To ask the Secretary of State for Education and Science if he will list Her Majesty's Government's new measures centrally to fund nursery education.

We are not planning any such measures. We see no reason to change the present arrangements whereby local education authorities can determine what to spend on nursery education within the total resources available to them.

What happened to the promises made in 1972 by the right hon. Member for Finchley (Mrs. Thatcher) when she was Secretary of State for Education and Science? She told the House that by 1982 she would provide 700,000 nursery school places. Twenty years later we are still 200,000 short of that target. How shall we cope with the projected shortage in the labour force if we do not provide the nursery places that are needed? Does the Minister agree that the private sector has let us down very bady indeed in the high cost of nursery school provision, with people having to pay perhaps £75 a week for nursery education for their children?

I will tell the hon. Gentleman what happened. In 1976 there were 440,000 youngsters in nursery education. By 1978 the number had fallen to 415,000. That was the priority that the Labour party gave when in power under the right hon. Member for Leeds, East (Mr. Healey), with his cuts in public expenditure, and when the hon. Member for Derby, South (Mrs. Beckett) was Parliamentary Under-Secretary of State for Education.

Is my hon. Friend aware that while many people feel that there is a strong case for helping women who bring up their children alone and must go out to work to support the family, many people also feel that women who go out to quite highly paid jobs and who want their children cared for while they earn a lot of money should make a contribution and pay for the education of their children at that stage of their children's lives?

I believe that a large number of people agree with my hon. Friend.

Does the Minister remember the advice given by his right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) that the Government had acted dishonestly by not increasing the number of nursery places? Does he realise the deep anxiety felt by parents up and down the country who do not have access to nursery education for their children? Is not it an entitlement that the Government should be building towards so that there is opportunity and choice for those families?

Yes, and there are 150,000 more under-fives in maintained schools in England than there were in 1979. We have increased the number of places by 150,000 and the Labour party decreased it by 25,000 over two years. That is the relative record of our two parties. What is more, the hon. Lady knows that all that she can promise from the Opposition Front Bench is 50 part-time nursery places per local education authority area.

To ask the Secretary of State for Education and Science what consideration he is giving to the structure and size of education authorities concomitant on their proposed reorganisation.

The Government are currently considering responses to their consultation paper on the structure of local government, and will be drawing up in due course guidelines for the proposed local government commission, which will cover aspects of education.

I thank my right hon. and learned Friend for that answer. Will he tell the House whether he has in mind any minimum size for a local education authority as a result of the changes? Does he agree that, wherever possible, the smaller the authority the better?

I agree with my hon. Friend that democratic accountability is improved if services are delivered on the smallest scale practicable consistent with good service. We are proposing a consultation process locally and that will not necessarily lead to a uniform national position. The Government will be issuing guidelines in due course on the impact on the education service of particular structures of local government and we shall be pointing out that a great deal has happened recently since local authorities were last reorganised. In particular, polytechnics have been taken out of local education authority control and sixth-form colleges and further education colleges are about to be taken out of local education authority control. We have moved over to a system of local management of schools so the duties of an education authority are very different from those that existed when the present authorities were set up.

Does my right hon. and learned Friend agree that schools will be at their best if they are self-governing in every respect? It would be better for the schools, the teachers and particularly for the children. If that were to happen, would not the role of local education authorities virtually disappear?

I share with my hon. Friend the expectation and hope that there will be a rapid change beyond the local management of schools to grant-maintained status for most secondary schools and many primary schools. I agree that that has considerable implications for the changed role of local education authorities in the future. They will be moving over to what is known in the jargon as an enabling role because their direct management duties will have been devolved to a much more sensible local level.

To ask the Secretary of State for Education and Science what plans he has to increase Government funding of scientific research.

The size of the science budget for 1992–93 will be considered in the forthcoming public expenditure survey.

Does the Minister accept that the level of funding for the science budget this year, including the additional funds that the Government announced last month, is wholly inadequate? For example, even with that money, the Science and Engineering Research Council is still unable to avoid closing the nuclear structure facility at Daresbury. It will have to cut its staff by 300 by 1993. When will Government give British science the money that it needs?

The Government have increased the science budget by no less than 23 per cent. in real terms and that increase has matched the growth of GDP. It is well known that the Government's economic strategy has been to reduce public expenditure as a proportion of GDP, but we have made an exception for basic science because we recognise the Government's inescapable and important responsibility in that regard. We also believe that it is right that judgments on scientific priorities should be taken by scientists and we believe that the arm's-length principle is important. It would not be appropriate for me as a politician or for my right hon. and learned Friend the Secretary of State to take a decision as to the priority that should be given to the nuclear structure facility at Daresbury among the range of candidates for funding through the science budget. It is entirely right that the Science and Engineering Research Council is reviewing its priorities and is seeking to improve efficiency. I recognise that these are worrying and difficult times for scientists and others who are working at Daresbury, but these choices and this prioritisation cannot be avoided.

My hon. Friend will understand that the Opposition always choose foreign comparisons. He will also know that my constituency needs a large number of well-qualified young engineers. Do we produce more engineers than, for example, the Germans or the Americans?

My hon. Friend is absolutely right to draw attention to a fact that is too little known and too little appreciated. It is indeed the case that the number of young people in this country who are qualified in engineering and in scientifically based disciplines exceeds the number in France and Germany.

Does the Minister accept that Scotland produces proportionately a larger number of scientists and engineers than the rest of the United Kingdom? Does he also accept that there is a crisis in the funding of science in the universities, and in particular in fundamental physics and mathematics research? What does he intend to do about that?

We have increased the funding available for scientific work in universities. Indeed, the research councils have increased their expenditure within the universities by 78 per cent. in real terms during the Government's period in office. That is a reflection of the first-rate quality of the science that takes place in our universities, and it is enormously important to recognise that. I know that the hon. Gentleman has at heart the interests and well-being of science in the United Kingdom. It is extremely important for scientists and for those who speak on their behalf to present science in this country as the winner that it undoubtedly is.

To ask the Secretary of State for Education and Science what proposals he has to encourage teacher training to have greater practical content.

Our criteria for the approval of teacher training courses aim to ensure that all student teachers are trained in the practical skills they need to be effective in the classroom. But we want to reinforce this by making teacher training more school-based. We are currently looking at ways of securing this.

Further to develop the practical content of teacher training, will my hon. Friend consider a scheme whereby most classroom teachers during their careers spend at least one year at a teacher training college so that they can teach trainee teachers to teach? Would not that have a double benefit—for the trainees and for the teachers?

I find that a very attractive suggestion. The reverse is already true—my hon. Friend might be interested to know that as from next year a teacher at a teacher training college will spend at least one term every five years back at school.

Is not it an indictment of the Government's record that after 12 years in office the Minister confesses that the Government have not yet got right something of such fundamental importance as the quality of teacher education and training? Is not it clear that the way to improve the practical content of courses is to put into effect the Labour party's proposals for a core curriculum for teacher education, which focuses on competence, and to overhaul the crucial induction year for newly qualified teachers? The chief inspector's reports repeatedly describe the induction year as the weakest link in the British system of teacher education, so what is the Minister going to do about that?

I have yet to hear any member of the Opposition suggest that there should be less theory in teacher training. We believe that there should be more subject study, more school experience and more professional training in teacher training colleges. That is what our current review aims to secure.

Will we support more classroom-based teacher training? In view of local management of schools, teacher assessment and the need to consider classroom practice, is not there a strong case to consider the qualifications needed by head teachers and to match their training to those qualifications?

Yes, indeed. We are currently considering that as part of the review. It is very important for the professional development of all teachers—heads, deputies and classroom teachers—that they receive more appropriate and practical training.

To ask the Secretary of State for Education and Science if he will make a statement on the steps he is taking to make good deficits facing schools moving towards responsibility for their own budgets.

Schools taking on formal delegation under the Education Reform Act should not inherit a deficit on their school accounts. Local education authorities have ample scope to cushion schools' budgets as formula funding is introduced over four years, with longer available for schools facing particular difficulties because of high inherited staffing costs.

Does the Minister accept that many primary schools in particular have had to cut teaching posts and merge classes in order to keep within budgets based on a formula for average rather than actual teaching staff? Will he announce emergency funding to make good that shortfall in time for the next school year?

As I understand it, primary schools in Neath do not yet have their delegated budgets. Local education authorities in England and Wales were able to design their local management of schools schemes to protect not only schools with high inherited staff costs but, specifically, small schools and to allow generous transition arrangements from historic to pupil-led funding.

Is my hon. Friend aware that five of the seven secondary schools in my constituency reported worse GCSE results in 1990 than in the year before, when national average figures were improving, and when the county budget showed that the bulk of the staff employed under the education budget were not teachers? My constituents are no thicker than the Secretary of State's constituents in Nottinghamshire; the problem is that the county council retains a far higher proportion of the budget. Will the Minister explain how matters in Derbyshire can be put to rights?

I would not be surprised any more at anything that happened in Derbyshire. I am becoming increasingly concerned about the way in which Derbyshire allocates its schools budget. For example, it subsidised its school meals service—to the tune of £14 million last year—for every pupil in the county, and it has not increased school meal prices since 1981.

Will the Minister assure the House that the real motivation behind financial delegation to schools is not to obscure underfunding of the education service throughout the United Kingdom, and not to allow any failure or deficiency that may arise later to be attributed to incompetence on the part of principals and local school governors?

The key point to grasp is that local management of schools funds not teachers but pupils. It does not change the total amount of resources available in the schools system, but some adjustments may be necessary and desirable where successful and popular schools were deliberately underfunded by local education authorities in the past.

To ask the Secretary of State for Education and Science whether he will bring forward proposals to limit the amount of money an individual local education authority can spend in a campaign against a particular school seeking grant-maintained status.

As my right hon. Friend the Prime Minister announced on 3 July, we intend to legislate to limit the amount of taxpayers' money an education authority can spend on campaigns against applications for grant-maintained status, and to reimburse governing bodies up to the same limit for their own campaign expenses.

I am grateful for that reassurance. Is my right hon. and learned Friend aware of the almost pathological hatred of any movement that takes control away from Nottinghamshire county council and gives it to schools? So great is that hatred that I believe that the chairman of my local education authority would do anything, say anything and spend anything to keep his empire intact. Other hon. Members who represent Nottinghamshire seats are aware of that tyranny—the authority has sought to deny Members access to schools in case they say something wrong to boards of governors.

I am as familiar as my hon. Friend with the extraordinary extent to which Nottinghamshire county council will go in its hostility towards schools that are not under its control. At the moment, it is distributing large amounts of leaflets to parents involved in ballots in respect of grant-maintained status in the north of the county. We believe that there is a case for factual information to be given to parents when such ballots are held and that it should be in the form of a simple leaflet on each side. We are taking steps to ensure that large amounts of charge payers' money are not spent on defending bureaucratic empires, and, I hope, to improve the quality and accuracy of some of the information put out by the local authorities.

I am more concerned about the money that the Government have spent on schools that have opted out. For example, the Secretary of State knows very well that Stratford school in my constituency was due to close as part of the reorganisation but that, to serve their ideological purposes, the Government allowed it grant-maintained status. That makes no sense, given that when Walsingham school in Wandsworth wanted to go for grant-maintained status as part of the reorganisation, the right hon. and learned Gentleman refused its application. We now have to pay £6,000 for every student at Stratford and we get only £3,000 for students in the rest of Newham. The Secretary of State should stop playing politics with the kids of Newham.

The hon. Gentleman displays all the spiteful fury that was shown by his local education authority against the wishes of the parents of Stratford school who voted for grant-maintained status. Not only were large sums spent on pressurising people to reject the application for grant-maintained status; the authority went to huge lengths to try to stop the school opening, including barring all the future governors and anyone else concerned with grant-maintained status from the school until the legitimate date, attempting to take away equipment, and a large number of other steps. I recall that that was the school at which some of the staff who intended to leave asked children who were intending to stay at the school to stand up. When those children identified themselves, they were made to stand in front of the class to be berated.

It is a lie.

Oh!

Order. Fortunately, I did not hear that.

We are organising ballots to determine the parents' wishes about whether schools should be governed by the local authority or by their own governors. There is a case for common sense and for a sensible level of information on both sides so that parents can reach an objective and non-pressurised view.

Is my right hon. and learned Friend aware just how much many local authorities spend on their campaigns—often outrageously political campaigns, such as that in Kirklees—to persuade parents and school governors that it is not right for schools to apply for grant-maintained status? The campaigns that they run are quite outrageous.

What is called for is a straightforward factual leaflet produced by one side and a straightforward factual leaflet produced by the promoters. The ballots can then be carried out in a sensible atmosphere and parents can make their own choice.

The Department's own propaganda budget has increased by more than 300 per cent. since the last general election and the Government are spending more than £250,000 of taxpayers' money on Grant-Maintained Schools Ltd.—a Conservative party front organisation. Is not it about time that the Government introduced powers to stop the use of taxpayers' money for party-political purposes? Or are the Secretary of State and the Government so worried about the weak nature of their own policies that they have to use taxpayers' money to get their cheap propaganda arguments across?

It is totally false to claim that the Government are increasing spending on propaganda. The hon. Gentleman describes as propaganda activities that are certainly not party political, such as the advertising campaign to recruit teachers. The hon. Gentleman has merely taken a bit of briefing from the hon. Member for Holborn and St. Pancras (Mr. Dobson), who always does these things, and who cites as examples of political propaganda all the Government's health education leaflets, including those in connection with the AIDS campaign.

To ask the Secretary of State for Education and Science how many secondary schools currently manage their own budgets under the system of local management of schools; and if he will make a statement.

Of the 3,853 secondary schools in England, 3,015—or 78 per cent.—have fully delegated budgets now. The remainder must have them by April 1993 or, in the case of schools in inner London, April 1994.

Were not many people wary of local management of schools when it was first announced, but now see the benefits of it? Does my hon. Friend agree that we should encourage more schools to look after their own affairs locally instead of their being dominated by left-wing, Labour-controlled authorities?

Yes, I have yet to hear of a school that wants to hand its budget back. However, I must tell my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) that his local education authority of Trafford has chosen to delegate less to schools this year than last year and to spend a higher proportion of its school budget on central administration. That means that every school in Trafford this year will lose out because classroom money is being spent on the bureaucracy at Trafford town hall.

Did the Minister read in the press about the extraordinary events a couple of weeks ago in the royal festival hall when Simon Rattle conducted 2,000 youth musicians and 300 youth choristers to draw attention to the damage being caused to instrumental music teaching in schools by LMS because local authorities can no longer sustain central support for youth orchestras and the instrumental peripatetic music budgets of schools are being cut to the point at which they are not worth having? In the case of school instrumental music LMS means divide and destroy.

There is no evidence for that kind of assertion with regard to school meals.

Music!

The plain fact is that local education authorities have plenty of scope to reduce their administration and bureaucracy. For example, Waltham Forest is spending 7 per cent. of the schools budget on central administration while other LEAs are spending between 1 and 2 per cent. If Waltham Forest did not do that, it would have a lot more to spend on music.

To ask the Secretary of State for Education and Science what is the average amount of money being held back by local education authorities in England and Wales, per pupil, under the system of local management of schools.

Figures for the current financial year 1991–92 are not yet complete, but I can tell my hon. Friend that the Isle of Wight local education authority is holding back 16·25 per cent. of its potential schools budget, which works out at about £280 per pupil. I shall write to my hon. Friend when the national average is available.

If local education authorities conformed to the Government's recommended 15 per cent. retention, would not there be an extra £140 million available to schools throughout the country? Have not governors, pupils, school teachers and lecturers become thoroughly fed up with the political posturing of local education authorities like the Liberal Democrats who have retained £200,000 from the college of art and technology on the Isle of Wight, a fact which came to light only when I led a delegation to my hon. Friend's Department, and who have sacked school governors, many of whom had given years of non-political service to their school boards? That was the greatest act of political spite by the Liberal Democrats ever to occur on the Isle of Wight.

I certainly deplore that. The Liberal Democrats on the Isle of Wight are holding back £5 million of the £30 million and that is precisely why by April 1993, hold-back will be limited to 15 per cent. so that schools' money can be spent in classrooms and not in the town halls.

Will the Minister confirm that the amount being held by Bradford local education authority is not unreasonable? Will he also confirm that there is widespread concern in schools in Bradford about the wholly insufficient amount of capital allocation from the Minister's Department which means that crucial renovations and repairs which have been hoped for for many years are likely to be deferred yet again this year? That work will include an attack on the enormous number of temporary classrooms and schools that are literally crumbling, a point highlighted by a headmaster who does not have an office and must work in the corridor, in the playground or in his parked car?

Overall we were able to increase schools' capital guidelines this year by 15 per cent. to £470 million. Bradford's allocation was more than £9 million.

May I congratulate my right hon. and hon. Friends on the success of their LMS policy, which releases substantial extra funds to schools? Will my hon. Friend the Minister carefully note the opposition that comes from Labour Members and their supporters? Does he agree that the success of the LMS policy helps to show the way towards grant-maintained status? I am sure that my hon. Friend will join me in hoping that more schools adopt GMS.

We regard local management of schools—the preparation and management of a budget—as a preliminary and important preparatory step towards full grant-maintained status. Indeed, it is difficult to see how anybody could be against local management of schools, as it ensures that schools' money is actually spent in schools. [Interruption.] If the hon. Member for Blackburn (Mr. Straw) says that he is not, why does he not deplore the practice of councils such as Newham and Waltham Forest spending so much on central administration, or is he happy to see a bureaucrats charter?

If the Minister does not have the figures for the hon. Member for Isle of Wight (Mr. Field), how can we assess the success or otherwise of the policy? When we are moving into 1992, why does he not have the figures for 1990–91? I question whether the Department of Education and Science has published the figures for 1989–90. One of our problems is that we have no up-to-date statistics on which to work. If we had, the Minister would give us the figures today.

I published the figures for 1990–91 last December. I gave the figures for the Isle of Wight. Whether the hon. Gentleman likes it or not, I will now give him the current year's figures for Wolverhampton. Wolverhampton holds back the fifth highest amount in England and refuses to delegate that money to its schools.

To ask the Secretary of State for Education and Science if he will meet representative teachers of seven-year-olds to discuss appropriate assessment procedures.

My right hon. and learned Friend and I have met a considerable number of teachers of seven-year-olds as part of our evaluation of the recent assessments, and we will continue to do so.

May I say that that is welcomed by every teacher of seven-year-olds and also by parents who want the benefits of testing and reports without putting too much extra load on teachers who are doing a better job year by year?

I agree with my hon. Friend. The tests this year were difficult to manage in the classroom. However, a number of those tests were welcomed by both pupils and teachers. There is no doubt that they revealed a considerable amount about pupils which had not been available to teachers using teacher assessment. It is a mixed result, but the big problem has been manageability within the classroom.

What responsibility do Ministers take for the fiasco to which testing at seven has been reduced, as a result of constant experimentation and change over the past four years? Does the Minister think that credibility in testing would be enhanced if some serving teachers were put on the School Examinations and Assessment Council, rather than turning the council into a branch of the Conservative party by appointing a right-wing ideologue, Lord Griffiths, as its chairman?

The tests have not been a fiasco.

They have.

No, they have not been a fiasco. I am surprised that the hon. Gentleman jumps to conclusions about the results of the test without waiting for the full evaluation from Her Majesty's inspectorate and from SEAC. I do not think that that is a responsible attitude for the hon. Gentleman to take. He must be as interested as we are in ensuring that there is a proper testing regime within schools and that that testing regime responds to the need of teachers and is fair to pupils.

To ask the Secretary of State for Education and Science how many schools in Essex have applied for grant-maintained status; and if he will make a statement.

Parents in nine schools in Essex have voted in favour of grant-maintained status. One school is already up and running and another is approved for grant-maintained status in September. I am considering proposals from two schools, and the remaining five schools will publish their proposals in due course.

Does my hon. Friend agree that all head teachers, boards of governors and parents of pupils at schools in Essex should be looking seriously at the option of their school becoming grant maintained? Does he also agree that the benefits of becoming a grant-maintained school should be being pushed vigorously by all Conservative county councillors in the county?

I agree entirely with my hon. Friend, and have one additional bit of advice. Those connected with schools that are thinking of becoming grant maintained—and they should be thinking about it—should visit Chalvedon school, which has been extremely successful as a grant-maintained school.

Does the Minister agree that the few schools in Essex that want to take on grant-maintained status should study the experience of Stratford school in Newham? Does he accept that despite the fact that every local head teacher and the chairman of the training and enterprise council warned against that school becoming grant maintained, the Minister allowed that for ideological reasons and the school now has only one third of the pupils that it could take, with the result that education there costs more than £6,000 per pupil, which is twice as much as anywhere else? How can the Minister justify so bizarre a situation?

Ideology. Playing politics—

Order.

The hon. Member for Newham, North-East (Mr. Leighton) and his hon. Friend the Member for Newham, North-West (Mr. Banks) should have words with the director of education for Newham council. They have just written the most disgraceful letter to parents, deliberately trying to frighten and intimidate them into withdrawing their children from Stratford school or attempting to dissuade them from taking up their option to attend Stratford. That is old-fashioned party thuggery of the kind that Opposition Front-Bench spokesmen claim to have given up.

Come outside and say that.

Order. The hon. Member for Newham, North-West (Mr. Banks) has already had one outburst.

To ask the Secretary of State for Education and Science how many primary schools have achieved grant-maintained status.

I have approved five primary schools for grant-maintained status and I am minded to approve one more. Fifty-four primary schools in all have so far applied for grant-maintained status and a further 11 are currently balloting parents on whether to apply for such status.

In determining applications, what weighting does my right hon. and learned Friend give to parental choice, academic achievement and the strength of lay and professional support? In answering that question, will he bear in mind the circumstances at the Down school where 85 per cent. of parents voted in favour of grant-maintained status, where the above-average academic achievement is well documented and where dedicated staff and governors are unanimously in favour of running their own affairs? What assurances can my right hon. and learned Friend give me that the decision that the Government have denied my constituents on this important policy is not a case of "Whitehall knows best"?

We give high regard to the expressed wishes of parents, which is why, having done just that in the case of Stratford school, my hon. Friend the Minister of State and myself are being so vigorously threatened by hon. Members representing Newham. However, we also consider the merits of each application and the likely success of the school as a grant-maintained school. My hon. Friend the Member for Ludlow (Mr. Gill) has told me how strongly he regrets our decision on the Down school, which is housed in an old Victorian building and has only two teachers, including the head teacher. I am afraid that we were driven to the conclusion that it was unlikely to succeed as a grant-maintained school. At least my hon. Friend's indignation answers the allegation that is frequently made against us that we always allow grant-maintained status in the case of closures.

Is it not a fact that the Government's attempt to dragoon schools into becoming grant maintained is a total failure? Is it not a fact that if all schools wanted to become grant maintained, the Government would have to increase the number of bureaucrats in Whitehall tenfold to centralise the education system? Is it not also the case that because the Government have not succeeded in encouraging schools to become grant maintained through a proper vote, they are now offering financial rewards and giving schools that accept grant-maintained status more money than is given to other schools and are not such schools usually about to be closed anyway?

The number of schools that have balloted has doubled in the past six months. The number of schools where that status has been approved has now risen past 100. I believe that today's count is 104. The effect of the change is to reduce bureaucracy, because more of the school's budget is placed in the hands of the governors and parents and is spent directly for the benefit of that school.

To ask the Secretary of State for Education and Science what communications he has received from the directors of further education colleges concerning his statement on 21 March; and if he will make a statement.

My Department has received a substantial number of responses from principals of further education colleges about our proposals to remove colleges from local authority control. Their comments have been overwhelmingly favourable.

Does it come as a surprise to my right hon. and learned Friend to hear that when I recently met a group of directors of polytechnics, not one of them wanted to go back to local authority control? Would not that be the same for further education colleges once they have freedom from the political Labour local authorities which constrained them and the opportunity to manage their own affairs? In my own area of Wolverhampton can it be right that the chairman was not only a Labour councillor but is now the prospective Labour parliamentary candidate? Is not that political bias of the worst sort?

Like my hon. Friend, I have never met a director of a polytechnic who wanted to return to local authority control; I have never met a head teacher of a grant-maintained school who wanted to return to local authority control; I have never met a head teacher of a school with a fully delegated LMS budget who wanted all the money to be placed in the hands of the local authority. Yet the Labour party in Wolverhampton and elsewhere defends bureaucratic local government control of all education to the last ditch.

To ask the Prime Minister if he will list his official engagements for Tuesday 23 July.

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.

The Prime Minister will be aware that we came into this place together and that we have been friends ever since. However, when my right hon. Friend the Leader of the Opposition asked him a question yesterday on the Bank of Credit and Commerce International, I wondered where Honest John was. Will he tell me please?

The hon. Gentleman is perfectly correct that we entered the House on the same day. I, too, am proud to have been his friend during that period and I hope that that will continue. I made it clear to his right hon. Friend yesterday that I had no knowledge of the fraud at the BCCI until 28 June. I have set up an inquiry that will have open access to all the information that is available and all the people who are concerned, up to and including Ministers and myself. When that report is concluded, I will publish it.

Will my right hon. Friend the Prime Minister please confirm that it was the Conservative party which first gave parents their rights, gave trade union members their rights and gave council tenants their rights? Is it not now the Conservative party which is giving the ordinary citizens of Britain their rights and is not that to be admired under the leadership of my right hon. Friend?

I would not wish to disagree with my hon. Friend.

Does the Prime Minister recall that he told the House on 18 January 1990 that he was aware of the reports about the banking operations of BCCI, that he said:

"I am satisfied with the supervision responsibilities and powers available to the Bank of England"—[Official Report, 18 January 1990; Vol. 165, c. 402.]

As I told the right hon. Gentleman, the first time that I knew of serious banking irregularities was on 28 June—last month. My right hon. Friend the Chancellor of the Exchequer made that clear to the House on Friday, I made it clear to the House on Monday and the Governor of the Bank of England made it clear in a letter to the hon. Member for Leicester, East (Mr. Vaz). I am surprised that the right hon. Gentleman, as a Privy Councillor, is unwilling or unable to accept those assurances.

If the Prime Minister will refresh his memory, he will discover that he made absolutely no mention whatever either yesterday or on any other occasion of serious banking irregularities. Is it not a fact that in early 1990 the Prime Minister knew about the use of BCCI by drug traffickers, and therefore clearly knew about the other grave irregularities? It is a matter of record in columns 402–3 of Hansard of 18 January 1990 that he knew about the other grave irregularities at BCCI, that he told the House that it was a "serious matter" and that he then let the matter drop, with tragic consequences for those who, in complete innocence, continued to use the BCCI. Has not he been utterly negligent? Was not his failure to act on the knowledge that he had a complete dereliction of duty?

I regret that the right hon. Gentleman continues to conduct opposition by smear. The reality of what happened all the way through, of who knew about the details of the fraud and other serious matters, will be entirely uncovered by the inquiry that I have set up. The right hon. Gentleman should wait for the results of the inquiry and, meantime, he should not continue as he is doing.

The Prime Minister is rightly exercised about the sovereignty of this House of Parliament. Will he answer questions to permit us to exercise the sovereignty of this House and hold the Government to account? He says that it is a matter of regret that I ask these questions. It truly is a matter of regret that 200,000 people continued to trade with the BCCI, including 60 local authorities and countless companies, in complete innocence when all the time the then Chancellor of the Exchequer knew about serious irregularities in that bank, but did nothing to warn anyone.

Those depositors are in difficulty because of the fraud perpetrated by the BCCI. I have told the right hon. Gentleman that the first knowledge that I had of that fraud was on 28 June. [Interruption.] If he is saying that I am a liar, he had better do so bluntly. [Interruption.] If he is not, he had better stop insinuating it.

The Prime Minister has already misled the House once today by saying that yesterday he referred to the irregularities, when it is in the recall of this House that he did not say a word about the irregularities yesterday, despite being asked about them. I have said to the Prime Minister that he knew about matters other than fraud before January this year and before June this year. Despite what he knew as Chancellor of the Exchequer, he did nothing to warn innocent people of the trap into which they were moving and of a bank that was near bankruptcy, that was giving unsecured loans and was not fit to trade. He let the bank trade.

The right hon. Gentleman has just revealed to the House why he is unfit to be in government—[Interruption.]

Order. [HON. MEMBERS: "Guilty!"]. Order.

It all started when—

Order. Let us behave like the House of Commons.

I congratulate my right hon. Friend on his excellent citizens charter. Does he agree that the typically churlish and sour reaction of Opposition Members demonstrates once again that, unlike the majority of the political parties in the world, they have still not understood that it is the competition and choice in the private sector which create quality of service? Does he also agree that it is the right of customers in the public sector to receive that same quality of service?

I agree with my hon. Friend about that. The measures in the citizens charter, both the large ones and the smaller ones, will be welcomed by people up and down the country. It is often the small matters that cause the greatest degree of frustration to ordinary people, and those small matters require to be dealt with. Many of the provisions of the citizens charter will do precisely that.

Further to that answer, yesterday the Prime Minister rightly said that where the authorities fail, the citizen should be compensated. Will he confirm to the House that that principle of compensation will apply if the Bingham inquiry shows that the authorities failed in the BCCI affair?

The right hon. Gentleman had better wait for the result of the Bingham inquiry.

Is my right hon. Friend aware that, in more than 40 prison establishments in this country today there is a full-blown industrial dispute? Does my right hon. Friend agree that that is a thoroughly unsatisfactory state of affairs? Does he further agree that the Government must do something to sort out that rotten union?

I agree with my hon. Friend. It is important that we address that matter.

To ask the Prime Minister if he will list his official engagements for Tuesday 23 July.

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

Is the Prime Minister aware that the Health Select Committee recently heard evidence that there has been a huge increase in serious infections during child birth because of the declining standards of hospital cleaning, directly arising from the privatisation process? Will he include as part of his citizens charter a commitment to return to the public sector those unsafe and unsatisfactory privatised services currently operating in the national health service?

It is a curious reality of life that all over the world different countries are moving increasingly to privatise services, including the Soviet Union which is looking to move many of its services into the private sector. Only the Labour party in this country is seeking to move back to nationalisation.

Does my right hon. Friend agree that we are less likely to have seriously ill patients turned away from hospitals and less likely to have people waiting to be buried if we continue with our privatisation scheme and eliminate the unions from the hospitals?

It is the Government's policy to continue to improve the quantity and quality of health care in this country, as we have done in recent years. That is in the interests of patients and it is certainly what is set out in our provisions in the citizens charter. That is the policy we will follow.

To ask the Prime Minister if he will list his official engagements for Tuesday 23 July.

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

Is the Prime Minister aware that the most important right available to citizens is the right to decide for themselves under which kind of Government they live? Since that is the very right that the Government are denying to the people of Scotland, does the right hon. Gentleman understand that his so-called citizens charter will be seen in Scotland for what it is—a fraud and a deceit? It is yet another reason for inflicting deserved electoral defeat on the Government when the Prime Minister finally finds the courage to face the citizens at the ballot box.

I sometimes wonder whether the hon. Gentleman lives in the real world.