asked the Chancellor of the Exchequer whether he will arrange to make the purchase of premium bond gift vouchers possible at post offices.

National savings gift tokens are sold in denominations of £1, £2 and £5 and can be exchanged for premium savings bonds. There would not appear to be any need for a special premium savings bond gift voucher.

Is the Minister aware that since I put the question down events have caught up with premium bond savings and there are now no bonds? How will that be dealt with? People cannot get their money or their prizes, and the Government are making a profit. On the question on the Order Paper, may I say to the Minister that it is extremely difficult—

Order. The hon. Member may say nothing to the Minister. He may only ask a question. The hon. Member has asked two questions, but he may ask a third briefly.

Is the Minister aware that it is extremely difficult for grandparents to buy premium bonds for their grandchildren? The Government are losing money as a result.

National savings gift tokens are widely used for the purchase of premium savings bonds, and that situation is satisfactory. If it were to change, I should consider it further. There are problems with repayments of savings certificates, save-as-you-earn and premium bonds as a result of the dispute. Until last week urgent repayments were made on savings certificates. There have since been further problems, and these savings certificates are not available at present.

Will the Financial Secretary acknowledge publicly that the Government have an obligation to those who wish to draw their interest or capital on the due dates? Will he also announce publicly that the Government will pay compensation or damages—however he chooses to describe it—to those who have been prejudiced in this way, whether through industrial action or other administrative problems?

There are problems with the documents acting as securities and therefore attracting interest that need to be closely considered. I accept the principle of recompense.

Whatever action the Government take, will my right hon. Friend accept that it is foolish to threaten civil servants with dismissal or suspension if they refuse to do other people's jobs and break strikes?

There are a number of difficult circumstances here. We have the right to insist that work is done for payment made. The maintenance of the public service must be protected.

asked the Chancellor of the Exchequer what is his estimate of the future prospects for growth in United Kingdom gross national product compared with the average for OECD countries.

I ask my hon. Friend to await publication of the Government's economic forecast with the Budget on April 3.

I thank my right hon. Friend for that answer. Does he agree with the Government-TUC statement that the faster we can bring down the rate of inflation, the more likely we are to achieve a European rate of economic growth?

Yes, I think the single most important aspect of the statement to which my hon. Friend referred was the agreement between the Government and the TUC that while we may aim at European growth rates, we shall not achieve them unless we achieve the inflation rates which are common among our European competitors.

Since there is now general acceptance that there is an inescapable relationship between the growth of GNP and the availability of national energy supplies, will the Chancellor say upon which premises his forecasts are based?

I have not announced a forecast. If the hon. Member is asking about the likely availability of energy this year, I remind him that my right hon. Friend the Secretary of State for Energy undertook, with other representatives at the International Energy Association meeting, that we would aim at a 5 per cent. cut in the use of oil in this country. However, in our case that will be made up by increased coalburn and by other methods which will be announced to the House in due course.

My right hon. Friend the Chancellor mentioned his Budget. Will he give an assurance that the industrial dispute now in progress will not in any way interfere with his Budget, with his prophecies or with his estimates, right or wrong?

I cannot give such an assurance, as I think my hon. Friend very well knows.

The Chancellor will have noticed yesterday's report from OECD that inflation in the year ahead is likely to run at 12 per cent. or thereabouts and that the growth of domestic product, excluding oil, is likely to be about 1 per cent. Is he aware that manufacturing output in this country is still lower than it was 10 years ago? Is not that a disastrous commentary on the right hon. Gentleman's five-year tenure of office at the Treasury?

I read the OECD forecast. As was pointed out by the OECD when it launched the report in Paris, it was compiled a couple of months ago when the outlook for wage inflation was a great deal worse than it has become since the recent Government agreement with the TUC.

asked the Chancellor of the Exchequer when he expects next to meet his EEC counterparts; and if he will make a statement.

I next expect to meet Community Finance Ministers at the meeting of the Finance Council in Brussels on 14 May.

Will my right hon. Friend remind the other Ministers that when Britain refused to join the European monetary system the pound went up in value in relation not only to the dollar but to the franc and the mark? Will he point out that when my right hon. Friend the Prime Minister decided to attack the EEC budget contributions it went up again? Is it not clear that every time we make these anti-Market moves we improve the chances not only of the pound in relation to these other currencies, but of my right hon. Friend the Chancellor staying in his job?

I do not know with what equanimity I can contemplate the fate that my hon. Friend has mapped out for me for the long-term. However, what he says is true. The pound has been strong in relation to other currencies for the past two months. I do not think that that has been because we decided not to join the EMS. It has been because we have been following fiscal and monetary policies which form a shining contrast to those of the Conservative Party. I note what my hon. Friend says about the Community itself.

Why does the Chancellor not refer the hon. Member for Bolsover (Mr. Skinner), who relates anti-European measures to the strength of the pound, to the hon. Member for Southampton, Test (Mr. Gould) who is also anti-European and believes that the value of the pound should be reduced by stages?

I have every confidence that my hon. Friend the Member for Bolsover (Mr. Skinner) will ensure that those who otherwise share his views will share his view on the value of a strong and stable pound.

Is my right hon. Friend aware that if it were not for our £1,000 million contribution to the EEC budget our EEC colleagues would have to find that sum for themselves, and that if we were not consuming EEC food surpluses at twice the world price those surpluses would be even more expensive to dispose of? Since the Common Market could not survive without our participation, will my right hon. Friend ignore the feeble faint hearts on the Opposition Front Bench and recognise the strength of our negotiating position?

I am grateful to my hon. Friend the Member for Southampton, Test (Mr. Gould) for not raising the question of the exchange rate. That must be a record in the House in recent years. I thank him for asking me to perservere in doing good, which I certainly propose to do. I assure him that I persistently ignore the faint hearts on the Opposition Front Bench and shall continue to do so for many years to come.

Why are the Government refusing to pay contributions on the basis of the EEC's 1979 budget, as enlarged by the European Assembly, since it was only the Chief Secretary's refusal to veto that enlargement that allowed it through in the first place? Did the Chief Secretary by any chance make a blunder?

It is absolutely inconceivable that my right hon. Friend should have made a blunder, but as the hon. Member for Blaby (Mr. Lawson) knows, from the nature of his question, we, along with several other countries, are refusing to make a contribution which would otherwise be made because we do not accept the view that the Assembly has determined the nature of the current budget. We shall be sorting out that question in the near future.

If matters go on like this much longer I shall suffer from the same weakness.

asked the Chancellor of the Exchequer how the Government's decision to increase military spending will be affected by cash limits.

I refer my hon. Friend to the answer I gave on 23 February to my hon. Friend the Member for Thornaby (Mr. Wrigglesworth) in the Official Report, Vol. 963, c. 334–5.

If cash limits can be breached so easily for defence purposes, why are they sacrosanct elsewhere?

My hon. Friend is wrong in his first premise, so the second part of the question does not stand.

If the Government are to put taxpayers' money to any useful purpose, is it not worth while putting it where it could provide a useful return? Will the Government consider allocating further funds for the Defence Sales Organisation so that we may try to sell more aircraft and tanks to the Chinese, for example, which would help our balance of payments?

Not surprisingly, I am blessed if I can see what the hon. Gentleman's question has to do with the question on the Order Paper. Defence sales are separate from cash limits.

asked the Chancellor of the Exchequer what representations he has received about the contents of the forthcoming Budget; and if he will make a statement.

asked the Chancellor of the Exchequer what recent consultations he has had with organisations representing smaller business in formulating his Budget judgment.

I have received representations from a large number of individuals and organisations and am considering these in formulating my Budget. The House will not expect me to make any further comment at this stage.

Instead of imposing the savage cuts in public expenditure which are being demanded by the Tories and by the Treasury bureaucrats who have consistently overestimated our public sector borrowing requirement, will my right hon. Friend try to increase public expenditure in order to improve the essential services, to create more jobs and to improve essential items such as child benefits and retirement pensions?

My hon. Friend will know that the Government are planning to increase public expenditure this year. The House approved our plans last Monday. I do not think that it is fair to accuse the forecasters in the Treasury or elsewhere of consistently overestimating the PSBR. They underestimated it by £4,000 million in 1974.

Will the Chancellor tell the House what specific organisations representing small business he has seen recently in the course of formulating his Budget proposals? Does he agree that smaller business can be the section of industry that will help to solve the unemployment problem? Does the right hon. Gentleman agree also that smaller business very easily suffers cash flow difficulties and that he should therefore not lightly propose to the House an increase in national insurance contributions, which could be very damaging to the potential of smaller business?

I have noted the hon. Gentleman's comments. He will not expect me to comment on my proposals in the forthcoming Budget. I assure him, however, that I attach great importance to the health and efficiency of small business. That is why the Government have made a large number of concessions to that sector in the last year—concessions which were not made by the previous Government.

To remedy the omission of my hon. Friend the Member for Southampton, Test (Mr. Gould), and while, of course, observing the convention that my right hon. Friend the Chancellor never mentions the exchange rate, may I ask my right hon. Friend whether he agrees that, as he prepares his Budget proposals, he is somewhat relieved to see that the pound has eased a little?

I do not think that anyone can accuse me or my hon. Friend the Member for Southampton, Test (Mr. Gould) of never mentioning the exchange rate. As I have said on many occasions in the House, I believe that a stable exchange rate is of great advantage to this country. I am pleased to see that the CBI has shifted its view on this matter and that it now regards stability in the exchange rate as a better thing for British business than attempting to solve problems by depreciation.

Will the Chancellor of the Exchequer tell the House whether he has received representations from groups of taxpayers who are represented by trade unions for forgiveness of their existing tax liabilities in his forthcoming Budget?

No. Sir.

Will my right hon. Friend introduce an expansionist Budget—lowering the interest rate and introducing meaningful import controls? If he does that he could be capped in the role of Father Christmas.

The House will note that we have recently reduced the minimum lending rate. Market rates are now about 3 per cent. lower than they were a month ago. I hope that the process will continue. I shall consult my barber on the question of Father Christmas.

It is now apparent that the Inland Revenue broke with precedent in negotiating with trade unions a general tax amnesty for casual workers in Fleet Street. Will the Chancellor take account of representations that section 1 of the Taxes Act 1970 should be altered to limit the discretion of the Inland Revenue to give group amnesties?

I shall take account of all representations that are made to me.

asked the Chancellor of the Exchequer what has been the percentage increase in the national debt, and the percentage increase in servicing it, since February 1974.

To the nearest available dates, the percentage increase in the outstanding national debt between 31 March 1974 and 31 March 1978, at constant March 1974 prices, was about 5 per cent. The percentage increase between the interest payable in 1973–74 and in 1977–78, at constant 1973–74, prices was about 14 per cent.

Has not the right hon. Gentleman cooked the figures again? What will people say to the Chancellor of the Exchequer if they ever find out that the Government have more than doubled the national debt? How does the Chancellor propose to repay the amount that he has borrowed and squandered on behalf of the British people?

I shall ignore the last part of the question because it is an obvious piece of nonsense. In relation to the gross national product, the national debt has declined. In 1973–74 the amount of national debt, as a proportion of the gross national product, was 55¼ per cent. Last year it was 54½ per cent. Perhaps the hon. Gentleman will take note of that.

Will my right hon. Friend take into account the horrific increase in our national debt to the Common Market? Will he provide some answers as to how we can be rid of the national debt which the hon. Member for Derbyshire, South-East (Mr. Rost) seems to ignore? Will he level matters by reference to the common agricultural policy and our possible withdrawal if proper terms are not reached?

The correct way to deal with the difficulties of debt arising from the considerable repayments is to pursue the vigorous policy of my right hon. Friend the Prime Minister.

The Financial Secretary is trying to confuse the House. Is it not the case that, in straightforward money terms, the Government have added more to the national debt in five years of office than have all the previous Administrations over the past 300 years? When he makes comparisons with 1974 prices, is he satisfied that, at constant 1974 prices, the burden of interest on the national debt—a burden for future generations to bear—has risen by about 50 per cent.?

The hon. Gentleman chooses real terms when it suits him and money terms when they support his argument. In practice, interest payments are not as he states. In real terms—that is the only way to look at it—interest payments were 3·1 per cent. in 1973–74 and rose to 3·5 per cent. in 1977–78.

On a point of order, Mr. Speaker. In view of that deliberately misleading answer. I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

asked the Chancellor of the Exchequer what has been the total amount paid by the 100 largest companies in corporation tax expressed as a percentage of profits declared in each of the past five years for which figures are available.

Information in the form requested is not readily available, but corporation tax receipts this year are expected to be about £4 billion.

Is it not true that, whether corporation tax is seen as a percentage of GDP or as a percentage of the total tax obtained, British companies pay considerably less than their counterparts in our major competitor countries? If we are to look for the real reasons for our poor economic performance should we not look elsewhere than at the so-called disincentive effects of taxation?

I have always felt that the arguments about incentives in taxation are much more complex than are frequently allowed for in debate in the House. My hon. Friend will be aware that stock relief and capital allowances reduce the intake of corporation tax, for very good reasons. First, because of investment that is undertaken, and, secondly, because if that were not undertaken we would find that, in real terms, negative profits could be taxed.

Has the Financial Secretary noticed that the Governor of the Bank of England and the OECD have said clearly in the past few weeks that profits in this country are at a dangerously low level—lower than they are in any of our competitor countries, for example, France, Germany and the United States? Will he confirm that, apart from corporation tax, this year British industry will pay almost £4,000 million in national insurance surcharge? Will he take that as a clear warning that it would be the height of folly for the national insurance surcharge to be increased in the forthcoming Budget?

The right hon. and learned Gentleman cannot exclude corporation tax as one of the payments that companies make. If that is taken into account with the national insurance surcharge he will see that, by comparison with other countries, British companies do not bear the heavy burden that he is trying to impute to them. In many other countries there is a near equivalent of our national insurance surcharge. Those countries pay very much larger amounts in that way.

Is it not a fact that the number of major multinational companies based in the United Kingdom are not paying any mainstream corporation tax in the current financial year? How will my right hon. Friend remedy that?

There are good reasons why certain companies do not pay large amounts of mainstream corporation tax; for example, investment and stock relief. For the reasons that I mentioned earlier, it is right that those beliefs should be given. We should be aware that the problem of reaching a final conclusion on these matters is becoming urgent. We are anxiously awaiting the agreed solution of the accountancy profession, which will provide for the more rational continuance of corporation tax in the manner in which it was originally devised.

Does the Financial Secretary agree that the high nominal rate of corporation tax is misleading? It produces very little revenue when compared with other taxes. Will the right hon. Gentleman look with equanimity on the considerable growth in leasing activities and other means of reducing the burden of corporation tax?

The hon. Gentleman is correct. The rate of corporation tax is not in close relationship to its yield, for the reasons that I have given. Leasing represents considerable problems. There are considerable advantages in leasing, for both the customer of the investment products and the manufacturer. The matter should be closely examined.

asked the Chancellor of the Exchequer whether he will make a statement on his latest estimate of the size of the public sector borrowing requirement in (a) the current and (b) the next financial year.

A preliminary estimate of the PSBR for this year will be included in the Financial Statement and Budget Report. For the PSBR for 1979–80, I have nothing to add to the Chancellor of the Exchequer's comments to the House in the debate on 25 January.

Is it still the Government's view that next year the public sector borrowing requirement can be held at £8·5 billion, assuming an average earnings increase of 7 per cent.? If not, what do they intend to do about it?

The hon. Gentleman and the House would do well to await the Chancellor of the Exchequer's Budget Statement.

In exercising his judgment on public sector borrowing and private expenditure, will the Chancellor take into account that this year we have spent privately £12,000 million on cigarettes, wine and gambling and that that is half as much again as the total public expenditure on the National Health Service? Ought not that to be taken into consideration in my right hon. Friend's judgment on his Budget Statement?

I assure my hon. Friend that his comments and the many thousands of others are taken into account in my right hon. Friend's judgment.

asked the Chancellor of the Exchequer if he will examine the taxation treatment of working widows.

The tax treatment of all widows is kept under constant review.

Is the Minister aware of the anger of working widows who find that when they get their pay slips at the end of the week and compare them with those of married women working alongside them they find that they have less take-home pay because they have no married woman's allowance and their widows' pensions are taxed? Will the Government look urgently at that matter?

As the hon. Gentleman knows, I am aware of that difficulty, which a number of widows face without fully understanding the reasons for it. The House knows that the reasons are simple. The widow receives a pension which is taxed at her place of work. If she compares her pay slip with that of a married colleague who does not receive such a pension, she will see that she has a greater deduction. As long as the reasons for that are understood, I think that they will come to be accepted.

Is it not time that the Treasury recognised the need for a special householder's allowance? Will my right hon. Friend recognise that many widows and widowers have to meet additional household expenses that are not met by many other single people? Will he consider the question of a special allowance?

My hon. Friend knows that this matter has been looked at repeatedly. I am glad to note that he includes widowers among those who suffer in this way. However, he will also be aware that a similar situation is faced by divorced and separated people and by those in a number of other categories. Once we start extending help into those areas, we shall cover a very large number of people.

asked the Chancellor of the Exchequer what is the latest annual rate of inflation.

asked the Chancellor of the Exchequer what is the current rate of inflation; and if he will make a statement.

asked the Chancellor of the Exchequer what is the current rate of inflation.

The retail price index rose by 9·6 per cent. in the 12 months up to February 1979. It is essential for the country's economic prospects that we make progress as soon as possible towards reducing the rate to 5 per cent. This will require moderate pay settlements.

With the approach of another general election, will the Chancellor take this opportunity of redeeming his reputation by giving an accurate prediction of the trend of inflation? Does he accept the OECD forecast that in the second half of this year inflation will be running at 12¼ per cent.?

I said in answer to an earlier question that the OECD forecast was compiled at a time when the expectation was that earnings would increase this year on the basis of settlements at the sort of level reached after the lorry drivers' strike. All forecasters have revised their figures downwards since then.

Does my hon. Friend remember—and in the annals of inflation it is almost historic—the runaway rate of inflation that we inherited from the previous Tory Government? Will he expatiate a little on that and extend his imagination to the situation that could arise following the massive handouts that a Tory Government would give to their chums if a mental aberration on the part of the electorate ever allowed another Conservative Government to come to power?

I fear that if I expatiated and used my imagination you might call me to a halt, Mr. Speaker. I content myself by referring to facts. If the Conservative Party ever comes into power, increased indirect taxes on the scale that it has been mentioning, increased house rents through the abolition of housing subsidies and raised commuter fares caused by the abolition of subsidies to the railway service would produce a rate of inflation that would dwarf even that which we inherited from the last Conservative Government five years ago.

The Chancellor has already mentioned the much-vaunted agreement between the Government and the TUC. Does he agree that an integral and important part of that agreement is that efforts should be made to get inflation down to 5 per cent. within three years? If the Government get on as well with the TUC as they keep telling us, why wait three years?

I agree with what the hon. Gentleman said about one of the objectives of our agreement. I said that in my answer. I am discussing with the TUC how we can reach the critical path to that commonly desired objective.

Bearing in mind the direction of inflation and the desirability of getting it down to 5 per cent., can my right hon. Friend give an assurance that in his forthcoming Budget he will not put on any extra expenditure taxes which will affect the prices index?

I fear that if I gave such an assurance at this time, I might be drummed out of the Brownies.

Does the Chancellor recollect that the fashion for using the three-monthly inflation rate was set not by by my right hon. Friend the Leader of the Opposition but by himself at the time of the election in October 1974, when he and the Government just crept into power? Does he recollect that that was when he gave his notorious forecast that the inflation rate would be 8·4 per cent.? Does he accept that, on the same basis, the inflation rate is now running at 13·3 per cent? Is that not a disgraceful situation?

The right hon. and learned Gentleman is wrong again. There has been more sloppy homework by his researchers. The 8·4 per cent. figure was not a forecast. It was a statement of the three-monthly inflation rate. I confess that I was a little surprised when the Leader of the Opposition, after attacking for five years the use of a three-monthly inflation rate, chose to resurrect it on Tuesday.

asked the Chancellor of the Exchequer if he remains satisfied with the workings of the gilt edged security market.

The gilt edged market has made possible net sales of Government stock outside the banking system totalling nearly £21 billion in the period from April 1974 to December 1978. This enormous capacity has been vital to the maintenance of the public services during a very difficult period. However, the Government are always looking for ways of improving the functioning of the market The announcement last week of a minimum rather than fixed subscription price for today's issue of 12¼ per cent. Exchequer 1999 should help to avoid the difficulties that arose on 22 February when there was a substantial unforeseen change in market sentiment between the announcement of new issues and the due date for subscriptions.

Does my right hon. Friend agree that there is something deeply offensive about the vast and easy profits made on the gilt edged market in recent weeks? Does he also agree that the market was able to force a dangerous and unwarranted rise in interest rates, and can he say whether the new tender issue has proven a means whereby speculators can be killed off and interest rates can be kept down?

As I told the House, we have introduced a modified tender system for the current issue which will avoid the difficulties that arose on 22 February. I am glad to say that there have been very heavy applications for that stock today, but it has not been oversubscribed, and therefore the problems that arose on 22 February and the means of meeting them have not turned out to be relevant.

Does the right hon. Gentleman agree that recent disorders in the market owe more to the umpire and the linesmen than to the players on the field?

There is a blinding light on the pitch tonight all right. A lot of the disorder in the market recently, and particularly the fall in the financial markets and gilt edged prices yesterday, was due to a rumour, which I trust to be totally without foundation, that there might in the near futuure be a general election which would put the Conservative Party into power.

How does the Chancellor of the Exchequer square the answer that he gave to my hon. Friend the Member for Gloucestershire, West (Mr. Watkinson) about relatively easy profits with the answer that he gave to my hon. Friend the Member for Rossendale (Mr. Noble) who asked for a household allowance, and the rejection of that allowance by the Treasury? How does he reconcile the two?

I say to my hon. Friend what I have said to all hon. Members. I take careful note of the views they have put to me about action in the current Budget. I would be in serious danger if I were to indicate any action which might follow from the very careful consideration which I give.

While appreciating the candour of the Chancellor's initial answer to his hon. Friend, may I take him back to an answer given by his right hon. Friend the Financial Secretary? Will the Chancellor state explicitly that there will be monetary compensation for those holding Government paper who are unable to withdraw their capital or their interest on the due dates?

We shall accept responsibility for the interest in this case.

asked the Chancellor of the Exchequer why a family brick ice cream is subject to value added tax.

All ice cream, together with confectionery, soft drinks, crisps and similar snack foods, is subject to value added tax which, like other taxes, is imposed to raise the necessary revenue.

Is it not ridiculous that housewives can buy sweet courses such as ice cream, custard and yoghurt that are tax-free but that she has to pay an extra 8 per cent. on her family ice cream brick? Is not this unnecessary discrimination against the ice cream manufacturers, and will the Chancellor use the opportunity in his forthcoming Budget to remedy this anomaly?

I am afraid that this is an inevitable consequence of VAT which has to make these distinctions. The hon. Gentleman may not recall, though other hon. Members certainly will, that when VAT was introduced it was supposed to be a broad-based tax free from anomalies. This is one of the anomalies inherent in the tax, and it is my task to implement it as best I can.

Will my right hon. Friend remind the Opposition that it was the Conservatives who introduced value added tax in the first place? Will he confirm that the really important taxes on food are the import levies which are exacted on foods imported from outside the EEC, many of which are staple foods, the prices of which have increased considerably because of these import levies?

There is no question about import levies, but I will add to the point made by my hon. Friend that at present 50 per cent. of the articles in the value added tax system are zero-rated. To go any further in this direction would be to make it a much more narrowly-based tax even than the one introduced by the Conservatives in 1972.

Does the Financial Secretary acknowledge that when VAT was first introduced it was visualised that it would be refundable or rebateable to firms in the construction industry, the pharmaceutical industry and in relation to the export trade? Is he aware that as a result of the current industrial dispute many firms in those industries are now suffering growing embarrassment due to the Government's failure to pay the refunds due to them? Can the right hon. Gentleman give an assurance that more effective action will be taken to see that those firms do not run into serious cash flow difficulties, with mounting unemployment?

There are obvious problems for a number of firms as a result of the computer being out of action due to the industrial dispute. I hope that it will not be long before these refunds are made. Meanwhile, I hope that the other alternatives available to firms to find sources of finance to make good any deficiencies will be employed by them.

asked the Chancellor of the Exchequer what is the estimate of the benefit to the balance of payments of North Sea oil and gas production for the years 1978–79 and 1979–80.

The October 1978 economic progress report included estimates of the direct and identifiable contribution of the North Sea programme to the current account of the balance of payments. For 1978 and 1979, these were £3 billion and £4½ billion respectively, both at 1977 prices. At current prices, it is now estimated that the contribution for 1978 was about £3½ billion.

When the right hon. Gentleman compares those figures with the dismal prospects for the overall balance of payments outturn, will he agree, even at this late hour, that this is a manifestation of the tragic cost and waste of a national opportunity caused by his Socialist policies?

The only dismal prospect for the balance of payments would be if by any mischance the hon. Gentleman and his right hon. and hon. Friends were ever to come into power in this country.

asked the Prime Minister whether he has any plans to visit Southern Africa.

Yes, Sir. I hope to attend the Commonwealth Heads of Government meeting in Lusaka in August.

However that may be, will the Prime Minister say why the Government are so opposed to the sending of observers to the Rhodesian elections, whether sent by the Government or by the House? Is it because they believe that that would amount to recognition of the elections? Is the Prime Minister not aware that his predecessor, with all his experience of Rhodesia, has publicly said that observers should be sent? Does the Prime Minister imagine that his predecessor believes that that would amount to recognition?

I have nothing to add to the answer that I gave on this matter a week or two ago.

Will my right hon. Friend take every opportunity to explain to the world the farce of the forthcoming rigged election in Rhodesia, in which already 28 per cent. of the seats have been allotted to 4 per cent. of the population? Does he agree that Smith knows as much about running a democracy as the Tory Party knows about achieving social justice?

The important thing in Rhodesia is to secure a settlement acceptable to all the major parties there. Unfortunately, it does not seem that this election, either because of the composition of the new Assembly or because of the circumstances under which it is held—namely, the extension of guerrilla activity—is likely to produce a result that will be sustainable. In those circumstances, it seems to Her Majesty's Government that it would be better to proceed in due course to an election that would be internationally accepted and supervised by the United Nations.

If the Prime Minister—provided that he is in a position to accept such reports—receives reports from the international observers who are going to the Rhodesian elections that those elections are free and fair, will he take steps—provided that he is in a position to take any steps at all—to inform his Back Benchers and his Government that that ought to be a reasonable criterion for saying that the elections have been properly conducted?

Any question that contains so many"ifs"is bound to be hypothetical, and it is not my responsibility to answer such questions. But clearly, the answer that I have just given to my hon. Friend the Member for Lunch-field and Tamworth (Mr. Grocott) holds good for this question also.

asked the Prime Minister if he will list his official engagements for 23 March.

This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others. I shall also be making a ministerial broadcast. This evening I hope to attend a reception for winners of The Queen's Award for Export and Technology in 1978. It is not the custom for the Prime Minister to give details of his engagements in advance.

Does the Prime Minister recall that last Tuesday he sneered at my my right hon. Friend the Leader of the Opposition when she described the current rate of inflation as 13·3 per cent.? That was a statistic provided by the Treasury, and he described it as having been given in response to a question designed to produce a certain answer. As that statistic was based on the same criteria as the Chancellor of the Exchequer used to produce his statistic of 8·4 per cent. inflation at the last general election, can the Prime Minister tell us whether his party fought the last general election on a false prospectus? Is he proud that after five years his Government have raised inflation from 8·4 per cent. to 13·3 per cent.?

I must say that if the hon. Gentleman has to go back to that he is getting in pretty poor shape for asking questions. As to the basis on which the election was fought, I shall recount it to the House, namely, that the overcoming of inflation was the first priority, together with ensuring that our balance of payments was put in order. Both those aims have been achieved.

Will my right hon. Friend take time off from his engagements, either today or tomorrow, to intervene in the rapidly deteriorating situation in Northern Ireland resulting from the Bennett report and allied issues, further highlighted today by the action of another distinguished member of the medical profession, Dr. Denis Elliott? Is my right hon. Friend aware that charges and countercharges between the Northern Ireland Office and representatives of the minority community have antagonised many members of the minority community in Northern Ireland and many impartial observers in this country, and that this is bringing into question the Government's whole approach to the problems of the Six Counties in the North-East of Ireland?

I believe that the Government have shown by their immediate acceptance of the Bennett report that they stand firm by the principle that there should be no possibility that any prisoner taken into custody should suffer injury as a result of that being done. Every case that is brought to our attention where that happens will certainly be dealt with most rigorously, for there can be no worse condemnation of the Government than that we should allow such matters to pass unchallenged and uncorrected. I give my hon. Friend that firm assurance.

Will the Prime Minister acknowledge that the political manoeuvres in which he is engaged today degrade the high office which he temporarily holds and are bad for Britain? Will he now put Britain first and give the people of this country the chance to elect a Government?

I do not complain if the hon. Gentleman thinks that it is not electioneering or is putting Britain first to believe that his own party would do better, but it comes a little strange when he makes a remark suggesting that, of course, that has nothing to do with politics. It seems to me that I have reached the stage when, were I even to say that spring is on the way, it would be regarded as electioneering of the worst order ever witnessed in this country.

Will my right hon. Friend find some time today to study the transcript of the broadcast yesterday by Dr. Rhoodie in order to consider whether he should hold an inquiry into whether any British politicians on the Opposition Benches—[HON. MEMBERS:"Or the Government Benches."]—received any payment for speaking in support of South Africa's apartheid policy?

I shall certainly ask the Foreign and Commonwealth Secretary to study this matter, but I would not myself propose to go into it. I am sure that if any factors come to light my right hon. Friend will suggest that we take the necessary action.

asked the Prime Minister if he will list his official engagements for Thursday 22 March.

This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others. I shall also be making a ministerial broadcast. This evening I hope to attend a reception for winners of The Queen's Award for Export and Technology in 1978.

Will the Prime Minister say why the Government have accepted a 20 per cent. increase for lorry drivers in the public sector, and may I ask him to be honest with the House and explain, since he is so bitterly opposed to 20 per cent. pay increases in the private sector, how two inflationary wrongs can make a non-inflationary right?

I am sure that what the hon. Gentleman suggests in the last part of his question must be correct, but it does not arise out of my official engagements today.

Will my right hon. Friend take time off today to receive the overwhelming thanks of the majority of the British people for the decision which he has announced today to set up a council for animal welfare? Secondly, when he comes to announce the membership of the council, will he pay no heed to balance but make sure that the majority of the council are there for the purpose of animal welfare and not animal use?

Yes, Sir. The Government received many representations on this issue, and I have told my hon. Friend the Member for Hemel Hempstead (Mr. Corbett) that because of the growing concern about the treatment of animals the Government have decided to set up a council for animal welfare to maintain an oversight in this matter and to advise the Government. The council will have the power to review existing legislation and recommend legislative or other action on any animal welfare matter and to propose improvements in the existing advisory machinery.

Is it true, as is alleged in the Western Mail today—[HON. MEMBERS:"NO."]—that in their bid for survival the Government have offered Plaid Cymru a compensation scheme for slate quarrymen suffering from dust diseases? If that is true, is it not the most despicable bit of bartering possible?

On the first part of the hon. Gentleman's question, while I have every respect for the Western Mail, it is not my responsibility to comment on reports in that newspaper. As regards the whole question of the compensation for slate quarrymen, I wish that the hon. Gentleman had not put his point in that way. He will remember that the Royal Commission which examined this matter was very sympathetic about it but could not find a solution, and when I reported some months ago on the outcome of the Royal Commission I announced that the Government would try to find some way of compensating these slate quarrymen. I believe that when he reflects on his question, the hon. Gentleman will regret the insinuation which he made.

asked the Prime Minister if he will list his engagements for 22 March.

I refer my hon. Friend to the reply which I have just given to the hon. Member for Macclesfield (Mr. Winterton).

If my right hon. Friend finds himself today contemplating what to do in Parliament over the next seven months during which the Government will remain in office, will he turn his mind to the Official Information Bill which is shortly to come to the House on Report and remind himself that in the Labour manifesto there was a pledge to reform the Official Secrets Act and to provide a public right of access? Will my right hon. Friend remind himself also that the Bill was not opposed by the Government on Second Reading, and will he give the House some sort of indication that all the reports that he is against it are completely wrong?

In all these matters, of course, there is collective responsibility and I accept my share of it. As regards the future of the freedom of information Bill, I hope that there will be some discussions with the sponsors of the Bill and others who are interested before it comes back to the House. It contains a number of very valuable points, but it also contains others which would not be acceptable, and perhaps we can make some progress on it in the light of the discussions which may take place.

Will the Prime Minister in his broadcast tonight explain to the people why he made no ministerial broadcast during the campaigns for Assemblies in Wales and Scotland? Will he explain why the Government made no effort to explain the measure to the people who are utterly bewildered by it? Will he also explain why the Labour Party in the constituencies in Wales took virtually no part in the campaign for a Welsh Assembly?

I think that the hon. Gentleman knows the difficulties about broadcasting during the campaign. As for my own part in the campaign, I say—I hope with due modesty—that I addressed the largest assembly in Wales that heard anybody speak on the subject during the course of the campaign. Unfortunately, it did not have the required effect. I hate to think what might have happened if I had spoken to an even larger audience.