asked the Chancellor of the Exchequer what representations he has received from the TUC and CBI for increased family benefits.

None in recent months, no doubt because there is general support for the new child benefit scheme, which is due to start in April 1977.

Is the right hon. Gentleman aware that the child benefit scheme does nothing for one-parent families who are in receipt of supplementary benefit and that the introduction in October 1977 of an allowance for the first child will be far too late? Will the right hon. Gentleman assure the House that when the son of this incomes policy is put together during the next three or four months the interests of those 14 million parents and 14 million children, who amount to over half the population of this country, are taken into account just as much as the TUC's 10 million?

Order. It is just as well that the hon. Gentleman is asking the first Question. It is not fair to the House if we have long supplementary questions.

We shall take everything into account in coming to our views in the next round of the incomes policy.

Is my right hon. Friend aware that April 1977 will be too late to help those children who are cold and hungry this winter? Will he look at the supplementary benefit scale with a view to helping the poorest families as soon as possible?

I appreciate my hon. Friend's long-standing interest in this matter. However,.it is a matter not for me but for my right hon. Friend the Secretary of State for Social Services. I am sure that she will take careful note of my hon. Friend's view.

Does the right hon. Gentleman regard the reviewing of tax thresholds in relation to any increase in family benefits as at least as important? Does he recognise that those who are not in receipt of benefit and who are on low earnings compare unfavourably when most of any increase in their low earnings is taken in tax?

We are certainly aware of the problem and we shall also look at tax thresholds.

How much longer will the Minister tolerate a situation in which a man who has two children and who earns £45 a week can take home less money than if he had stayed out of work in the first place?

The hon. Gentleman overstates the case. There is only a small number of such people.

asked the Chancellor of the Exchequer what plans he has to abolish dividend restraint.

The future of the dividend control will be considered in the development of counter-inflation policy as a whole.

Is not the right hon. Gentleman aware that dividend restraint helps the rich private investor who wants capital accumulation and not income from his investment? Is it not the case that the Diamond Commission pointed out that the only beneficiaries from abolishing dividend restraint would be small investors, pension funds and charities? Why do the Government continue to penalise them?

I do not entirely accept the hon. Gentleman's case. As I am sure he will recognise, successive Governments have believed some form of dividend restraint to be necessary in the context of any counter-inflation policy. If we ask those earning incomes to have some restraint, it is not unreasonable to include dividend recipients, too.

Does my right hon. Friend agree that, if we have dividend restraint for the reasons he stated, the natural accompaniment is an effective wealth tax?

As my hon. Friend knows, we shall be introducing an effective wealth tax.

Is the Chief Secretary aware that one of his colleagues in a previous reply on this subject said that the Government would take decisions in the light of the Diamond Commission's Report? As that Report is riddled with arguments and facts in favour of the abolition of dividend restraint unconnected with any pay policy, does not the right hon. Gentleman feel that now is the time to act?

We shall be looking at the subject of dividend control in the context of our review of the next stage of the counter-inflation policy.

Does my right hon. Friend agree that, although in theory corporation tax has not been abolished, in practice we collect hardly anything from it? Will he explain why that is and take measures to see that the appropriate amount is collected?

The Question is about dividend restraint, but I can tell my hon. Friend that his assertion is not entirely correct. We are still collecting substantial sums from corporation tax.

asked the Chancellor of the Exchequer when the 50p coin was introduced; and what has been the fall in the value of the pound since that time.

The 50p coin was introduced on 14th October 1969; the internal purchasing power of the pound fell by 52 per cent. between October 1969 and December 1975.

As the pound in our pocket has been so obviously devalued in this period, would it not be realistic for the Government to accept that and to introduce a £1 coin, which might be distinguished from other coins by a large hole in the middle?

The hole in the value of the pound is the responsibility of the several Governments who have held office since 1969. I have no firm views about the introduction of a new coin to replace the £1 note. If there is a demand for it, it will be considered.

asked the Chancellor of the Exchequer whether he has any plans to implement the proposals of the Expenditure Committee with regard to the Financing of Public Expenditure (ref 69–1) published on 11th December 1975.

I am still considering this Report and a reply will be given in due course.

Is the Chief Secretary aware that that is a disappointingly slow response to the Committee's criticisms? Does he accept that they were a devastating indictment of the Treasury's inability adequately to control public expenditure? What specific steps does the Chief Secretary intend to take to make sure that there is not another £5,800 million of unplanned expenditure and will those steps include cash limits?

Is the Chief Secretary aware that that is a disappointingly slow response to the Committee's criticisms? Does he accept that they were a devastating indictment of the Treasury's inability adequately to control public expenditure? What specific steps does the Chief Secretary intend to take to make sure that there is not another £5,800 million of unplanned expenditure and will those steps include cash limits?

We shall be introducing cash limits. It is not true that the response is slow. We hope to give a reply to the Committee in the next week or two. The allegations about the so-called £5 billion are wholly untrue and were answered by the Treasury in evidence to the Committee.

The Chief Secretary will know that one reason for the £5·8 billion was the very high increase in the price of land and houses. Now that the price of land and houses has fallen, to what great saving in public expenditure may we look forward?

I am sure that the hon. Gentleman can control himself sufficiently to wait for the public expenditure White Paper. As he rightly said, part of the £5 billion to which Mr. Godley referred arose from the rather uncontrolled growth of the money supply during the period when the Conservative Government were in office, a Government whom the hon. Gentleman sometimes supported.

asked the Chancellor of the Exchequer by what date, at the latest, he expects to publish the public expenditure White Paper; and whether that White Paper will contain the promised publication of the various cash limits for expenditure 1976–77.

My right hon. Friend expects to publish the White Paper on public expenditure on 19th February. It will not include details of cash limits for 1976–77. As announced in the debate on the Address on 25th November, details of the cash limits would be published around the beginning of the financial year.

I am grateful to the Chief Secretary for his announcement of the date of the public expenditure White Paper. Presumably that means that for the time being at any rate the differences within the Cabinet have been resolved, and I am delighted to hear it. Will the Chief Secretary assure the House that the system of cash limits will mean a great deal more than the mere allocation of the relative price effect among the component parts of the public expenditure programme? Will he further assure the House that public expenditure in 1976–77 will not materially exceed the figure envisaged at the time of the Budget, when cuts of £900 million were announced?

The hon. Gentleman will have to wait until he sees the White Paper, which will give him all the information he requires on cash limits. Expenditure for 1976–77 will be disclosed on 19th February in the public expenditure White Paper.

Will the White Paper give clear evidence that the Government are in earnest about shifting resources from the public sector into more productive channels?

We shall set out in the public expenditure White Paper the Government's policy for public expenditure both for 1976–77 and the years thereafter.

asked the Chancellor of the Exchequer whether he is now in a position to announce detailed proposals for public expenditure levels in the next financial year.

These will be included in the White Paper on public expenditure to be published later this month.

Will the White Paper confirm or deny the extensively leaked report that one cut in public expenditure will be in Civil Service manpower?

I cannot confirm or deny anything. I am sure that the hon. Gentleman will be happy to wait until 19th February to see precisely what the White Paper contains.

Will my right hon. Friend bear in mind that unemployment is now so widespread and so serious that, unfortunately, there will not be enough resources and manpower to cover both necessary public expenditure and the investment in industry which he requires?

I know that my hon. Friend will agree with the Government's policy, announced some time ago, of not cutting public expenditure now for precisely the reasons he gave—namely, the present level of unemployment, about which he and I are concerned. That is why we shall not be cutting public expenditure for 1976–77.

As the right hon. Gentleman has been generous enough to take us into his confidence about the date of publication of the White Paper, will he tell us when the Budget Statement will be made?

I am happy to do that as well—6th April.

Will the Chief Secretary allay the fears of the public and the foreign bankers by telling the House that the amount of money which the Government intend to borrow next year will be significantly less than the £12,000 million they are borrowing this yar?

I am sure that the hon. Gentleman will be happy to wait in patience both for the public expenditure White Paper and for other statements in the Budget on 6th April which will make everything clear to him and everyone else.

As 200,000 construction workers are out of work, will more finance be made available to local authorities to enable them to bring out of their pigeon-holes construction plans which are temporarily held back? Would not that be a great boost for the construction industry and help to bring down unemployment?

I entirely share my hon. Friend's concern. My right hon. Friend the Chancellor of the Exchequer will be making a statement next Thursday dealing with certain aspects of that matter.

asked the Chancellor of the Exchequer what was the average monthly percentage increase in the money supply—M1 and M3—between June 1970 and February 1974, and the corresponding figures for the period since March 1974.

Monthly series for the money supply going back to June 1970 are not available. On the basis of seasonally adjusted quarterly figures, the average annual rate of growth of M1 was 8·8 per cent. from end June 1970 to end March 1974 and 17 per cent. from end March 1974 to end September 1975. The comparative figures for M3 are 20·2 per cent. and 11·3 per cent. respectively.

Is it not surprising that the figure for M3—which is generally regarded as being the significant figure—is given such inordinate importance by the Opposition when my right hon. Friend's achievement is so much better than was the achievement of the Conservative Government?

I am grateful to my hon. Friend. For those who are interested in controlling the money supply, the fact is that my achievement on M3 was four times superior to that of the Conservative Government, which allowed M3 to increase in their last year of office, 1972 to 1973, Q4 to Q4, by 29 per cent. as against a 13 per cent. increase in money GDP. The figures for Q3 1975 on Q3 1974, showed an 11 per cent. increase in M3 as against a 21 per cent. increase in money GDP over the same period.

To what causes does the right hon. Gentleman attribute the inverse contrast between those two pairs of figures?

Primarily to the far superior fiscal probity of the present Administration.

Does not the right hon. Gentleman recognise that the only reason for the money supply figures that he has given being lower than they were during the Conservative Administration is that investment is now declining and the rate of increase of consumption is falling dramatically? Is it not clear that during the next two years, if the Chancellor's policy of encouraging investment is to be possible, the money supply must grow unless he proposes to reduce public expenditure within the next two years?

I do not agree with the hon. Gentleman's latter point. As regards the money supply figures, he will recall that in the year to which I was referring, 1972 Q4 to 1973 Q4, investment was still falling under the previous Conservative Administration. Growth came to a total halt in the middle of that year.

As the right hon. Gentleman has laid all his stress on the M3 figures, will he undertake to concentrate entirely on M3 during the course of the next year as being the only real indicator of the money supply?

No, I shall publish both figures. I have made them clear this afternoon. The hon. Gentleman will know that there is great dispute among theologians who profess the theory of monetarism as to which is the best indicator. The United States Administration takes the view that the M1 is the better indicator.

asked the Chancellor of the Exchequer what was the growth of the money supply on the M3 definition in the last full year for which figures are available.

Over the 12 months to mid-December 1975 M3 rose by 7·9 per cent. seasonally adjusted.

Is not my right hon. Friend's careful handling of money supply one of the most optimistic features for the future continued decrease in the rate of inflation? Is it not typical that Opposition Members, having called for such a policy, do not now seek to applaud it? Will my right hon. Friend reiterate his view that it is not necessary to make public expenditure cuts?

I am always grateful for support from my hon. Friends, or indeed from any part of the House. I used to have support on these matters from prominent Opposition Front Bench spokesmen. I ask the House to recognise—I apologise, Mr. Speaker, for answering at this length; I have your rebuke very much in mind—that people tend to exaggerate the importance of the money supply. I think it is important to keep the matter under control and I have done so. However, I do not think that that aspect is as important as many hon. Members believe.

Does the Chancellor agree that the principal objection levelled against following a so-called monetarist policy was that it would lead to a million or more unemployed? Is it not a curious and dangerous paradox that the moment our unemployment figures rise, the right hon. Gentleman suddenly discovers this new technique of financial probity which is to be imposed on top of our other economic stresses?

I cannot fully track the intricacies of the hon. Gentleman's argument. The fact is that I started to control money supply the moment I came to office two years ago. The country that uses money supply control as a main instrument of policy is the United States. There unemployment is very much higher than it is in Britain and, according to official forecasts, will remain higher than in this country for the next five years.

asked the Chancellor of the Exchequer what revenue has accrued from VAT on television repairs and maintenance during the last six months.

I regret the information is not available.

Does my hon. Friend agree that this rate of tax has an adverse effect upon low income groups, and especially pensioners, in the maintenance of television sets and other electrical goods? Does he agree that it has had an indirect effect upon the television tube industry? Is it not now about time the tax was reviewed so as to relieve that area?

I do not see the connection between the television tabe industry and VAT on television repairs and maintenance. I understand my hon. Friend's natural concern about those with limited means who have to get such repairs carried out. My hon. Friend must be aware that this situation is inherent in the application of VAT to all goods. There can be no distinction between VAT charged on goods and VAT charged on repairs and maintenance. Very often one is a substitute for the other.

Will the hon. Gentleman reconsider what he has just said, as it does not make much sense? Will he further consider the 25 per cent. VAT charged on the maintenance of electrical goods? It is a high rate and it encourages people to carry out their own repairs on electrical goods, which is often highly dangerous. I should not like to think that the hon. Gentleman was responsible for the death of anyone by electric shock.

I am grateful for the hon. Gentleman's concern. This is an argument that we explored in some detail in the Finance Bill debates last year. I have waited since then—it has been almost a year—for further evidence about the problems to which the hon. Gentleman has referred. I am pleased to say that I have not seen any evidence about accidents of the kind that the hon. Gentleman is asserting.

Will my right hon. Friend agree that a washing machine is not a luxury but an indis"ensable piece of equipment?

Order. I appreciate the hon. Gentleman's difficulty, but the Question concerns television repairs. If the Minister wandered into the realm of washing machines, he should not have done so.

Will my hon. Friend agree that as a television set, for example, is a desirable part of household entertainment and education, so washing machines are of equal value in another context? Why should they be so bard hit by VAT?

I shall go as far as to say that both articles are desirable. In view of what you have just said, Mr. Speaker, I do not think I should say any more than that.

Does the hon. Gentleman have an estimate of the number of people thrown out of work by the high rate of VAT that is applied to what he himself calls socially less desirable goods?

No. Let me take this opportunity to correct what was said in an earlier debate—namely, that 20,000 jobs were at stake. I think that there is a little confusion in that the figure of 20,000 was the result of the demana effects of the whole of the Budget of last year. If the hon. Member for St. Ives (Mr. Nott) cares to go into this matter in a little more detail, I think that he will find that my statement is correct.

asked the Chancellor of the Exchequer if, in view of the recent drop in the home market of the purchasing of home produced electric hair-dryers and toasters, he will now reduce the VAT down to 8 per cent. on such goods.

I cannot anticipate my right hon. Friend's Budget Statement.

That is the usual statement, Mr. Speaker. May I impress upon my hon. Friend—

Order. No. This is a time to receive information. Impressions can be left until later.

When my hon. Friend studies the effects of the Budget, will he take into account that the Hotpoint factory in my constituency is on very short time? Will my hon. Friend do something to ensure that demand increases for these necessary household goods? Or does he want the British people to dry their hair before an open fire and to toast their bread on a toasting fork as of old?

My hon. Friend knows that I shall be happy to take into account everything that he asks me to take into account, especially regarding his constituents. [HON. MEMBERS: "0h."] I would say the same for almost any hon. Member. My hon. Friend must remember that the 25 per cent. rate of VAT cannot be held responsible for the fall in demand for electric hair driers and toasters. I am extremely concerned about the large number of imports of these items, for they show that demand is certainly holding up, and that cannot be laid at the door of VAT.

Is the Minister fully aware of the extent to which we are faced with foreign competition in the domestic appliance industry? Is he aware that these are low-priced imports and that the 25 per cent. VAT discrimnates against the home-produced high quality product?

As the hon. Gentleman knows, VAT was introduced as a broad-based tax without discrimination. It is a tax that I reluctantly inherited. It is not a tax that I should have thought was ideal for any of the hon. Gentleman's purposes. My task is to administer, however reluctantly, the rather inadequate tax that we have. However, the domestic electrical appliance industry will be very much advantaged by the removal of the hire-purchase and credit restrictions. Indeed, this action has been well received by the industry as a whole.

Will not my hon. Friend agree that although there are other factors that have led to the extenguishing of the Thorn factory in my constituency, the 25 per cent. VAT rate has crippled the industry? Will my hon. Friend further agree that the Treasury needs to think out more deeply the effects of a 25 per cent. VAT rate? Will he take on board the electrical appliance industry's plea that if it is to survive the rate must be substantially reduced?

I read the Adjournment debate which my hon. Friend initiated on this subject. He will recall from that debate that there were a large number of other factors involved, notably the failure of the industry to take account of the particular demands that were then in evidence. I understand the important point which he has subsequently raised. Following the monitoring exercise which I mentioned earlier and which I should be receiving within the next few days, all these matters will be available for consideration before the Budget judgment is determined.

Does the Minister agree that, if the object of multi-rate VAT is to increase revenue and if the result is unemployment in and the breakdown of those industries affected, he is achieving the worst of both worlds?

I do not accept the lion. Gentleman's premise. The higher rate of VAT was a straightforward measure to increase the revenue at a very difficult time when all sources of revenue needed to be considered. It has been extremely successful in that respect and has involved a small number of civil servants. As far as other matters are concerned, we shall await the results of the monitoring exercise.

Is the Minister aware that the Thorn electronics factory in my constituency has already suffered considerable redundancies and more redundancies are feared? If my hon. Friend could see his way clear to reduce the 25 per cent. VAT rate to 8 per cent. On coloured television sets it would make a considerable difference to the employment situation in Bradford.

I understand the problems of the hon. Gentleman's constituency. Unemployment problems are very serious. My hon. Friend will be aware that the major problem for that industry arose with the reflation which occurred in 1972 and which produced an enormous demand for television sets, a demand which could not be met by production. Consequently there was a massive inflow of imports which established a firm footing. In my view, that is the most important and most serious problem of all.

What evidence does the Minister have that many foreign imports are being dumped here below the cost of manufacture?

My right hon. Friend the Secretary of State for Trade is always anxious to have details of dumping. However, the hon. Gentleman will be aware from the comments and debates on this subject that no allegations have been sufficiently well proved for my right hon. Friend to take the type of action that he would be only too happy to take were the evidence available.

asked the Chancellor of the Exchequer what revenue is available to the Treasury as a result of the imposition of 25 per cent. VAT on galvanised straining eye bolts.

None. These items remain chargeable at the 8 per cent. standard rate of VAT.

Is the hon. Gentleman aware that under pending legislation these items will be charged at 25 per cent. whether or not they are provided free of charge and whether or not they are purchased from a hardware store and handed over to the boatbuilder? I believe that Section 18(4) of the Finance (No. 2) Act 1975 is applicable. If that is so, it demonstrates that the Government have a total lack of understanding of the problems of the boat-building industry and the evils of multi-rate VAT.

As I have said, the items remain chargeable at the 8 per cent. standard rate of VAT. If the hon. Gentleman has any information from constituents who may have been overcharged, I shall be happy to look into the matter.

Will my hon. Friend enlighten the House by telling us what galvanised straining eye bolts are?

They are items that have wide industrial use and application. They are used in the boat-building industry and elsewhere.

Is the hon. Gentleman aware that the boat-building industry is especially hard-hit by the anomalies of this tax? Will he give an assurance that when he reviews multi-rate VAT he will take account of the reduction in employment in many industries, a reduction which can be traced directly to the increase of VAT on many items to 25 per cent.?

The hon. Gentleman will know that, following last year's Budget, I set in train a monitoring exercise for certain aspects of VAT. The report of that exercise will be coming to me within the next few days. It will obviously be considered before the Budget is decided.

asked the Chancellor of the Exchequer if he will bring forward legislation to reduce the rate of income tax on higher incomes so as to bring down the rate of emigration from the United Kingdom of able and revenue-producing citizens.

The hon. Gentleman will not expect me to anticipate my right hon. Friend's Budget proposals.

Will the hon. Gentleman give the House an indication of the revenue lost as a result of people leaving Great Britain because of excessive taxation?

It is very hard to give details of the increase in revenue that is obtained by taxing those who have very high earnings and who decide to stay here. We are grateful for the Diamond Report, which shows that it is unlikely that many higher income earners emigrate from the United Kingdom. That is a finding that will illuminate all our debates on the subject.

Would it not be better for my right hon. Friend the Chancellor of the Exchequer to devote any available resources to the lower end of the income scale, especially to old people in need of fuel, thereby reducing their rate of emigration to the Kingdom of the Almighty above?

There we have it. There is the voice of those who rightly say that certain advantages claimed for higher earners should be considered in the light of those who are less well-off. What we are trying to achieve—I think that we are being successful—is a fair balance between the competing claims.

asked the Chancellor of the Exchequer if he will seek to exempt from tax part-time earnings by retirement pensioners.

The age allowance already provides a measure of tax exemption for pensioners over the age of 65 who supplement their State retirement pension with small earnings. I do do not think it would be fair to other taxpayers to go further in the direction which my hon. Friend suggests.

Is my hon. Friend aware that those who now receive old-age pensions stood by the nation in strenuous and difficult times and gave no thought to emigrating because they were not making enough money? Is it not now time for their earnings to be uplifted? If he cannot end the rule completely, will he raise its ceiling so that we can give as much consideration to pensioners as we do to inefficient capitalist entrepreneurs?

I share my hon. Friend's concern for retirement pensioners and I appreciate their contribution to the nation. It is fully recognised by the fact that elderly people have a considerably higher tax starting point then do young people—almost 50 per cent. higher in the case of married old-age pensioners and more than 40 per cent. higher for single persons. This takes account of their special needs, which will always be in the forefront of our minds.

Is the Minister aware that one of my constituents aged 70, a serving servant of this House, received in overtime £40 gross two weeks ago but earned in total a net sum of £10? Is that not an absurd situation and will he examine it?

There must be a number of special factors relating to a tax bill of that kind. It does not appear to be consistent with the income such a person would expect to have. If there are any problems which the hon. Gentleman would like me to examine in regard to that constituent or anybody else, I shall be happy to do so.

asked the Chancellor of the Exchequer whether he proposes to make any changes in the policies of his Department as a result of his attendance at the International Monetary Fund conference on 12th January.

As I told the House on 12th January, the outcome of the meeting was very satisfactory. I do not anticipate that any changes in my economic or financial policies will be necessary as a result of the meeting. A Bill will, in due course, be submitted to the House to implement the increase in our subscription to the IMF and to ratify amendments to the IMF's Articles of Agreement.

Does my right hon. Friend remember that in his letter of 18th December to the IMF he referred to the Government's policy of increased economic growth and a reduction in unemployment? Do not the bureaucrats in the Treasury realise that we have 1½ million unemployed? Would it not be a good idea to use some of our increased borrowing rights to create jobs by channelling investment into industry through the National Enterprise Board and the Scottish and Welsh Development Agencies?

My hon. Friend should know that the unemployment figure of 1½ million—I think he meant nearly 1½ million—was due to the presence on the register of over 100,000 students, all of whom have now returned to college. Therefore, as I said last week, the figure is now nothing like as high as he suggested. Seasonally corrected, the figure is 1,200,000. The right hon. Lady the Leader of the Opposition is president of a body that put the figure at 800,000, ridiculously lower than the true figure.

To what does the right hon. Gentleman attribute the fact that over the past year unemployment in the United Kingdom has risen by about 85 per cent., whereas in the rest of the European Community it has risen by about 30 per cent.?

I imagine that the situation in the rest of the European Community depends on averaging figures in the tiny countries and the larger countries.

No, that is not so.

The level of unemployment as a percentage of employable people in Britain on the same calculation as is used in other countries is lower than in France and Italy, very much lower than in the United States, and about the same as that in Western Germany where in a single month there was an increase of 10 per cent.

Does my right hon. Friend agree that married women are not included in the unemployment figures and should be added to them? Does he not agree that what is needed is something more extensive than the measures which he announced last week? Will he reconsider the imposition of import controls?

I do not recall announcing any measures last week. I then said that I should be announcing a series of measures in the near future, and I shall be announcing them next Thursday. I also made clear that reflation of domestic demand, whether brought in by tax cuts, increases in public expenditure, or import controls, would have no effect on the unemployment figure this year. The risk is that we might repeat the tragic blunders made by the Conservative Administration when excessive reflation in 1971 and 1972 brought about a seizure of the whole economy in 1973, as is now recognised by the Opposition Front Bench.

Order. I remind the House that the request I made a little earlier also applies to the length of Ministers' answers.

As the level of unemployment is falling in every OECD country other than Belgium and the United Kingdom, should not the Chancellor of the Exchequer correct the answer given to my hon. Friend the Member for Blaby (Mr. Lawson) and avoid misleading the House and the country about figures, which at times he is rather inclined to do?

Characteristically, the hon. Gentleman is attempting to confuse the House. The hon. Member for Blaby (Mr. Lawson) referred to the rate of increase in the past year. The hon. Member for Guildford (Mr. Howell) is talking about what is happening at present. In Germany, the rate of unemployment is increasing; there are some signs that it is also increasing in France. It is our objective to bring down the rate of unemployment as fast as possible and on current policies we look like doing so at least as successfully as other major European countries.

asked the Prime Minister when he next intends to visit the east coast of Scotland.

I have at present no plans to

When the Prime Minister next decides to visit the east coast of Scotland will he take a personal interest in the defence plans for Britain's vital and vulnerable North Sea oil/gas platforms, because those plans have been criticised by numerous independent defence experts? Will he try to achieve better co-ordination between the numerous Government Departments, the four separate police authorities and the commercial operators involved? Secondly—

Order. It is not fair to other hon. Members if the hon. Gentleman puts half a dozen supplementary questions.

The hon. Gentleman has raised an important point. As he will know, the Government's policy on measures for the peacetime protection of our offshore oil interests was announced in the House on 11th February 1975 by my right hon. Friend the Minister of State for Defence. During subsequent debates there have been further additions to the information already available to the House. New Royal Navy ships will begin to enter service and a number of other protection methods are being added. It is of course the fact that the Home Secretary—in Scotland the Secretary of State for Scotland—is responsible for dealing with onshore terrorism, but I think the hon. Gentleman will find that the offshore position has been fully explained by my right hon. Friend.

Will the Prime Minister bear in mind when he eventually makes a visit to the east coast of Scotland that, because of the Government's economic failure, expenditure on the social services, old folks homes, home helps and other services of that sort has been savagely cut back in the Tayside region? Will he further bear in mind that, because of the temperature differences in Scotland compared with the South-East of England, in Scotland it costs 14 per cent. more to heat houses to the temperature level of houses in the South-East? What will he do about dealing with that situation?

These questions are very much in the mind of my right hon. Friend the Secretary of State. I do not accept at all what the hon. Gentleman has said about the cutback in the social services in the Tayside region, because since this Government came into office there has been a substantial increase. We have had to rein back further increases. However, in view of the proclivity of the Scottish National Party to vote with the Conservatives, who want to cut back the social services by several billion pounds, I think the hon. Gentleman might study his own record in this matter.

When my right hon. Friend visits the east coast of Scotland will he also take his official car to the west coast of Scotland and visit the constituency and town of East Kilbride? I am sure that he will receive a very warm welcome in that town, which nurtured William and John Hunter, who contributed so much to medicine and—

Order. This is all very interesting and I am willing to learn, but this is Question Time.

With all due respect, Mr. Speaker, I should like my right hon. Friend to visit the town—[Interruption.]

Order. Let the hon. Gentleman now ask a Question.

The question is: will my right hon. Friend visit the town of East Kilbride?

Yes, Sir. My hon. Friend knows that I have done so very many times. It does not strictly arise from the Question, because even I know that East Kilbride is not on the east coast of Scotland, but it arises perhaps out of my Answer. I said that I had

"arranged a series of meetings on industrial problems in Scotland in the spring",

asked the Prime Minister what plans he has to meet the Chancellor of the Federal German Republic.

I have invited the Chancellor to talks at Chequers on 7th February, Sir.

As France at this time is so firmly committed to one side of the Arab-Israeli dispute, when he meets Herr Schmidt will the Prime Minister endeavour to secure his co-operation within the EEC for an even-handed commitment concerning the Middle East?

My right hon. Friend the Foreign and Commonwealth Secretary and I have repeatedly had the opportunity of discussing with the Heads of Government and the Council of Ministers matters concerning the Middle East. Regrettably, there have been differences when these matters have come up—for example, at the United Nations. We have done our best consistently to work for a joint contribution by the Nine in the search for a just settlement in the Middle East. I shall be surprised if we do not discuss this matter on Saturday as we have on previous occasions when I have met the Federal German Chancellor.

When the Prime Minister meets the German Chancellor, will he draw his attention to the recently reported statement of the Belgian Defence Minister—that Western European countries must either do more about their own defence or risk losing American protection? Will he assure the German Chancellor that the United Kingdom Government will increase rather than reduce defence expenditure?

I have not said that we will increase defence expenditure. This comes badly from a party pressing for thousands of millions of pounds of cuts at this time. I have told the House—the Federal German Chancellor is well aware of what is said in this House—that any reductions, any economies, will not fall on our contribution to the teeth element in NATO.

Would it not be more appropriate for the Prime Minister to visit Italy, bearing in mind that that founder member of the Common Market is now nearly bankrupt in both financial and leadership terms? If the—

Order. How on earth the hon. Member links that question with the Chancellor of the Federal German Republic I do not know.

I shall try.

If we are to wander all round the globe on a specific subject, the House will get nowhere.

I was about to suggest that if we further integrate our economy with that organisation, we could eventually suffer the same fate.

At least my hon. Friend, unlike the chunnerers opposite, will note the significant improvement in economic prospects announced by the CBI and the Financial Times as well as by other indices. If I am to meet the Federal German Chancellor on 7th February, I cannot be in Italy at the same time. Neverthless, as I have made clear, there are plans for a meeting of the so-called European Summit—the European Council—in Luxembourg at the end of April.

Will the Prime Minister explain to the German Chancellor that the recent attack by a British official, Ambassador Ivor Richard, on a retired American official, Ambassador Mr. Moynihan, was unprecedented, regrettable and will not be repeated? Will he also explain to the Chancellor that our German Allies need not fear that their representatives will be treated with such a gross lack of diplomatic propriety at any time?

The Federal German Chancellor has no responsibility for what might have been said by Mr. Moynihan or by Her Majesty's Ambassador at the United Nations. I certainly intend to give no explanation of these matters to the Federal German Chancellor. Our Ambassador was entitled to say what he did in this matter. Obviously we all appreciate the frankest possible speaking at the United Nations and elsewhere, but it is not necessarily my view that that kind of speaking is good for either the Western Alliance or the United Nations.

asked the Prime Minister when he last met the TUC; and if he will make a statement.

I refer my hon. Friend to the reply which I gave him on 25th November, Sir.

Will my right hon. Friend remind the TUC that he is currently leading an army of 1½ million unemployed workers which is costing £1 billion in unemployment and related benefits and another £1 billion in lost tax? Will he take its half muted advice to impose import controls on a wide range of goods and direct investment to stop this degradation of 1½ million workers?

The TUC, when it meets myself or my right hon. Friends, is always capable of briefing itself and of deciding what it will say to us. I am sure that if my hon. Friend sent the TUC any supplementary briefs, it would consider them very carefully, though it might want him to get his figures right the first time round.

Will the Prime Minister discuss with the TUC the enormous increase in the amount of tax taken out of the pay packet by this Government? Is he aware that this year the average household in Britain will pay £335 more in income tax than in 1974? Is not this the intolerable cost of Socialism?

The right hon. Lady will know that these figures have been referred to by my right hon. Friend the Chancellor of the Exchequer both inside and outside the House and that he has expressed his anxiety and even given some hints as to his intentions in these matters. However, she will know that the figures she quotes would have to be much increased if we increased defence expenditure by £4·8 billion, as she has been advocating. There would also be a further very big increase if this Government were to fulfil the frivolous election promises which she made in 1974 regarding mortgages.

Has the Prime Minister noticed that the indications that the Government are getting inflation more under control continue to strengthen business confidence and that this revival in optimism is due not only to a feeling that the recession is bottoming out, but as this week's Financial Times survey of business forecasts points out, to the more favourable response of the trade unions to the economic situation, a response of which we have just been given an indication?

In an earlier answer I referred to both the CBI and the Financal Times monthly survey being the most optimistic since the middle of 1973 when the Conservative Government were in charge. They also confirm absolutely what the Opposition always deny—that the sheer fall in production, productivity, turnover, profitability and capital investment began in the summer of 1973, which was even before increased oil prices and the three-day week. That destroys the whole of their argument.

In any discussions with the TUC will the Prime Minister give high priority to the growth of unemployment among the young as reported in an EEC Commission Report published yesterday, which shows that in Britain 35 per cent. of the unemployed are between 15 and 25 years of age?

We are all concerned about the percentage of the young unemployed. In Scotland, where there is a different school-leaving pattern from that south of the border, it is particularly acute. The hon. Lady will be aware of the proposals and the decisions announced and now put into effect by my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for Employment at the turn of the year about help specifically for school-leavers.

Does my right hon. Friend recollect that the last time he met TUC leaders to discuss general economic matters he assured them that resources would be made available for the manufacture of capital goods for stock? Will he reflect on the debate on unemployment when the Chancellor of the Exchequer said that there was a continuing argument with the EEC Commissioners about whether Britain would be allowed to do that? Therefore, will he announce to the House his determination to ensure that these resources will be made available in line with his promise?

The Chancellor of the Exchequer has informed the House of his intention to do more in regard to taking stocks off the market. He has indicated that he will make a further announcement in the very near future about further action—not on the basis of a general, wild reflation, but on relevant measures to help with employment—and I had better not anticipate anything he may say.