To ask the Chancellor of the Exchequer what is his estimate of the effect on the weekly income of a single unemployed person with no private income of his Budget changes.
My right hon. Friend the Chancellor has asked me to apologise to the House for his absence today. He is attending meetings of the interim and development committees of the IMF and the International Bank for Reconstruction and Development in Washington.The answer to the hon. Gentleman's question is that the Budget is about tax and will not therefore have a direct effect on the incomes of those who do not pay tax.
Can the Chief Secretary justify an unemployed young person under the age of 25 having his social security benefit reduced to £26·05 a week when one of the right hon. Gentleman's millionaire friends earning—or should I say, receiving—an income of £1 million a year has been given £3,729 a week as a result of the Chancellor's Budget? Is that not a disgrace, and does the right hon. Gentleman not go in fear that his rich friends might now become part of the dependancy culture of which his right hon. Friend the Secretary of State for Social Services is so fearful?
A substantial part of that question does not arise from the original question. However, more than half a million people under 25 gain in cash terms, as the hon. Gentleman should know.The hon. Gentleman asked about the unemployed, and the Budget does several things of material interest to them. First and foremost, it will, in my judgment, improve their chances of getting a job. Secondly, when they have jobs the Budget will raise the threshold at which they will pay tax. Thirdly, it reduces the basic rate at which they pay. Fourthly, the unemployed will receive any tax rebates speedily, and they will be substantial rebates if they have been unemployed for some time.
Despite the precise wording of my right hon. Friend's original answer., does he agree that as a result of the Budget some of those who were paying tax will not now pay it?
I am entirely content to agree with my right hon. Friend about that. The figure that my right hon. Friend perhaps had in the back of his mind was 780,000—the number of people who will not pay tax and who otherwise would have done so.
We will refuse to separate the tax cuts of the Budget from the benefit cuts of the social security changes. Does the Minister agree with my estimate that, after this Budget, a person earning £100,000 a year will receive a staggering extra £268 a week, while the benefit changes mean that a single unemployed person will receive less than one tenth of that amount? Can the right hon. Gentleman—he is spoken of as a future leader of the Conservative party—not see what anyone with a basic sense of fairness can see, namely, that it is the function of government to eradicate social injustice, not deliberately seek to create it?
The Government spend one third of their income on social security to eradicate social injustice.
To ask the Chancellor of the Exchequer for how many years the rate of economic growth in the United Kingdom has averaged 3 per cent., or more.
The six years to 1987 saw average economic growth of 3 per cent. a year. This is the longest period of steady growth, at around this rate, for half a century.
Are not those figures an eloquent testimony to the success of the Government's economic policies? Is it not interesting to note that in the last year, when we have had growth of 4·5 per cent., we have been firmly at the top of the international league of growth of our major competitor countries?
My hon. Friend is absolutely right. It is a great contrast with the 1960s and 1970s, when we were bottom of the international growth league. It is a contrast also with the performance of the last Labour Government, when the growth rate in every year was lower than the average of the last six years under this Government.
What will happen to growth if exchange rates are at a high and uncompetitive level? Will the Minister heed the warnings of the CBI and others about the effects on GDP of what is happening to exchange rates, or would that be bucking the market?
I am happy to say that the outlook for growth is very favourable and we remain one of the more rapidly growing countries in the Western world.
Does my hon. Friend agree that industrial growth is proceeding well and that it was fed very much with the pound much lower than it is today? My right hon. Friend the Chancellor, who is in Washington, says that we will have a stable pound. Without a stable and lower pound we will not maintain economic growth.
Economic growth has been improved and our economy transformed by a series of measures to improve the supply side performance of the British economy. That is of the utmost importance and has been achieved within a monetary framework which keeps monetary policy bearing down on inflation and ensures that exchange rates are reasonably stable.
Given that the Minister thinks that the Government's economic record is so wonderful, can he tell us how many people are in full-time employment in the United Kingdom now compared with the figure for the last year of the Labour Government?
I remind the hon. Gentleman that over the past year the fall in unemployment has been greater than ever previously recorded.
To ask the Chancellor of the Exchequer what responses he has received to his Budget proposals for changes in business taxation.
To ask the Chancellor of the Exchequer what responses he has received to his Budget proposals for changes in business taxation.
The proposals that my right hon. Friend announced in his Budget statement have been widely welcomed.
Does my right hon. Friend agree that the responses which may well have come in congratulate the Government on establishing a single rate of inheritance tax? Will not this measure ensure that it will be much easier to pass on family businesses and retain those family businesses in operation for future generations?
My hon. Friend is right, but that was, of course, just one of the measures in the Budget. It will, as he said, enable family businesses to be passed on to future generations, which is a good thing. The Budget was widely welcomed. The CBI said:
"This is the Budget we have been waiting for. It will help to maintain the momentum of Britain's economic recovery and should boost business confidence."
Is it not right that, because of the Budget, we now have one of the lowest rates of business taxation in the Western world? Is that not a major boost to companies wishing to invest here, to companies that are already here, and to the revenue?
My hon. Friend is right. We have one of the lowest rates of corporation tax in the Western world, and the small business rate of tax is at the lowest level ever. This should be a great magnet, bringing further inward investment into this country, and should be welcomed by everyone.
Has the Chancellor received representations on the business expansion scheme proposals, to the effect that it is wrong to provide a tax shelter for those who are the richest in society to enable them to set up rented accommodation, often to exploit those at the poorest end of society?
We have not received representations to that effect. The hon. Gentleman may be interested, and perhaps surprised, to hear that we have had some representations from people protesting because we have narrowed and limited the relief fund of the business expansion scheme. We did that because we wanted to concentrate on start-ups and small businesses. We think that it is well worth while extending the scheme to the private rented sector. We need more rented accommodation.
Do the Government not recognise that their own commissioned survey of the business expansion scheme has shown that it has relatively minor job creation effects, that it has tended to concentrate on low-risk, asset-based enterprises and not on high risk ventures, that it is largely based in the south-east, and that it has tended to transfer funds from the north to the south? In addition, it is being used as a tax haven rather than as an efficient way of channelling private investment into enterprise and wealth creation. Far from expanding it, should the Government not have changed it radically or even scrapped it?
The hon. Gentleman seems to be ignoring what I have just said. In many respects, we have narrowed the scheme. It is obvious from his question that he is unaware that we had a survey of the scheme done by Peat, Marwick, Mitchell and Co. which reached very different conclusions from those to which the hon. Gentleman referred. It s precisely because we think that the scheme should not he used to create asset-backed investments at the taxpayer's expense that we have narrowed its application to £½million small businesses. That will deal precisely with the point that the hon. Getleman raised and he should acknowledge that.
To ask the Chancellor of the Exchequer what representations he has received on his Budget.
My right hon. Friend has received widespread support for his Budget.
Nevertheless, it is a pity that a Treasury Minister did not have time to meet representatives of the general aviation industry before the Chancellor's Budget, which might then have pleased that industry a little more. Does my hon. Friend think it fair that jet airliners pay no duty on the Avtur fuel that they use, while the general aviation industry, which is 95 per cent. piston engine, pays duty on its Avgas? Does my hon. Friend not think that that is unfair?
I am sorry that I did not have the chance of meeting my hon. Friend on this occasion as I have done in previous years. On his specific question, the duty on Avgas was reduced to half the duty on petrol in 1982, and there is no justification for a further reduction. Avgas is a high-lead petrol and many cars could run on it. The pump price of Avgas limits abuse. If the duty were removed there would be a serious risk of the diversion of Avgas to road fuel use and significant revenue loss.
Given that economic stability at home and constructive economic co-operation abroad are among the Budget's prime objectives, how does the Minister reconcile yesterday's G7 commitment to stable exchange rates with recent serious policy disagreements within the Treasury and at No. 10 about both interest rate and exchange rate policy?
Given the first half of the hon. Gentleman's question, he must have been very pleased by yesterday's announcement.
Is my hon. Friend aware that this is a Budget, not for the rich people of this country, but for the 25 million people engaged in employment and producing the real wealth of this nation? Is it not the result of those people keeping more of their own money that indirectly leads to our creating more real wealth for use in our health services and social benefits programmes?
My hon. Friend is quite right to draw attention to the fact that the Budget does not involve a giveaway. It involves less money being taken from taxpayers. My hon. Friend is also entirely right to say that it is the success of the whole economy that has contributed to our present prosperity.
Is the Minister aware of the widespread resentment at the Chancellor's rates bill for his mansion at Dorneywood in Buckinghamshire? That bill will fall from £6,400 to a mere £400 for the Chancellor and his wife when the poll tax is introduced. That sort of unfair taxation has caused widespread resentment.
Some of the difficulties that the Opposition are experiencing at the moment may arise from the fact that that question has absolutely nothing to do with the original one.
So that the Labour party may make a proper international comparison, can my hon. Friend confirm that the top rate of income tax in the Soviet Union is 41 per cent.?
My hon. Friend has always been a man of the widest possible information, and I am delighted that he has added to mine.
Bearing in mind that the Minister has other political responsibilities as well as his duties at the Treasury, can he estimate how much the Conservative party will gain and how much the Revenue will lose as a result of the proposal in the Budget to remove inheritance tax completely from all donations to political parties?
The right hon. and learned Gentleman is quite right to draw attention to the fact that I have separate responsibilities. The office of Paymaster General is quite separate from the Treasury. In neither capacity, however, do I propose to crystal gaze on the question that the right hon. and learned Gentleman asked.
Will my hon. Friend reconsider the matter of Avgas in view of the experience with other fuels, namely that by changing the colour of the fuel one can ensure that it is not used improperly? Does my hon. Friend agree that that method is better than using taxation for the same purpose?
I will treat my hon. Friend's question as a very early representation for next year's Budget.
To ask the Chancellor of the Exchequer what is his estimate of the weekly gain for a single person earning £50,000 a year from his Budget tax changes.
Just under £80 for an individual with no reliefs other than the single person's allowance.
Does the Minister agree that it would have been better to give that money to the pensioners, who have received nothing from the Budget? What has the Minister to say to the pensioner from my constituency, who has travelled here today, whose total income from a state pension and a British Rail pension is £60 per week and who received nothing from the Budget, but last Monday lost £8 as a result of housing benefit cuts? When will the Government stop taking from the poor and giving to the rich?
As the hon. Gentleman knows, it is not the custom to announce pension increases at the time of the Budget. That will be done at the time of the Autumn Statement. A single person with an income of £60 per week will be paying tax and will benefit from the Budget. The contribution made by the cuts in tax rates is that they will continue the economic growth that has enabled us to increase the total pensions and social security bills by very considerable amounts.
How does my hon. Friend account for the fact that when higher rates of taxation reached a maximum of 83 per cent. under the Labour Government they raised only £800 million, whereas today, when the highest rate is 60 per cent., £3,800 million is raised? Does this not show the logic of reducing, and continuing to reduce, higher rates of taxation?
My hon. Friend makes a very good point.He and the Opposition may be interested to know that in 1978–79 the taxpayers on higher rates produced 19 per cent. of tax revenue, whereas the figure for this year is 30 per cent. We have thus demonstrated that it is possible to cut rates and increase revenue, as my hon. Friend has pointed out on this and other occasions.
Will the Minister confirm that as a result of the Finance Bill published today £800 million will be given in tax handouts to the very small minority of people with earnings in excess of £100,000 per year? Will he also confirm that for the same amount of money no pensioner need suffer a cut in housing benefit, no family need suffer a freeze in child benefit and no one at all need feel compelled to beg or borrow from the state charity that has been set up in the form of the social fund? Does he accept that in all sections of the community there is deep revulsion against the two-nation Toryism which he now represents and which has produced the most unjust, the most unfair and the most socially divisive Finance Bill this century?
I do not see anything "two-nation" about 70 per cent—[Interruption.] Hon. Members should listen to what I have to say. Seventy per cent. of the cost of the Budget is going on basic rate cuts and increases in personal allowances. I also see nothing "two-nation" about 23 million people benefiting from the basic rate cut.
Does my right hon. Friend agree that the reductions in the higher rates of tax will encourage the internationally mobile either to stay in the United Kingdom or to come back to it? Does he agree also that the presence of leading surgeons and leading industrialists, and leaders in other areas, can only benefit Britain?
That is no doubt why cutting the higher rates in the past has increased revenue. My hon. Friend rightly emphasises that we need to attract inward investment, and we also need to attract the managers that go with those projects. That is just one of the reasons why the higher rate cuts are to the benefit of the whole economy.
Departmental Votes (Transfers)
To ask the Chancellor of the Exchequer what arrangements his Department has to vire money between one Department and another.
The Treasury has no power to vire money between Votes. That can be done only by the presentation of Supplementary Estimates.
Will the Minister concede that the Treasury's monthly returns show an increase in spending in the last three or four months of the financial year which is due to Departments trying to spend up to their limits, and that if there were an effective viring system, transferring money from one Department to another, greater spending could take place on housing and social security?
There has for a long time been bunching in public expenditure, and not only at the end of the year. It is precisely to deal with unexpected demands that we have a contingency reserve that is unallocated at the beginning of the year. This year, that was substantially used.
Will my right hon. Friend move more towards three-year funding arrangements for more Government Departments?
We agree a public expenditure settlement that spreads far further than one year.
Balance Of Payments
To ask the Chancellor of the Exchequer if he will make a statement about the impact on the current account of the balance of payments of the basic and higher rate income tax cuts announced in the Budget.
To ask the Chancellor of the Exchequer if he will make a statement about the impact on the current account of the balance of payments of the basic and higher rate income tax cuts announced in the Budget.
The current account deficit is forecast to remain below I per cent. of national income in 1988.
Is the Minister aware that the CBI trend survey for March suggested that manufactured imports would grow more than twice as fast as exports in 1988? If so, will he explain to the House why the Chancellor gave away billions of pounds in tax cuts to the rich in the same month? Does he not understand that, as well as being socially divisive and unjust, those tax cuts can only serve to damage the long-term economic interests of the nation? They will lead to the sucking in of even more imports and thereby worsen an already critical trade imbalance.
Our forecast for the balance of payments in the coming year is based on the tax cuts that were announced in the Budget. I do not know whether the hon. Gentleman is suggesting that instead of running a surplus of £3 billion we should run a surplus of £7 billion. We are running a surplus on public account, and he believes that that has some impact on the balance of payments. So far, our track record in forecasting the economy is much better than that of most outside bodies. Of course, there is a degree of uncertainty about it, but we believe that that is the best estimate that can be made.
Is it not right that, on the Government's own estimates, we are facing in the current year a deficit of £4 billion, that, even worse, in the first two months there is a deficit of £1·6 billion, and that tax cuts will only suck in more imports? Why can the Government not recognise that the Budget was no good for the poor or for the economy?
The deficit forecast for the coming year is, at less than 1 per cent. of GDP, a fraction of the deficits that were run by the previous Labour Government. It is clearly easily manageable. I repeat the point that I made earlier. If the hon. Gentleman is against any tax reductions in the Budget, he is presumably in favour of running an even larger surplus, which is the exact opposite of the Labour party's policy at the time of the election.
Does my hon. Friend agree that the small balance of payments deficit that we are facing is easily contained in the huge reserves that Britain now has, compared with the overall deficit of the previous Labour Government? Since 1979 this Government have had a £20 billion surplus on the balance of payments.
My hon. Friend is quite correct. As a country, not only do we have large official reserves, but we have large net assets overseas amounting to some $90 billion. That puts us in a much stronger position than we were under the last Labour Government.
In view of the sizeable increase in net disposable income which will derive from the Budget tax cuts, and the possibility that some of that spending will be on imported goods, will my hon. Friend pay some attention to the possible effect on our balance of payments of such a move? In particular, will he reassure me that the whole business of control of credit is being given some attention at the Treasury, as to some of us it seems to be getting out of control?
The estimates and projections that we have made take into account the effect of tax deductions on expenditure. I can assure my hon. Friend that the growth that we forecast will be very balanced. We expect consumer expenditure to grow somewhat less rapidly in the coming year than it did in the last year—by some 4 per cent. By contrast, we expect business investment to grow at 9 per cent. per annum. We envisage very strongly investment-led growth in the coming year. Naturally, we keep an eye on credit, and we believe that credit growth is perfectly containable at the moment.
In view of the fact that the current account figures for the months so far this year have been very bad indeed, and that the deficit appears to be getting steadily worse, will the Minister tell the House clearly and precisely what is the Government's strategy for reducing the deficit in the balance of payments?
Clearly it is too early to come to conclusions on the basis of the first two months of the year, when there may well have been exceptional factors resulting from the introduction of the single administrative document. We never make changes in forecasts on the basis of the figures for one or two months. We believe that the sort of deficit we are forecasting is easily containable, and, as I pointed out, it is substantially smaller than that which the Labour Government seemed content to run.
To ask the Chancellor of the Exchequer what is his estimate of the weekly gain of a single person earning £300,000 a year from his Budget tax changes.
Just over £1,000 for an individual with no reliefs other than the single person's allowance.
Is it not ridiculous in the present day that that answer confirms the fact that an income tax saving of £1,037 per week will accrue to someone earning £300,000 a year? Was the Minister not in the House yesterday to hear the Secretary of State for Social Services describe his cuts for the poor as a charter for self-respect? In view of that, will he give an assurance to the House that the next Budget will be one-nation Budget whereby the poor get richer as an incentive, rather than being ground into the dust as they are at present?
The hon. Gentleman concentrates on an extraordinarily small proportion of the tax-paying public, and a very small part of the cost of the higher rate reductions,. Even of the higher rate reductions, 60 per cent. of the gainers are earning less than £40,000, which shows, incidentally, that the point made by the hon. Member for Dunfermline, East (Mr. Brown) was wholly wrong arithmetically.
Will my right hon. Friend tell the House exactly how many taxpayers are in that position, and by how much the basic rate of tax for the rest of us could have been reduced if their gain had been taken away entirely?
It certainly would not have enabled any reduction in the basic rate for the rest of us.
Is it not clear that the large majority of ordinary taxpayers will be paying tax at 25 per cent. and national insurance contributions at 9 per cent.—a total of 34 per cent. and the higher taxpayers in the land will be paying only 40 per cent.? Therefore, the difference between the people at the bottom and the people at the top paying tax is only 6 per cent. It is not clear that we are now coming to the end of progressive taxation, which has been embraced by every Administration this century until this one?
No. It would be quite wrong to say that the tax system was still not progressive. I point out to Opposition Members that a person on five times average earning will still be paying 10 times the amount of tax of a person on average earnings.
To ask the Chancellor of the Exchequer what information he has as to what will be the higher rates of income tax in each of the major industrial countries in 1988–89.
To ask the Chancellor of the Exchequer what information he has about the higher rates of income tax in each of the major industrial countries in 1988–89.
The higher rate of income tax in the United Kingdom is now one of the lowest of any major industrial country. I shall arrange for the relevant information to be placed in the Official Report.
I thank my right hon. Friend for that information. Does it not prove that as a result of the Budget Britain is one of the most attractive countries internationally? Will it not lead to an increased number of industries moving into this country, providing more jobs and thus increasing the amount of revenue coming to the Exchequer, for the benefit of all citizens?
We certainly hope and expect that there will be an increased flow of inward investment. However, there has been a substantial amount of inward investment in recent years. There was £6·1billion in 1987 alone, the largest figure ever recorded, and £2·6million in Scotland alone over the past few years.
Does my right hon. Friend agree that penal rates of taxation damage the economy as a whole and help no section of society? Does he further accept that there may be no economic justification for any level of income tax higher than the basic rate?
I am certainly prepared to agree with my hon. Friend on the subject of penal taxation. The subject of a single rate of taxation might be a matter for another day. However, I recall that Mr. Disraeli once proposed the abolition of taxation in an election manifesto and lost.
In view of the proposals for capital taxation, why does the Government's philosophy of easing dependence apply to those who seek social security but not to those who benefit from inherited wealth? Can the Minister offer a scrap of evidence that the sons or daughters of those who benefit from unearned income will use that for the greater good? Why should they be dependent? Why should the enterprise ethic apply purely to the poorest of the poor?
I am not entirely sure that the hon. Gentleman's question follows from the specific question on the Order Paper. In any event, I think that his premise is wholly mistaken.
Do not the Minister's answers represent two-nation Toryism at its worst? Does he recall the answer given to my hon. Friend the Member for Fife, Central (Mr. McLeish) that a single person earning over £300,000 a year will benefit by £1,000 a week? Will he contrast that with the admission made yesterday by the Prime Minister that a single person earning less than £50 a week will be £7·80 a week worse off after the social security cuts? Does that not represent two nations, or are they both part of the same big happy family?
Perhaps I might remind the hon. Gentleman that before any tax cuts were contemplated in the Budget an extra £2,000 million was allocated to social security expenditure for the forthcoming year. On the matter of higher and lower rates of tax, I must say that high taxes do not redistribute income; all they do is redistribute it to taxpayers and that is of no use to anyone.
Following is the information:
Higher rates of income tax (percentage) for a married couple without children Group of Seven countries
Total number of rate-bands
Notes to figures in table:
Married Couples (Taxation)
To ask the Chancellor of the Exchequer what representations he has received since the Budget about his proposals for separate taxation of married couples.
My right hon. Friend's proposals have been widely welcomed.
Will the proposals end the iniquitous tax on marriage and ensure that a married couple pay no more tax than two single people? Will it also stop the taxation of a wife's savings income at her husband's marginal rate of tax? If it will do those things, has my right hon. Friend received the congratulations of the Opposition Front Bench, or are the Opposition embarrassed about not having done that when they had the chance?
We have not received any representations from the Opposition on this matter. My hon. Friend is right. The significance of this change is that it ends a 180-year anomaly whereby a married woman's income is aggregated with that of her husband and she does not fill in her own tax return. That is obviously wholly wrong and wholly inappropriate today.
Will the Minister recognise that the only thing that this has done is ensure that women can fill in their own forms? As for gaining any benefit, that is much less likely. Will he confirm that it is still the Government's intention that what used to be the married man's allowance is, in effect, still going to be the married man's allowance because it will be paid to the husband irrespective of the wishes or the earnings of the wife?
On the second point, no, I do not accept that because, as the hon. Lady knows, since she participated in the debate on the Budget, it is possible for the husband to transfer the unused portion of the allowance to the wife. Secondly, when the hon. Lady says that it is far from certain that these changes will be of benefit to people, she is way off the mark: 1·6 million women will pay less tax. Half of those are elderly people, and 165,000 elderly couples will be taken out of tax completely. I do not call that a rather marginal change. I think that it is a major change.
Will my hon. Friend give some attention to the proposal whereby the basic tax allowance for a mother could be transferred, in the case of a non-working mother, to the husband, as an encouragement to those mothers who stay at home to look after their children?
I shall look at the point that my hon. Friend makes, but I think that I have partly answered that in the reply that I gave to the hon. Member for Durham, North-West (Ms. Armstrong). In most cases what we propose via the transfer will ensure the right result and that the allowances are used in the way that most benefits the married couple.
Can the Minister tell the House how many super-rich couples will benefit as a result of these proposals and by how much per week, in cash terms, on their unearned income, if they arrange their tax affairs to the best of their ability?
The hon. Gentleman, like the Opposition in general, is obsessed by the super-rich. The significance of this change is that 1·6million women will pay less tax. The Opposition make the wrong assumption, namely, that the only people who have any savings are rich people, whereas all married women with savings who at the moment have their tax aggregated with their husband's will benefit very significantly from this reform
To ask the Chancellor of the Exchequer by how much in real terms he expects take-home pay for a married man, with two children, on average earnings to have risen between 1978–79 and 1988–89.
I expect his real take-home pay to have risen by 27½ per cent. between 1978–79 and 1988–89. This compares with about one half of 1 per cent. between 1973–74 and 1978–79.
Does my right hon. Friend agree that the very welcome answer that he has given the House this afternoon shows that it is this Government who have a real commitment to helping ordinary families on ordinary incomes and to tackling family poverty? Further, will he tell the House how many people have been taken out of taxation altogether as a result of last month's Budget?
On the last point, 780,000 people who would otherwise have paid it have been taken out of tax as a result of the Budget. My hon. Friend is entirely right in that real take-home pay will be substantially up at all multiples of average earnings, whereas with the 1973 to 1979 position quite the reverse occurred.
Economic Assistance (Leicester)
To ask the Chancellor of the Exchequer what action he proposes to take to assist the local economy in Leicester.
The Government's economic policy is creating the conditions for the economy to flourish in all parts of the country. For example, unemployment in the Leicester, East constituency has fallen by over 20 per cent. in the past year.
Does the Minister agree that one way in which the Government could positively affect the economy in Leicester would be by the Treasury releasing to the Department of the Environment the £30 million that has been stolen from the people of Leicester through cuts in the housing investment programme? Does he not accept that the expenditure of these resources would provide more jobs and more homes for people in Leicester?
I think that the economy of Leicester is doing very well indeed without the suggestion of the hon. Gentleman.
Does my right hon. Friend agree that the economy of Leicester is much improved as a result of the Budget? Has he seen the great welcome which has been given by the business men of Leicestershire to the Budget proposals? Is he aware that they say that it will increase the economic growth of the area?
I understand that that excellent newspaper, the Leicester Mercury, started its article on the morrow of the Budget with the words:
To remain within the rules of order, Mr. Speaker, I should explain that the Lawson referred to is my right hon. Friend the Chancellor of the Exchequer."Reaction from Leicestershire's business community suggests that Lawson's tax-slashing Budget could be the key to job-creating growth."
To ask the Chancellor of the Exchequer if he will make a statement on the present level of interest rates.
Bank base rates are 8 per cent.
As exports and the balance of payments continue to attract concern, why has the Chancellor been so reluctant to ease interest rates? There can be few hon. Members on either side who have not received appeals from local industry in recent months.
Interest rates are at a level which keeps monetary policy bearing down on inflation. That is our first priority. But it is clear from the buoyancy of business and business intentions that investment intentions are strong. As I mentioned earlier, investment is projected to grow by 9 per cent. in the coming year and manufacturing investment by 11·5 per cent.