Gentleman's wish that it should continue to do so.

Does my right hon. Friend agree that the Ford pay dispute is unfortunate because it inhibits investment and is a clear sign of overheating in the economy?

With great respect to my hon. Friend, it would be unwise to read overheating into every indicator. Improvements on the supply side since 1979 mean that firms can operate at a much higher rate of capacity utilisation than before, and my hon. Friend's concern may be a little overdone. In any event, if overheating were to appear, there is no doubt that the Government would not hesitate to take action against inflationary pressures.

When will the Chief Secretary realise that he cannot fool all the people all the time on manufacturing investment? The reality is that, in real terms 1980 prices, manufacturing investment now is 10 per cent. below what it was in 1979. Even if the CBI forecast of an 8 per cent. increase this year were achieved, the 1979 level would still not be reached, and this is at a time when the world economy is slowing down. When will the right hon. Gentleman pursue policies which, in the long term, will ensure that savings go into manufacturing investment so that we can rebuild the competitive economy?

The end product of investment is productivity and profitability, and the quality of investment, as well as its quantum, are extremely important, and those have improved. The evidence of higher profitability and better productivity suggests that investment has been running at a high level and that it has been quality investment.

Business Starts

9.

To ask the Chancellor of the Exchequer by how much business starts have exceeded stops between 1979 and 1986.

Over the seven years from January 1980 to December 1986 the net increase in the number of businesses registered for VAT averaged 500 a week.

I congratulate my right hon. Friend on creating the economic framework that has led to the successful figures that he has announced, and will he join me in congratulating those who create the wealth —mostly the self-employed, small business men and the enterprise agencies — on achieving that magnificent figure?

I am grateful for my hon. Friend's enthusiasm. Since 1979 the number of self-employed is estimated to have increased by more than a third to 2·7 million up to the end of 1986. Of those companies registered for VAT, a majority have a turnover of less than £250,000 and constitute 20 per cent. of the nation's turnover, and enterprise agencies now number 350. I agree with my hon. Friend on the contribution that all three have made to the creation of jobs.

Does not the right hon. Gentleman's original answer, that 500 extra businesses per week register for VAT, hide the real fact that there were more than 100,000 bankruptcies and insolvencies in the business sector between 1979 and 1986 — the highest record at any time in Britain's history? That is one reason why my hon. Friend the Member for Vauxhall (Mr. Holland) was able to point out that manufacturing investment is lower now than it was in 1979 when that lot on the Conservative Benches came into power.

The hon. Gentleman is correct in thinking that I was quoting a net figure. There is always an element of risk in setting up any business, but that is what enterprise is all about. The hon. Gentleman will be encouraged to hear that bankruptcies last year were falling.

Is my right hon. Friend aware that over 6,000 new firms come on to the market in the north-east of England every year and that about 10,000 people are self-employed on Teesside alone? Is that not convincing proof that the Government's policies in the north-east of England are working just as well as, if not better than, they are in other parts?

I salute my hon. Friend for his constant championing of firms in the north-east.

Tax Relief

To ask the Chancellor of the Exchequer what average income tax relief has been received by a taxpayer earning £50,000 each year since 1979 at 1987 prices.

I refer the hon. Gentleman to the answer I gave to the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) on 14 January 1988 at colunm 390 in the Official Report.

I do not think that I have a direct interest in this question. However, how can the Minister possibly justify the giving of tax handouts of well over £10,000 a year to the richest 1 per cent. of people in the country at a time when the National Health Service, its patients and staff, are suffering the effect of a financial squeeze? Why should hospital patients in my constituency face the closure of their hospitals to subsidise the very rich?

The hon. Gentleman does not seem to have noticed that cutting rates is quite compatible with increasing revenue. As all my hon. Friends behind me know, the top 5 per cent. of income groups now pay a larger proportion of income tax than they did before the Government's tax cuts. It could be said that as a result of those tax cuts there has been more, not less, money for the National Health Service.

Does not the deplorable term "tax handout" imply that the whole of an individual's income belongs in the first place to the state, and that it is at the discretion of the state that he is allowed to enjoy some of it?

I wonder whether the Minister will give us an assurance that his priority this year will be to ensure that those who have done well from his economy will be enabled to support the Health Service, and not to profit personally in the way that he has described them as being able to do in the past six years?

The purpose of my right hon. Friend's Budgets in the past has certainly been to produce policies that benefit all the people in the country, and the result of our tax cutting has been that the take-home pay, or disposable income, of a person on average earnings has increased by more than 20 per cent. That is how the policies of this Government have been in the interests of all the people.

Is my right hon. Friend aware that, whereas the Labour Government attempted to squeeze until the pips squeaked and collected only about £800 million from the higher rates of tax, this Government, by increasing growth in the economy with the consequent increase in incomes, now collect some £3,800 million from the higher rates of tax? Does that not augur well for a Budget in which tax cuts among the higher rates might be considered?

As my hon. Friend knows, I cannot anticipate my right hon. Friend's Budget. However, I entirely agree with his point about the results of cuts in the top rates hitherto. The top 5 per cent. were previously paying some 24 per cent. of income tax revenues. That has now increased to nearly 30 per cent., amply illustrating my hon. Friend's point.

Does the Financial Secretary deny that those earning £50,000 a year or more have been gaining £10,000 a year under his regime? Does he deny that anyone earning £450 a week or less is now paying more tax—both in real, cash terms and as a proportion of income—than in 1978–79?

Does the right hon. Gentleman believe that that now produces a disincentive effect, with the top rate at 60 per cent., and that there is therefore a case for cutting it? Or does he believe that the rich are due for yet another handout? If he believes the former, what is his hard evidence, as opposed to hearsay? If he believes the latter, will he simply admit it?

As I said, I shall not anticipate my right hon. Friend's Budget. The only point that I was making about the cuts in higher rates was that, in my opinion, they have been in the overwhelming interest of the country, and the revenue figures show that. The figures also illustrate that those on half average earnings have done a great deal better under this Government than they did under the Labour Government.

Productivity

11.

To ask the Chancellor of the Exchequer what has been the growth of productivity in the United Kingdom economy over the period since 1980.

19.

To ask the Chancellor of the Exchequer what has been the growth of productivity in the United Kingdom economy over the period since 1980.

From 1980 to the third quarter of 1987 output per head in the whole economy has grown at an average rate of 2¾ per cent. per year, similar to that of Japan, and faster than all other major industrialised countries.

How does the figure that my right hon. Friend has just announced compare with figures in the 1970s?

Productivity growth in the whole economy has averaged about 2 per cent. per annum since the cyclical peak of 1979. That is nearly twice as fast as the average annual growth between 1973 and 1979, when, as I recollect, another party was in power.

Does my right hon. Friend agree that the very low productivity which used to characterise our economy and which got to the heart of our national economic ills has now been replaced by increasing and increased productivity, which is why we shall compete so effectively and why we are the envy of our Western industrialised competitors?

I totally concur with my hon. Friend's question. It is significant that United Kingdom manufacturing output per head has increased since 1979 at six times the rate it increased between 1973 and 1979.

Given the issue of investment, will the Chancellor reflect on exports and imports? Is the Chancellor proud of the fact that since 1979 manufactured imports have risen twice as fast as exports? Why has the Prime Minister broken the pledge she made in 1979 that the Tories would create conditions for our factories and workshops that would produce manufactured goods, so that the customers of the world would be scrambling over each other to buy them? Is it by design, or by sheer incompetence on the part of the Government, that such a disastrous imbalance in manufactured goods has been achieved?

The question that I was asked related to productivity rather than to investment and exports, but manufacturing output and productivity have been increasing even more rapidly than the rest of the economy.

How can the Minister concur so boastfully when, as recently as 1986, Britain imported cars, textiles and steel to the value of £8 billion? Is that not a ruinous rate of imports? What will he do about that?

As I remarked a moment ago, the question related to productivity rather to than imports.

Does my right hon. Friend agree that the increase in productivity has resulted in a significant increase in profitability and that the taxes from profits pouring into the Treasury will give the Chancellor the opportunity in the Budget to do what no Chancellor has been able to do in the past 50 years—to balance the budget, reduce taxation and increase public expenditure by the £4·6 billion laid down in the White Paper on public expenditure?

I cannot anticipate my right hon. Friend's Budget, but the scenario my hon. Friend describes sounds attractive.

If the Minister is correct in obtaining some satisfaction from productivity figures, why did Britain have a surplus in the balance of trade on manufactured goods of £5 million in 1979 and a deficit last year of £8 billion, which is deteriorating? What is the point of so-called increases in productivity if we cannot compete successfully with our competitors? What will the Government do about the balance of payments?

The economy is competing successfully and we have maintained our share of manufactured exports in world trade in a manner unknown in recent generations.

Tax Changes

12.

To ask the Chancellor of the Exchequer what the distributional effects of the changes in direct and indirect taxation have been since 1979.

The effect has been that real take-home pay has increased by at least 18 per cent. at all multiples of average earnings.

Does the Minister accept that most commentators now take the view that the burden of increased taxation since 1979 has fallen more heavily on the lower paid, part-time workers? Is he aware that if he takes the opportunity coming to him in the next few weeks to indulge in across-the-board cuts that will simply mean that the relative advantage will be given to those on higher levels of income? When will he take steps to redress the balance?

The hon. Gentleman may not have heard my answer, which was that all income groups have enjoyed increases in take-home pay of at least 18½ per cent. When one considers the proportion of tax and national insurance at all levels of income and compares that with the regime that we inherited in 1979, if that had been adjusted only for inflation, it will be seen that everybody is paying substantially less tax and national insurance at all levels of income.

Does my right hon. Friend agree that if the Social and Liberal Democrats are really concerned to help the lower paid they would be better advised to look beyond ideas such as putting VAT on children's clothes, and look instead to the example set by the Labour Government in New Zealand, where they are abolishing all higher rates of income tax, thus giving a real boost to productivity and growth, and to everybody's income?

I note my hon. Friend's suggestion. I am sure that he will understand if we are extremely careful in responding when we are so near to the Budget.

Will the Minister rule out now the destruction of jobs that will take place if VAT is put on newspapers?

Borrowing Requirement

13.

To ask the Chancellor of the Exchequer if he now anticipates a public sector surplus rather than a public sector borrowing requirement in 1987–88.

Is it not clear that there is now every prospect of a balanced Budget, or a public sector lending requirement surplus? Will this not be the best performance since the early 1950s, with the exception of the year 1969–70? As my hon. Friend the Member for Bridlington (Mr. Townsend) said, does that not offer the prospect of a tax-cutting, expenditure-rising, balanced Budget on 15 March?

My hon. Friend will understand that there is no way in which I can anticipate my Budget today, but I can tell him and the House that public finances at present are fundamentally sounder than they have been at any time since the war, and I intend to keep them that way.

Does the Chancellor remember that the last Chancellor to anticipate a public sector borrowing surplus was Roy Jenkins, now Lord Jenkins? Does the Chancellor expect that his career will follow the same glittering progress?

I have never before been compared to the noble Lord Jenkins. [Interruption.] I have long since given up drinking claret. He was, of course, Chancellor of the Exchequer for only a relatively short time.

Will my right hon. Friend give top priority to raising the tax thresholds in his forthcoming Budget, to help restore incentives to work and help the lower paid generally?

My hon. Friend is quite right. He has been waging a campaign for a long time pointing out the importance of reductions in income tax to create incentives and to help the lower paid, and indeed all those in the economy, to make the economy stronger. I think he will agree that the economy is now very much stronger, and one of the reasons for that, although not by any means the only one, is that we have been pursuing a policy of reducing levels of income tax.

If Britain's public finances are as sound as the Chancellor says, why are the Government not spending the money where it is desperately needed, in the National Health Service? Or does the Chancellor now tell us that enough is being spent on the Health Service? Will he give us a direct answer?

I shall say two things to the right hon. and learned Gentleman. First, as my right hon. Friend the Chief Secretary to the Treasury said in answer to an earlier question, we have provided in this most recent public expenditure White Paper for the biggest ever increases in spending on the National Health Service in the next three years. Secondly, as my right hon. Friend the Prime Minister has already made clear, health provision is currently under review by the Government. Finally, I make it clear to him that anybody who knows anything about provision of health care in the National Health Service in this country knows that the problems—and there are problems—go far beyond the simple question of funding.

Personal Disposable Income

4.

To ask the Chancellor of the Exchequer what has been the growth of real personal disposable income since 1983.

Does my right hon. Friend agree that that excellent figure shows that policies that promote enterprise, competition and fiscal prudence certainly deliver the goods?

Is the Chancellor aware that figures put forward by the Family Studies Institute suggest that, under this Chancellor, the rich have become richer and the poor have become poorer? Should we not have a strategy against poverty, beginning with the scrapping of the notorious social fund, which the Government are determined to introduce in April?

The studies to which the hon. Gentleman referred were based on incorrect data and we are writing to the institute to point that out. The truth of the matter is that, at all income levels, the vast majority of the people of this country have seen a substantial increase in their living standards since the Government came to office.

Overseas Assets

15.

To ask the Chancellor of the Exchequer if he will give his latest estimate of the United Kingdom's net assets overseas.

At the end of 1986 the United Kingdom's net assets overseas were estimated at £114 billion.

Will my right hon. Friend confirm that that is a huge increase in recent years? Does he agree that the net income from those assets is highly beneficial to our economy? Does not all this underline the success of the previous Chancellor's decision eight years ago to abolish exchange controls?

I entirely agree with my hon. Friend. He is right in both his propositions. The net income in the first three quarters of the present year amounted to £5·4 billion, and the abolition of exchange controls was wholly welcome and beneficial.

Prime Minister

Engagements

Q1.

To ask the Prime Minister if she will list her official engagements for Thursday 11 February.

The Lord President of the Council and Leader of the House of Commons
(Mr. John Wakeham)

I have been asked to reply.

My right hon. Friend is in Brussels for a meeting of the European Council.

Will the right hon. Gentleman take time today to put pressure on his colleagues in the Ministry of Defence to answer the criticisms of the Comptroller and Auditor General about the privatisation of the Royal Ordnance factories, one of which is in my constituency? The Minister refused to answer those criticisms, which point out that that privatisation cost this country tens of millions of pounds, that dividends were waived to make the company more attractive and that the delay in the transfer of pension rights and redundancy pay made this whole operation exceedingly expensive. Does the right hon. Gentleman not think that, before further privatisation takes place, some answers should be given to the complaints of the Auditor General?

I think that the hon. Lady misses the important point. The important point is that there were difficulties in the armaments procurement industry. That industry will do much better under privatisation than it ever would under state control.

Has my right hon. Friend seen the quite astonishing economic progress report, published by the Chancellor of the Exchequer, which shows that the average British family is having to spend £11 per week more for food, simply because of the price support for the CAP? Does he agree that in no circumstances should the Government agree to extra resources going to the EEC as long as the Common Market is spending £233 million per week on dumping and destroying food and £50 million per week on financing fraud?

As my hon. Friend knows, my right hon. Friend the Prime Minister is in Brussels at the European Council dealing with some of those very difficult issues. I know that she goes with the best wishes and strong support of the vast majority of the British people.

Is the Lord President aware of the growing concern, both in this country and among our allies, over the Government's deplorable decision not to follow the Stalker-Sampson report with appropriate prosecutions? Does he realise that it is now essential that the affair — the shoot-to-kill RUC conspiracy and Special Branch involvement—be cleared up by a judicial inquiry? Are the Government prepared to set up such an inquiry?

The Government are not prepared to set up a judicial inquiry. The matter has been the subject of a very thorough and detailed investigation, at the end of which the Director of Public Prosecutions for Northern Ireland reached his decision. A further inquiry would be unnecessary and inappropriate.

Does the Lord President not realise the damage that that answer does both to our reputation abroad and to the prospects of lasting peace in Northern Ireland? How can the Government hope to establish the rule of law in Northern Ireland if they manipulate the law themselves? How can they expect to end the domination, dominance and role of the IRA if they are prepared to allow criminal conspiracy to go ahead without taking appropriate action?

Those are disgraceful remarks. Surely if any damage is done, it is by allegations that the Director of Public Prosecutions in Northern Ireland did not act independently and properly in accordance with his duties.

The Lord President either deludes himself or seeks to deceive others. [HON. MEMBERS: "Withdraw".]

I withdraw that at once. The Lord President either deceives himself or seeks to delude others. The Attorney-General made it absolutely clear that there was a case to answer but that he chose not to answer it. The Lord President has to defend that, and not some other charge.

The Attorney-General made a clear statement in the House and indicated the reasons why, in the national interest, he had made his decision. My right hon. Friend the Secretary of State for Northern Ireland will make a statement in the House on the disciplinary matters and matters of control of the RUC that arise from that decision. The right hon. Gentleman will have to wait for that.

When the Prime Minister in Brussels talks to the Taoiseach, with whom she got on very well on an earlier occasion, will she tell him that the British people are prepared to accept the interference of the Irish Republic in the internal affairs of the United Kingdom only to the extent that he is prepared to accept British interference in the affairs of the Irish Republic?

I am not privy to what my right hon. Friend the Prime Minister will say to the Taoiseach in Brussels, but I know that she will seek to deal with the matter in the best way possible, that is, to recognise that the Anglo-Irish accord is something that we believe to be important, and hope to get over some of the difficulties.

Will the Leader of the House confirm that since 1969 166 people who were not members of paramilitary organisations and were not involved in violence have been killed by the security forces in Northern Ireland? Will he further confirm that in those 166 cases there have been three convictions? What plans have the Government to ensure that the law will apply in Northern Ireland without fear or favour equally to every person?

I cannot confirm the figures that the hon. Gentleman gave. He may well be right. I think that in anybody who atempts to deal with the difficult issues in Northern Ireland a recognition of some of the people who are the victims of terrorism would be appropriate.

Does my right hon. Friend agree that among the many remarkable achievements of Comic Relief was the quality of the films used to educate the British public about events and about the handicapped at home and abroad? Will he therefore consult his right hon. Friends about the possibility of the BBC and ITV making available— —

—to Departments these remarkable films for the use of voluntary organisations?

My hon. Friend is right. Unfortunately, I was appearing on a rival channel while that was going on. I shall certainly pass the remarks of my hon. Friend to the appropriate quarters.

Q2.

To ask the Prime Minister if she will list her official engagements for Thursday 11 February.

I have been asked to reply.

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

In the light of the Appeal Court decision yesterday, will the Lord President of the Council acknowledge that the Government have brought confidence in the public security services in this country into disrepute by identifying the Conservative Government and party interest with the national and public interest? In the light of the judges' comments yesterday, would it not now be appropriate to set up a Committee of the House, composed of senior Privy Councillors, to help restore confidence in the objectivity of determining what is the national security interest?

I do not believe that by his question the hon. Gentleman meant to impugn the integrity of the judges who dealt with the case. The case remains before the courts, and I have no intention of commenting. The Government remain determined to uphold the principle of confidentiality, without which the security services could not function effectively to protect our freedom.

My right hon. Friend will be aware that, for solely demographic reasons, the number of 18-yearolds available to enter the nursing profession is likely to decline dramatically. Is it, therefore, not regrettable that so few health authorities encourage, retrain and consider the special needs of young nurses who have young families and who wish to re-enter the profession after having been married?

My hon. Friend makes a valid point, and I am sure that all those who have responsibilies for the matter will take it on board.

Q3.

To ask the Prime Minister if she will list her official engagements for Thursday 11 February.

I have been asked to reply.

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

Is the Lord President of the Council aware of a letter sent to hon. Members representing constituencies in the north-west by Dr. Thistlethwaite and other paediatricians in the north-west region about cutbacks and closures at St. Mary's hospital in Manchester? Does he realise that those paediatricians warn of the dire consequences if those closures and reductions in service take place, and that they may result in the deaths of babies? Will he recognise that there is a crisis in the Health Service and that the solution lies in the Government's hands? When will they adopt it?

I do not recognise the analysis that the hon. Gentleman gave. The Health Service is receiving this year the greatest increase in income it has every received. My right hon. Friend the Prime Minister left me a note for the hon. Gentleman when she went away. She told me that I was to remind him that capital expenditure in his district increased by £16·5 million—[Interruption.]

Q4.

To ask the Prime Minister if she will list her official engagements for Thursday 11 February.

I have been asked to reply.

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

Does my right hon. Friend share my deep concern about the organised violence—not merely the mindless hooliganism — at sporting events recently, including that at Bingley Hall in my constituency at the world title fight, and that reported today as having occurred in the Greater Manchester area? Will the Government consider taking improved powers to apprehend these thugs before they create havoc such as they created at those events?

I certainly share my hon. Friend's concern, and I believe that the House would wish to congratulate the police on their excellent work. The measures taken by the Government, the football authorities, the clubs and others have helped to tackle the menace of football hooliganism. There is still some way to go, and the disgraceful scenes on Sunday were deeply disturbing. I can assure my hon. Friend that my right hon. Friend the Home Secretary will keep his suggestions—and others— in mind as possible ways of tackling the problem.

Q5.

To ask the Prime Minister if she will list her official engagements for Thursday 11 February.

I have been asked to reply.

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

Is the right hon. Gentleman aware that Rachmanism is flourishing in Lambeth under a company called Toddingtons Ltd., in which the hon. Member for Northampton, North (Mr. Marlow) is the majority shareholder? This week it is evicting a Mr. Fisher, who has lived there with his sick mother for 14 years and who is unemployed. He is being evicted on the grounds that his mother has had to go into hospital.

Is it not outrageous that Rachmanism still abounds? Does the Leader of the House agree with the Labour party policy that people in the private sector should have the same right to buy from absentee landlords?

I am somewhat sceptical about what the hon. Gentleman said. He knows perfectly well that if he has anything of that sort to say he should deliver it to the police and not try to make party capital out of it. The fact of the matter is that no hon. Member would want anything to do with Rachmanism or anything like it. The Housing Bill brought in by my right hon. Friend and at present before Parliament will do a great deal more to improve the housing conditions of millions of people in this country than anything done by the Opposition.

Returning to things that are the responsibility of the Government, is my right hon. Friend aware that, following the Prime Minister's visit to the Channel tunnel, I have written to her asking whether she could obtain, for the benefit of the House, precise information as to the levels of investment and the criteria for that investment as between the French Government and SNCF on the one hand and the British Government and British Rail on the other? Will my right hon. Friend assist me and the House to obtain that information so that we may assess the relative actions of the two Governments in providing the necessary public infrastructure to maximise the advantage of the tunnel?

I will certainly refer that matter to my right hon. Friend. I cannot give my hon. Friend the answer that he wants here and now.

Q6.

To ask the Prime Minister if she will list her official engagements for Thursday 11 February.

I have been asked to reply.

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

Will the Lord President turn his mind again to the question of Northern Ireland? Is there not a pervasive and growing stench about the refusal of the Attorney-General to engage in prosecutions in connection with the killing of those people, who were unarmed, especially the young man in the hay shed? Does he not realise that if there is not a judicial inquiry under the 1921 Act this will grow and grow? It will not go away, and it will sour relations with the Republic.

The first thing that the hon. Gentleman must get absolutely straight is that it was not the decision of the Attorney-General; it was the decision of the DPP not to prosecute.