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Commons Chamber

Volume 129: debated on Thursday 10 March 1988

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House Of Commons

Thursday 10 March 1988

The House met at half past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Private Business

Birmingham City Council Bill

Dartmouth-Kingswear Floating Bridge Bill

Read the Third time, and passed.

British Railways (London) Bill Lords (By Order)

Order for Third Reading read.

To be read the Third time upon Thursday 17 March, at Seven o'clock.

London Regional Transport Bill (By Order)

Order read for resuming adjourned debate on consideration [10 December], That the Bill be now considered.

Debate further adjourned till Thursday 17 March.

TEIGNMOUTH QUAY COMPANY BILL (By Order)

YORK CITY COUNCIL BILL [Lords] (By Order)

ASSOCIATED BRITISH PORTS (No. 2) BILL (By Order)

Orders for Second reading read.

To be read a Second time upon Thursday 17 March.

BRITISH RAILWAYS (No. 2) BILL (By Order)

Order for Second reading read.

To be read a Second time upon Tuesday 15 March, at Seven o'clock.

CARDIFF BAY BARRAGE BILL (By Order)

CITY OF LONDON (SPITALFIELDS MARKET) BILL (By Order)

FALMOUTH CONTAINER CARGO TERMINAL BILL (By Order)

NORTH KILLINGHOLME CARGO TERMINAL BILL (By Order)

ST. GEORGE'S HILL, WEYBRIDGE, ESTATE BILL (By Order)

SOUTHERN WATER AUTHORITY BILL (By Order)

Orders for Second reading read.

To be read a Second time upon Thursday 17 March.

Oral Answers To Questions

National Finance

Forestry

1.

To ask the Chancellor of the Exchequer what estimate he has made of the revenue impact for the Exchequer of the removal of all special taxation provisions for forestry development.

The income tax forgone is currently estimated at some £10 million. No information on which to base an estimate of the cost of capital tax reliefs is available.

I am grateful to the Minister for his half helpful reply. Does he realise that most current commercial afforestation is carried out despite the objections of those who care for our landscape and wildlife and not especially for timber production but to provide tax dodges for the very rich? I do not expect the Minister to give away any Budget secrets, but will he at least confirm that there can be no social or economic justification for allowing the present tax regimes to continue?

I note what the hon. Gentleman says, although some people would point out that forestry is important for employment in some rural areas and for the pulp and paper industries. The hon. Gentleman will be aware that we have introduced the broadleaved woodlands scheme so that there can be a better environmental balance in some of the forests that are being developed.

When my right hon. Friend is considering matters affecting the taxation of forestry, will he bear in mind that the many thousands of acres of forest in Scotland and many hundreds of acres in my constituency are an essential part of the balance of the economy in many parts of Scotland, including my constituency, and will he not be taken in by all the noise of those who have never been near the forests?

I note what my hon. Friend says. I said that forestry was important for employment, especially in remote rural areas. It is true that the industry operates on an extremely long time scale.

Is the Minister aware that inefficient use of public money on forestry does not stop with tax exemptions? Is he aware that, under the provisions of Wildlife and Countryside Act 1981, landlords are compensated not for planting trees but for not planting them? Is the right hon. Gentleman aware that one Highland landlord raked in almost £500,000 for not planting trees in a Caithness bog? When will the right hon. Gentleman put an end to this scam?

I note what the hon. Gentleman says and shall draw it to the attention of my right hon. Friend the Secretary of State for the Environment.

Does my right hon. Friend recognise that in the October gales more than 1 million trees were lost and that they will not be replaced without suitable tax provisions for those engaged in planting forests?

Is it not true to say that, not only in forestry, but in business expansion schemes, enterprise zones, bed and breakfasting and executive share options, tax avoidance is mushrooming? Will the right hon. Gentleman agree that the money which is squandered for no real economic benefit on the tax havens of a few would be better invested in a better National Health Service for us all?

I note that the hon. Gentleman takes advantage of a question on forestry to repeat his speech of the other day about tax breaks. I note also that the hon. Gentleman is not in favour of tax incentives that help small companies to raise capital or enable rundown areas of cities to be regenerated.

Self-Employment

To ask the Chancellor of the Exchequer what has been the increase in self-employment in the British economy since 1979.

Self-employment fell between 1974–79, but has since risen in every year. The total increase since 1979 is nearly 1 million.

Does my right hon. Friend agree that the striking increase of more than 50 per cent. shows that substantially more people — [HON. MEMBERS: "Reading".]

Order. I think that the hon. and learned Gentleman is referring to his notes.

Does my right hon. Friend agree that the striking increase of more than 50 per cent. in the number of people in self-employment shows the substantial interest of many people in the freedom and independence provided by self-employment? Will he agree to ensure in the monitoring work being carried out by his Department that no pressure is exerted on self-employed people to become employed and that no one is deterred from self-employment by pressure from his Department?

On the first point, I entirely agree with my hon. and learned Friend. On the substantial point about the Inland Revenue, I note my hon. and learned Friend's concern, but whether an individual is self-employed is a question of fact and general law. Essentially, the test is whether someone is in business on his own account. If he is, the Revenue will treat him as self-employed.

The enterprise allowance scheme has allowed a number of people to become self-employed. However, my research shows that a number of them could have survived in business had an allowance been available to them in the second and even in the third years. Some are failing unnecessarily at the end of the first year. Will the Minister consider examining the enterprise allowance scheme with a view to funding people for a second year?

I note the hon. Gentleman's point. I think he will agree that the enterprise allowance scheme has been very successful. The number of entrants has increased by about 70 per cent. since 1985. Of those who remained on the scheme for more than a year, more than 60 per cent. were still trading two years later and in most cases had employed further staff by then. It has been an exceedingly successful scheme.

Does my right hon. Friend agree that it is a sign of the health of our economy that more and more people are self-employed, whereas under the last Labour Government the self-employed represented a declining proportion of the total?

My hon. Friend is quite correct. Self-employment has grown in every region in the country in recent years, whereas, as my hon. Friend said, it fell between 1974 and 1979. It now stands at its highest level since 1950.

Value Added Tax

3.

To ask the Chancellor of the Exchequer whether he has any plans to discuss with his European Economic Community counterparts the question of zero rates on value added tax.

The Economic and Financial Affairs Council will discuss the Commission's proposal for tax approximation in the light of the report by its economic policy committee, which is expected in the spring.

Does the Minister think that the Prime Minister's assurances during the last election campaign that there was no question of imposing VAT on food or children's clothes should be treated with more, or less, confidence than her assurance on 23 April 1979, before the 1979 election, that there was no question of massive increases in value added tax?

My right hon. Friend made it clear to the Ecofin Council in November that we would not allow to come into force any proposals that would in any way impinge on our election promises to retain zerorating of VAT on those products, and that stands.

Does my right hon. Friend agree that many Eurofanatics are more concerned with harmonisation than with common sense? They should be told to mind their own business in matters that do not affect Europe but concern this country alone, and be told that we still run our own affairs, thank God.

My hon. Friend has put an opinion that clearly has widespread support in this country. The Government have made it clear that they have difficulties with many of the proposals that have been put forward by Lord Cockfield. Those difficulties are shared in different ways by several other countries. Indeed, we find some of the proposals quite unacceptable.

Will the Minister heed the report of the Treasury Select Committee, published this morning, which suggests that VAT harmonisation is in no way essential to the achievement of the internal market, which, contrary to the views of some hon. Members who have been calling out, is in the interests of this country?

The hon. Gentleman is correct. The Treasury Select Committee echoed a point that I and the Government have made. We welcome the moves towards an internal market, but do not believe that it is essential to harmonise all excise duties or necessarily to approximate all VAT rates.

As Lord Cockfield seems unable to understand the messages that have gone from the House previously, and for the avoidance of doubt, will my hon. Friend write to him and explain in explicit terms that his proposals for the approximisation of VAT, and especially for the abolition of zerorating, are totally unacceptable to Her Majesty's Government and to the House of Commons?

The noble Lord is perfectly well aware of our views. Over the years he has shown an ability to learn from experience and argument. After all, he was once the chairman of the Price Commission, and subsequently realised that there were less bureaucratic and more effective ways of reducing inflation. A similar relevation may occur in this matter.

Inquiring with interest whether the Chancellor of the Exchequer will be consulting the Almighty as well as other Finance Ministers in Europe before he imposes VAT on the Bible, may I ask whether, in pressing for allowing different rates of indirect tax, the Minister will draw to the attention of those other Finance Ministers the fact that the United States has a large internal market without integrating or harmonising state or local taxes? Will he further press on them that if they want industrial competitiveness they need to move beyond harmonisation of taxation to a joint or common industrial strategy in the European Community?

The hon. Gentleman is correct. The United States has achieved what is by any standards a free and open internal market and has done so without requiring its states to give up some freedom to operate different rates of taxation. Clearly, the United Kingdom Parliament should retain greater freedom than an individual state of the United States of America.

Vehicle Excise Duty (Coaches)

4.

To ask the Chancellor of the Exchequer what representations he has received seeking changes to vehicle excise duty for coaches.

My right hon. Friend has received a forceful representation from my hon. Friend.

To avoid framing any questions that would enable my hon. Friend to make a bland comment about not revealing Budget secrets, may I ask whether he is aware that vehicle excise duty is £100 for a small private car but £84 for a 50-seat coach? In view of the pollution, congestion and road damage done by those coaches, is that not a grotesque distortion of the tax system? So that we may know whether to blame the Treasury or the Department of Transport, can my hon. Friend make it clear whether he has received any specific proposals on that matter from the Department of Transport?

The Government have only one policy on every issue, and that is the collective responsibility of the whole Government. However, I note my hon. Friend's point. I advise him that this country is unique in operating a policy whereby categories of vehicle are required to cover, both by VED and their fuel taxes, the track costs that they generate. Coaches cover their track costs.

Instead of increasing vehicle excise duty for coaches, will the Minister consult his right hon. and hon. Friends at the Department of Transport and suggest that the Treasury charges British Rail £84 for every passenger vehicle while, at the same time, meeting its track, signalling and infrastructure costs, which is what happens with the coach business at present? That would at least lead to lower rail fares and go some way towards the principle of fair competition about which the Conservative party is always talking.

I note the lion. Gentleman's point. Of course, in assessing whether fair competition applies between rail and road, one has to take into account not only vehicle excise duties but the fuel costs borne by the different industries.

I welcome my hon. Friend's statement that road taxation should cover vehicle track costs. Will he consider carefully whether that policy is being implemented in relation to coaches?

Before I came to the Dispatch Box today I checked to confirm that coaches cover their track costs through a mixture of VED and fuel duties.

Does the Minister accept that any additional VED on coaches would make them less competitive? Does he understand that that has implications for my constituency, where most of the United Kingdom's coaches are built? We would not want additional VED on coaches and the Minister should not go down that route.

I shall certainly ask my right hon. Friend the Secretary of State for Transport to take note of that point as well as all the other points that have been made in this exchange.

Vat (Confectionery)

5.

To ask the Chancellor of the Exchequer what value added tax revenue is expected from United Kingdom confectionery sales in the current financial year; and if he will make a statement.

VAT on confectionery, including chocolate biscuits and similar products, is expected to yield some £450 million.

I thank my hon. Friend for that reply. On behalf of the House may I extend warm birthday congratulations for tomorrow to my right hon. Friend the Chancellor of the Exchequer and hope that he may still enjoy confectionery despite the penal rates of taxation imposed upon it. Does my hon. Friend agree that there would be considerably more employment in the manufacture of confectionery if, along with other EEC countries, we re-regulated VAT on confectionery in line with food?

Obviously I join my hon. Friend in wishing my right hon. Friend a happy birthday. I understand that I must extend the same congratulations to my hon. Friend, because he shares a birthday with my right hon. Friend. I am sure that confectionery will be in order.

I have noted the points that my hon. Friend has persistently and assiduously made in the House on behalf of an industry which is of great importance to his constituency and the country. He will appreciate that I cannot be more specific during this pre-Budget period.

Does the Minister accept that it is ridiculous that children at birthday parties tomorrow who eat cookies with chocolate on the outside will have to pay VAT on that chocolate, but that those who eat cookies with the chocolate on the inside will not pay VAT?

I pay tribute to the hon. Gentleman, who has also pursued the interests of the confectionery industry in Adjournment debates and otherwise. He has displayed a great knowledge of the details and complexities of the industry. The hon. Gentleman should take up his argument with his right hon. Friend the Member for Leeds, East (Mr. Healey), who imposed VAT on confectionery in the first place.

Is VAT constant on all confectionery at a relative level? If so, why is some confectionery so much more expensive than others, although the same items are involved? Why are humbugs and fudge up the road so much more expensive than they are in the House of Commons?

Humbug is in more plentiful supply in some places than in others and, doubtless, that determines the price. Taxation does not determine the price. The rules of taxation, as they apply to biscuits, are somewhat strange and include as confectionery only buscuits that are entirely covered with chocolate. Those that are partially covered with chocolate are, for some reason, exempt.

Personal Taxation

6.

To ask the Chancellor of the Exchequer what proportion of earnings of a married male on average earnings with a non-working wife and two children were taxed by (a) income tax, (b) national insurance contributions, (c) value added tax, (d) other indirect taxes and (e) domestic rates, in 1979 and 1987.

I refer the hon. Gentleman to the answer I gave to my hon. Friend the Member for Hornchurch (Mr. Squire) on 18 December 1987.

I thank the right hon. Gentleman for that answer. Does he agree that tax incentives are now overdue after the promises given in two general elections? Will we soon see those tax incentives? Does he also agree that the vast majority of people would rather see some incentives put into the National Health Service and into small businesses?

I note what the hon. Gentleman says and that he is singing a very different tune from the one that his party sang last year. He will understand that I cannot anticipate my right hon. Friend's Budget.

Does the question imply that taxation should be lowered? Does my right hon. Friend expect the Liberal party to support any forthcoming tax cuts, or does the hon. Member for Southport (Mr. Fearn) represent a separate Southport branch of the Liberal party?

That seemed to be the clear implication of the hon. Gentleman's question and, as I said, there seemed to be a very different approach last year.

It might be more useful to examine the Government's position rather than the Liberal party's position. In a very helpful written answer, the Financial Secretary told the House on 28 January that in the last year of the Labour Government total tax and national insurance contributions were 33·8 per cent. of the gross domestic product, yet between 1981 and now the same figure has averaged well over 38 per cent. In those circumstances, how can the Government claim that the Conservative party will give people more say over their spending decisions?

I note the hon. Gentleman's very interesting intervention which, again, clearly seems to be a plea for reduced taxes, which I note.

Pay Increases

7.

To ask the Chancellor of the Exchequer what level of pay rise would be required by the average employee paying tax in order to compensate for price increases over the past year.

Given the tax cuts in the last Budget and the low rate of inflation, the pay rise needed to compensate fully the average tax-paying employee for the rise in prices over the past year is about 1½ per cent.

Does my right hon. Friend therefore agree that claims for pay increases of 8, 9 and 10 per cent. can only be damaging to the economy and possibly lead to increased inflation and the loss of jobs?

My hon. Friend is correct in much of what he says. Unlike the previous Labour Government, we do not believe in a prices and incomes policy, but there is no doubt whatever, and the country should be aware of this, that excessive of pay increases, which are certainly not warranted by the figure that I quoted, are liable to lead to a loss of competitiveness and a loss of jobs.

Does the Chancellor agree that other aspects of Government policy, particularly the large increase in electricity prices and the way in which rates are being forced up in the shire counties into double figure increases through the Government's reduction of rate support grant, have put added burdens on people in employment? Should not those facts be taken into consideration in determining the average increases that those people need to maintain their living standards?

The figure that I quoted at the beginning took all those factors fully into account. The plain fact is that under the last Labour Government the real take-home pay of a married man with two children who was on average male earnings rose by less than 1 per cent., but under the present Government the take-home pay of a married man on average earnings with two children has gone up in real terms by 23 per cent.

I think it right that the House should be more concerned about the number of jobs, which, although rising fast, would rise even faster if there were greater moderation in pay claims.

Does my right hon. Friend agree that the average employee has benefited from reduced rates of taxes and that there is some evidence that his own receipts have gone up since the reduction of rates of tax and duty? Why does he suppose that he is opposed in these matters by the Opposition Benches? Could it be that the Opposition's taxation policies owe more to spite than to reason?

My hon. Friend is right that, although, under Labour Governments, taxes go up, the tax revenues have not risen nearly as much as they have under the Conservative Government, who have been able to reduce rates of income tax. There will be one occasion on which the Labour party can show more clearly its attitude towards reductions in taxation, and that will be next week.

Asset Sales

8.

To ask the Chancellor of the Exchequer what is the expected level of asset sale receipts for 1987–88; and if he will make a statement.

I am sure that the Prime Minister's guide to household economics says that capital asset receipts should be reinvested in capital projects and not used to fund current expenditure. In the light of that, can we expect the sum that the Financial Secretary mentioned and any sums that may accrue in the next financial year to be used to fund infrastructure projects in the community and to invest in the health and education of our people?

As the hon. Gentleman will be aware, capital spending is broadly, in real terms, around the same level as it was in 1979. There has been a very considerable increase in expenditure on roads, railways and other items of infrastructure, but I am sure that the hon. Gentleman's plea for more expenditure on infrastructure has been noted by my right hon. Friend the Chief Secretary.

Does the Financial Secretary agree that, while we welcome the progress that has been made in electricity and other big asset sales, now is also the time to look at some of the lesser assets that are languishing in the public sector, such as the PSA and Ordnance Survey, and to bring them forward to be included in this excellent programme?

I note what my hon. Friend says. I am sure that he will welcome yesterday's announcement about the Professional and Executive Register, which is one of the smaller agencies of precisely the sort to which he rightly says we should give attention.

Fortunately, there is a long way to go. As the hon. Gentleman well knows, we are expecting the implementation of water and electricity privatisations to occupy us for a little time yet.

Will my right hon. Friend accept my congratulations on this excellent figure, which is a reflection of how successful the Government have been in transferring ownership of these assets from the state to individual shareholders? Does he not think that it is time he speeded up the process by privatising British Coal and British Rail?

I note what my hon. Friend says. We have said that we have no present plans to privatise those industries. As I said to the hon. Member for Sunderland, South (Mr. Mullin), privatising the electricity and water industries is a considerable task in itself at present.

Interest Rates

9.

To ask the Chancellor of the Exchequer if he will make a statement on the present level of interest rates.

In view of the present balances on trade and external payments, and the serious extent to which both will be aggravated by this week's predictable surge of sterling, how does the Chancellor explain last month's hike in interest rates—or was he overruled?

I am not sure what the hon. Gentleman means by the predictable rise in sterling; I was not aware that he had predicted it. We remain committed to maintaining a policy of exchange rate stability. That was agreed by the Group of Seven Finance Ministers and central bank governors in the communiqué of 23 December last year. While stability certainly does not mean immobility, any further significant rise in the exchange rate, certainly against the deutschmark, would in my opinion be unlikely to be sustainable.

Does my right hon. Friend agree that amid all the speculation about the likely next movement of interest rates and the sterling exchange rate, what really matters is keeping a continuous downward pressure on inflation? That is likely to be far more valuable to British industry than any minor damage done by a 3 per cent. rise in the exchange rate.

My hon. Friend is right. The battle against inflation is at the core of the Government's policy. That is why it is necessary, as I have said time and time again in the House, to maintain interest rates at whatever level is necessary to keep downward pressure on inflation.

Will the Chancellor bear in mind the words of the president of the CBI, who said yesterday that allowing the exchange rate to develop in this way would produce a serious threat to British industry? Is he aware that most of us thought we understood his policy, which was stability? It does not seem to be stability now. Can he explain it?

I was certainly aware of what the president of the CBI said, and I fully understand why he said it. It is also right to remind the right hon. Gentleman that he said something else, too. He said that it was very much the responsibility of business and industry to contain their costs.

In view of Britain's trade balance and the lower level of oil prices, does my right hon. Friend consider that the present strength of sterling is due to our very high interest rates, or mainly to overseas confidence in the Government's ability to manage the economy?

It is clear that confidence throughout the world in the British Government's management of the economy is a major factor in the strength of the pound.

Do not the combination of the high pound, high interest rates, and high and worsening trade deficits emphasise the economic and social case for a Budget that puts investment before tax cuts? Does the right hon. Gentleman recall the statement that he made on the question of exchange rate stability, and the statement he made to the Financial Times on 10 November to the effect that the pound should not rise above Dm3? Has he changed his mind, or has the Prime Minister changed it for him?

I never quoted any particular figure, and if the Financial Times quoted one attributed to me it was wholly wrong. The hon. Gentleman should recognise that the policies that we have been pursuing have made this country's economy stronger than it has ever been before, with living standards at record levels, low inflation, output at record levels, exports at record levels—a far better performance than most of our major competitors.

If the Opposition Front Bench are correct in saying that high interest rates discourage investment, how is it that we have seen a more prolonged period of sustained investment in this country despite moderately high interest rates? Will my right hon. Friend confirm that he will persevere with his monetary policy until we achieve our declared manifesto aim of stable prices?

I can certainly confirm what my hon. Friend has asked me to confirm. I can certainly give that assurance. He is right to point out that the policies that we have been pursuing for nearly nine years, and which have brought unprecedented success, were condemned and criticised every inch of the way by the Opposition.

Public Services (Finance)

10.

To ask the Chancellor of the Exchequer what assessment he has made of the relative effects on the level of resources available for financing public services of (a) reducing taxes on higher income earners with the aim of stimulating economic activity and generating higher revenue in the longer term and (b) devoting the same amount of money as would be preempted by such tax cuts directly to expenditure on those services; and if he will make a statement.

The success of the Government's economic strategy, of which reductions in income tax are an important part, has created increased resources both for the provision of priority public services and for higher living standards in general.

I thank the Minister for that answer. Is it not true that a Government-commissioned report by Stirling university could find no basis for assuming that cuts to higher tax earners would lead to any incentives? Further, is it not true that a reduction of 40 per cent. on higher income earners would cost the Exchequer £1·7 billion, a sum that would go far towards supplying the underspend of the National Health Service and would more than fund the package of proposals made by the Association of London Authorities to meet the crisis in this capital city? Is it not time that the very rich were asked to forgo their luxuries in order to meet the needs of the majority of the population?

The truly substantive point is the extent of revenue raised by the Exchequer in order to finance precisely those public services that the hon. Lady cares about. The proportion of total income tax paid by the top 5 per cent. as risen from 24 per cent. in 1978–79 to 29 per cent., despite the substantive cuts in the top rates of income tax in earlier Budgets.

Will my right hon. Friend explode the myth peddled by the Opposition that cutting taxes and increasing public expenditure in certain targeted areas are alternatives? In a thriving economy such as ours they are not alternatives, particularly when we have lower taxes which create more wealth and result in more revenue to the Treasury.

My hon. Friend is correct. I share his view that worthwhile public expenditure is important. That is why this year we have been able to increase public expenditure on programmes by £4½ billion. The revenue to finance that depends on a successful economy, and it is our judgment that past reductions in income tax have helped to make the economy successful, and that has financed that public expenditure.

What research has the Chief Secretary undertaken to show whether a top rate of income tax of 60 per cent. is a disincentive to the quantity and quality of work undertaken, as opposed to remuneration for it?

On the general point, the hon. Gentleman will recall that during the period when we had excessively high rates of income tax a clamour arose when many skilled people such as surgeons, doctors and others left the country. That was a clear illustration of what happens with unduly punitive tax rates.

Economic Growth

11.

To ask the Chancellor of the Exchequer what is the current rate of economic growth.

The Autumn Statement forecast growth in 1987 of 4 per cent. I shall be presenting my latest estimate in my Budget next week.

Is it not good news that the 1980s have seen the fastest sustained period of economic growth since the second world war, with considerably faster growth than our European competitors? Does the Chancellor feel that the country has yet fully come to terms with our rise up the international league table from the relegation zone to championship status?

My hon. Friend makes a very good point. Certainly it is the case that during the 1960s and 1970s we had the lowest rate of economic growth of all major European countries, and that during the 1980s we have had the highest. I think that the country has an inkling of this, and that may have accounted, among other things, for the general election result last year. But Opposition Members seem to find it particularly difficult to hoist this on board.

If the Chancellor is right in saying that things are going so very well, why will he not give the National Health Service a better deal?

In the Autumn Statement in November I announced the biggest increase in spending on the National Health Service that had ever been announced for any one year.

Will my right hon. Friend concede that the present growth rate is not sustainable, and, since it is now claimed that he does not have the political support of the Prime Minister for maintaining the pound in the European exchange rate mechanism, will he reintroduce monetary controls?

I do not know what my hon. Friend means by monetary controls. It sounds like some kind of socialistic intervention, which I would certainly not endorse.

If the Chancellor is so confident about the prospects for economic growth in the coming year, would he care to reflect on the continuing low level of investment, the worsening balance of trade, the worsening balance of payments and now, it would appear, the pound going into free float against the deutschmark? The Chancellor said very clearly on 10 November that his objective was to keep the rate below Dm 3. He used to be proud of having devised what he called managed floating. Is it not now rather less management and rather more floating?

I stand entirely by what I said at the September meeting of the International Monetary Fund, and there was nothing about Dm 3 there. The Financial Times must have been mistaken on that point. More fundamentally, the hon. Gentleman is wholly mistaken, because what is being shown at the present time is the confidence of the world in the British Government and the economic policy and the economy of this country.

While congratulating my right hon. Friend and the Government on what they have achieved for the economy of our country, and while industry can certainly cope with relatively high interest rates, may I ask whether he is not now a little concerned about the exchange rate, because this may well undermine the competitive position of British industry in the world?

I entirely understand what my hon. Friend is saying. Clearly, we do not want an excessively high exchange rate, but, by the same token, nor are we prepared to see attempted salvation through devaluation, which is espoused by the Opposition, but is the route to higher inflation.

Vat (Funeral Charges)

13.

To ask the Chancellor of the Exchequer if he has received any representations seeking zero-rated value added tax on funeral charges.

Is the Minister aware that, on average, about 10,000 people die each week and that the National Association of Funeral Directors has estimated that the present VAT arrangements result in the Treasury receiving between £14 million and £18 million a year, which is, in effect, a tax on death? Will he look at the possibility of giving tax relief on simple insurance schemes, which would give reassurance to many elderly people that their funerals have been paid for, and result in reducing their savings below the £6,000 a year capital limit which prevents them from getting benefit?

I understand the point that the hon. Gentleman makes. The Government recognise the inevitable sadness at the time of bereavement by exempting essential funeral charges from VAT. We do not have the power, however, under our treaty obligations and successive directives on VAT to change that from exemption to zero rating, but I will draw to the attention of my right hon. Friend the point that the hon. Gentleman has made about insurance policies for funerals and the costs of bereavement.

Industrial And Commercial Profitability

14.

To ask the Chancellor of the Exchequer what are the latest figures for the level of industrial and commercial profitability.

The net rate of return of non-North Sea industrial and commercial companies was 8·9 per cent. in 1986—higher than in any year since 1973. 1987 is likely to see a further rise.

Does my hon. Friend agree that the continued confidence of industry and commerce about future prospects contrasts with the forecasts of gloom and doom due in the autumn that we heard from Opposition spokesmen last May and June? Is not the major achievement of the Government the very changed attitude that now exists to company profitability?

My hon. Friend is right, and what he says is borne out by the CBI survey, which shows strong growth in manufacturing investment and manufacturing production. Opposition Members say those words because they know of no others, even if they have no correspondence with reality whatsoever.

Prime Minister

Engagements

Q1.

To ask the Prime Minister if she will list her official engagements for Thursday 10 March 1988.

This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today, including one with a delegation from the National Pensioners Convention. This evening I am attending a reception for the winners of the 1987 Queen's awards for export and technology.

In welcoming the announcement that was made yesterday to stop councils building up unsustainable debts, pawning their property and entering into shortsighted and irresponsible deals, may I ask my right hon. Friend to condemn councils such as the London borough of Brent, which has already entered into such deals and has built up debts that will be paid for by generations to come?

Yes, Mr. Speaker. The announcement made by my right hon. Friend the Secretary of State for the Environment yesterday has come as a great relief to many hard-pressed ratepayers. The Government will not bail out those authorities which have been very extravagant. Many people in those authorities look forward to the commencement of the community charge.

Sir David Nickson, who is chairman of the CBI, yesterday said:

"High exchange rates and high interest rates at the same time are bad"
for British industry. Does the Prime Minister agree with him?

I indicated our policy, and my right hon. Friend the Chancellor of the Exchequer has already indicated the policy. It is absolutely vital to try to keep inflation down. The right hon. Gentleman will recall that we used to have a Bretton Woods fixed exchange rate system. It was inflation that brought an end to that system. The last thing that the CBI or manufacturers want is a very high rate of inflation, because it would mean that they could not compete in selling their goods abroad.

Is the Prime Minister not aware that the CBI and the Association of British Chambers of Commerce take a different view of inflation from herself and say that, in the interests of guarding against rises in price and cost inflation, it is necessary to get the pound back down to DM 3 and to cut interest rates? When faced with that very practical advice, why does the Prime Minister prefer primitive monetarism?

I have never known any industrialist want higher inflation — higher than the industrial rivals against whom we have to compete in the industrial market. The CBI and industry are doing very well under the excellent stewardship of my right hon. Friend the Chancellor of the Exchequer. Industry must rely on its own efficiency, salesmanship and design for getting exports.

The Prime Minister mentioned her right hon. Friend the Chancellor of the Exchequer. Does she recall him saying on 9 December,

"Keeping the pound in line with the Deutschmark is likely to be over the medium term a pretty good anti-inflationary discipline."
Does the Prime Minister agree with that?

My right hon. Friend the Chancellor and I are absolutely agreed that the paramount objective is to keep inflation down. The Chancellor never said that aiming for greater exchange rate stability meant total immobility. Adjustments are needed, as we learnt when we had a Bretton Woods system, as those in the EMS have learnt that they must have revaluation and devaluation from time to time. There is no way in which one can buck the market.

My right hon. Friend said in her initial response that she was attending a meeting with the National Pensioners Convention. Will she give some thought to the pre-1973 war widows in Britain who are at a grave disadvantage as they receive only half the income of post-1973 war widows? The total cost of rectifying that terrible injustice would be very modest indeed. Will my right hon. Friend see what she can do to alleviate the problems of those people from whose suffering we are now benefiting because their loved ones laid down their lives that we might live?

As my hon. Friend is aware, we have done a great deal to help war widows, in that we have made their pensions non-taxable. That was a great advance for them. It is not possible to go back and have retrospective increases for everyone whom one wishes to help. Naturally, we receive complaints, but when we make a change for people, to operate in the future, everyone wants it to operate in the past. Sometimes that would preclude future changes from being made. We have done a great deal, and for the time being we must stand on our record.

When the Prime Minister later today honours British exports and technology, will she take the opportunity to reaffirm her support for the fast breeder reactor programme? [Interruption.] Will she recognise that the Government's plans for the privatisation of electricity are causing grave anxiety over the future of that programme throughout the Atomic Energy Authority and the industry?

The hon. Gentleman is aware that I have visited Dounreay and have indicated my support for the work being done there. However, I cannot say that I think we shall have a fast breeder reactor for many years, but I am well aware of the importance of the work going on at Dounreay.

If my right hon. Friend finds it necessary to talk to the Irish Prime Minister about the recent deaths in Gibraltar, will she emphasise, not only that due consideration will be given to the events there, but that the bombings were being planned at the same time as the IRA was wringing its hands about the deaths at Enniskillen?

Most people are very grateful for the fact that, due to the excellent security operations of the Spanish police and our own, another terrible tragedy, with many deaths and maimings, was wholly avoided. We should like to express our thanks to all those involved.

Q3.

To ask the Prime Minister if she will list her official engagements for Thursday 10 March.

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

Is the Prime Minister as concerned as others, including one very senior person in our society, about the future of the elderly persons' unit at St. Tydfil's hospital, Merthyr Tydfil?

There was a particular unit at that hospital, a special unit that was to have worked up to five beds. So far, only three beds are operational. That unit is being closed, and not, of course, the entire hospital. It has been closed to save only some £30,000. [Interruption.] May I point out to the hon. Gentleman that the extra amount of money for Wales for the Health Service has been 39 per cent. in real terms above inflation.

Would my right hon. Friend like to join me in praising the work of the Ulster Defence Regiment? Will she comment on the fact that just one small unit which I had the privilege to visit over the weekend, has had 29 members murdered off duty in the last 12 years, yet continues to do its work with remarkable cheerfulness and courage?

Yes. We all recognise the tremendous courage of the Ulster Defence Regiment and the debt that we owe to it. No matter what the difficulties and the casualties, there are always more people prepared to be recruited to the regiment, and they play a very important part in the security of Northern Ireland.

What is the Prime Minister's present policy towards devolution in Scotland?

It is the same as it has always been. I am against further devolution in Scotland.

Will my right hon. Friend find time in her busy day to study the survey report from Liverpool earlier this week that children as young as seven have been supplied with cigarettes? In all the cases surveyed, not one shop stayed within the law. Will my right hon. Friend confirm that the maximum penalty of £400 is quite inadequate, when 100,000 people die as a result of smoking in this country?

I am grateful to my hon. Friend for pointing out that smoking is indeed a very great danger to health and for bringing up what is undoubtedly a very difficult problem, in that some young children smoke and are supplied with cigarettes. It is absolutely scandalous.

To ask the Prime Minister if she will list her official engagements for Thursday 10 March.

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

Has the Prime Minister had the opportunity to read the letter to the British Medical Association from Dr. Mitchell, a consultant physician at Scarborough hospital, in which he points out that the much-vaunted throughput statistics for that hospital are felt by all the consultants to be positively dangerous to the standards of patient care, and in which he comments that it is easy to appear efficient when understaffed and underfunded? Will the Prime Minister for once listen to those who are best qualified to comment on standards of patient care— the doctors—and will she ensure that on Budget day the NHS has a chance to have its version of a super-Tuesday?

As the hon. Gentleman will have heard me say many times, the resources available to the Health Service are greatly in excess of any that have ever been available before. The numbers of nurses and doctors, and patients being treated, are also greatly in excess of any in the past.

With regard to the Tayside health board — [Interruption.]

Tayside remains the second best funded board in Scotland, and its revenue allocation is £146 million, giving a per capita allocation of £372, compared with the Scottish per capita allocation of £307.

Q5.

To ask the Prime Minister if she will list her official engagements for Thursday 10 March.

Does my right hon. Friend agree that under Mikhail Gorbachev there has been a rapid improvement in the effectiveness of Soviet propaganda presentation, unsupported by any real change in Soviet foreign or defence policy or human rights performance? Does she agree that that is a dangerous situation, about which some of our NATO allies should be constantly reminded?

I think that my hon. Friend is essentially right in his premise. Not a great deal has changed in military developments in the Soviet Union: indeed, modernisation continues apace. At the same time, I think that we must welcome the Soviet Union's wish to withdraw from Afghanistan. It is what we have been urging upon the Soviets, and we hope that the withdrawal will very soon be completed. In the meantime, we must make certain that our own defence is sure, and continue to plead on behalf of those in the Soviet Union who do not enjoy the human rights that we take for granted.

Q6.

To ask the Prime Minister if she will list her official engagements for Thursday 10 March.

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

Will the Prime Minister accept that we have one thing in common, and that is that we both abhor the filth and disgrace of our inner cities? Litter is a massive problem that is now facing the nation and, as a provincial Member, I am distressed beyond belief at Londoners' failure to try to smarten up this capital city of ours. Will the right hon. Lady accept that, with the possible exception of Westminster, the rest of the boroughs of this great metropolitan area are somehow or another losing the battle to keep our streets clean? It must be a source of great distress to foreigners leaving the clean surroundings of Heathrow to see the filth and grime in this city. Is it possible for someone from the right hon. Lady's Department to go to our European capitals to see how they tackle the question that we fail to tackle?

I agree wholeheartedly with what the hon. Gentleman has said. I also agree that Westminster city council makes tremendous efforts to try to keep the city clean. Litter is a problem, not only in our inner cities, but often on the sides of major roads and on the central reservations. The problem is tackled in Europe by giving people responsibility for clearing the frontages before their shops, offices and houses. That is a possible change. It would be a major change. If people did not throw down litter and had more pride in their cities and motorways, we should not have the problem.

Business Of The House

3.31 pm

May I ask the Leader of the House whether he will state the business for next week?

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

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

MONDAY 14 MARCH—Progress on remaining stages of the Housing (Scotland) Bill.

Consideration of Lords amendments that may be received to the Social Security Bill.

TUESDAY 15 MARCH — My right hon. Friend the Chancellor of the Exchequer will open his Budget statement.

European Community documents relevant to the Budget debate will be shown in the Official Report.

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

WEDNESDAY 16 MARCH and THURSDAY 17 MARCH—Continuation of the Budget debate.

FRIDAY 18 MARCH—Private Members' motions

MONDAY 21 MARCH—Conclusion of the debate on the Budget statement.

[Debate on Tuesday 15 March

Relevant European Community documents

  • (a) 9561/87 Annual Economic Report, 1987–88
  • (b) Unnumbered Annual Economic Report, 1987–88 (as adopted by the Council)
  • Relevant Reports of European Legislation Committee

  • (a) HC 43-viii (1987–88) para 4
  • (b) HC 43-xv (1987–88) para 3.]
  • I thank the Leader of the House for his statement. Will he reconsider his proposal that we debate the Lords amendments to the Social Security Bill on Monday? That is an important measure, affecting some of the worst-off people, and, in particular, worst-off young people, in the country. As we speak, at this moment, the Lords have not even finished debating the Bill. Last week, the Leader of the House said of Lords amendments to the Local Government Bill that if Lords amendments were available on Friday morning it was not unreasonable to debate them the following Wednesday. He is now proposing that Lords amendments available this Friday should be debated the following Monday. Surely that is unreasonable.

    Will the Leader of the House arrange for the publication of the Ministry of Defence document "Learning from Experience" which, we understand, shows cumulative overspending of £20 billion on procurement by the Ministry of Defence? Surely that should be made public, brought to the House and debated.

    Will the Leader of the House also arrange for the Secretary of State for Social Services to make an early statement in reply to today's second report of the Select Committee on Social Services so that he can repair the damage done by his ill-informed and contemptuous remarks about the Select Committee?

    In view of the concern in all parts of the House, as expressed by early-day motion 794, about the imprisonment of Nelson Mandela, will the Leader of the House arrange for the Foreign Secretary to make a statement on Britain's use in the Security Council of our veto as recently as Tuesday evening to block the resolution proposing certain mandatory sanctions?

    [That this House, taking note of the fact that on 18th July Nelson Mandela will celebrate his 70th birthday and that he has been imprisoned continuously for over 25 years, recalls the repeated appeals by Her Majesty's Government, the United Nations Security Council, the European Council and Council of Ministers, and the Commonwealth Heads of Government, calling for his release; and reiterates its belief that Nelson Mandela should he released immediately and without condition.]

    Labour Members welcome the motion setting up the Select Committee on televising the proceedings of the House. Will the right hon. Gentleman give an assurance that the Committee will meet before the Easter recess?

    Does the Leader of the House recall that, when we last debated the Select Committee on Scottish Affairs, he asserted the right of Tory Members from England to sit on the Committee? Could he tell us when they propose to get on with exercising that right, because the people of Scotland want the Select Committee set up?

    Finally, rather than including the debate with all the other reports from the Procedure Committee, is the right hon. Gentleman prepared to put before the House a proposition for a general ten-minute rule on speeches, so that the matter can be debated separately and quickly and there is less frustration among Back Benchers in many important debates?

    The hon. Gentleman asked me seven questions on the business for next week, and I will do my best to answer them. He first asked about the Lords amendments to the Social Security Bill. The Bill will have its Third Reading in another place today. The timing of the debate has, as with all business, been discussed through the usual channels. I hope that the arrangements made will be for the convenience of the House, hut I am perfectly happy to have further discussions through the usual channels if the hon. Gentleman would find that helpful.

    I believe that the Ministry of Defence document was discussed at a Select Committee yesterday. I will refer the matter to my right hon. Friend the Secretary of State for Defence to find out the position about publishing it. I can confirm that my right hon. Friend will be making a Government reply to the Social Security Select Committee report which was published recently.

    The hon. Gentleman asked me about early-day motion 794. We support the motion, together with our Commonwealth and European partners. We have long called for the unconditional release of Mr. Mandela and other political prisoners.

    With regard to the United Kingdom veto on the draft Security Council sanctions resolution, we and the United States vetoed the resolution on 8 March because it included a call for mandatory economic sanctions. As we have consistently made clear, we do not believe that such action will help to bring about the peaceful end to apartheid.

    As I said last week, I hope to get on with setting up the television Select Committee as soon as possible. As the hon. Gentleman knows, the names of Members for the Select Committee have been put forward. There is a difficulty in resolving it insofar as the minor parties are concerned. We will have to consider how best we can proceed to resolve it as quickly as possible. If it is possible to resolve it in time to have a first meeting before Easter, that would give me great pleasure.

    The position of the Scottish Select Committee has moved on a bit since last week. I have written to the Chairman of the Committee of Selection and asked him to reconsider the position in light of information that I have given him.

    With regard to procedure, I recognise that there is a desire to get on with this. As the hon. Gentleman knows, I have invited him to have a meeting to discuss those matters, because it is best to proceed with as much agreement as possible. I hope to have a meeting with him in the near future to discuss the matter he raised and other outstanding matters, and to decide how best to proceed.

    I draw the attention of my right hon. Friend to early-day motion 6.

    [That this House deplores the fact that, alone among public service pensioners, those whose service was overseas cannot count pre-appointment war service towards their pensions; and calls upon Her Majesty's Government to remedy this injustice to a dwindling group of elderly people whose working lives were spent in adverse conditions while dedicated to the service of British interests overseas.]

    The motion has been signed by 331 colleagues. Bearing in mind how many hon. Members do not sign early-day motions, will he find time for a debate in the fairly near future?

    I am sorry to disappoint my hon. Friend, but I do not think I can find time in the near future to debate the matter. I recognise how strongly he and my hon. Friend the Member for Orpington (Mr. Stanbrook) feel. My learned Friend the Member for Orpington has had a long interest in the matter and has raised it in the House on many occasions. We recognise how strongly colonial service pensioners feel about the issue and we will keep it under careful review. As my hon. Friend will appreciate, there are many claims on public expenditure resources.

    Does the Leader of the House appreciate that the last meeting of the Scottish Grand Committee was on 23 March 1987 and that on 30 November 1987 the House agreed that the Scottish Grand Committee should discuss education in Scotland? When does the Leader of the House foresee a meeting of the Scottish Grand Committee taking place?

    Does the right hon. Gentleman intend to hold a debate on the Prime Minister's statement on Monday on the inner cities, or does he think that there was insufficient new matter in that statement to merit a debate?

    I cannot promise an early debate on inner cities, but I believe that the statement made by my right hon. Friend the Prime Minister contained some important points and it would be a very good idea to have a debate. However, I cannot promise one in the immediate future.

    With regard to the Scottish Grand Committee meeting, I understand that my right hon. and learned Friend the Secretary of State for Scotland has written to the hon. Member for Glasgow, Garscadden (Mr. Dewar) proposing arrangements for and seeking his agreement on three Scottish Grand Committee meetings in the near future. No doubt we will have discussions on that through the usual channels.

    Am I to understand from what my right hon. Friend the Leader of the House said a few moments ago that, as a result of the letter to the Chairman of the Committee of Selection, when that Committee next meets it will have sufficient personnel to complete the appointment of the long outstanding Select Committee on Scottish Affairs?

    The selection of Select Committees is not a matter for me. I have been doing my best to resolve some of the difficulties that arose in that matter and I have communicated with my hon. Friend the Chairman of the Committee of Selection. It is best for him to decide how best he should proceed as a result of receiving my letter.

    Is the Leader of the House aware that all service personnel who are disabled by negligence can now sue for compensation? Those who were disabled by negligence before December 1986 can, as a result of firm Government policy, neither sue nor receive an ex gratia payment. May we debate the setting up of a trust fund to give ex gratia payments to those disabled ex-service men?

    I recognise that the law has been changed and that that change was an improvement. However, there is always a difficulty over the position that existed before the enactment of any improvement. I will refer the matter to my right hon. Friend.

    Will the Leader of the House find time for a debate on the need for a Bill of Rights for Northern Ireland, if not for the whole of the United Kingdom?

    I cannot do so next week. No doubt many hon. Members would want to speak on that subject, but I cannot promise an early debate on it.

    It was most welcome to hear that the Under-Secretary of State for Northern Ireland intends to monitor employment recruitment facilities in big companies in Northern Ireland to check on religious discrimination. There has been disquiet on the mainland about the fact that sometimes there has been discrimination in nationalised industries, particularly over promotion. Will the Leader of the House look into the matter and discuss it with his colleagues?

    I am grateful to the hon. Member for what I took to be encouraging words about the position in Northern Ireland. I will take his points on board and will refer his comments to my right hon. Friends who are most concerned.

    Does my right hon. Friend recall how helpful he was at the beginning of this month when the House considered Northern Ireland business? Can he go one stage further and tell us whether he has been able to give consideration to dealing with Northern Ireland legislation on the Floor of the House rather than by Order in Council late at night?

    I have had a number of discussions with some of my right hon. and hon. Friends and others about this question, which I know is not entirely satisfactory to many hon. Members. I cannot promise that we have reached a point at which proposals will be brought forward.

    Has the Leader of the House read early-day motion 792 which deals with the extension of legal rights to grandparents for the adoption of grandchildren?

    [That this House deplores the increasing frequency of grandparents being deprived of the right of access to, care, fostering or adoption of their grandchildren notes with alarm the attitude of some social services employees; and calls on Her Majesty's Government to introduce early legislation to give legal rights to grandparents providing immediate right of access before children are taken into care and the right to be present or legally represented at any official hearing or inquiry regarding future access to, care, fostering and adoption of their grandchild or grandchildren.]

    Within 24 hours, the motion was signed by more than 100 hon. Members. It is high time that the Government found time for early consideration of this very pressing matter.

    I recognise that there is considerable concern about and interest in what is, in some cases, an important and serious matter. Grandparents may already be made parties to adoption proceedings. Further rights are provided for in amending legislation to be implemented this year and in our White Paper proposals for child care and family services. Something is happening, but I appreciate that this is a matter of concern.

    Further to my right hon. Friend's comments on the Scottish Grand Committee, can he tell the House where it is proposed that the meeting should be held? Does he agree that one problem has been the absurd notion that the Scottish Grand Committee should meet on Monday mornings in Edinburgh? That is extremely inconvenient for the great majority of Scottish Members who neither live in Edinburgh nor have ministerial cars.

    I am sure that it must be in the interests of everyone that the Scottish Grand Committee meet in the most convenient place. Discussions on this matter will take place, and I am sure that my hon. Friend's points will be considered.

    Is the Leader of the House aware that a Mini-Minor will be sufficient to take the Scottish Tories to the Scottish Grand Committee, wherever it meets?

    Will the right hon. Gentleman make certain that on Monday the Government have a proposal that will allow a debate to highlight the position whereby large numbers of people in Scotland live in damp and overcrowded housing while the Secretary of State for Scotland and his Ministers spend £150,000 on moving from one house, New St. Andrew's house, to another house, old St. Andrew's house, to look after their own comfort? Is that not yet one more display of their arrogance and their contempt for the Scottish people?

    I recognise that the hon. Gentleman is concerned to get on with the debate next Monday. He has given us a foretaste of the sort of speech that he may make if he catches your eye, Mr. Speaker. It is helpful for the Minister to know the hon. Gentleman's line in advance so that he may give him, no doubt, an adequate reply.

    Does my right hon. Friend agree that the recent debate on privileges was one of the most enjoyable that we have had in the House for a long time? For the benefit of those hon. Members who may from time to time in recent years have been the butt of certain journalists—especially those hon. Members who have opposed televising the proceedings of the House — may we have another debate, say, in July, when perhaps a little light relief will be welcome?

    The debate was enjoyable. I am sorry that my hon. Friend did not contribute, because I am sure that he would have had some wise comments to make. I cannot guarantee that I can provide for a repeat of the debate. When it comes, we shall not shirk it, because Tuesday's debate was a good one.

    The Leader of the House must be aware of early-day motion 758.

    [That this House joins with all other parliaments throughout the Commonwealth in the observance of Commonwealth Day on Monday 14th March and recognises the importance of the work of the Commonwealth Parliamentary Association which brings together parliamentarians throughout the Commonwealth who share a community of interests, respect for the rule of law and a commitment to promote the positive ideals of parliamentary democracy.] He must be aware also that Monday 14 March is Commonwealth day, when observances of the ideals of the Commonwealth are organised throughout the 36 nations that form this organisation. The Commonwealth Parliamentary Association is committed to respect for the rule of law and the promotion of parliamentary democracy. Can the right hon. Gentleman find time for a debate so that we may analyse those ideals relative to the demands of our modern society?

    The Government wholly concur with the statements expressed in the early-day motion. I am sure the whole House recognises the value of the work carried out by the Commonwealth Parliamentary Association, but I do not think that I can find time for a debate next week. Perhaps we do not really need a debate to express our enthusiasm for the hon. Gentleman's sentiments.

    May I refer my right hon. Friend to the question asked by the hon. Member for Orkney and Shetland (Mr. Wallace)? Will he remind the House that the meeting of the Scottish Grand Committee on what the hon. Gentleman called 30 November but other Scottish Members would call St. Andrew's day was scuppered by the Liberal party before it obtained the alibi or synonym, or both, that it has recently taken? The hon. Gentleman urged my right hon. Friend for a debate on the inner cities. That is welcome to those of us who represent Scottish cities because in Scotland we do not have inner-city problems such as those they have in Kirkwall because we live in them.

    The hon. Member for Falkirk, East (Mr. Ewing) regretted the fact that the Government had to move back into old St. Andrew's house at the cost of £150,000. That would never have been necessary if the Labour party had not ruined the inner city of Edinburgh by moving into New St. Andrew's house in the first place.

    I am grateful to my hon. and learned Friend for his analysis of the situation. I had quite forgotten that the Liberal party was difficult about the meeting of the Committee—I have never known that to happen before — but I shall learn to be wary as I continue in this job.

    Will the Leader of the House consider having an early debate on the shootings in Gibraltar, on the ground that in editorials The Daily Telegraph, The Independent and The Guardian have shown great disquiet? I have had dozens and dozens of letters, some from ex-SAS men—

    The hon. Gentleman can see them.

    I have already received letters from ex-colonels and others in the Army and from Tories, all of whom have expressed their great disquiet about what has happened. The whole basis of democracy is at stake. May we have an early debate on the issue? We have not yet got into the position of having Government death squads, but it is about time that the House had a full debate on the issue.

    No doubt proper inquiries are being made within the services and the police to establish the details of what happened. I should have thought that in any debate the House would want to show its overwhelming support for the security forces, given that many hundreds of innocent lives were saved by their speedy and skilful handling of a very difficult situation.

    May I draw my right hon. Friend's attention to early-day motion 275, concerning the national dock labour scheme and standing in the name of my hon. Friend the Member for Gravesham (Mr. Arnold) and others?

    [That this House believes that the National Dock Labour Scheme is an anachronism which both endangers the viability of jobs in the scheme areas and acts as a deterrent to job creation by new ventures; and calls on Her Majesty's Government to abolish the scheme, and open negotiations immediately with employers and unions to bring that about.]

    In view of the latest report about dockers in Boston turning down £1,200 for two days' work, and as the scheme is responsible for many parts of our inner cities being derelict, may we now have a vote and abolish the scheme once and for all?

    I cannot promise exactly what my hon. Friend wants, but I think that there is a debate tonight on this matter, and no doubt if my hon. Friend catches your eye, Mr. Speaker, he can express his views then.

    The Leader of the House will be aware that the Government recently announced their intention to withdraw their financial support from the British Agricultural Exports Council for the next financial year. Bearing in mind that the value of United Kingdom agricultural exports is £1 billion a year and also the crisis faced by farmers in the domestic market, will the Leader of the House arrange for an early debate so that we can consider the true value of the council in facilitating exports in the light of the modest amount that it needs to ensure financial viability?

    The subject that the hon. Gentleman raises is relevant to any debate on agriculture. I recognise that our last debate on agriculture was dominated by the Brussels meeting, and I am looking for an occasion for 4 further debate. I cannot promise one in the immediate future, but I shall certainly bear the matter in mind.

    As the Government, in deference to American public opinion, are to introduce legislation in Northern Ireland that proposes reverse job discrimination supported by criminal sanctions, will my right hon. Friend undertake to consult the Governments of India, Pakistan and Bangladesh and then tell us in a debate whether he intends to introduce measures of reverse job discrimination in England and Wales and Scotland in deference to those foreign Governments?

    The short answer to my hon. Friend is, "No, Sir." However, I shall certainly refer the matter to my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs.

    Would not next week be a peculiarly good moment to debate early-day motions, 228, 253, 272, 273 and 286?

    [That this House notes in the book, Campaign, by Rodney Tyler, the Selling of the Prime Minister: from behind the doors of Downing Street and Conservative Central Office—A unique inside account of the Battle for Power that the author on page 1, chapter 1, paragraph 1, sentence 1, states 'It was an extraordinary turnaround in fortunes from the moment on 27th January 1986 when Mrs. Thatcher secretly confided to a close associate that she might have to resign …' and on page 3 that 'On the eve of the crucial Westland debate she herself felt shaky enough to doubt her future' though some around her later sought to dismiss this as late evening anxieties of the sort that had disappeared the following morning). It is certainly true that if Leon Brittan had chosen to, he could have brought her to the brink of downfall, by naming the real culprits inside Number 10. Instead he chose to remain silent', and calls on the Prime Minister to give a full account of what transpired between 3rd January and 27th January 1986, at Number 10 Downing Street, in relation to the selectively leaked Law Officer's letter concerning the Westland Affair.]

    [That this House notes that the Member for Aldershot on page 136 of his book Heseltine: the unauthorised Biography, states in relation to the Westland Affair that 'John Wakeham issued an order of the day which contained the trite, if effective message, that it was time 'Or all good men to come to the aid of the party. We did and calls on the Leader of the House, The Right Honourable Member for South Colchester and Maldon, to explain when he first knew the role of the then Trade and Industry Secretary, The Right Honourable Member for Richmond, Yorks, in the matter of the disclosure of a selectively leaked Law Officer's letter.]

    [That this House notes that in his hook Mrs. Thatcher's. Revolution, published this week by Jonathan Cape and Co., Mr. Peter Jenkins writes on page 200 'Brittan himself refused to enlighten the Select Committee on any point of substance. However, he is reputed to have told close friends subsequently that not only has she known perfectly well what had happened but that, on the day following the leak, had expressed her satisfaction to him at the way things had been handled. However, at that time, the downfall of Heseltine had not been achieved … He (Mr. Brittan) might point the finger at her (Mrs. Thatcher). Potentially he now had the power to destroy her'; and calls on the Prime Minister to give the House a full account of her conversations with the then Secretary of State for Trade and Industry, the Right honourable Member for Richmond, Yorks, over theperiod from 3rd January and 27th January 1986, in relation to the selectively leaked Law Officer's letter concerning the Westland Affair.]

    [That this House notes that in The Thatcher Years—A decade of Revolution in British Politics, published by BBC Books, Mr. John Cole, on page 170, considering the selectively leaked Law Officer's letter in the Westland Affair, writes 'why did he (Sir Robert Armstrong) not give her a quick interim report when he discovered that the leak was an inside job, authorised by her office?' Why did Leon Britian not tell her? Or the private secretary concerned? Or his chief, who sits in the same room? Or her press secretary? And why did she never ask?; and calls on the Prime Minister to inform the House of the answers to these questions.]

    [That this House notes that, in the book 'Not with Honour—The Inside Story of the Westland Scandal', on page 142, Magnus Linklater and David Leigh write that "Instead, following Havers's complaint, she spoke privately to Britian about the leak. Although this is something the Prime Minister has failed to disclose, to widespread disbelief, the evidence comes from an authoritative source, who told us: "The Prime Minister knew about the leak. She was pleased it had been done. There was a meeting between Brittan and her after the complaint from Mayhew. Only the two of them were present … Brittan assumed she knew of [the leak's] origins. You must draw your own conclusions." One of Brittan's friends adds, "Nobody thought it was a problem. The complaints were out of the public domain and any inquiry was expected to be a formality. Leon wasn't worried at all about it."; and calls on the Prime Minister to give a full account to the House of the meeting between herself and the Right honourable Member for Richmond, Yorks, referred to therein.]

    If she has not done it again, as in Westland, it has been done on her behalf again. Why has the Secretary of State for Education and Science got the Henley treatment? Do the leaks involving letters between Downing street and a senior Government Department happen by alchemy? Will there be a leak inquiry? What on earth are the Government going to do when they cannot send for Sir Robert Armstrong?

    The hon. Gentleman is very ingenious in the way in which he raises these matters. I cannot promise him a debate on the subject next week. Of course, leaks are to be deplored wherever they come from—

    I am busy trying to answer the hon. Gentleman's questions in the way which I think is most appropriate for the House. I have no doubt that those responsible for these matters will decide what is the appropriate form of inquiry necessary to find out what happened.

    As a matter of fact, the most interesting thing about this leak was the reaction of the hon. Member for Blackburn (Mr. Straw), because it seemed to me that he aspires to be a member of a Government one day who do not have vigorous discussions within the Government.

    When my right hon. Friend and the Government are considering the venue for the Scottish Grand Committee meetings, will he bear in mind the experience of the previous Parliament and look carefully at the attendances of the Grand Committee meetings that took place in Edinburgh? Will the Government note that often those who screamed to have the meetings in Edinburgh were the individuals who did not attend? For example, the former leader of the Scottish National party, Mr. Donald Stewart, and the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), the leader of the former Liberal party, rarely attended. Many Labour Members who constantly screamed for meetings in Edinburgh never attended either.

    In my innocence, I have just mentioned the existence of a letter written by my right hon. and learned Friend the Secretary of State for Scotland to the hon. Member for Glasgow, Garscadden (Mr. Dewar). I did not realise that there was so much detail in this matter; otherwise perhaps I would not even have mentioned it.

    If possible, may we have a statement next week on the Settle-Carlisle line? I have asked the Leader of the House about it on several occasions. It is a beautiful 80-mile railway line which is operated with great affection by the staff. It is well used and it covers its costs. British Rail is having to use it for diversions from the west coast electrified route, but an air of uncertainty hangs over it. The Department of Transport is trying to pressure local authorities, which are strapped for cash, into providing the money.

    There is an outstanding Jarvis plc report, relating to a job creation project along the Settle-Carlisle corridor. People who are dedicating their lives to the running of a successful, beautiful and treasured heritage, and who are supported in that by people from all over the country—both in sentiment and in practical travel — have uncertainty gnawing at them, and want the line kept. It is intolerable that that uncertainty should continue.

    My right hon. Friend the Secretary of State for Transport recognises the need for the uncertainty about the line to be ended as soon as possible. He is actively considering British Rail's proposals. I understand that he hopes to make an announcement in the near future.

    Order. I draw attention to the fact that we have a Consolidated Fund debate later today and will consider a Third Reading before that. I ask hon. Members to make brief contributions.

    Is my right hon. Friend prepared to consider an early debate on the subject of allegations made last Friday in a Channel 4 programme on the subject of child cancer clusters? If we had a debate, some of us could introduce a bit of balance, because many of my constituents were distressed and worried by the allegations. I dare say similar worries have been expressed in other constituencies.

    I recognise my hon. Friend's concern. I am advised that there is no evidence to suggest that the alleged incidence of leukaemia in Humberside is related to the discharge of pollution from Capper Pass. Local variations in the incidence of the disease in relation to industrial sites are already being considered by the small area health statistics unit at the London School of Hygiene. I note that my hon. Friend the Member for Beverley (Mr. Cran) may he lucky enough to debate this matter later today during the debate on the Consolidated Fund Bill.

    The right hon. Gentleman may be aware of the total chaos prevailing at Lunar house in Croydon where there are masses of unopened mail containing passports which constituents of all hon. Members are entitled to have returned. Is he aware that that total chaos has arisen because his right hon. Friend the Home Secretary was not prepared to listen to the advice that the end of December deadline should be extended so that the civil servants would have a chance to cope with this mass of mail? Is he further aware—

    Is the right hon. Gentleman further aware that I have two constituents—a woman whose mother is dying in the Punjab and a gentleman whose father is dying in the Punjab—who cannot get their passports returned to enable them to get out to see their parents before they die?

    Is he further aware—

    This is very important, Mr. Speaker.

    Is the right hon. Gentleman further aware that there is a story that all the letters are to he returned to those who wrote them with the request that they send them in later? If that story is true, may the House have a statement from the Home Secretary as to what is intended? We would then have a chance to debate this extremely important matter in the Chamber.

    I do not recognise the hon. Gentleman's analysis of the situation. However, I recognise that, within the general context of his remarks, problems have arisen for his constituents. I shall look into the matter and see what can be done. I will write to the hon. Gentleman as soon as I have any information.

    Will my right hon. Friend check the printing of column 430 of yesterday's Official Report regarding the debate on clause 28 of the Local Government Bill? The name of the hon. Member for Brent, East (Mr. Livingstone) appears to be missing. I understand that he made a strong speech in the debate and also at a meeting of the parliamentary Labour party, saying that he felt it was very important for the Labour party to oppose the clause at all stages. My right hon. Friend may be helped in his investigation by considering last night's television programme. I understand that, at about the time of the Division, the hon. Member for Brent, East was appearing on a television programme and was not present in the House to vote.

    I will certainly consider the matter raised by my hon. Friend. However, as the hon. Member for Falkirk, East (Mr. Ewing) says, I do not believe that it will feature in next week's business.

    I wonder whether the Leader of the House was aware of the sabotage carried out a few days ago by Sir Robert Haslam—the head of British Coal—in relation to the miners? He invited the miners to end their overtime ban in the knowledge that wage negotiations and consultations would continue. As a result of a ballot, the overtime ban was lifted and then, cynically, Sir Robert Haslam treated the miners with contempt by telling them that they could not have their back money from November. Therefore, miners will lose hundreds of pounds.

    The Leader of the House is a sort of superintendent of hon. Members, many of whom never turn up for work for weeks and weeks, but they still get their pay. Peers of the realm pick up £100 a day tax-free, with expenses, and some of them just walk through the door and walk out again. Does not the right hon. Gentleman believe that there is some morality in the miners calling for their back pay so that all miners in all the coalfields may be paid the same, in common with Members of Parliament?

    The question of pay within British Coal is a matter for the management and not the Government. I should have thought that Sir Robert Haslam had acted in an extremely sensible and conciliatory way by, immediately after the overtime ban was lifted, paying miners the new rates of pay that they have long wanted.

    Can the Leader of the House spare time for a debate on the contracting out of services in the Health Service and the subsequent effect on patient services? This morning I received a copy of a letter from the district manager of ray district health authority asking staff, including nurses, whether they could work part-time in the laundry. Because of the disastrous effects of cuts and being forced to contract out, he is now asking nurses to moonlight in the laundry. We cannot get enough linen for the wards at weekends and the situation is becoming dire.

    I cannot find time for a debate next week, but I believe that a debate would be a good opportunity to put right the slanted way in which the hon. Lady has put her question, especially given the advantages of contracting out, which has provided £100 million or more of additional funds for patient care.

    Has the Leader of the House noted early-day motion 785?

    [That this House notes the recent decision of the Post Office to increase charges by 35 per cent. for Datapost services for the Highlands and Islands of Scotland only; that these proposals were imposed without consultation with their Scottish Chairman, Mr. Ian Barr, who is to be congratulated for standing by his principles and resigning his position over this latest in a series of discriminatory postal charges imposed upon the Highlands and Islands of Scotland to the detriment of the economic and social life of these communities; and calls on the Post Office to reverse these penal imposts.]

    It relates to the imposition of a Datapost surcharge in the Highlands and Islands. Does the right hon. Gentleman appreciate the deep dismay and disappointment with which the surcharge has been greeted? It makes the Government's oft-repeated words in support of small business ring extremely hollow in that area. So that the Government may have an opportunity to salvage their reputation, will the right hon. Gentleman schedule a debate on this matter?

    Questions about the competitive Datapost service and the Scottish Post Office are operational questions for the Post Office. I fear that it would not be appropriate to debate them in the House.

    Further to the right hon. Gentleman's replies about the Scottish Select Committee, can he say whether, as a result of the letter that he is about to send to the Chairman of the Committee of Selection, he is hopeful that the Select Committee will be set up?

    I should correct the hon. Gentleman; I have already sent the letter. I am always hopeful, but sometimes I am disappointed.

    Statutory Instruments, &C

    Ordered,

    That, the Town and Country Planning (Compensation for Restrictions on Mineral Working) (Amendment) Regulations 1988 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Maclean.]

    Social Security Bill

    4.8 pm

    On a point of order, Mr. Speaker. May I raise with you the difficulty in which the House is placed as a result of the business statement relating to Monday? We have been invited to consider Lords amendments to the Social Security Bill on Monday, although some of them have yet to be debated in another place. This indecent haste poses a serious challenge and places an important duty on this House when scrutinising Government legislation.

    There are two questions with direct relevance to your office, Mr. Speaker, that I wish to put to you arising from this difficulty. As the Lords have not considered some of the amendments before them, it is clear that we will have a proper marshalled list of amendments before us, at earliest, tomorrow—Friday. Therefore, it is technically impossible for us to table unstarred amendments for consideration on Monday — there are three or four Lords amendments that we would wish to amend. In addition, it is possible that some hon. Members, in good faith, have made arrangements to be in their constituencies tomorrow. Therefore, they will see the amendments for the first time on Monday and will be able to submit manuscript amendments only.

    In those circumstances, I ask for your assurance that a star against an amendment on Monday will not be a bar to considering it for debate and that you will sympathetically consider a manuscript amendment from any hon. Member who does not have the opportunity to see the amendments until Monday.

    There have been exchanges across the Chamber on this matter, and I heard the Leader of the House say that he thought that further discussions might take place. If the business does come on on Monday, I shall most certainly bear in mind and deal sympathetically with the matter that the hon. Gentleman has raised.

    Mrs. Alice Mahon
    (Halifax)