To ask the Minister of Agriculture, Fisheries and Food whether he is satisfied that the current levels of agricultural income are adequate to sustain the long-term viability of the industry.

The long-term viability of the industry can best be assured by a reformed common agricultural policy that encourages farmers to compete effectively in the market place.

Does the Minister accept that during the past two years there has been a severe decline in farm incomes? In the livestock sector in Wales, the decline has been 20 per cent. Does the Minister further accept that the 4·1 per cent. increase in support prices is not enough to offset the livestock support amendments, let alone the 9 per cent. increase in inflation? Will he take positive steps to end the disparity between the green pound and the pound sterling to allow farmers to compete effectively?

The hon. Gentleman is right to say that when there is a gap between the pound sterling and the green pound, British farmers are competing on an unfair basis. The Commission has made recommendations and we shall ensure, as far as possible, that we defend the interests of British farmers in the negotiations. I am sure that the hon. Gentleman will agree that, as we are about to enter negotiations, we cannot promise the outcome now; nor can I say how we can best achieve our end, which is to make a fairer Community for British farming.

I accept that agricultural incomes have risen marginally in the past year, although I hope that my right hon. Friend will agree that they have fallen substantially since the early 1980s. Does he also agree that the right way forward is for farmers to seek to add value to what they produce on their farms to make it more attractive to the consumer?

I am sure that my hon. Friend will agree that it is much more difficult to increase one's income when there is a surplus than when there is a shortage, and all farmers must face that change. We must ensure that the battle is fair, and that Britain's farmers take more account of the need to sell their products effectively in the market place. I have tried to put that message over as widely as possible, and I thank my hon. Friend for his help.

Is the Minister aware that farmers in my constituency are worried about their long-term future because of the lack of anthrax vaccine? I raised the matter in Scottish Question Time on 20 December, and was promised a reply from the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Edinburgh, West (Lord J. Douglas-Hamilton); so far, however, I have received no such reply. Will the Minister have a word with his colleague and then provide me with some information, so that I can perhaps give some comfort to those worried farmers?

I shall be happy to take the matter up immediately with my right hon. and learned Friend the Secretary of State for Scotland, who, I am sure, will give the hon. Gentleman the answer that he wishes.

Bearing in mind the low level of agricultural income over the past few years, will my right hon. Friend try to bring some confidence to hill farmers by assuring them that in 1991 this country will receive at least as much in hill livestock compensatory allowance as it will in the current year, and that the same will apply to the suckler cow subsidy? Both are extremely important in rural areas.

I hope to be able to make an announcement about HLCAs very soon. My hon. Friend will know that we fought very hard against the discriminatory stand taken by the European Community against our hill livestock farmers. We won a much better result than we had expected, but we nevertheless find the Community's decision entirely discriminatory, and we shall continue to fight such decisions.

Is the Minister aware that the current value of the green pound is having a serious effect on the beef sector, especially in Northern Ireland, where producers are faced with green-pound-subsidised competition from across the land frontier?

I assure the right hon. Gentleman that I shall go to the first round of our European Community discussions very well seized of that point as it applies not only to Northern Ireland but to the rest of the United Kingdom. British farmers can do well if they compete on equal terms and our job is to ensure that we reach our 1992 goal of a level playing field reasonably and sensibly. It will be a tough battle, because other countries do not wish even the Commission's proposals to be accepted.

Is my right hon. Friend aware of the severe concern among farmers in west Wales about a green pound gap of up to 19 per cent? Can he confirm that the Government still intend to abolish monetary compensation amounts by 1992?

It is a question not of the Government's intention, but of the inevitable need for the completion of the single market. Any country that suggests that we could have a single market while maintaining a green pound system clearly does not understand what the single market is about. If one country continues to express that view, the rest of us will be forced to carry out a major conversion job very rapidly.

To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the operation of his food safety directorate.

The food and safety directorate brings together all the divisions of my Department that have responsibilities for matters relating to the safe production and handling of foodstuffs, and other consumer protection matters concerned with food. My right hon. Friend the Minister will therefore receive official advice as Minister responsible for food, which is separate from that given to him on the economic aspects of agriculture, food production or fishing as Minister responsible for agriculture and fisheries.

When he set up the consumer panel, the Minister said that it would be an advisory forum for him. In view of the excessive secrecy that he enforces on all his other advisory committees, will he assure the House that members of the consumer panel will not be gagged, and that they will have access to all the information that they require to carry out their duties in the public interest?

The hon. Gentleman is utterly wrong to imply that excessive secrecy is imposed on all the members of the independent advisory committees who advise this Department. None of the eminent scientists who advise us would be willing to serve on such committees if they were unfairly gagged in the way that the hon. Gentleman suggests. I can assure him that the consumers and advisers who will serve on the consumer panel will want to serve only if they have access to all the relevant information.

This is a simple question. Will my hon. Friend confirm that food safety is the priority in his Department?

Food safety always has been, always is and always will be the prime priority of this Department.

Does the Minister recall an answer that he gave me shortly before Christmas? I asked how many of the turkeys and chickens that were being sold were likely to be infected by salmonella. His answer was that the last time that an examination had been carried out on a sample of a mere 100 chickens, it was found that 64 were contaminated with salmonella. I have had no answer on the number of contaminated turkeys. The Minister also said that if cooking was carried out properly, the problem would be solved. As the last investigation was carried out two years ago, will he institute a proper investigation and give further information to the public on the correct cooking of turkeys and chickens?

I have 700 experts and scientists in my Department. Between them, they know practically all that there is to know about food safety. In view of the marvellous Christmas that we have all had, there is no question of me, or any of my experts, telling 25 million British housewives how to cook the Christmas turkey.

Does the Minister not understand that while he is slashing research into food safety, sacking scientists by the thousand and delaying the introduction of vital regulations, the general public will have little confidence in a food safety directorate within his Department that is responsible directly to him? Why does he not show that he takes the issue seriously by establishing a food standards agency, independent of the Government, as advocated by the Labour party and many other information organisations?

During the past few days we have announced a massive amount of research expenditure on bovine spongiform encephalopathy. That was followed by the announcement yesterday of further research expenditure into BSE. I was even asked on radio why we were spending so much on research. The Department is spending more money on research into essential food safety measures. All the staff who work in my Department are not paid or funded by any outside organisation—neither a trade union, nor a commercial interest, nor any other media or vested interest.

To ask the Minister of Agriculture, Fisheries and Food what plans he has to provide for the inspection of railway freight trucks travelling to the United Kingdom from the continent after the opening of the Channel tunnel.

Our intention will be to complete inspections of incoming rail freight as quickly as is possible, consistent with the need to safeguard human, animal, plant and fish health, but the precise arrangements will depend on decisions still to be taken in the Community.

Does my right hon. Friend accept that it must be in the interests of the country as a whole that there should be the speediest possible transit for freight trains to Britain? Does that not require health inspections to be carried out at several locations, just as is proposed for Customs examinations? Would it not be ridiculous if all the freight wagons had to wait at Willesden, or some other spot in London, for health examinations, which would delay transit to the north and other areas?

I am determined to do that as quickly as possible, so long as we can also safeguard animal, plant and fish health. That has always been and it continues to be our priority. That is why we are the independent protectors of the health of our nation. No one else can be.

Will the Minister discuss the animal quarantine regulations with the National Union of Railwaymen?

I am happy to discuss the animal quarantine regulations with anyone, but I hope that the hon. Gentleman accepts that first I want to find out how we are to operate the regulations on both sides of the Channel. I need to have clear information about that before I hold wider discussions. If, however, the hon. Gentleman wishes me to look into any particular matter, I shall be happy to do so.

Does my right hon. Friend agree that the methods of checking food imports proposed by the Labour party, which involve detaining the food until it goes bad, would be illegal anyway under European Community law?

It is a great sadness that in the past week the hon. Member for South Shields (Dr. Clark), the official spokesman for the Opposition, told people that he would have broken European Community law by holding up food coming into Britain until it had been tested. That is wholly contrary to European law and would do British farmers and the British farming industry great harm, because every other European country would treat our products in exactly the same way. The hon. Gentleman was among the first to attack the French when they attempted similar checks on sheepmeat.

Does the Minister deny that here is a clause in European legislation that allows him to prohibit contaminated food from entering Britain when public health is at risk? Does he further deny that salmonella-contaminated eggs have been coming into this country from Holland and that in the four days awaiting the test results those contaminated eggs were for sale in shops in Britain? Why should there be two standards, one for British eggs and one for foreign eggs?

Of course, British eggs are healthier because we have tougher rules here than in any other EC country. The hon. Gentleman should be ashamed of himself for misleading the British people. He knows that what he proposes would be wholly contrary to European Community law, and he should not perpetrate what is entirely wrong.

Does my right hon. Friend agree that much of the inspection of inter-European traffic is necessary because health regulations in the rest of Europe do not come up to our standards? It seems wrong that British farmers have taken such stringent measures to get rid of salmonella in eggs while Dutch and other farmers do not have the same regulations.

My hon. Friend is exactly right. That is why we are encouraging a campaign for all the boxes of British eggs to be marked, "British". That is why there will be notices in almost every supermarket pointing out that the eggs sold are British and that is why we remind British farmers that, instead of complaining about imports, they should be campaigning about the advantages of British eggs, which are better protected than any others in Europe. Above all, we are fighting in the European Community to bring other countries up to our standards.

To ask the Minister of Agriculture, Fisheries and Food in which areas of the United Kingdom levels of radioactivity are such as to prevent or restrict local agricultural production from being used in human consumption.

We continue to operate controls over the movement and slaughter of sheep from certain upland areas of Cumbria, Scotland, north Wales and Northern Ireland that were affected by radioactive deposition following the accident in the Soviet Union in 1986.

Would it not be fair to describe the Government's record of response to the problem as almost furtive negligence? In the nearly four years since that accident, can the Minister honestly say that his Department and the British public have been adequately informed? Did not the Swedes carry out an aerial survey within six weeks of the disaster? When will we in Britain emulate our neighbours?

I had always regarded the hon. Gentleman as fair until now. I do not recognise the description that he has given. No other country in the world acted as promptly or as comprehensively as the United Kingdom in taking action to protect all our food supplies. I invite the hon. Gentleman to go to the Library of the House of Commons, where the shelves are groaning under the weight of information that we have made available to the public and to the House about how we have protected the food supply. We have carried out an aerial survey and it has not given us any more safety information than the men on the ground looking at the soil.

Does my hon. Friend agree that the fact that Chernobyl was a ghastly accident for the Soviet Union does not mean that our power stations are in the same category? Concordski fell out of the sky, but Concorde is still flying. We have the necessary means to monitor and to protect our people from accidents that will not occur in our power stations.

My hon. Friend is right to draw attention to the technological failures of Socialism, just as in recent months we have seen its political failures. Shortly, we shall see its political failures in this country as well.

To be fair to the British farming industry for once, and that includes myself, does the Minister agree that British farmers are producing healthier food in the 1990s than they ever have in this century?

I welcome the hon. Gentleman's statement. Characteristically, he is fair and accurate, and I am delighted to agree with him.

To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on European Community fishing quotas.

We won the best possible opportunities for British fishermen consistent with the need to conserve stocks, which is now an urgent priority.

Will the Minister take this opportunity to emphasise that the schemes for the sale and leasing of quotas, which he has been mooting in newspapers over recent days, are entirely speculative and not yet Government policy? Will he take on board the fact that any such scheme would have a devastating impact on the fishing industry in certain areas such as the north-west coast of Scotland, where it is vital to the local community's economic well-being and dominated by the small boat sector?

In the present very difficult circumstances for the fishing industry, the Government have a duty to examine all the options that could provide long-term stability. I have made it clear that we are examining that scheme, which is known as individual transferable quotas, in the light of the decision of New Zealand, parts of Canada and Iceland to adopt it. If it offers us some help, we shall discuss it with the industry. We certainly should not introduce anything without the consent of the industry and we should consult it fully. If the scheme offers nothing, we shall throw it away.

Does the Minister agree that, when fishing quotas are set, it is vital to ensure that they are within the scientific evidence available on the size of stocks? Will he not follow the lead given by certain fishing interests in Scotland, who suggest that we should overfish and thus not preserve our stocks for the future?

My hon. Friend is perfectly correct. We have always been scrupulous to negotiate catching levels that are consistent with scientific advice. The alternative is to fix them on the advice of politicians, which tends to be less reliable.

Has the Minister fully considered the social and economic impact on fishing communities of the Council's decisions on quotas? Will he comment on the case of Forbes boat builders in the village of Sandhaven in my constituency, which has just laid off a quarter of its 32-strong work force? Is the Minister saying that boat-building and repairing skills, which have been present in that village for almost a century, are no longer needed? Has he ruled out any form of aid to cushion the blow on fishing communities?

As I have said many times in the House, I cannot invent fish. There is a problem with stocks; we must get our fishing effort in line with the availability of stocks. That, of course, means that there must be contraction in the fishing industry. The skills to which the hon. Gentleman referred are certainly important. I hope that by trying to secure the long-term interests of the fishing fleet, through technical, conservation and better management measures, we shall secure the future of such jobs in Scotland and the rest of the United Kingdom.

No one can deny that the fishing industry is facing one of its most severe downturns in recent years, but is that not due to appalling mismanagement over 10 years, not only by the EEC but by the Government? Is it not a fact that in the 1980s, with grants, the Government encouraged the expansion of the fishing fleet, against scientific advice? Yet they are now refusing to help to reduce the fleet with decommissioning grants. Does the Minister accept that the industry needs a strategic plan that takes into account supplies, conservation measures, technical assistance and grants? Why are the Government prepared to pay farmers not to produce crops but not prepared to help fishermen who cannot catch fish?

I have been seeking to discuss our long-term plans with the industry. That is why I have not brought forward any plans from secret committees and why I discuss our projects quite openly. If they work, we shall see whether we can adopt them and if they do not, we shall throw them away. I notice that when I start to talk a little about schemes that might be helpful, many people become alarmed.

I thank my hon. Friend for attending the North Shields fish quay last Friday. I remind him of the concern expressed to him by the industry about the serious consequences of the cuts in quotas that have been inevitable for this year. Can he confirm that there will be recompense for the quotas that the fishermen lost last year as a result of the excessive fishing by other fishermen, especially north of the border? Will he give particular consideration to the EEC laying-up scheme, which was discussed with him on Friday?

I know that my hon. Friend takes a particular interest in this and he accompanied me on my visit to North Shields, which I enjoyed very much. He has raised two separate issues. When fishermen have suffered from over-fishing elsewhere, there is a mechanism by which they are compensated, and we shall ensure that that mechanism is observed. The laying-up scheme was designed by the Community to respond to specific circumstances. It does not, of course, respond to the circumstances in which one needs to achieve a significantly lower fleet and there is a long delay in payment. Were circumstances to arise in which that would be a useful instrument, we should not, of course, close any doors.

To ask the Minister of Agriculture, Fisheries and Food if he has any proposals for a compensation and decommissioning scheme to allow the English fishing industry to adjust to reduced total allowable catches.

I do not believe that decommissioning would provide value for money. It would not achieve any worthwhile fish conservation objectives because it would not lead to a proportionate reduction in fishing effort.

I am saddened by that reply. There can be only two explanations of the Government's refusal to do justice to an industry that has been brought to the brink of ruin by the failure of the EEC to provide proper policing on conservation. The first is that they are too mean to do it and the second is that they made such a cack-handed, crackpot cock-up of the compensation scheme last time that they are now anxious to redeem their own reputation at the expense of the future of the industry. Which is it?

The answer is very simple. The hon. Gentleman reaches for someone else's wallet whenever he finds himself in a difficulty. We do not believe that that is appropriate. The sensible way to approach these matters is by putting far greater emphasis on conservation. I accept that in the past, the European Community has not given sufficient priority to that area. The second method is to produce far more intelligent management measures that are designed to secure the long-term future of the industry. We are doing that and, no doubt, the hon. Gentleman supports us as we do so.

It appears that the Government have rejected decommissioning on the grounds, as the Minister says, that it does not give value for money and is interventionist. As the Government are obliged by the European Community to find some way of reducing fishing effort by the end of January, do they intend to impose a compulsory laying-up period for the fishing fleet for certain parts of the year and will that be done without compensation for the fishing industry? Is that any more acceptable, because it is still very interventionist?

The hon. Gentleman is referring to our commitment to reduce fishing effort for haddock by 30 per cent. We shall consult the industry fully on the proposals and we hope to be able to come up with a formula that the industry accepts as being intelligent and operable.

Before my hon. Friend comes up with that sensible solution, will he bear in mind that the fishing industry is extremely complicated? There are many different interests to balance and he must also balance the interests of the taxpayer. Will my hon. Friend consult widely and carefully with all the different parts of the industry before he makes a statement?

I am very aware from my visits around our ports that they do not always have the same interests. I am also very aware that Lowestoft, which my hon. Friend represents, regards itself as being a very special fishing port. We shall be certain to consult all industry interests fully.

To ask the Minister of Agriculture, Fisheries and Food what discussions there have been on the issue of access as part of the conditions for farmers receiving grants for designated evironmentally sensitive areas.

The payments are designed specifically to encourage environmentally beneficial agricultural practices and are not conditional upon permitting increased public access.

Does the Minister accept that the payments have been a fairly successful initiative? Will he also accept that there has been considerable disappointment among those who like to enjoy the countryside that they have not had better access to it and that there is now growing alarm from farmers in the areas because the Government have refused to increase the payments in line with inflation? Could not the Minister solve both those problems by putting up the payments in line with inflation on the basis of agreeing that there should be better access for those who want to go to the countryside to enjoy peace, quiet and fresh air?

The hon. Gentleman, whose interest in these matters is well known and respected, will accept that there is a problem in trying to balance the various interests in the countryside—even, for example, the difference between those who want additional access and those who are seeking primarily the conservation of flora and fauna. Therefore, it would not be appropriate to mix the two aspects.

When my right hon. Friend considers the conservation of the countryside will he bear in mind those people who, for generations, have been concerned about the countryside, such as farmers, sportsmen and others who live in it?

It seems a pity the some people still believe that there is a conflict between farming and conservation. Farmers have conserved the countryside throughout its history—in fact, in large measure, they have created the countryside. Farmers are the front line in conservation. I will not allow people to believe that they should be attacked for the job that they do.

To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the feasibility of completely eradicating salmonella enteritidis from the egg production process.

The Government accept that complete eradication of salmonella enteritidis is unlikely to be feasible. The measures that have been adopted are designed to reduce the level of infection to the minimum that can reasonably be achieved.

I thank my hon. Friend for his reply. I ask my question on behalf of the chicken farmers in my constituency who are extremely worried about Government policy on salmonella enteritidis. As we have already slaughtered over 1 million of our domestic chickens, and given that this form of salmonella is ineradicable—it is as much a part of chickens as their feathers are—when will my hon. Friend decide that enough is enough, and realise that our national flocks are threatened with total extinction and that, between Gummer and Gumbro, we will not have a chicken industry any more?

Not unnaturally, I disagree with my hon. Friend's concluding comments. I cannot tell her when the present scheme will end. We shall consider all the scientific evidence. My hon. Friend is a doughty fighter for the British chicken industry. I invite her now to use her considerable presentational talents to help to market the British egg like never before and to use that wonderful slogan which the Agriculture Select Committee has given us—"British eggs are safer than imported eggs." If she turns her attention to that, I am sure that she will do a marvellous job for the British chicken industry.

Does the Minister agree that there is little value in reducing the salmonella content of British eggs if we allow salmonella to be imported wholesale? Will he confirm the point made by my hon. Friend the Member for South Shields (Dr. Clark) that salmonella has been found in imported Dutch eggs but that, by the time that tests reveal the presence of salmonella, the eggs have been distributed and are adorning the breakfast plates of Britain? Why does the Minister not use the available EEC regulations on contaminated food and stop the distribution of imported eggs until they arc tested and cleared?

It is nonsense for the hon. Gentleman to talk about salmonella being imported wholesale. That is an outrageous allegation. Had he bothered to read the Select Committee report on Tuesday, he would have seen that the Agriculture Select Committee has also agreed that the incidence of salmonella in foreign eggs and the risk from them is remarkably low—the same as in this country. The hon. Gentleman knows that it is dishonest to suggest that we could use powers in this country to delay for ever and a day until they are approved imports of eggs that have no salmonella. That is not the correct approach. I agree with the approach of the Agriculture Select Committee. We will intensify our efforts in the EC to get a salmonella control order across the whole of Europe, because that is the proper and sensible solution.

To ask the Minister of Agriculture, Fisheries and Food if he will review the level of compensation for farmers whose herds are infected with bovine spongiform encephalopathy.

No, Sir. We believe that 50 per cent. of the value of the animal as if it were healthy is fair compensation for an animal which is terminally ill and therefore worthless. Compensation of 100 per cent. is paid on animals that are slaughtered and found not to be infected.

As there are similarities between neurological disease—wasting disease in the human brain—and BSE, and as we know that diseased sheep pass that disease to cows, although we do not know whether it goes to the human brain, will the Minister explain why he is not giving farmers the incentive to expose cows in the early stages of BSE so that they do not go on to the market for sale, as is happening in North Yorkshire and Northamptonshire, with the result that it is going into the food chain, with the beginnings of BSE in the system?

I can help my hon. Friend considerably. What he says is just not the case. We have so many safety belts and braces on this operation it is not true. About 99 per cent. of all animals are caught at the farm stage. We then have the offals ban, which removes all offals which could contain BSE, such as the brain, from all animals. That is the first pair of braces. We also have the state veterinary service, the members of which go to the markets, and we have meat inspectors in slaughterhouses doing spot checks. So because the offals are removed, there is no prospect of meat contaminated with BSE getting into the human food chain.

The Minister gives assurances, but I do not believe that they will reassure either producers or consumers that BSE is being prevented from getting into the human food chain. A row erupted yesterday between environmental health officers from my area and the Department. The officers believe that they are being overruled from taking the necessary action to prevent contaminated offal from getting into the human food chain through meat. I understand that, because the industry lobbied the Ministry to try to get action taken, the Ministry intervened. This is turning into a scandal.

I advise the hon. Gentleman to check his facts. I do not blame farmers for wanting to get 100 per cent. compensation for all animals, but the hon. Gentleman must not pretend that 50 per cent. compensation is somehow leading to infected animals entering the food chain. I am satisfied that my veterinary officers behaved absolutely correctly yesterday. It is irrelevant whether the animal's head was or was not cut off before it entered the slaughterhouse.

Why not?

Because the relevant offals have been removed from all animals' heads. I advise the hon. Gentleman to check his facts.

I thank the Minister for his prompt and efficient efforts to deal with the problem and in particular for the increased allocation for research into BSE, which is a matter of great concern in my constituency. As and when he is considering financial assistance for farmers affected by this problem, will he also take into account the damage done to farmers affected by the other problem of contaminated meat—lead in feedstuffs that has gone to some of my farmers' cattle?

I thank my hon. Friend for drawing attention to the extra money that we have made available for food research, and I hope that that will stop Opposition Members from continually suggesting that essential research for food safety has been cut, which is patently not the case.

If what the Minister says is true, will he explain why there are regular and consistent reports from county council trading standards departments indicating the identification of BSE-infected cattle at livestock marts and abattoirs? Is it not a fact that the Tyrrell committee, the Minister's own scientific advisers, and the Government's announcement of the new research programme are clear indications that the Government recognise the real danger that exists to human health? Given that, why will the Minister not accept that the only way to prevent BSE-infected products from going into the human food chain is by offering 100 per cent. compensation, thereby stopping the entry at source?

That is absolute nonsense. Neither 100 per cent. compensation nor 50 per cent., compensation is the means to stop any infected offals entering the food chain. That is done by cutting out all the relevant offals. People wrongly call BSE "mad cow disease"; but it is a disease of the cow's brain and central nervous system. Those offals are removed from all cows whether they have BSE or not. There is, therefore, no question of meat being infected by BSE as those offals are removed.

To ask the Minister of Agriculture, Fisheries and Food if he will review the distribution of free European Commission foodstuffs with a view to increasing the number of distribution centres; and if he will make a statement.

I will shortly be deciding on the arrangements for distributing surplus intervention foodstuffs to our most needy citizens.

Is the Minister aware that great difficulty was caused in the city of Bradford by the relatively small number of distribution centres and that although that caused great distress to a number of old people who had to queue for long hours, the Ministry turned down my request for extra distribution centres? Is he also aware that organisations such as the Dovesdale club in my constituency were willing and able to distribute the foodstuffs, but were turned down? The Ministry therefore contributed to the distress and difficulty caused by the distribution process. Will the Minister give me an assurance that he will consider establishing more distribution centres?

When this not very satisfactory scheme began, we took the view that distribution would be carried out by voluntary agencies. In fact, five undertake that task in Bradford. I have no intention of erecting a Government bureaucracy. Those organisations that can satisfy our requirements will, of course, be given entitlements, but the more that take part, the less each will receive and there is very little food to go around. Although I do not think it is a sensible scheme, we shall operate it as best as we can.

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

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

Does my right hon. Friend agree that irresponsible wage claims unrelated to productivity will, if granted, lead to higher inflation, an erosion in the value of savings and the destruction of jobs?

My hon. Friend is quite right. If our wage costs rise faster than those of our competitors, our competitors will get the orders and the jobs. The movement of wage costs is disturbing. On the last available figures, for the second or third quarter of last year, United Kingdom wage costs were up by 6 per cent; those of the United States were up by 2 per cent; West Germanys were up by only 1 per cent; Japan's were down by 1 per cent; those of France were down by 3 per cent. and those of the Netherlands were down by 4 per cent. Those figures mean that all those concerned with getting orders and jobs in this country must have a careful look at keeping wage costs down.

Will the Prime Minister tell us how far she is prepared to blame herself and her Government's policies for the rate of inflation?

As the right hon. Gentleman is aware, we have made it quite clear that there was too much money in the system for our output and therefore steps had to be taken to correct it—and they are being taken. I should point out that a rate of inflation of 7·6 per cent. was regarded as so low by the previous Labour Government that they had ambitions to get down to it.

But when it is the Government's deliberate policy to keep mortgage rates and interest rates very high, to increase electricity prices and fares arid shortly to impose both the business rate and the poll tax, is not the director general of the Confederation of British Industry absolutely right to say that inflation is the Government's fault?

No. Inflation happens when we have too much money in the system, which means that we are taking more out in money than we are putting in in output. That has to be corrected by two means. The first is by interest rates and the second is by keeping a tight fiscal policy. We are doing both.

Will my right hon. Friend comment on the old-fashioned attitude of some trade union leaders who have not learnt lessons of the 1979–80? Will she reject the view that an increase in productivity automatically justifies a pay increase? It may be that productivity is rising in an industry but demand is falling. In those circumstances, a pay increase may not be justified.

I agree with my right hon. Friend. The first rule is that wage increases must not outstrip productivity. As my right hon. Friend said, the other rule is that increased productivity comes from substantially increased investment of capital, so there must be a return on capital. Another rule should be that increased productivity should result in price reductions. The consumer is entitled to reductions if we are to remain competitive.

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

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

Can I remind the Prime Minister of the views that she expressed during a previous inustrial dispute? She said that she believed that the three emergency services—the police, the fire service and the ambulance crews—should have their pay negotiations taken out of the industrial arena and settled on the basis of a pay formula. Given the obvious merit of the ambulance crews' case, their overwhelming public support and the division in the ranks of the right hon. Lady's Government, is there any reason, other than her own love of confrontation, why there should not be a settlement of the ambulance dispute based on her own idea of a pay formula?

I do not accept the early part of the hon. Gentleman's comments. The ambulance crews' pay should be settled by reference to the NHS. The matter went before the Clegg commission, which rejected the claim that it should be settled on the same basis as the police and the firemen.

My right hon. Friend may recall that at precisely this time last year I expressed my fear at the availability of crack spreading in our inner cities. One year later she will be aware of the escalation of the problem and the increased haulage of cocaine. In the light of those events, will she take the opportunity to reiterate the Government's determination to take every initiative possible to crack down on drug pushers? Does she have a message for young people who may be tempted to take drugs?

I agree that crack is a new and damaging form of cocaine. Last year Customs seized more cocaine than heroin, which shows that it is on the increase. We are co-operating, through the economic summit, to do everything possible to stop the laundering of the cash from drug trafficking. As my hon. Friend knows, we are supporting the efforts of President Barco of Colombia—[Interruption.]

We cannot hear.

Of course hon. Members cannot hear as they are making so much noise.

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

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

Why is it that, according to ministerial answers, between now and the year 2013 the student loan scheme will cost the British taxpayer £2,170 million more than the present student grant scheme that it will replace?

There are obvious reasons. On a loan scheme, money is paid out for many years before money is returned. As it is returned—[Interruption.]

Order. It is impossible to hear.

I should hardly have thought that the hon. Member for Don Valley (Mr. Redmond) would need to ask the question. When the money is returned it will enable us to put more back into education.

Given my right hon. Friend's absolute determination to defeat inflation, what does she think of the idea, apparently supported by the governor, deputy governor and former deputy governor of the Bank of England, that a statutory obligation to maintain the stability of money should be placed on the Bank of England?

That obligation should remain as part of the Government's duty. As my right hon. Friend knows, there are two ways of achieving the goal. The first is by keeping money tight, which can be done only by interest rates. Secondly, it could also be achieved by tight fiscal policy—[Interruption.]

Order. I am aware that there is a problem with the microphones. It is difficult to hear.

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

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

Does not the Prime Minister understand that if her policy is to increase interest and mortgage rates it is obvious that people at work will demand higher and higher wages to pay for those higher interest rates? Is it her view that there is no alternative to that strategy—if so, it means that the wage demand escalation taking place is irreversible—or does she have some other secret policy which she is unwilling to disclose to the House; a sort of informal incomes policy based on the threat of higher and higher unemployment?

Wage costs and wage claims and their settlement are matters for industry. We hope that workers will take into account the fact that if wage costs price their products out of the market, workers price themselves out of jobs. The alternative to using the right policies to deal with inflation—interest rates and a tight fiscal policy—is to let inflation rip. That would result in far more unemployment than the steps we are presently taking, through which we have created more jobs in this country than ever before.

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

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

As we are to some extent still a nation of shopkeepers and my right hon. Friend was born and brought up above the shop, as I was, what message does she have this week for those small businesses and shopkeepers worried about uniform business rates?

First, the amount raised from the business rate next year will be the same as this year plus inflation and, therefore, there will be no real increase in the business rate. My hon. Friend knows that there have been some changes in the business rate, one cause of which is the first rating revaluation since 1973. That has given rise to nearly three quarters of the increase in rates and would be an object lesson for anyone wanting to apply it to a domestic rating revaluation. My second point involves the way in which the business rate is collected. Because of those two factors the increases will be applied over a transitional period of at least five years so that the larger businesses do not pay more than 20 per cent. extra in real terms and the smaller ones no more than 15 per cent. in real terms each year during that period. It will be the first time that businesses have had an assurance about rates. It will be of great benefit to those manufacturing businesses and shops in the north and will help them to keep their costs down and get their jobs up.

While on the subject of shopkeepers, will the Prime Minister give her support to the "Parents Against Tobacco" campaign launched this week? Does she realise that its surveys reveal that more than 50 per cent. of shopkeepers are still prepared illegally to sell cigarettes to children under 16? What steps will she take to ensure that the law is enforced or, better still, strengthened, to provide an effective blockade between the tobacco industry and our children?

As the right hon. Gentleman knows, the law is enforced by the police. We have already taken some steps. For example, in conjunction with the European anti-cancer campaign, I announced a programme of £2 million for anti-smoking advertisements aimed at teenagers. That was launched on 11 December 1989. Although far too many young people between the ages of 11 and 15 still smoke, fortunately, the numbers are falling. Only about 8 per cent. smoke now, compared with 13 per cent. in 1984. We give our full support to the "Parents Against Tobacco" campaign. It will keep careful note of where cigarettes are sold to young children and give the information to the police. Knowledge of the campaign should already serve as an effective deterrent to those shopkeepers who perhaps do not take sufficient care to ensure that they do not infringe the law.