To ask the Chancellor of the Exchequer what is the level of corporation tax for small companies; and what it was 12 years ago.

The small companies rate of corporation tax is 25 per cent. compared with 42 per cent. at the time of the 1979 general election.

I congratulate my hon. Friend on the Government's significant progress in reducing corporate tax rates. However, will he assure the House that the importance of retained profits is truly understood by his Department, especially in relation to unquoted companies where the profits ploughed back by those companies are often the only source of capital? If that seedcorn is confiscated, it inevitably drives companies into the hands of their bankers, which gives rise to many of the problems that small businesses are currently experiencing.

I take my hon. Friend's question as an expression of support for our policy of increasing the amount of profit that is left with companies for them to retain or distribute as they think proper. That is the best way of providing a good environment in which businesses can flourish. That is the judgment not just of the Government, but of those hard-hearted characters who decide where mobile investment projects should go ill the EC. The majority of Japanese mobile investment projects and many of the American projects are coming to Britain in preference to anywhere else because Britain has the best environment in which to do business.

Is not the uniform business rate imposed by the Government hammering small businesses which cannot pay it? Is not that an extra tax that the Government have imposed on business?

Britain is full of small business people who are breathing a sigh of relief that their business rate is limited to an increase in the retail prices index rather than the 60 or 70 per cent. annual increases that some irresponsible Labour-controlled councils were imposing and which had the sole effect of driving businesses out of many of our major inner-city centres.

My hon. Friend will realise that his statement on corporation tax for small companies needs slight adjustment and I am sure that he is considering a major adjustment on capital gains, which I understand is one of the taxes where the cost of collection exceeds the revenue. Will he consider those matters before the next budget?

I treat my hon. Friend's question as an early Budget representation, which I have noted and will consider carefully.

To ask the Chancellor of the Exchequer if he has had any further discussions concerning the closure of the Bank of Credit and Commerce International; and if he will make a statement.

Both I and my officials have had a number of such discussions with a variety of people. On 6 November I saw a delegation of small business men who had been customers of BCCI, and yesterday I saw representatives of the BCCI depositors protection association.

Will the Minister join me in welcoming the proposals put forward by the provisional liquidator and the Sheikh of Abu Dhabi as a first step towards a settlement of the problem? Will he confirm that the Government support a further adjournment of the liquidation period on Monday to allow the negotiations to be completed? Does he agree that the liquidators and other representatives should study every proposal and option in order to secure the best possible deal for depositors, creditors and former members of staff?

Obviously, the Government share the hon. Gentleman's pleasure at the fact that the liquidator may well be working out an arrangement with the main shareholders that would mean BCCI's creditors possibly getting a considerably greater return on what they are owed than was previously thought possible. Those negotiations are a matter for the liquidator and shareholders, and the question of what the court should do is a matter for the court and the parties before it, not the Government.

Does the Minister agree that we are long past the stage of apportioning blame? People may have been misled, but they may not have been. Should not we now bend our efforts to supporting the proposal that the Minister mentioned and to finding some way of compensating those who have lost dearly?

The first line of compensation is the deposit protection scheme, which needs a liquidation order to come into effect. Whether or not that will happen on 2 December remains to be seen. The Government will welcome any arrangement that the liquidator and the principal shareholders can make that would result in BCCI's depositors getting a considerably greater return on their investment than was previously thought possible.

Does the Minister share the view of Sir Leon Brittan and the European Commission that there should be a Europeanwide deposit protection scheme—[HON. MEMBERS: "No."] Such is the hostility of Conservative Members to Europe that it is quite mind-boggling. Does the Minister also share Sir Leon's view that such a scheme should include non-sterling deposits? In the aftermath of the Bingham inquiry, will he ensure that there is a full review of the second banking directive?

Clearly, the Government will take appropriate action on any recommendations that result from the Bingham inquiry. Early drafts of a possible EC directive on a Europeanwide deposit protection scheme are being discussed. We think that the basis should be home country protection and that one should not be liable to pay deposits in other people's currencies.

To ask the Chancellor of the Exchequer what is the current level of retail price inflation in the United Kingdom; and what is the average within the European Community.

To ask the Chancellor of the Exchequer what is the latest annual rate of inflation.

Headline retail prices index inflation in the United Kingdom was 3·7 per cent. in the year to October—the lowest for three and a half years. The latest available average for the European Community is 4·6 per cent. in the year to September.

Are not those figures very encouraging? Does not the fact that our inflation rate is lower than the European Community average offer a real opportunity to British industry to improve its competitiveness? Does my right hon. Friend by any chance recollect the average inflation rate under the last Labour Government? What does he think about that?

Just by chance, I do remember it. The average inflation rate under the last Labour Government was no less than the astonishing figure of 15½ per cent. What is so interesting is that despite that disastrous performance, Labour's policies have hardly altered—and they would have the same effect again.

While the reduction in price rises is very welcome—taking us back to where we were three and a half years ago—does my right hon. Friend recognise the irony that, as a result, current interest rates—the price of money—are, in real terms, at an all-time high? Can he defy what may appear to be a paradox by both easing the burden of excessive interest rates and pressing on relentlessly until inflation is completely eradicated from the economy?

My hon. Friend asks me to do several things that might not be so easy to do at once. Our first priority must be to maintain the pound's position within the exchange rate mechanism. That is our policy for interest rates. At the same time, we have been able to achieve a dramatic reduction in inflation—which, because it is better than the European Community average, means that there are better prospects for exporting firms and for the jobs in them. There is no way that we can sustain high employment unless we are competitive in inflation levels.

Is the Chancellor worried that we are not sustaining high employment? Is he worried that it has taken such a deep and prolonged recession to reduce inflation to its current level? Does he think that he is doing a good job in alerting the country to the rapid rate of convergence at which he is aiming in the exchange rate mechanism and the possible move towards European monetary union?

I am astonished at the hon. Gentleman's last point. If I understood him correctly, he seemed to be saying that our inflation rate was converging too quickly, and that that was imposing costs on the economy. That is an extraordinary contrast with the uncritical support for monetary union expressed by his right hon. and hon. Friends, who want to leap in with no conditions and to throw away the conditions that we have negotiated—[Laughter.] Labour Members scoff, but that is precisely what the Leader of the Opposition said in the debate the other day.

My right hon. Friend is to be congratulated on the dramatic reduction in the inflation rate. Is he aware that in setting standard spending assessments for prudent local authorities, my right hon. Friend the Secretary of State for the Environment expects them to achieve an even greater reduction in costs and prices? In the light of that, will my right hon. Friend the Chancellor consider consulting the Secretary of State to establish whether the SSAs for prudent authorities, which demand such remarkable reductions in costs and prices, are really justified?

That is an extremely ingenious question. I know that my right hon. Friend has already made those points to my right hon. Friend the Secretary of State for the Environment. We believe, however, that the settlement that my right hon. Friend the Secretary of State announced to the House the other day is realistic and generous and that all responsible local authorities should be able to cope with it.

The reduction in inflation is to be welcomed; it will greatly assist in increasing the number of job opportunities. However, does not every reduction in the inflation rate leave the real interest rate a little higher? Surely the Chancellor now has the opportunity to announce a further cut in interest rates. That would help every company in the country, including the small companies that were the subject of an earlier question.

As I have already said, our first priority will be to maintain the external value of the currency—that is, to maintain its position in the exchange rate mechanism. I dread to think where the pound would have been in the past few days if I had followed the advice of Opposition Members.

The Chancellor will probably recall that his right hon. Friend the Prime Minister, when he was Chancellor, told the House on 15 February 1990 that the retail prices index was an inaccurate measure of the real rate of inflation. He reiterated that point in June and again in July.

Is not it the case that the present underlying rate of inflation in the United Kingdom is 5·5 per cent. if mortgage interest rates are excluded, and 7·3 per cent. if both mortgage interest rates and poll tax are excluded? Is it not also the case that the underlying rate was 5·9 per cent. when the right hon. Member for Huntingdon (Mr. Major) became Chancellor, and that it is now 7·3 per cent? A little more humility would not go amiss.

I touched on those points yesterday when I appeared before the Treasury Select Committee. Whether we take the retail prices index minus mortgage interest payments or producer prices, the rate of inflation has declined sharply in the past year and I suspect that the underlying measures of inflation will continue to decline in the next year—[Interruption.] I can tell the right hon. and learned Member for Monklands, East (Mr. Smith), who is interrupting from a sedentary position, that the underlying rate of inflation compares extremely well with the position under the Labour Government of which he was a member.

To ask the Chancellor of the Exchequer what was the average annual rate of investment in manufacturing industry (a) from 1974 to 1979 and (b) since 1979.

Manufacturing investment, narrowly defined, averaged £9·8 billion a year between 1974 and 1979 and £9·8 billion a year between 1979 and 1990 at constant 1985 prices. Total capital investment in plant and machinery averaged £17·7 billion between 1974 and 1979 and £24·3 billion a year between 1979 and 1990, also at constant 1985 prices.

The Minister has chosen his statistics carefully. Has not he forgotten to mention that between 1979 and 1981 investment fell sharply and that it was lower in the third quarter of 1991 than in any other quarter—12 per cent. of the 1979 level? With all the income from oil and from selling off the family silver, is not it a disgrace that manufacturing investment is now lower than in 1979? If the right hon. and learned Gentleman believes in that vital sector of our economy, why does not he take measures to increase investment?

If one takes the narrow definition of manufacturing investment, which excludes a range of investment that is made by manufacturing companies in services that no longer count as manufacturing investment but which they used to do in-house, the average for the past six years was£10·9 billion—much higher than under the previous Labour Government. I do not know what the Labour party is so proud of, because under the previous Labour Government manufacturing output fell by 2½ per cent. whereas between 1981 and 1991 it increased by 25 per cent.

Will my right hon. and learned Friend confirm that in the 1980s manufacturing output rose by 31 per cent? Irrespective of what the Labour party says about what happened before 1979, if he visited various parts of Yorkshire he would see massive investment in manufacturing, including £1 million in wool textiles.

My hon. Friend is absolutely right, but the international comparisons are even more telling. In the 1970s—for much of which there was a Labour Government—the United Kingdom was the only Group of Seven country where average year-on-year manufacturing output fell. In the 1980s, we ran joint third among the Group of Seven, which was a considerable improvement

Is the Chief Secretary aware that today 900 of our fellow citizens in Derby, Crewe and York will lose their jobs in the manufacturing sector? Is he further aware that since 1979, 2 million of our fellow citizens have lost their jobs in the manufacturing sector? Is it the Government's policy to arrest the accelerating decline in manufacturing—both in investment and employment—and, if so, when they will do it and how?

There is evidence that the decline in manufacturing has been arrested, and I shall give the hon. Gentleman that evidence. It seems clear that in 1991, as in 1990 and 1989 and after decades of decline, Britain's portion of world trade in manufacturing exports will increase. That is a significant achievement, of which the hon. Gentleman should be aware. Despite the Labour party's smears about what has been happening recently, manufacturing exports are up this year, notwithstanding the recession.

The latest Confederation of British Industry economic forecast shows a decline in manufacturing investment in 1991 of almost 20 per cent. and a further decline of 4·4 per cent. in 1992. Is the right hon. and learned Gentleman satisfied with that performance?

What is absolutely clear is that——

Answer the question.

I am about to do so. It is not an answer that the right hon. and learned Gentleman will like.

The only basis on which criticism can be made of the inevitable decline in investment during the recession is if high praise is lavished on the Government for the three years in the last 1980s when investment touched peaks. Even with the decline in business investment in this recession, it is about 40 per cent. higher in real terms than in 1979. That is the proof of our achievement in the 1980s, to which we can return.

Does not business investment, of which manufacturing investment is a part, remain extremely high? Is not it higher today than throughout the 1970s and the first half of the 1980s?

My hon. Friend is absolutely right. I am only too happy to discuss manufacturing, as it is an important sector of the economy. However, it is 20 per cent. of the economy and I never understand why the Labour party is not interested in the other 80 per cent. It appears that unless people go to work in some landscape recognisable to L. S. Lowry, their jobs, conditions and efforts are not worth talking about.

To ask the Chancellor of the Exchequer what is the current level of consumer debt in Britain; and what was the comparable figure in 1981.

The level of outstanding consumer debt at 30 September this year was £52·6 billion. Because of changes in coverage, comparable figures are not available for 1981.

Those figures, which show £52 billion of personal debt excluding mortgages, surely represent personal misery and are a major cause of family and social breakdown. Does the Minister think that it is now time to implement the proposals in the report "Escaping the Debt Trap" to introduce social loans, to take more stringent action against loan sharks who exploit poor people by their extortionate interest rates and to encourage a more responsible lending policy by banks?

On the question of extortion and credit, the Director General of Fair Trading published a report in September which the Department of Trade and Industry is considering. As for the proposals contained in "Escaping the Debt Trap"—the hon. Gentleman kindly sent me a copy—it will not surprise him if I do not agree with all of them. It is not the Government's business to start telling banks and consumers what arrangements they should make between themselves although, clearly, some people are in difficulties with consumer credit. I do not think that the fact that consumer credit is at a high level is evidence that people are miserable—they have done things with the money that they have. Most have either made sensible investments or have bought what they wanted and could afford.

Does the Minister recognise that the question of loan sharks has been on the agenda for the past 12 years, but that nothing positive has occurred other than the report to which he referred? Is not it time that the Government took on board that question and began to tackle the problem of loan sharks positively? Such action is certainly lacking at the moment.

As I said in reply to the hon. Member for Liverpool, Mossley Hill (Mr. Alton), the Government have obtained a report from the Director General of Fair Trading, which was only published on 24 September. It is reasonable to give the appropriate Ministers at the Department of Trade and Industry a little more time to respond to it.

To ask the Chancellor of the Exchequer if he will make a further statement about public spending levels.

The Government's plans for public spending were announced in the Chancellor's autumn statement on 6 November. Further details were set out in the written statement published on 13 November.

Most people who see the run-down state of schools and public transport do not think that the picture of public spending is as rosy as that set out by the Chancellor. Does the Minister remember that before the last general election the Government promised an increase in public spending of £11·2 billion in the following three years? In fact, it turned out to be a cut of £12·7 billion. In those circumstances, is not the Chancellor's promise of an extra £10 billion a similar Tory election hoax? Far from protecting public services, is not the Conservative party the party of public squalor?

The hon. Gentleman would do me a great favour if he could kindly confirm that his party, if in power, would spend an extra £13 billion above what we are spending. We have been trying to extract the figures from the Opposition. If the hon. Gentleman has agreed with members of his Front Bench that that is the line to take, I should be glad of confirmation.

Does my right hon. and learned Friend agree that spending an extra £35 billion could be financed only by massive increases in taxation and higher interest rates, which would lead to a massive increase in the level of unemployment?

This is a point to which we return time and again. No Opposition have ever mutilated more forests in the interests of producing an endless stream of written policy documents containing come-ons and pledges of all sorts to every sectional interest, but when we add up those pledges and cost them, the Labour party becomes very coy. We want to know—[Interruption.] The right hon. and learned Member for Monklands, East (Mr. Smith) can leap up and tell me—the House would be delighted to hear from him—how he will cover the difference between the £10 billion of extra taxation to which his party has already committed itself and the £35 billion of extra spending to which it has also committed itself?

rose——

Answer!

When I am on the Government side of the House it will be my turn to answer questions. Now it is my turn to ask them.

Speaking of how to meet levels of public spending, does the Chief Secretary recall the sharp increase in borrowing forecast in his public spending programmes? Will he confirm that it would be grossly irresponsible for any Government to cut the standard rate of income tax when public borrowing is about to shoot up in that way and that consequently, if the Chancellor of the Exchequer proposes such a cut in his next Budget, he will have to make it up by increasing other taxes—perhaps VAT?

The record shows that during the 1980s we were able both to increase public expenditure in real terms by about 20 per cent. and to cut tax rates—[HON. MEMBERS: "No!"] Oh yes—and for the decade following 1981–82, we reduced the tax burden.

That is wrong.

It is not wrong and I understand that next week we shall have the opportunity to debate the correctness of what I have said.

Given the new-found concern of the hon. Member for Derby, South (Mrs. Beckett) about public borrowing, will my right hon. and learned Friend remind her that the previous Labour Chancellor of the Exchequer managed to borrow not only more money than any previous Chancellor, but more money than all previous Chancellors added together? What would that do for the living conditions of the poor?

It is an interesting fact that the fastest-growing public expenditure programme under the Labour Government was not the health service, education or social services, but debt interest.

To ask the Chancellor of the Exchequer what is the latest International Monetary Fund forecast for growth in United Kingdom business fixed investment in 1991.

A fall of 12 per cent. from the historically high levels reached in 1989 and 1990 is forecast. In 1991 business investment will still be 37 per cent. higher in real terms than in 1979.

Is the Chief Secretary aware of the IMF prediction of a further 2 per cent. cut in investment next year? Is he unaware of the ever-deepening industrial crisis if such cuts were to take place next year? Is not it time that he built the economy in a constructive way rather than just waffling about it?

As Gavyn Davies, who may be better known to some Opposition Members than he is to us, has said, the interesting thing is at how high a proportion of GDP investment has settled, notwithstanding the recession. It is 14·1 per cent. of GDP for the second half of 1991—that is a high level. If Labour Members wish regularly to employ international statistics on investment, they should bear in mind the fact that during the 1970s the average annual growth rate in business investment in the United Kingdom was 2·3 per cent., against an average of 3·1 per cent. for the Group of Seven. In the 1980s the average annual growth rate in business investment was 6·7 per cent. as against a Group of Seven average of 4·6 per cent. That is quite a transformation.

Is not it clear that the excellent record of business investment in the United Kingdom reflects the fact that business men recognise the Government's commitment to containing inflation in the long term? After all, it is the cost of capital which determines business investment. Would not that be threatened only by the advent of a Labour Government, with their profligate spending plans?

Yes. It also reflects the bold decision taken by my right hon. Friend the Member for Blaby (Mr. Lawson) to cut corporation tax and liberate a range of resources for investments which companies would choose for themselves rather than being pointed in a certain direction by the distorting effect of allowances. In the middle to late 1980s that led not only to an unprecedented increase in investment in terms of value, but to a sharp increase in the quality of that investment. That is evidenced by the unprecedented increase in the productivity of all manner of industries that has taken place since.

Will the right hon. and learned Gentleman have a serious look at capital allowances, especially for plant and machinery, which should not have only a 25 per cent. capital allowance? That is not an incentive; it is a penal rate. Will the right hon. and learned Gentleman consult the Confederation of British Industry, which is coming round to the view that a 40 per cent. rate—which is not enough—would be appropriate?

The real point that one needs to note is the increase in capital investment in plant and machinery under this Government—[Interruption.] It is no good hon. Members shaking their heads. Since I gave the figures to the House last time, they have not been contradicted. I will give them again and, if I am wrong, I shall have to be put right next week. Gross investment in plant and machinery in the last year in which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) had stewardship of these matters, at constant 1985 prices, was just over £17 billion. In 1990, it was over £32 billion. That is comparing like with like and is a sign of the real difference in investment under this Government.

Does my right hon. and learned Friend remember that under the previous Labour Government, the International Monetary Fund came to the rescue? Is not a warning signal needed for Labour Front-Bench Members over the current draft proposal on economic and monetary union, because it contains a no bail-out clause? This country had better not be under a Labour Government.

That is one of the subtleties of the European negotiations that should impinge on the consciousness of Opposition Members.

As the Chief Secretary takes refuge in international comparisons, especially with the other countries of the Group of Seven, will he explain why the United Kingdom is not only at the bottom of the investment league of the G7, but at the bottom of the investment league of leading European nations?

That is a very short-term statistic. It is clear that over the 1980s, our investment record has run well ahead of that of the rest of the Group of Seven. We shall return to that. The right hon. and learned Gentleman and I can swap statistics quite soon and I look forward to it.

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

Base rates are 10½ per cent.

Does my hon. Friend believe that interest rates should be reduced by 0·5 per cent. now and that immediate action would save thousands of jobs? Do the Government have the ability to make that adjustment, or are they tied hand and foot by the exchange rate mechanism? If so, will my hon. Friend say so?

My hon. Friend knows that our policy on interest rates is to set them in a way that is compatible with our commitment to the pound's band within the exchange rate mechanism and to bear down on inflation. That policy has been manifestly successful over the past 12 months in reducing the rate of inflation to 3·7 per cent.

Is the Minister aware that a respectable reason for high interest rates is the control of inflation? However, given the claim of the Chancellor of the Exchequer, in response to the hon. Member for Ealing, North (Mr. Greenway), about lower inflation, should not the Chancellor have a little more regard for board rooms where, in the balance between optimism and pessimism, the state of opinion remains distinctly negative, than for the exigencies of the exchange rate mechanism?

The mood in board rooms as disclosed by the CBI business confidence survey shows something rather different—a substantial and continuing increase in business confidence. Business men who are borrowers naturally want lower interest rates, but I am afraid that the Government have to take a rather broader view of what is in the interests of the economy. They cannot simply allow one sectional interest in the community to override others.

Does my hon. Friend accept that high interest rates are a disincentive to investment? Instead of indulging in sterile exchanges of statistics across the Chamber, should not the House decide whether the level of investment in this country is adequate to ensure that our manufacturing base can compete against other countries? [HON. MEMBERS: "Hear, hear."] How does the level of investment in this country compare with that of our major competitors?

I am surprised that Opposition Members cheered that question. They obviously have short memories. My right hon. and learned Friend the Chief Secretary has given them the figures on investment in this country and they are rather good. Interest rates are set, as I said, in a way that is compatible with our commitment to the exchange rate mechanism and to bear down on inflation. That policy has been successful. There is nothing in the long run that is more damaging to investment than inflation.

To ask the Chancellor of the Exchequer what have been the changes in the rates of value added tax since the beginning of 1979.

From 18 June 1979, the higher rate of VAT was abolished and the standard rate of VAT became 15 per cent. On 1 April this year that rate was increased to 17½ per cent.

I thank the Minister for his answer. It demonstrates clearly the enormous burden of indirect taxation that has been placed on the shoulders of millions of families since the Government came to power. Will the Minister give the House a categorical assurance that VAT on road and rail transport will not be increased?

What short memories we have. The hon. Gentleman does not remember that, under the previous Labour Government, the rate of VAT on things that they described as luxuries, such as petrol and caravans, was 25 per cent. I can certainly give the hon. Gentleman an assurance that we will not go back to that.

Does my hon. Friend concede that the cause of the recession is not the high level of value added tax, but our membership of the exchange rate mechanism? Does he concede also that the question is not whether the war can be won, but whether it can be won with fewer casualties? Is not there a risk that, in future, the present Chancellor will be known in the economy as soldiers remember Field Marshal Lord Haig?

No.

To ask the Chancellor of the Exchequer what he estimates the public sector borrowing requirement will be for 1992–93.

The actual PSBR for 1992–93 will be set in the Budget. A working assumption of a PSBR of 3 per cent. of GDP was used to construct the autumn statement forecast.

Will the Chancellor confirm that the large increase in the public sector borrowing requirement planned for next year will be to pay for the massive increase in unemployment which has been brought about by his own economic incompetence?

Of the £6 billion increase in the planning total, it is true that £4 billion is for social security, but not all that—indeed, I think that only about £2 billion—is the increase in unemployment benefit. There is another £2 billion for other benefits. There is also a large increase in the financing programmes of nationalised industries. I thought that Opposition Members wanted more investment in infrastructure. That is what they are always telling us and that is what they have got.

What would the public sector borrowing requirement be today if it was running at the same proportion of GDP as in 1975–76?

My hon. Friend, remarkably, has those figures at his fingertips. He knows that it was 9½ per cent. of GDP. That would be in excess of £50 billion today. As my right hon. and learned Friend the Chief Secretary pointed out, when the Labour party was in power the fastest-growing item of Government expenditure was debt interest. They would certainly have had no chance of financing their programme without large increases both in taxation and in the borrowing requirement.

Will the Chancellor have a word with his Chief Secretary and tell him the facts of life, which are that the burden of taxation is much higher than it was in 1970 when the Labour party was in office? As the Chancellor has decimated British industry, how will he pay for all the public borrowing? Has he a secret agenda to put VAT, for example, on items which bear no VAT at present, such as railway fares, books and periodicals? Has he a secret agenda to increase VAT to 22 per cent? Has he a secret agenda to do both?

The hon. Gentleman's question makes no sense. He asked how we are going to pay for the borrowing. We shall pay for the borrowing by borrowing—that is the normal way in which one pays for it.

Does my right hon. Friend agree that if the Labour party implemented even a fraction of the spending priorities that it has been spreading around over the past year or two, to the tune of £30 billion or £40 billion extra expenditure, it would not only have to face the problem of raising taxation, but would have to resort to massive borrowing, which would increase interest rates and greatly damage the economy?

My right hon. Friend is absolutely right. The Labour party seems to have a new-found concern about the level of borrowing, but I must advise the Opposition that if they are serious about that, they could pay for their programme only by increases in taxation. There is no other way.

To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

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.

I congratulate my right hon. Friend on the anniversary of his Prime Ministership. May I remind him that inflation has come down from 10·9 to 3·7 per cent., that interest rates have been cut by 4·5 percentage points and that we have the lowest level of inflation for 25 years—below that of west Germany. Is not that in marked contrast to the events of 25 years ago this very day, as reported by The Times, when the then Economic Affairs Minister warned the Confederation of British Industry that if it breached the inflation-wage restraint, there would be a prices and incomes policy? It brought the worst economic turmoil that this country had seen since the industrial revolution. Will my right hon. Friend set out his policy for 1992—[interruption]—so that I can congratulate him on his anniversary again next year, when he will still be Prime Minister?

I am grateful to my hon. Friend. He is right about the success of the anti-inflationary policy. It is absolutely imperative that we get inflation down to the lowest level and keep it there, for most of our future prospects depend on that being the case. Happily, we are making excellent progress on inflation. It has come down and we shall ensure that it stays down.

Is the Prime Minister aware that in the past 12 months, because of his policies, 768,000 people have lost their jobs, 100,000 people have lost their homes and 45,000 companies have gone bankrupt? How does he square that record with his promise a year ago today to build a country at ease with itself?

If the right hon. Gentleman examines completely what has happened during the past year with that objective in mind, he will find that not only have we cut inflation, as I have just said, but we have cut interest rates. We have given Britain the lowest corporate tax rates in Europe. We have successfully come through a war. We have successfully produced a new initiative for the Kurds which has saved hundreds of thousands of lives. We have introduced the largest debt relief package anywhere at any stage and we have made changes in both domestic and overseas policies which command the wide respect of people throughout the country.

Is not it clear that everyone knows that the Prime Minister has reduced inflation only by creating a deep and lasting recession? The right hon. Gentleman has lost more jobs, more businesses and more homes than any Prime Minister in modern history. He truly will be known as the Prime Minister of evictions, unemployment and bankruptcies and that is why, as soon as the people get the chance at the next general election, they will stop him.

The right hon. Gentleman cannot seriously expect that the people of this country will buy the pig-in-a-poke policies that he produces. Now that inflation and interest rates are coming down, the economy is moving into an upturn and prospects are getting better, as even the Labour party's former adviser has agreed and written repeatedly in the newspapers.

If there are any pig-in-a-poke policies, the recession policies of the Government are the pig and 768,000 people have got the poke.

I can only assume that the right hon. Gentleman's last question was a knee-jerk reaction.

To ask the Prime Minister if he has any plans to visit Derbyshire.

I am making a series of visits to all parts of the country and very much hope to include Derbyshire.

Is the Prime Minister aware that in south Derbyshire, having seen off Arthur Scargill, we have a vigorous, successful engineering industry, a high level of exports and a young and growing work force with a low level of unemployment? We know that we are far better off in Europe—indeed, we are well off in Europe—and far better off in Europe than out. May I therefore pass on to the Prime Minister the good wishes of all my constituents for his efforts at Maastricht and hope that when he has finished there he will come up to Derbyshire and tell us all about it?

I am grateful to my hon. Friend. I share her view that industry, commerce and individuals in this country are better off in the European Community than outside it. Many companies are increasing their sales and increasing their relationship with Europe week after week. One of our objectives at Maastricht will be to achieve stricter implementation of Community measures to ensure that there is genuinely a level playing field for British industry and commerce in Europe.

If the Prime Minister comes to Derbyshire, whatever else he does, he wants to avoid canvassing with the hon. Member for Derbyshire, South (Mrs. Currie). When she went to Bolsover a few years ago at the time of the salmonella in eggs crisis, she went into South Normanton marketplace and met a woman there who said, "Hey you, are you Currie, the one about the salmonella?" The hon. Lady said, "Oh, yes. Are you going to vote Tory?" The woman said, "Look, I've got six of these eggs in my basket and if you don't sling your hook back to south Derbyshire, you'll have these on top of your head."

I did not detect a question in all that, but carry on.

I suspect that many people in Bolsover will carry eggs in their basket in the hope of meeting the hon. Gentleman.

To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

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

Does the Prime Minister accept that any reform of the government of Scotland implies some useful reform of the procedures of this place? As it is now three weeks since the Kincardine and Deeside by-election, when will he respond to our invitation to meet him to discuss these serious matters?

I have made it clear to the right hon. Gentleman and to the House that we believe that the Union between the United Kingdom and Scotland is important. We have no plans to change it.

To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

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

Does my right hon. Friend recall the answer that he gave to my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) on Tuesday about monetary union? He said that he was surprised at the contradictory answers which the House had received from the shadow Chancellor and the Leader of the Opposition on this complex issue. Why was my right hon. Friend surprised?

I am always hoping for something better from the right hon. Gentlemens although, alas, I rarely get it. The Leader of the Opposition claims that he has been a consistent supporter of the Common Market for years, but everyone knows that he was a consistent and bitter opponent of it for many years. Many of us doubt that he has really changed his mind.

To ask the Prime Minister when he plans to make his first visit to Liverpool.

I am making a series of visits to all parts of the country and hope to include Liverpool in them.

When the Prime Minister visits Liverpool will he meet some of the local trade union leaders and some of the long-term unemployed, especially the construction workers who lobbied Parliament last week? Unemployment is very high in Liverpool. My constituency has the highest level in England, Scotland and Wales with an average of 30 per cent. When the Prime Minister arrives, will he let people know that he is coming? His predecessor, the right hon. Member for Finchley (Mrs. Thatcher), crept into Liverpool and crept out again without letting people know that she was coming. That was an insult to the people of Liverpool and I hope that it will never be repeated.

I will certainly bear that in mind. I share the hon. Gentleman's concern about unemployment in Liverpool and elsewhere. I know that he will join me in welcoming the announcement yesterday by my hon. Friend the Minister of State, Treasury at the start of the project to construct a new building for Customs and Excise at Queen's dock. When completed, it will provide more than 800 new jobs locally.

Will my right hon. Friend give his assurance that, neither explicitly nor implicitly will any deal be done at Maastricht?—[Interruption.]

Order. It will have to be done in Liverpool, I am afraid.

To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

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

Is my right hon. Friend aware that in Portsmouth, which is connected to the continent by the finest ferry services in the country, there is a growing realisation that success at Maastricht is crucial to trade and investment, on which jobs depend, and that the main prize to be achieved is an agreement which recognises the importance of closer co-operation between European nations rather than moves towards inevitable integration?

I agree with my hon. Friend. It is crucial to our trade and investment that we continue to play a leading role in the Community. All the Governments of the Community, without exception, are working for an agreement at Maastricht, but there are important national interests at stake. I am negotiating for an agreement that reflects our national interests and is also in the interests of a wider Europe.

Does the Prime Minister understand that his description of the Sunday trading laws as "bizarre" has encouraged law breaking? Will he withdraw that word and condemn the retail giant law breakers?

I should have thought that the hon. Lady would now recognise that the description that I gave was entirely apposite. The present situation is unsatisfactory. There are acute difficulties in changing that in the short term. The House of Lords has concluded that our Sunday trading laws are unclear and has therefore referred them to the European Court of Justice to clarify whether they are compatible with European law. We hope that the European Court will make its ruling at the earliest possible moment so that the House of Lords can give a judgment. In the light of that, the next step will be for the Government to identify proposals that will command the support of the House.

To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

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

Will my right hon. Friend confirm that on 15 May 1983 he said:

"We want out of the Common Market?"

Could he also tell me whether he said on 16 December 1983:

"We are committed to a non-nuclear defence policy?"

Also will he confirm that in August 1991 he said:

"I think the people trust me. They trust me for my word and my attitude."

Would he also tell me——

Order. I think that is enough.

I can confirm that, of course, I made none of those statements, but I believe that each of them can be attributed to the Leader of the Opposition. It was also the Leader of the Opposition who said that if he were to abandon socialism he would not be worth voting for.

To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

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

Will the Prime Minister tell the House where my constituent Joanne, who is on a vocational course, receives £35 a week, lives on her own through no choice of her own, occasionally goes without food and sits in the dark because she has no coins for the meter, fits into his citizens charter and the classless society?

I cannot comment on individual cases without all the information available in front of me. If the hon. Gentleman will provide me with all the information, I shall examine the case.

To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

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

I thank my right hon. Friend for his clear and positive support for finding a solution in Cyprus. Will he now seek the urgent help of the President of the United States in making it clear to the new Government in Turkey that the west expects a positive and constructive contribution to the United Nations peace process from now on?

I have discussed Cyprus with President Bush on more than one occasion and we both actively supported the efforts of the United Nations Secretary-General. A settlement will require good will on both sides and I hope that the new Turkish Government will play a full, constructive and early part in the Secretary-General's renewed efforts to find a settlement. A settlement in Cyprus is long overdue.

To ask the Prime Minister if he will list his official engagements for Thursday 28 November.

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

Have the Government finally abandoned the erstwhile Tory doctrine that the rule of law must be upheld in all circumstances, now that the Attorney-General is turning a blind eye to big supermarkets breaking the Sunday trading law and as the poll tax non-payment campaign has apparently recruited the architect's daughter?

The law must be obeyed. In the case of Sunday trading, it is not at the moment clear, because of the House of Lords' ruling, what the law may be. In the case of the community charge, the law is clear. People should pay their community charge. It might have helped if the hon. Gentleman had given people a better example in that respect.