asked the Secretary of State for Defence if he will make a statement on his plans to axe officers of the three Services.

On present plans, about 1,000 officers will be leaving the Services on redundancy between now and the end of the decade.

Will the Secretary of State confirm that he intends to axe 182 out of 500 naval commanders? Is he aware that these continual cuts, allied with the disparity of Services pay in relation to industry—it is now some 20 per cent. below that of industry—are having a very grave effect on the morale of all three Services?

These redundancies arise from the defence review and are being phased to have the minimum disturbance, although, naturaily, everyone is disturbed when good officers and men leave the Services. That is why I was particularly glad to be able to continue 41 Commando, because I thought it would be in the national interest so to do. I am advised that only 50 officer redundancies are scheduled for the Royal Navy in the period between now and 1980, and, as the hon. Member knows, most of the people leaving are volunteers.

asked the Secretary of State for Defence how many ship repair contracts his Department has let for the years 1975, 1976 and 1977 in (a) the North-West Region, (b) the North-East Region, (c) Scotland, (d) the South-East Region and (e) the South-West Region.

With permission, Mr. Speaker, I will arrange for this information to be published in the Official Report as it involves a lengthy table of figures.

I thank my hon. Friend for the information and the fact that it will be published. Is he aware of the plight of the Merseyside ship repairing industry? I recognise that this is not a responsibility exclusively for his Department, but does he agree that there ought to be a quota for the sharing of work in the regions? The facts and figures indicate the need for this.

Yes, I am aware of the position on Merseyside and of the anxiety expressed by my hon. Friend, not merely on this occasion but on previous occasions when he has led a deputation to the Ministry of Defence and has corresponded with me.

asked the Secretary of State for Defence whether he will make a statement about the strength and operations of Her Majesty's Forces in Northern Ireland.

There are 14 major units of the combat arms, or about 14,000 Regular troops, in Northern Ireland. The Armed Forces are continuing to operate with success in support of the civil authorities in the Province. Increased emphasis is being placed on the collection of information which will improve the effectiveness of the security forces and facilitate the prosecution of those who break the law.

To relieve the strain on Regular units, should not the Ulster Defence Regiment be further and speedily expanded, and, therefore, must not UDR pay and allowances be overhauled? To take on example, I know a married couple, both of whom are serving with distinction in the regiment, who would be financially better off if one of them resigned. Does the Secretary of State endorse the principle stated by my right hon. Friend the Leader of the Opposition that no Service man or woman should be worse off because of an Ulster posting?

I am sure that the hon. Gentleman is already aware that we are expanding the UDR, particularly the full-time element, in regard to which another 700 full-timers are being recruited. At the present time we have full-time platoons already in operation. Three of them are already in full operation, two of them are partially in operation, we are in the process of recruiting another platoon, and a further five platoons will be recruited.

Is the Minister aware of the satisfaction which attended the announcement that the Government intended to make 2,500 their immediate target for the size of the full-time UDR? May I ask him to allow nothing to defer the reorganisation of the UDR which the embodiment of this element will involve?

I am grateful to the right hon. Gentleman for his observations. I assure him that we are giving the highest priority, within resources, to the expansion of the UDR. If right hon. and hon. Members have a case of hardship that they wish to bring to my attention, I shall listen and look at it with sympathy.

Can the Minister say whether the special inquiry into pay and conditions for Regular soldiers in Northern Ireland, which he announced during the course of the Army debate, has finished its work and whether any further statements about improvements in pay and conditions can be expected?

I am sure the hon. Gentleman is well aware of the fact that my right hon. Friend has already announced a considerable improvement for the resident battalions. With regard to other issues, I am sure that these will be looked at in relation to the next phase of pay policy.

asked the Secretary of State for Defence if he will make a statement on future nuclear test explosions by Great Britain; if he intends a further test at Nevada; and if he will now discontinue research and development of a British Cruise missile.

It has not been the general practice of any Government to give details of nuclear test programmes or to make prior announcements. On the last part of the question, I assume that my hon. Friend is referring to the type of long-range Cruise missile under development in the United States. We have no programme for such a missile.

While I am glad of those last few words, I am not glad about my right hon. Friend's opening words since he did not deny that there is to be such a test. Why is such a test needed if Britain carries out her election pledge that there should be no future generation of nuclear weapons? Secondly, would it not help the vital test ban talks if Britain forwent these tests and appealed to America and Russia to do likewise?

I neither denied nor confirmed that there may be future tests. If one uses the form of words that have been used for many years, one is open to that kind of implication. It is quite impossible to answer speculative questions one way or the other.

Is it not true that the achievement of the Soviet Union of nuclear equivalence with the United States means that the need for Britain to maintain her independent nuclear deterrent is all the greater? Will the Secretary of State confirm his support for the maintenance of the independent nuclear deterrent and say whether he believes that the Cruise missile should be a vital future option for this country?

As successive Ministers have made clear, we have no intention of abandoning the existing Polaris weapons, but, equally, we do not intend to take a decision about a new generation of such nuclear weapons. With regard to the Cruise missile, we have no research and development programme but we have limited studies so that we can take an informed part in discussions on the defence and arms control aspects of the Cruise missile in NATO and at similar meetings.

Does not the right hon. Gentleman resent the suggestion of his hon. Friend the Member for Salford, East (Mr. Allaun) in relation to developing research on the Cruise missile? Does that not add to the view that Britain's alleged independent deterrent is no longer independent? Ought we now to take steps ourselves to acquire the American Cruise missile?

With regard to the first part of the hon. and learned Gentleman's question, we have always made clear that the nuclear weapons, both strategic and tactical, which we have are assigned to the Alliance, although their use would be subject to the approval of the Prime Minister. It would be premature to take any decisions about the Cruise missile until the development programme in the United States is rather further down the road than it now is.

Does my right hon. Friend agree that the arguments which are frequently put forward to justify nuclear tests by Britain can equally be advanced in favour of nuclear tests by every other country that is able to avail itself of nuclear weapons? Does he not regard it as desirable to argue against some of these arguments, bearing in mind the dreadful cumulative effects that would be incurred if this country went ahead with nuclear weapon tests?

I share completely my hon. Friend's concern about the proliferation consequences. Indeed, years ago, on behalf of the then Labour Government, I put forward a proposal at Geneva which, had it been accepted by the other Powers, would have led to a comprehensive test ban. Any tests that we have had comply in every respect with the partial test ban treaty that is in force. We should be the last country to seek to avoid any international obligations of that kind.

Will the Secretary of State bear in mind the recent deployment by the Soviet Union of a massive new arsenal of strategic nuclear weapons, particularly Backfire and SSX20—a mobile intermediate—range ballistic missile—which are specifically directed at neighbours of the Soviet Union and at Western Europe? Will he give an assurance that paramount among our considerations in the preparation of a comprehensive test ban treaty will be the security of all the peoples of Western Europe?

The hon. Gentleman can be assured that all relevant considerations will be in the minds not only of ourselves but of our American friends. I have no doubt that the Soviet Union will be looking after her interests as well.

asked the Secretary of State for Defence whether he will make a further statement about the implementation of defence cuts.

The cuts in 1977–78 are now being implemented. For 1978–79 a wide-ranging study has been carried out, and we have now put our preliminary conclusions to NATO as a basis for consultation. We shall not take final decisions until we have heard the views of our allies.

Does not the Secretary of State feel some embarrassment in submitting to NATO these plans for further massive cuts in our defence budget next year when he has just signed a ministerial communiqué calling for a 3 per cent. real increase in European NATO defence spending and when the Prime Minister has told us that we are on the threshold of unprecedented national prosperity?

The hon. Gentleman is less accurate with his facts than usual. There is no question of having signed a communiqué or that the communiqué was a commitment. It was an aim for a 3 per cent. increase starting in 1979. We are now talking about the year 1978–79. I have, of course, no shame whatever in NATO councils when, as is well known, we devote a bigger proportion of our resources to defence than does any other member of NATO, apart from the United States and Greece.

Will my right hon. Friend continue to resist the demand from the Conservative Party to increase defence expenditure when it is calling on the Government to reduce public expenditure as a whole? Does he not agree that an increase in defence expenditure must mean a far greater cut-back on pensions, social services, education and other things?

All the relevant considerations will be in the minds of Ministers when we come in the usual way to consider the public expenditure survey for future years. I take my hon. Friend's point. I find it a little nauseating to have lectures about the need for drastic cuts in public expenditure in general, not only in this area but in other areas, and opposition to any reductions in a particular area.

Will the Secretary of State accept congratulations on the success of the naval review last week at Spithead and also on his ingenuity in scraping together everything that would float to put into the shop window on that occasion? Does he realise that that, as a contribution to NATO's premier European Navy, indicates a clear need for expansion rather than for further cuts?

I think that the hon. and gallant Gentleman is a little unfair to his old Service. Not everything afloat was at Spithead. Quite a number of ships were on operational patrol duties. Fewer than 60 per cent. were there. While we have fewer ships than we had at the comparable review 24 years ago, I am sure the hon. and gallant Gentleman would agree that the capacity and fighting power of the ships at Spithead was greatly in excess of the Fleet in older times.

Have the Government accepted a 3 per cent. a year increase, or have they merely postponed it, and kicked it out of touch? Do they realise that it will cost us £7·3 billion a year at constant prices in five years' time? If the present rate of inflation continues, it will cost £16·1 billion in five years. Will he tell his NATO colleagues that we just cannot continue any longer with this nonsense?

As I have explained on previous occasions, I have made no commitments to my NATO colleagues on the future trends of our defence expenditure, because these decisions must be taken in the light of what is thought necessary and the resources that are available. I cannot accept my hon. Friend's arithmetic. I shall do all in my power—and I hope that he will help me—in making sure that the rate of inflation is nowhere near its present level in years ahead.

Since the right hon. Gentleman is Secretary of State for Defence, is it not rather odd that he should so much welcome cuts in public expenditure being reflected to such an extent in cuts in defence expenditure? If he believes what the Prime Minister has said about our economy—and presumably he is one of the few who does believe it—he should say to the Prime Minister that, as we are doing so well, the further damaging cuts in defence expenditure next year need not take place.

It would be of interest to the House—but I do not propose to do it—if I could give a dress rehearsal of what I might say on these matters. As I have made clear to the House, I accept that, when public expenditure cuts have to be made, defence should bear a pro- portion of those cuts—and our proportion is not massive, as has been suggested—along with other programmes. I would be very interested if the Opposition would give even an approximation of the figure that they think we should be spending.

asked the Secretary of State for Defence what discussions he has had on defence problems in the Far East with the Defence Ministers of the Chinese People's Republic.

None, Sir.

Would it not be useful for the Secretary of State to have conversations with the Defence Minister of China with a view to making sensible arrangements about the defence of Hong Kong? Is it not absurd to maintain a British military garrison there? It is pointless, because such a garrison could not possibly defend the territory and could only surrender if conflict broke out.

I have no objections to having discussions with the Chinese Defence Minister. As my hon. Friend knows, we are very happy and willing to consider exchanges of various kinds. However, this is a matter more for the Foreign Secretary than for me. There is no great concern in any quarter to upset the existing status quo and the agreement with the Hong Kong Government.

Does the Secretary of State agree that it would be useful for him to meet the Chinese Defence Minister and ascertain whether he agrees with the views of NATO experts that the doctrine, training and armaments of the Soviet forces have not a defensive purpose but an offensive one?

If—it is extremely speculative—I had discussions with the Chinese, no doubt these matters might arise.

Will my right hon. Friend consider the proposal that he and the Defence Ministers of NATO should have informal conversations with the Chinese Defence Minister, bearing in mind that both NATO and China have the same problem—the possibility of Soviet aggression?

That is a most interesting suggestion. I cannot speak for my NATO colleagues, but it is a point that I would bear in mind if the occasion arose.

asked the Secretary of State for Defence if he will pay an official visit to RAF North Cotes.

My right hon. Friend has no plans to do so at present.

If the Secretary of State or the hon. Gentleman went to North Cotes, they would realise that a lot of married quarters there are unoccupied. Will the Minister take steps, with the Property Services Agency, to make sure that these 100 houses that are unoccupied are made available to my constituents or anyone else who wishes to live in them?

If the hon. Gentleman wishes to get a factual answer, he should put down a specific Question and not a general one. However, I think that I can help him. Of the 94 married quarters being retained for RAF North Cotes, only 23 are vacant and these are mostly for work services. Where there are instances of properties remaining vacant for a long time, we are only too happy to transfer them to the PSA in order to dispose of them as quickly as possible.

Would it not be sensible to relax the rules of married quarters in order to allow more single Service men to take advantage of them?

If that were done, a wage cost benefit would arise that would affect the whole pay structure of the Armed Forces. However, this suggestion could be considered at a future date.

asked the Secretary of State for Defence how many interceptions of unidentified or Warsaw Pact aircraft have been made by the RAF in the last 12 months to the latest available date.

The Royal Air Force, both in the United Kingdom and in Germany, maintains a constant watch on all aircraft which without notice approach the air space which it is committed to defend, and intercepts and identifies those it wishes to check. Although it is not the practice to publish detailed statistics of such interceptions, I can say that on average they have taken place two or three times a week.

While I appreciate my hon. Friend's reticence about numbers, may I ask whether, on the basis of the figures he has indicated, he is satisfied with the rate of interceptions? Also, is he satisfied that the RAF has the capability to intercept any aircraft that might violate our air space?

One must draw a distinction between the United Kingdom air defence region and our sovereign air space. There have been no Soviet or Warsaw Pact penetrations of our sovereign air space, and I am satisfied that in peace time we would be able to intercept and identify any aircraft that penetrated it.

Does not the high figure of interceptions underline the importance of having manned aircraft, and also of having a high performance aircraft such as the Tornado, at our disposal?

The high figures are a tribute to the professionalism of those who serve in the RAF and the superb quality of the aircraft they fly.

asked the Secretary of State for Defence if he will review the Nimrod fishing protection rôle.

Nimrod aircraft of the Royal Air Force have carried out their fishery protection rôle most effectively during the past six months. We will continue to keep the rôle under review in the light of experience and in consultation with the other Departments involved.

I thank my hon. Friend for that reply. Would he not agree that there has been a change of circumstances in the last week or so inasmuch as there has been a ban on herring fishing? In the light of the fact that some foreign Powers seem to want to disregard that ban, is he absolutely certain that all the necessary facilities are available to do the job of policing our waters and enforcing the ban, which, I believe, has a great deal of support on all sides of the House?

My Department is satisfied that the Royal Navy and the RAF have the capacity to maintain surveillance, as in the case of the RAF. and to intercept, as in the case of the Navy.

Would the Royal Navy fire on the ships of our EEC partners?

The precise rules of engagement for our ships at sea are within the competence of my hon. Friend the Under-Secretary of State for Defence for the Royal Navy. I know the rules for engagement for the RAF.

Is the Minister aware that normally our partners in the EEC, or indeed any others arrested in territorial waters, do not fire back but accept arrest gracefully?

I am sure we all hope that our partners in the Common Market will act with the same common sense as will Her Majesty's Government and that this dispute will be speedily resolved, so that we may conserve our herring stocks and be able to earn a decent livelihood in future.

asked the Secretary of State for Defence what steps he is taking to respond to SACEUR's call for improved readiness of NATO forces.

We are studying a number of measures and have already made one improvement: the decision not to disband No. 41 Commando Royal Marines was announced last Tuesday.

The whole House will welcome the decision on No. 41 Royal Marine Commando, but is the right hon. Gentleman aware of the damage being caused to the operational efficiency of the Royal Air Force as a result of the mass exodus from married quarters, 10,000 of which have been vacated, if we take the overall figures for the three Services in the past two years, as a direct result of the over-comparability on which the Armed Forces Pay Review Body has insisted in respect of accommodation charges?

I cannot, without notice, confirm or deny the hon. Gentleman's figures, but there is a tendency, in civil as well as in military life, for people to desire to own their own homes. [HON. MEMBERS: "Oh."] This is well known. I have no idea why Opposition Members should be so surprised. This has been Labour Party policy for many years. However, there is no point in flogging the horse involving comparability of charges or otherwise. They are on an analogue device which was set up by a Conservative Government. If anybody comes up with any other basis on which we can make our charges, subject to pay policy we shall be happy to consider it.

In considering improvements to NATO, may I ask whether NATO has considered examining the possibilities of the United States neutron bomb? Has the NATO Nuclear Planning Group discussed the deployment of such a weapon in future in the European theatre?

The short programme for NATO to improve its readiness would not include consideration of the neutron bomb or any other weapon of that character. We have no such plans ourselves. Although it is difficult for me to go beyond the communiqué of the Nuclear Planning Group, I can tell my hon. Friend that we did not consider that matter.

Will the right hon. Gentleman confirm that the greatest contribution which NATO countries could make to the readiness of the Alliance to meet attack would be to support a common communications and signalling system?

That is one of the priority areas of the study. I agree with the hon. and learned Gentleman that the more common and more efficient communications and signalling systems we have, the better will be our readiness at relatively low cost.

Will the Secretary of State and his NATO colleagues review the speed of response of the NATO forces in view of the new Soviet tactical doctrine of the daring thrust put forward by General Kulikov, the new Commander-in-Chief of the Warsaw Pact forces?

I think that the Alliance is aware that the warning time in the event of any emergency might be shorter now than was expected in the assessments that were made some years ago. In common with our allies, we are reviewing and improving the time for our reinforcements. It would be counter-productive if we were to issue a list of those arrangements, because it would make such reinforcements ready targets in the event of attack.

Since the right hon. Gentleman has spoken of an analogue, may I ask whether he has seen reports in the Press, if not in his Department, on the message sent by the Northern Ireland Command to his Department, regarding the grave disquiet in our forces in Northern Ireland about pay levels and the danger to morale as a result of what has happened so far? What does he intend to do about the situation?

The comments to which the right hon. Gentleman refers were collected before I was able to make my announcement about putting resident battalions on field service conditions. My information is that there was considerable satisfaction among those resident battalions as a result of a tax-free increase of £5 for privates and up to £10 for lieutenant-colonels.

The minute makes clear that the improvement in respect of resident battalions was welcomed, but what was causing concern was the question of conditions for the rest of the forces in Northern Ireland.

As far as I had official sight of the papers, I think it is clear that the comments concerned were collected before 27th May, although I understand that the letter was dispatched thereafter. However, I cannot comment on illinformed pieces in papers such as the Daily Telegraph.

asked the Secretary of State for Defence when he will next meet the other NATO Defence Ministers.

asked the Secretary of State for Defence when he next plans to meet the NATO Defence Ministers.

I look forward to meeting the other NATO Defence Ministers at the NATO ministerial meetings of the Nuclear Planning Group, Eurogroup and Defence Planning Committee which will take place towards the end of this year. No firm dates have yet been fixed.

At those meetings will the right hon. Gentleman raise with his NATO colleagues the subject of the growing influence of the Soviet merchant marine, which has been used as an extension of Russian influence? Does he think that in the light of these developments he should consider increasing the Royal Navy's contribution?

I think it is probably the case that my NATO colleagues do not fully appreciate the substantial contribution made by the Royal Navy to NATO defences, although I know that it is appreciated by the Supreme Allied Commanders, particularly by SACLANT. I cannot say until I see the agenda of the meeting whether it would be appropriate to go into detail about Soviet maritime marine forces.

Since the Government carry a major responsibility for the weakening of NATO during the past three years, is it not the prime duty of the Secretary of State to respond to the call of the conference of NATO Ministers to increase defence budgets in 1979 and thereafter? For a start, will he announce, and inform his NATO colleagues, that he proposes to cancel the plans to cut the defence budget by £200 million in 1978–79?

I totally refute the suggestion that this country, which continues to share a heavy part of NATO's defence capability, is responsible for any weakening in the Alliance or that the Alliance has been weakened. That is contrary, for example, to the view of the retiring Chairman of the Military Committee, the distinguished Admiral of the Fleet Sir Peter Hill-Norton. I do not accept that NATO has been weakened or that this country has been responsible for such a weakening. The defence cuts have been decided and debated, and it would be a little irrelevant to bring what we are doing by way of cuts this year into the 1980s planning of NATO. We shall be considering further provision for defence in the normal way that Governments conduct their public expenditure surveys.

When my right hon. Friend meets his NATO defence colleagues, will he consider having a particular word with the German Defence Minister to remind him that the burden of the Army of the Rhine is ever-increasing and that the Germans have not made their contribution, although they said that they would? Will my right hon. Friend tell the German Minister that unless the Germans play fair by us we shall have to think in terms of reducing numbers in order to effect the necessary economies?

That is a bilateral matter of a sort that I am not sure would be appropriate for the deliberation of the full NATO Defence Planning Committee. I expect to have the pleasure of meeting my German colleague later this week. However, the negotiations with the Federal Republic are being conducted by the Foreign Secretary. I hope and believe that some settlement of this offset matter will be achieved before too long.

When the right hon. Gentleman meets the NATO Defence Ministers and raises the subject of improved readiness, will he be able to assure them that British forces can be ready without the use of British Airways aircraft and Sealink ferries, or, if not, that these will be readily available?

Of course we have contingency plans of the kind that the hon. Gentleman has in mind, but it would be a grave misuse of defence resources to have available all the sea and air transport that would be necessary only in the event of an emergency. The whole of NATO's policy is to prevent—and it has been successful in preventing—such an emergency. I can imagine the criticism if we had a whole fleet of aircraft and a flotilla of ships that were never used because NATO was successful in preventing war.

At the next NATO meeting, will the right hon. Gentleman regard himself as a nearly normal Defence Minister and abide by the decitions of the Alliance, or will he, owing to the incompetence of his Government, be contracting out of any decision which has been made, saying that it does not apply to us?

I do not know what "nearly normal" means in the right hon. Gentleman's vocabulary, but if anyone has run away from talking in plain language it is the right hon. Gentleman and his colleagues. I have asked how much they think we ought to spend and I have received no response. I shall certainly continue to make a robust defence of what we are doing in this country. I have not run away from any commitment that I have given, and my NATO colleagues know exactly where I and the Government stand in these matters.

asked the Secretary of State for Defence if he will list his engagements for 5th July.

This morning I attended a meeting of the Admiralty Board. Also, in addition to any duties in this House, I shall be having discussions with my colleagues.

Despite my right hon. Friend's comments earlier about ill-informed reports in the Daily Telegraph, will he spend a quiet moment looking at a report by that newspaper's defence correspondent on 22nd June which suggested that Air Chief Marshal Sir Neil Cameron was studying designs for new aircraft to replace existing aircraft in 1980? Is he aware that some of the design specifications he is looking for would seem to be covered by the MRCA? Will he confirm that that aircraft will last into the 1980s for the Royal Air Force?

The Tornado will not arrive until the 1980s. Air Chief Marshal Sir Neil Cameron flew the aircraft recently and was extremely pleased with its performance. I am distressed at the way the aircraft has been "knocked". It is very unfair to all those engaged in its production, as well as "knocking" the possibility of successful collaborative ventures. Studies are taking place in conjunction with NATO in terms of the replacement of other aircraft which are now used in the Royal Air Force. They will be replaced not by the Tornado but by the Harrier and the Jaguar. Because it takes so long to plan and agree production aircraft, there has to be a 10 to 15-year time interval.

Has the Secretary of State spent any part of his busy day thinking about the representations which have been made to him from all quarters on forces' pay? Has he spent any part of today wondering why the men whom he sends to Ulster are drawing less pay than are the people at Grunwick, about whom he so actively demonstrated his concern?

I shall answer the hon. and gallant Gentleman readily. The pay at Grunwick has risen substantially since the dispute began. I understood that the basic rate was £28 as at August last year, and the hon. Member for Stretford (Mr. Churchill) quoted a figure of £53 per week received by a private soldier in Ulster. That was an instance in which the soldier in question received an addition of free accommodation and free food.

asked the Secretary of State for Defence whether he will make a statement on the terms of engagement, career and prospects of Coldstream Guardsman Tom Holdsworth.

Guardsman Holdsworth joined the Army as a junior soldier on 30th July 1974 and was discharged on 27th June 1977.

That may be, but can my right hon. Friend say whether it is the general practice for serving officers to make favourable statements in court on behalf of Service men who have pleaded guilty to serious criminal charges? Is it not necessary to give advice to commanding officers to carry out these duties with a little more caution?

There have been a lot of misunderstandings surrounding this matter, and my hon. Friend is guilty—no doubt unwittingly—of a yet further misunderstanding. There was no question of the officer going to make a favourable statement, and it was most unusual that there was such a requirement for an officer to be heard in the Court of Appeal at all. I am sorry if there have been misunderstandings about this, but there was no question of the officer acting in the way that my hon. Friend has suggested.

Will the right hon. Gentleman confirm that this deplorable case in no way tarnishes the reputation or professional standards of the battalion with which this soldier was serving in Northern Ireland?

My concern throughout has been to try to prevent unfair criticism of the Army in general and of the Brigade of Guards in particular. I understand that this soldier was most satisfactory in the discharge of his duties.

asked the Prime Minister when he last met the CBI.

I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Thornaby (Mr. Wriggles-worth) on 17th February.

Does my right hon. Friend agree that the much more optimistic forecast from the CBI this week, the substantial improvement in official reserves and the prospects for a stable pound and stable interest rates mean that the prospects for production investment are better than they have been for a long time? Will he therefore press the CBI to seek to persuade firms to bring forward investment programmes so that industry can give a lead in the programme of national recovery for which my right hon. Friend called at the weekend?

The reserve figures announced yesterday were at a record level. That is a sign of stability. The most encouraging aspect of the CBI trends is the reference to the fact that the CBI expects the rate of increase in prices to slow down towards the end of the year. That is something that I have been saying for some time, and I am glad that the CBI's views coincide with mine. [Interruption.] I hope that the Opposition are also pleased about it.

Can the Prime Minister tell the CBI what level of pay settlements during the next 12 months is consistent with decelerating inflation?

No. We have not discussed figures with the CBI on that matter, although discussions are now going on with the TUC.

Could my right hon. Friend arrange a meeting between the Opposition Front Bench and Lord Watkinson, so that Lord Watkinson can tell them about his prognostications for the next decade, which coincide so closely with those of the Prime Minister?

Lord Watkinson is not an utter stranger to those on the Opposition Front Bench, and he will no doubt be supplying the same information to them as he does to us.

Does the Prime Minister agree that it ought to be no part of a politician's job to seek to encourage or discourage investment? Should not investment be decided by individual entrepreneurs according to their assessment of the profitability of each act of investment?

No. I understand that that is the Opposition view, but I do not know what would have happened to Wales or Scotland during the past 20 years if that doctrine had been followed. In broad terms, of course, individual entrepreneurs will take their own decisions on profitability and they will also decide on what they expect to be the prospects for the economy as a whole and for reasonable expansion. It is the duty of all politicians to place in front of them the best assessment they can make about how the economy is likely to go in future.

asked the Prime Minister when he last took the chair at NEDC.

I last took the chair at NEDC on 2nd February. In addition, on 22nd June I took the chair at a conference of representatives from the sector working parties and the economic development committees on the industrial strategy. This conference enabled the Government to hear the views of more than 100 leading trade unionists and managers. Strong support was expressed for the industrial strategy and there was discussion about such matters as overseas markets, import substitution, investment and productivity, relations between customers and users and communication at company level. Another similar conference will be held on 11th July.

In regard to the power plant sector, on which my right hon. Friend has no doubt heard the views of the Confederation of Shipbuilding and Engineering Unions about the prospects for a GEC monopoly of the industry, is he aware that his halo over Drax B is, like all haloes, only nine inches away from becoming a noose? In view of the urgency of the situation, will he give a firm undertaking that the Government will reach a decision on this much-prevaricated matter before the impending redundancies at C. A. Parsons and Babcock and Wilcox are implemented?

There is an important difference of opinion here. The GEC management, the National Enterprise Board, the CPRS and the Government all take the view that the industry should be restructured if it is to have a long-term future. My hon. Friend is vehemently opposed to that and is supporting the workers of Parsons and the unions involved. However, that does not alter the nature of the argument and the Government must look at the long-term interests. We cannot enforce such a restructuring. I am glad that it is going ahead on the boiler-making side, but my hon. Friend has not been able to persuade his constituents in Parsons—if he has tried—that a similar restructuring of the turbo-generator side would be in their interests. As he has not done that and the Government cannot do it, we shall have to consider the future of Parsons against the present position and announce our decision as soon as we have reached a conclusion.

What positive contribution to industrial investment is being made by the sector working parties? Are not at least some of them simply talking shops?

With respect to the hon. Gentleman, he is doing less than justice to the large numbers on both sides of industry who are giving their time voluntarily to these matters.

They are wasting their time.

The right hon. Gentleman may think so but the people involved do not, and it is their time and not the time of the right hon. Gentleman.

They are fiddling like Nero.

The Opposition are barking up the wrong tree, or down the wrong alley, on this subject. I should like to encourage the Opposition to take off their party spectacles and look at the issues properly. At the conference that I held, the managers, industrialists and trade unionists involved all believed that it was worth while and should be carried down to company level. I expect to find a similar view on 11th July, and I should be happy if someone from the Opposition Front Bench would come to some of these conferences. He or she might learn one or two things.

Is my right hon. Friend aware that his own talking shop on industrial relations is one of the finest in the world, bringing together, as it does, employers and trade unions in a period of very grave industrial turbulence? He is to be congratulated on that because the present deadly situation can be solved only by the mixture of flexibility and firmness at which my right hon. Friend is so adept. Does he agree that if the Tories, with their dogmatic rigidity, returned to power, the country would be in an appalling industrial mess?

I accept what my hon. Friend has said and I wish that the Opposition would do the same. Looking at the analysis of the conclusions reached at my last meeting, I see that every subject was introduced either by a leading figure in the industry on the management side or by a leading trade unionist. They put forward a number of valuable suggestions and commented on what they were doing and what the Government should be doing. All these things help to promote the better atmosphere that British industry needs in order to get higher productivity. I hope that the Opposition will realise this and will join in.

asked the Prime Minister whether he will list his official engagements for 5th July.

In addition to my duties in this House, I shall be holding meetings with ministerial colleagues and others. This evening I hope to have an audience of Her Majesty the Queen.

Will the Prime Minister spend some time today discussing with Mr. Roy Jenkins his speech at the weekend in which he accused certain members of the Government of seeking to subvert the voice of the British people as expressed in the referendum on the Common Market? Does the Prime Minister agree with that view expressed by a former Foreign Secretary and Deputy-Leader of the Labour Party?

Among my many duties, I do not have to take responsibility for speeches made by the President of the Commission.

Reverting to the Prime Minister's earlier answer, may I ask whether he will have time today to meet his ministerial colleagues in relation to the Drax B order? Is he aware that the delay is becoming unbearable and that, while we accept his concern for the long-term future of the industry, if the order is not placed quickly there will be no industry left? Can he, therefore, take the chance today to knock the heads of his ministerial colleagues together and get a decision?

I cannot undertake to do that today.

How about tomorrow?

Not even tomorrow. The problem must be properly processed. I regret very much that the restructuring of the industry seems unlikely to go ahead. I do not believe that this is in the best interest of the people working in the industry, and in five years' time they may come to regret the obduracy being shown on this matter. The CEGB will have to consider the ordering programme. The Government are in touch with the Board on that matter and we shall have to reach a conclusion as soon as we can. I do not want anyone to lose his job, but I am bound to say to the handful of my hon. Friends who share the view of my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) that Drax B will not prove the salvation of this firm.

As one of the Prime Minister's official engagements today is answering Questions, will he take time to repudiate the view contained in a recent article written by his hon. Friend the Member for Ealing, Southall (Mr. Bidwell), who said that his views were virtually indistinguishable from those of the Communist Party except in one particular—namely, that he did not rule out civil war as a means of keeping Socialism in power?

If I were to spend time answering questions about every speech made by every public figure in this country, I should never do anything else. If I were asked to make a marginal comment on the speech of my hon. Friend—and I wish to say nothing unkind in his absence—I should say that I have always regarded him as a philosophical revolutionary rather than one who really understands how a machine gun works.

So the Prime Minister does not repudiate—[Interruption.]

Order. Hon. Members expect to be heard when they are called.

So the Prime Minister does not repudiate that view but is content to rely on the support of such fellow travellers to keep him in power?

I could, of course, give the right hon. Lady my views on these matters, but unfortunately I do not seem able to endow her with a sense of humour.

Will the Prime Minister have time today to follow the deliberations of the conference of the National Union of Mineworkers? Since he referred at the weekend to one man's excessive wage demand being another man's ticket to the dole queue, will he comment on the deliberations and the decisions that the members of the NUM appear to be taking against the advice of their president?

It would be imprudent for me to comment, in the middle of the conference, on decisions that are just coming over the tape. There is too much instant comment demanded of all public figures, and we might sometimes take a little time to reflect on what has been said.

Will my right hon. Friend, in giving advice to my hon. Friend the Member for Ealing, Southall (Mr. Bidwell), take a little time to give advice to the right hon. Lady the Leader of the Opposition, who apparently fails to understand that Adam Smith contributed a great deal to Marxist ideas? Is he aware that Adam Smith, together with Ricardo, was one of those who developed the Labour theory on values, which was a contribution that was taken up by Marx and developed further? Perhaps the right hon. Lady should understand a little more about Marxism before she becomes involved in something that she obviously knows little about.

I am looking forward to studying the speech that the right hon. Lady made yesterday. I hope to cull a few quotations from it to adorn future speeches. As for the relationship between Adam Smith, Marx, Ricardo, Malthus, John Stuart Mill and all those other great figures who have contributed, I do not wish to denigrate any of them but I must remind my hon. Friend that it was Morgan Phillips who said that the Labour movement owed more to John Wesley than it did to Marx.