asked the Chancellor of the Exchequer what was the cost of issuing the recent sale of British Petroleum Ltd. shares; why it was necessary to have the new issue underwritten by private commercial banks and at what cost paid out of public funds; and what part was played by the commercial banks in the administration of the issue.

The estimate laid before the House last week made clear that the cost of the recent sale of BP shares, excluding tax, was about £7½ million. As in 1977, the sale was underwritten because of the importance of getting the receipts in the financial year. The cost of underwriting was about £4 million. Six merchant banks underwrote the sale and arranged the sub-underwriting: a number of other banks assisted in the distribution of prospectuses and application forms and acted as receiving banks.

Is not that a disgraceful situation? Does not the right hon. Gentleman really mean that for a totally doctrinaire reason he is prepared, when it suits him, to give away taxpayers' assets and use private banks in order to get the stock underwritten?

The procedures followed were almost identical to those followed by the previous Government.

Does my right hon. Friend agree that the alternative to having the stock underwritten would have been to have offered it at a lower price, and that that would have resulted in less than £7½ million coming to the revenue out of the issue?

Absolutely—and the degree of oversubscription shows how right the Government were to employ underwriters.

May I remind the Minister that the TUC and the Labour Party have overwhelmingly agreed that the next Labour Government will re-nationalise without compensation. Is he aware that speculators who burn their fingers have only themselves to blame?

Expropriation is made no more dignified, even when endorsed by the Labour Party and the TUC.

asked the Chancellor of the Exchequer what the rate of economic growth has been during the past 12 months.

In the Industry Act forecast published on 22 November, the level of GDP in the second half of 1979 was estimated to be slightly above the level of a year earlier.

Does my right hon. Friend agree that in recent years economic growth in this country has been unnecessarily low? As there appears to be little evidence that damping down the rate of economic growth contributes to the battle against inflation, may I ask what measures he proposes to take to promote faster economic growth?

I doubt whether the relationship between Government activities and the rate of economic growth is as close as my hon. Friend suggests. However, I believe that the Government are right in having the containment of inflation as the central tenet of their economic policy.

Is the right hon. Gentleman aware that his colleague, the noble Lord Gowrie—a member of the Government in the House of Lords—said yesterday:

"We believe that we are in for deflation, recession, rising unemployment over the next two years and in for the first real cut in living standards for people in many years—".—[Official Report, House of Lords, 5 December 1979, Vol. 403, c. 729.]

Does the right hon. Gentleman feel that that statement coincides with the manifesto on which the Government fought the last election?

The right hon. Gentleman normally identifies me with the views that he has just quoted. It is true, as the Treasury forecast confirms, that the United Kingdom, in common with all other major economies in the Western world, will be facing a period of economic recession.

Has my right hon. Friend's attention been drawn to the interesting fact that, for the first time, industrial investment in Japan has exceeded that of the United States? Does he realise that next year the figure for GNP per head in Japan is expected to equal that of America? Will he draw the appropriate conclusions from that for Opposition hon. Members?

Absolutely.

As it is now six months since the Government's incentive Budget of June, may I ask whether the Chancellor detects any sign of industrial revival?

The Government's views on the prospects for the economy were canvassed in yesterday's debate and during the previous week. I have nothing to add to the remarks then made.

asked the Chancellor of the Exchequer what representations he has received concerning value added tax charges on disabled car adaption.

We have received a number of representations urging that car adaptations for disabled drivers should be relieved of VAT. Careful and sympathetic consideration has been given to these representations, but I am afraid that relief could not be justified in the context of a broadly based tax.

Does my hon. and learned Friend realise that the Government are saving a great deal of money by not proceeding with a specialised vehicle for the disabled? Is it not increasingly important to make sure that the Motability scheme is successful in providing adapted cars for the disabled? Will he take into account that the most severely disabled have to pay the largest amounts of money for such adaptations? Will he reconsider this issue?

I shall keep the problem under review. However, my hon. Friend will recall that in the Chancellor's Budget VAT relief was given for certain Motability inputs.

asked the Chancellor of the Exchequer what proposals Her Majesty's Government intend to make within the International Monetary Fund to assist the creation of a substitution account.

We agreed at the IMF annual meeting in October that the next step was for the IMF executive board to examine the technical problems of setting up a substitution account. It is due to report back in April.

Will the Chancellor be a little more positive and forthcoming? Does he agree that, in view of the fluctuations of the dollar, and the wild variations in the price of gold, it is important to bring some stability into foreign exchanges? A substitution account could help considerably.

As I have said, at the IMF meeting we supported the steps suggested. The substitution account could, in principle, make a useful contribution to the stability of the international monetary system.

asked the Chancellor of the Exchequer if he will make a statement on the minimum lending rate.

The recent increase in interest rates was necessary to control monetary growth. The prospect for lower interest rates will depend upon the rate at which the growth of the money supply is reduced.

Has the Chancellor heard City rumours of a further increase in minimum lending rate? Is it not clear that the present rate of 17 per cent. will lead only to more unemployment, recession, job stagnation and general economic decline?

The hon Gentleman has been unusually perceptive. Until we have succeeded, by these and other means, in getting inflation under control, the threat of higher unemployment, and all the woes that he described, will continue to exist and survive. We shall continue to pursue the right monetary policy until we have achieved those objectives.

Can my right hon. and learned Friend explain how it is consistent with the Government's undoubted intention to reduce the rate of inflation to issue Government stock that will pay an interest rate of 15 per cent. into the next century, instead of funding through short-dated issues?

My hon Friend's suggestion is one of many that is considered from time to time. I am sure that he will understand that it is of crucial importance to maintain effective monetary control as part of the task of keeping inflation under control. That underlines the parallel importance of ensuring that public spending is kept under control.

Does the Chancellor agree with the Prime Minister that minimum lending rate cannot fall until public expenditure is reduced as a percentage of GDP? As the Chief Secretary admitted yesterday that public expenditure will increase next year as a percentage of GDP does he agree that minimum lending rate is more likely to rise than to fall next year?

I shall not try to follow the convoluted analysis of the right hon. Gentleman. As he is asserting today that it is necessary to secure a more effective reduction of public expenditure to get minimum lending rate down, I welcome his support. That contrasts oddly with his assertions earlier in the week that he is in favour of a still higher public sector borrowing requirement.

The Chancellor must not try to brush off the views of his leader in that way. Those views—not mine I hasten to add—are that there is no chance of reducing minimum lending rate unless public expenditure is reduced as a percentage of GDP. The Chancellor is not achieving that. Does he agree with his leader?

There are forums and places more appropriate than the present—

Answer.

I shall answer the question if the right hon. Gentleman is prepared to listen. There are plenty of places in which the Prime Minister and I can exchange views about such issues and on which we express our total harmony with each other. The House is interested to know whether the Labour Party—and in particular the right hon. Gentleman—is advocating a greater reduction in public expenditure or, as appeared yesterday, increases in public expenditure.

Is the Chancellor aware that when premium bonds were launched, bank rate was 4½ per cent. and premium bonds paid 4 per cent. interest? Minimum lending rate is now 17 per cent. and premium bonds pay 5¾ per cent. interest. Is it not immoral to go on advertising premium bonds without telling the public what a lousy deal they are?

I would not wish to cross swords with the hon. Gentleman on the subject of immorality. I acknowledge his point to this extent—

What does that mean?

The existence of a gap between the interest rates payable is something that we should seek to close.

On a point of order, Mr. Speaker. I must ask the Chancellor to explain what he means by his remarks.

Answer.

I am astonished and surprised that the hon. Gentleman should be so sensitive to the preface to my remarks. I am confining my response to the question raised by the hon. Gentleman.

asked the Chancellor of the Exchequer what assessment he has made of the effects of his decision to abolish exchange controls.

The abolition of exchange controls will be of benefit to the economy. It removes damaging and unnecessary restrictions on our economic relations with the rest of the world.

Is not one reason for the collapse of gilt sales and the rise in interest rates in the market, which preceded the rise in minimum lending rate, the final lifting of exchange controls? Is it not an awkward fact that unless a Government are firmly pegging interest rates, exchange controls do not affect the exchange rate as much as they affect interest rates?

The evidence does not support the hon. Gentleman's point. The problems that arose over the monetary markets which led to the establishment of a minimum lending rate of 17 per cent. referred to a period that substantially predated the lifting of exchange controls.

Is it not true that the abolition of exchange controls and the current high interest rates attract hot money and short-term money into the United Kingdom? What steps does the right hon. Gentleman intend to take to ensure that sterling is not threatened by rapid outflows of money in future?

The best way to provide for an orderly market in sterling in the situation that the hon. Gentleman describes is to maintain the freedom of sterling.

Has the Treasury yet undertaken a study of the scope for tax avoidance as a result of ending exchange controls? Does the Treasury have any idea of the revenues that will be forgone by the Exchequer as a result of the ending of exchange controls?

Obviously that is a matter that is being kept under close consideration.

asked the Chancellor of the Exchequer what is the effect per month of each 1 per cent. increase in the minimum lending rate on a mortgage of £10,000 for a buyer paying the standard rate of tax if no assistance is given by him to building societies.

Changes in minimum lending rate have no direct effect on the mortgage rate; and the relation between a 1 per cent. rise in the mortgage rate and borrowers' net monthly payments depends on a number of factors. However, the increase from 11¾ per cent. to 15 per cent. on 1 January will add £16·37 to the net monthly payments of a basic rate tax- payer with a new 25-year annuity mortgage of £10,000.

Is the hon. and learned Gentleman aware that that is the answer that I worked out myself? Does he realise that such a figure puts a modest home out of reach of vast numbers of ordinary couples? What do the Government propose to do about it? Do they propose to do anything?

As the hon. Gentleman is so quick in his perception of my answers he will realise that the figure contained in my answer is, for the year, £49·1. I hope that that of itself will not have the effect that he has described. The hon. Gentleman and the House will appreciate that if the monetary policies of my right hon. and learned Friend are successful these matters may be resolved more easily than he expects.

Is my hon. and learned Friend aware that the time taken to get tax relief right is far too slow? Will he pay attention to that?

My hon. Friend will appreciate that it is a problem that has affected various Administrations. We have given thought to the problem. I regret that it will not be possible to recode everybody or to alter codes in the current year. However, individual taxpayers who want to be recoded may make application. Especial attention will be paid to tax repayments at the conclusion of the fiscal year.

Is the hon. and learned Gentleman not ashamed of himself? Are the Government not ashamed of themselves for imposing such a swingeing increase on ordinary working people who want only a roof over their heads? Is he aware that many young families are having to forgo having children as a result of the Government's policies? When will he do something about it?

I cannot accept any responsibility for the sociological consequences of an increase in the mortgage rate.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply beg to give notice that I intend to raise the matter on the Adjournment. The figure is not £49 but over £200.

asked the Chancellor of the Exchequer what is the latest rate of inflation; and how this compares with the rate 12 months ago.

asked the Chancellor of the Exchequer by how much the rate of inflation has increased during the past 12 months.

The retail prices index rose by 17.2 per cent. in the 12 months to October 1979. The tax and price index, which is probably a better guide to changes in taxpayers' costs over the year, rose by 14.8 per cent. over the same period. The RPI rose by 7.8 per cent in the 12 months up to October 1978.

If the rising rate of inflation leads to a further growth in tax avoidance schemes, such as that perpetrated by The Rossminster Group Ltd., will the right hon. and learned Gentleman give an assurance that his hon. and learned Friend the Minister of State will not be put in charge of any crack-down on such schemes, in view of his work for the Rossminster group and others?

Immorality.

What price immorality now?

I suppose that I must expect from the hon. Gentleman a question that has nothing to do with the question tabled.

Does the right hon. and learned Gentleman agree that the main burden of these dangerous inflationary increases is already falling on those who are least able to bear them?

The burden of inflationary increases bears harshly on every section of the community, including those who are seeking to work and to stay in employment. That is why we regard the battle against inflation as the central part of the Government's policy. I shall be grateful for the hon. and learned Gentleman's support in that task.

To what extent does my right hon. and learned Friend consider that the increases are due to the explosion in public sector pay last winter? To what extent does he feel that the infamous Proffesor Clegg is responsible? Has he any plans to do away with Proffesor Clegg?

I know that some of my hon. Friends are anxious to lay a good many things at the door of Professor Clegg, who has probably collected more epithets than most other professors in the past few weeks. I agree with my hon. Friend that one of the factors contributing to the accelerating rate of inflation that we inherited is the way in which the incomes policy adopted by the Labour Government collapsed so manifestly during last winter.

Does the right hon. and learned Gentleman agree that it is extraordinary if he regards what happened in the last pay round as the collapse of an incomes policy when the Prime Minister has welcomed a 20 per cent. settlement in an industry where productivity has increased by only ½ per cent. in the past 12 months as a triumph for free collective bargaining? Does he continue to claim that the 6 per cent. increase in the RPI that has been generated by his actions since the general election is a once-and for-all increase?

The right hon. Gentleman once again seeks to overlook the fact that increases in the RPI resulting from the switch from direct to indirect taxation are once-and-for-all. I do not think that anyone would claim that any settlement of 20peroent. is in line with our much lower rate of growth and productivity. It is my assertion—I hope that the right hon. Gentleman will give the Government his support in this respect—that the attempt to achieve over a prolonged period sustained reductions in the overall level of pay bargaining by means of a constraining statutory or semi-statutory incomes policy has not been seen to be successful. It inevitably results in an explosion of pay settlements of the sort that we have seen in the past 12 months.

The right hon. and learned Gentleman invited me to agree with him. In fact I disagree totally. These levels of pay increases under the Government, incited by an increase in the cost of living of 6 per cent. that has been generated by their fiscal action, proves that the fatuous idea of the right hon. and learned Gentleman—that if the Government increase the cost of living by 6 per cent. working men will make no attempt to compensate for that—is completely at variance with the whole of experience.

Question.

Distilling, as best I may, a question from a series of observations, I must say that the right hon. Gentleman does little credit to himself and his reputation if he fails to recognise from his own experience the way in which the ending of a period of tight income restraint under an incomes policy inevitably leads to the difficulties of a pay explosion. I should welcome the support that he should be offering to us as a result of his rather battered experience.

As we have had two supplementary questions from the author of Britain's problems, will my right hon. and learned Friend indicate how long he thinks it will be before his policies begin to overcome the damage done to the nation by the Labour Government?

My hon. Friend overrates the importance of the right hon. Member for Leeds, East (Mr. Healey). Although the right hon. Gentleman was the author of a great deal of disaster he should not be regarded as having produced disaster single-handed. As we have said many times, the conquest of our deep-seated economic problems, which in our manifesto we described as the most serious at any time since the war, is bound to take a substantial time. I hope that signs of progress will begin to appear quite shortly.

In view of the right hon. and learned Gentleman's answer about wage bargaining, will he confirm that he is not asking trade unionists to accept a cut in their living standards by negotiating settlements that are less than the rise in the index?

I am glad to have the opportunity to address myself to that question. The hon. Gentleman will realise that probably up to 2¾ per cent. of the increase in prices that has taken place in the past 12 months is attributable to the huge increase in oil prices during that period. He must recognise that no Government can protect the pub- lic from the consequences of that sort of increase on their standard of living. The Government do not suggest that pay bargaining should be undertaken with a view to securing protection against this or that increase in the retail prices index. It must be undertaken by reference to the extent to which the employers' organisation can afford a given pay increase. I am very glad indeed to see a much wider acceptance of the reality that is necessary to accept the case for a much wider spread of pay settlements.

the Chancellor of the Exchequer what policies he has for stimulating industrial investment in the United Kingdom.

The prospects for industrial investment depend on reducing inflation, which undermines business confidence and adversely affects profitability. Overcoming inflation is the Government's first priority. We have also taken measures to improve financial rewards for enterprise.

As the Government's record has been one of increasing inflation, is it not the case that over the next two years we shall see increasing redundancies, the destruction of many sectors of our manufacturing industry, and a rising number of bankruptcies among small businesses? Does the Chief Secretary have any evidence to support his optimism about the future of the manufacturing sector in this country?

I am not usually accused of being optimistic. There is no doubt, on the basis of most forecasts, including that from within the Treasury, that the next 12 months or so will be a period of at least mild recession. That is bound to take its toll.

With the possible exception of increasing the tax depreciation on investment in industrial buildings, would my right hon. Friend accept that the greatest stimulus that could be given to industrial buildings would come about by minimising the bureaucracy on planning and the interpretation and application of building and other regulations? Would he have a word with his right hon. Friend the Secretary of State for the Environment about these important matters?

I shall certainly draw my hon. Friend's question to the attention of my right hon. Friend.

As the Chief Secretary points to more and more distant horizons for the achievement of his objectives, will he bear in mind that he stated in his White Paper for 1980–81 that one of his three central objectives was to restore incentives? In what way does he now expect to restore any incentives in 1980–81?

By the emphasis in our policies on the virtues of price and profit.

How does the Chief Secretary square the statement made by his right hon. and learned Friend the Chancellor in the debate on his first Budget that he was creating an opportunity State with the fact that every single action of the Government has damaged employment prospects—and damaged them most seriously in the North-West and on Merseyside? When will the Government create the opportunities for my constituents to find work?

I simply cannot accept the premise in the hon. Gentleman's question. If public spending were the premise for increased employment, the North-West should now be prospering

asked the Chancellor of the Exchequer what proposals he has to encourage the wider ownership of shares.

It remains our intention, as we made clear in our election manifesto, to encourage employee share ownership and to ensure that our tax policies generally will provide incentives to save and build up capital. We are examining possible methods of achieving these aims.

Does my right hon. Friend agree that the wider ownership of shares goes much further than employee share-ownership? Does he also agree that the wider ownership of shares is just as important a part in forming a property-owning democracy as is the ability of a tenant to buy a council house? Will he look with particular interest at the schemes that are practised in France, and the other proposals which have been put to him? Will he urge his right hon. and learned Friend the Chancellor to bring forward suitable proposals in his Budget Statement?

I agree with my hon. Friend that the concept of industrial democracy must extend to the widest possible spread of share ownership. Like him, I have noted with interest the experience in France from the loi Monory. All those and other relevant considerations will be taken into account by my right hon. and learned Friend when he frames his Budget.

As the record level of minimum lending rate has led to a remarkably high level of mortgage interest and as an average borrower of, say, £8,000, has to find an additional £1 for every working day, can the right hon. Gentleman say where people will obtain the money with which to purchase shares?

That raises more general topics on the economy which were debated yesterday. I do not think that they arise from the question of my hon. Friend the Member for Horsham and Crawley (Mr. Hordern).

asked the Chancellor of the Exchequer if he will now publish the medium term targets for the money supply.

As I said to the House on 8 November, I am currently considering whether there would be advantage in formulating more precisely our longer term monetary objectives, which I reaffirmed in my statement on 15 November.

Does my right hon. and learned Friend agree that the great advantage of publishing these targets, at least in brackets, would be to make it plain to the whole nation that even if the Government wanted to execute a U-turn, once those targets had been published, they could not do so?

I am glad to endorse the entirely hypothetical nature of my hon. Friend's question, as no such contemplation is in our mind. I agree with him that there are certainly powerful arguments to be advanced in favour of publishing targets in that way. I have not excluded those arguments from my consideration.

As the right hon. and learned Gentleman does not publish medium term targets for money supply and as he is apparently already reconsidering the public expenditure plans that we discussed only yesterday may I ask what has happened to the attempt to abandon the fine tuning of the economy?

The hon. Gentleman must misunderstand the context in which the phrase "fine tuning" has developed. [Interruption.] The right hon. Member for Leeds, East (Mr. Healey) does not make his own comprehension of the position any better by laughing at it.

The case for considering monetary targets over a period of time, as suggested by my hon. Friend, is designed precisely to make less likely fine tuning of the kind that this Administration have, in any event, discarded.

Does my right hon. and learned Friend agree that, whether or not we publish long-term monetary targets, the achievement of a gradual and steady contraction in the rate of growth in the money supply, without exorbitant interest rates, is dependent on a continuing, gradual decline, year by year, in the money size of the public sector borrowing requirement?

I endorse my hon. Friend's restatement of the objective I set in my Budget speech, namely the reduction from year to year of the rate of growth of the money supply. I also endorse, within that, the objective of securing a reduction in the size of the public sector borrowing requirement. Whether that should follow the same smooth and steady downward path as the reduction of the money supply is a matter for consideration.

asked the Chancellor of the Exchequer what action he proposes to take, both nationally and in conjunction with the Finance Ministers of other member States of the Organisation for Economic Co-operation and Development, to diminish the adverse economic effects of a deteriorating situation in the Middle East.

I am in frequent contact with by counterparts abroad on the economic implications of events in the Middle East. I had the opportunity last week to meet the United States Treasury Secretary, Mr. Miller, after his visit there.

Does my right hon and learned Friend agree that the Middle East position suggests at the moment a rapid increase in the OPEC price of oil and increasing political instability? Does he further agree that if action is not taken, both at home and abroad with our allies in the OECD, such a situation could be detrimental to our economic prospects?

There are certainly factors, both economic and political, of the kind my hon. Friend described, which make it necessary for us to remain in the closest possible contact with our friends and economic partners around the world.

asked the Chancellor of the Exchequer what international action is proposed to seek to reduce lending rates.

It became clear at the IMF's annual meeting in Belgrade in October that there is now widespread international agreement on the central importance of reducing inflation and the need to adopt policies to achieve this. As these policies take effect, I would expect to see generally lower interest rates.

As the Government have increased MLR from 12 per cent. to 17 per cent., which is now a record high, will not they enter into discussions with other Governments to obtain general reduction in rates rather than competing with each other in putting up their rates, with this Government leading the way?

I think that the hon. Gentleman will have to recognise that most of the countries in the Western world are seeking to contain the problems of inflation by essentially monetary means. Therefore there is, to some extent, bound to be a degree of competition between interest rates.

Before we embark on the extremely important task of international co-operation in these matters, will my right hon. Friend say what steps have been taken to investigate the reasons for the misleading advice which, presumably, Ministers received about the growth of the monetary aggregates in the October banking month? Do the Government aim to make their policies less dependent on these inherently unreliable forecasts?

Neither the Chancellor nor I would seek to hide behind the shield of claiming that we had been badly advised. Advice was given in good faith and we acted on it. We stand by our actions.

Does the right hon. Gentleman recall the promises made at the last general election to the small business? Is he aware that, whatever he does for the small business from now on, or whatever he has done for it in the past, will by no means compensate for the disasters that will be caused by the 17 per cent. minimum lending rate and the restrictive practices that he is now pursuing?

I am well aware that high interest rates adversely affect the small business sector of the community possibly more than any other. That is one reason why we are determined to pursue our policies to ensure that there can be a reduction from the present levels as early as possible. We shall not prejudice our policy by panic and premature movement.

Does my right hon. Friend agree that the more Governments around the world tend to borrow rather than tax, the more will interest rates tend to rise?

That is a fair point.

Is it not the case that the reason why the original estimates of what would happen to the money supply have proved mistaken was that private bank lending to the private sector was not diminished by the 14 per cent. minimum lending rate introduced by the Government in June? There is no reason to believe that the 17 per cent. MLR will produce the necessary effect on private bank lending. That is borne out by the experience of other countries. Is it not the case that this Government, like others, will be compelled to resort to direct control of bank lending, as the United States is already doing to some degree and as France has done for a long time?

Of course, time will reveal whether the confident assertions of the right hon. Gentleman will be validated. He argued earlier this afternoon that a severe recession is impending. It would be extraordinary if that did not have some impact on private bank lending.

asked the Chancellor of the Exchequer when he expects to meet his West German counterpart.

I meet my West German counterpart regularly at EEC Finance Councils and at the twice-yearly bilateral consultations with the German Government. I expect to see him next at the Finance Council on 17 December.

When the right hon. and learned Gentleman next meets his counterpart, will he take up with him the exorbitant cost of running the British Army of the Rhine? Is he aware that it now costs well over £1 billion per annum? I understand that if the troops were kept in this country we would still have to pay for them. However, does he not agree that it is worrying that the foreign exchange costs are about £600 billion to £700 billion per annum, which is equivalent to a loss of exports of £700 billion? The Germans are well able to pay—we are not. If they are not prepared to offset those costs, does the right hon. and learned Gentleman agree that we should consider bringing the troops back to Britain?

I would not consider the remedy suggested by the hon. Gentleman. Indeed, we have no plans for raising the question of offset with the German Government. I agree that the burden of defence costs arising outside the United Kingdom is considerable. It is another substantial reason for wishing to end the inequitable burden of our net contribution to the Community.

Since the Germans have an economic structure similar to ours and a similar population but no oil, a gross national product two and a half times greater than ours and higher productivity per head in steel, coal and so on, will my right hon. and learned Friend emulate the German practice of a free market economy—even one run by Socialist Ministers?

Many aspects of the West German economy and the way that it is managed give us cause for admiration. Perhaps the most fortunate aspect of the German political system is that its Social Democratic Party has acquired so much more wisdom than ours.

In answer to a question from the hon. Member for Eastleigh (Mr. Price), the Chancellor said that we must have regular consultations with our economic friends and allies. Will he tell me who are our economic friends and allies? Are they our EEC partners?

Our economic friends and allies include our partners in the Community, certainly, but they include all those who share our interest in the effective operation of liberal economies in the free world.

asked the Chancellor of the Exchequer when he expects to complete his review of the types and conditions of issue of national savings certificates.

The terms and conditions of all National Savings instruments were reviewed recently. Following this review, my right hon. Friend the Chief Secretary announced to the House on 15 November the introduction of a new nineteenth issue of national savings certificates and an increase in the maximum holdings limit for retirement issue certificates from £700 to £1,200.

I welcome, particularly, the increase to £1,200 in the maximum holding of the retirement issue national savings certificates. However, will my hon. and learned Friend look sympathetically at the proposal that men between the ages of 60 and 64should also be allowed to secure that special issue, to avoid incurring any charge of sex discrimination?

I have noted the views that my hon. Friend expressed on 8 November in his question. The House will appreciate that the national retirement age provides a convenient and readily understood qualifying condition. In view of that, and the wide range of national savings facilities that are available, we believe, for the time being at least, that the present age qualification for men should remain as it is. I assure the House and my hon. Friend that, as with all other terms of national savings, the matter will be kept under review.

asked the Prime Minister if she will list her official engagements for 6 December.

This morning I presided at a meeting of the Cabinet In addition to my duties in this House, I shall be having further meetings with ministerial colleagues and others. Later today, I shall be meeting the Prime Minister of the Netherlands and, this evening, I shall give a dinner for him.

Does my right hon. Friend agree with me that a reduction of up to 15 per cent. in the number of immigrants from the new Commonwealth and Pakistan cannot properly be described as an end to immigration as we have known it since the war? Will she take the opportunity today to make a statement in which she gives her personal undertaking that legislative time will be found in the next Session of Parliament to introduce both a register and a British nationality Bill?

I cannot give an undertaking about legislation in the next Session because we do not know what the pressures on legislation will be. The only decision that has been taken about the register and a quota, both of which would require substantive legislation, was not to introduce a Bill in this Session but to proceed by order to undertake those matters which could proceed more rapidly.

Will the right hon. Lady, when she has time, ponder on the fact that many of her more enlightened hon. Friends refused to vote in the recent proposals on immigration? Will she take great heed of that fact, because many people in Europe, particularly in the EEC, will find it a little queer that our first woman Prime Minister has made proposals for discrimination against her own sex—that is, the women in this country who have received settlement rights?

The hon. Gentleman forgets that the vast majority of my enlightened hon. Friends fully supported the Government in carrying out the proposals which were foreshadowed in the manifesto.

Has my right hon. Friend read the report in the press today of the comment by Mr. Scargill that secret ballots are a subtle interference with unions? Will she take pleasure in expressing at a public meeting today her pleasure in the result of the subtle interference with the miners and with British Leyland?

As my right hon. Friend knows, we are very much in favour of secret ballots. I believe that they are the only way of properly revealing what the work force wants. We were delighted with the result of the miners' secret ballot, in that it rejected industrial action.

Does the right hon. Lady believe that it is right that her representatives should go to Brussels next week to take a decision about nuclear missiles before the matter has been discussed in this Parliament? Is she aware that we are one of the few western European countries in NATO who have not discussed the matter? Therefore, does she agree that her representative will go representing only the Tory Party and not Britain as a whole?

My right hon. Friend goes to Brussels representing the Government, who had a majority from the people of Britain as a whole at the last election.

Is my right hon. Friend aware that, although most of us agree with more open government, we do not mean by that leaks of confidential minutes from Cabinet Committees, including those chaired by my right hon. Friend, such as have appeared in The Guardian today? Can my right hon. Friend say what steps are being taken to find those who are leaking confidential minutes and will she assure us that when those people are discovered, whether they are in government or the Civil Service, they will be fired, not for their political views, but because of their unfitness for office?

There was a leak and there will, of course, be the customary leak inquiry. [Laughter.] I believe that it is only the second leak of Cabinet papers in recent times. The first, which was serious, took place under the previous Government. This is the first leak under the present Government. There will be a leak inquiry because it is extremely serious if Cabinet or Cabinet committee minutes find their way on to the front pages of newspapers. One cannot carry on government on that basis. We had better wait and see what the inquiry discovers.

asked the Prime Minister, if she will list her official engagements for 6 December.

I refer the hon. Member to the reply that I have just given.

Will the Prime Minister take the necessary action today to stop the importing of coking coal? Is it not a crazy system that this island, which is virtually made of coal, imports millions of tons of the stuff, which is threatening the jobs of thousands, not only in my part of the country? If the Prime Minister is so concerned about the financial aspects of the matter, what does she have to say about the fact that our coal industry receives a subsidy of 94p per ton, compared with subsidies in EEC countries ranging from £14 to £24 per ton? Is that not manifestly unfair, not only to our coal industry, but to our steel industry?

The load in question came from the United States on a Greek ship. I will not interfere in the argument between the National Coal Board and the British Steel Corporation. I understand that the Wales TUC is trying to get people together and that Mr. Len Murray is intervening.

There is a problem for both industries. It is understood that the miners naturally wish to sell as much coke as they can, but it is important to the future of the steel industry and the jobs init that that industry is able to get coke at as reasonable a price as it can.

I understand that my right hon. Friend expressed yesterday a certain amount of pleasure, and no doubt relief, at the fact that the miners had settled their pay claim as a result of their ballot. Will she make clear to other groups in the public sector, professional and otherwise, that they will not be justified in asking for a similar rise, as they did in 1974?

I make no comment on the level of the settlement, though there was a cogent comment in today's Daily Mirror about the level, which undoubtedly could not be sustained in other industries. The pleasure that we felt was that the ballot showed that people did not wish to pursue industrial action.

Will the Prime Minister undertake to ask the Dutch Prime Minister about a leak that was infinitely more far reaching than any leak of Cabinet papers? I refer to the leak of crucial nuclear secrets from the centrifuge project at Almelo. Will the right hon. Lady ask the Dutch Prime Minister how that situation occurred, since it is arguably more damaging to peace in the world than anything done by the Rosen-bergs or any other atom spies?

The hon. Gentleman knows that we have already made protests about this matter, which involved a person who had been working at that plant of Uren co on enriched uranium and the centrifuge process and then went to work in Pakistan, where we are trying to see that there is not proliferation of production of nuclear materials or any nuclear weapons. The matter is not on the agenda, but I shall reinforce the protest that we have already made.

Has my right hon. Friend noted the growing spate of truly horrific murders? Does she agree that there are many who have lost their lives in those dreadful crimes so that hon. Members can keep their consciences? Does she agree that if we had a referendum on the return of the death penalty, the great majority of our people would vote overwhelmingly for its return?

We were all horrified at a particular recent case, but, as my hon. Friend knows, the question whether there should be a return of capital punishment was dealt with in a debate in the House earlier this Session.

asked the Prime Minister if she will list her official engagements for 6 December.

I refer the hon. Member to the reply that I gave earlier.

Does the Prime Minister recall that last week she referred in strident tones to the callous disregard for humanity shown by those who were allegedly threatening to close Charing Cross hospital? Will she now, in loud and clear tones, repeat that to the Tory health authorities and Tory councils up and down the country which are threatening the closure of wards and hospitals, including the Lang with Lodge diabetic hospital near my constituency? If she fails to do that, she can be properly accused by hospital patients and millions of others of operating double standards.

I am delighted to know that we shall have the hon. Gentleman's support when we introduce a Bill to reduce administration in the National Health Service. I shall tell all health authorities that it is far better for them to reduce administration than services to the public.

Will the Prime Minister lend her great authority and influence to an initiative designed to save life in Rhodesia? In the period between the signing of the ceasefire and its implementation, will she use all the communications media available to her Government to suggest that there is no excuse for either side to carry loaded weapons?

It is far better to leave any further statement to the negotiations at Lancaster House. As my hon. Friend knows, we had hoped that there would be a ceasefire on all sides at the beginning of those talks. There was not, but I believe that we are near to one now. I think that it is best to leave the negotiations to the negotiators there who have already been so brilliantly successful.

Has the Prime Minister received any correspondence about the Providence hospital in St. Helens? If so, would she care to make a statement about the position there?

We get at least 11,000 letters coming in to my office each week. Before making any statement about the matter to which the hon. Gentleman refers, I prefer to consider it carefully.

Has my right hon. Friend noted that a distinguished American has said that our noble Friend Lord Carrington ought to be awarded the Nobel Peace Prize?

I have not seen that suggestion, but I am pleased to add "And so say all of us."

asked the Prime Minister if she will list her official engagements for 6 December.

I refer the hon. Member to the reply that I gave earlier.

Is the Prime Minister worried about the way in which the country is being swamped by imports, particularly of manufactured goods and particularly from the original EEC Six with which we have a horrendous deficit of £4,000 million this year, leading to factory closures and mass unemployment? Will she read carefully the speech made last night by her hon. Friend the Member for Plymouth, Sutton (Mr. Clark), who advocated import controls? Unless we have import controls, as part of an economic package, we shall have an industrial desert in Britain.

I am obviously worried about the amounts of imports and particularly the latest figures about the degree to which foreign cars are penetrating our home market. That means that there is a tremendous opportunity for car firms here to increase their output, because the market and the demand are here and our car firms must take advantage of that opportunity. I must be absolutely frank with the hon. Gentleman. We are against import controls. This country could not survive without considerable manufacturing exports. I believe that if we were to put on import controls, our export trade would be extremely badly hit.

On a point of order, Mr. Speaker—

Order. I reminded the House yesterday that I prefer to take points of order at the end of statements. I understand that the hon. Gentleman's point of order is likely to arise out of what happened at Question Time and therefore I will take it now. Mr. Freud.

Thank you, Mr. Speaker.

I believe that the House has always cared deeply about the honour and the integrity of individual Members of Parliament. I know that you, Mr. Speaker, have always upheld this. During Question Time, I pointed out to the Chancellor of the Exchequer that the disparity between the interest rate for premium bonds and the minimum lending rate was now 12 per cent. and asked whether it was not immoral to go on advertising premium bonds to the public without advising the public of the dangers, or certainly of the poor investment prospects. The Chancellor replied "I do not wish to cross swords with the hon. Gentleman on the subject of immorality."

You will recall, Mr. Speaker, that I asked the Chancellor to explain what he meant. He said that he was surprised and astonished that anyone should be sensitive to that accusation.

He is so dull himself, he does not realise that other people are sensitive.

I believe that it was a personal slur. I should be happy, Mr. Speaker, to accept an apology or to cross swords with the Chancellor.

The hon. Member for Isle of Ely (Mr. Freud) has a reputation for integrity which stands very high—at least as high as his reputation as a humorist. If any light-hearted political observation of mine cast any kind of doubt or shadow whatever on his personal integrity, I am as happy to withdraw that as I am to pay tribute to him in every other respect.

Business Question.

May I ask the Leader of the House to state the business for next week?

The business for next week will be as follows:

With regard to Wednesday's business and the proceedings on the Zimbabwe Independence Bill, we are very glad to see the progress that is being made in this connection. Tribute is due to the Foreign Secretary, and, of course, to all the other people who have taken part in the negotiations. In adding that, I do not wish to detract from anything I have said about the Foreign Secretary.

We have not yet seen the Bill and we shall want to look at it pretty closely, although there will be no attempt to obstruct it—unless we are really satisfied that there is something seriously wrong with it. I hope—indeed, I am sure—that there will not be. We have not pressed the Government for a statement on Zimbabwe because of the delicate nature of the negotiations, but I think that we are now getting to the stage at which we need to ask the Government to give us a statement, either on Monday or Tuesday next week, before the Bill is brought in so that we may have time to consider the Government's attitude to it as well as the details of the Bill.

Since I raised the matter of the Local Government Planning and Land Bill last week, we have seen the Bill. It is formidable, running to nearly 300 pages. It deals with matters which clearly ought first to be the property of this House. I ask the Leader of the House whether he has had time to reconsider the decision that lie announced last week.

Following the right hon. Gentleman's remarks at business question time last week and the formal representations made to me by the Shadow Leader of the House, the Government have decided not to proceed with the Local Government, Planning and Land Bill in another place. A similar Bill will be introduced into this House in due course. As Leader of the House, I am always concerned to accommodate the wishes of hon. Members, from whichever part of the House those wishes may be expressed.

I thank the right hon. Gentleman for his tribute to my right hon. and noble Friend the Foreign Secretary. I thank him also for the co-operation that the Government have received in making arrangements for the debate next week on the Zimbabwe Independence Bill. I shall pass on the request for a statement to my right hon. Friend the Lord Privy Seal. The Bill will be published later today.

I thank the right hon. Gentleman for meeting the representations that we made. I am sure that it is for the convenience of relations between the two Houses that the Local Government Planning and Land Bill should start here and be considered here in the first place.

I say finally to the right hon. Gentleman—he will not get many more bouquets from me, I promise him—that there is still joy in Heaven when one sinner repenteth.

rose—

Order. I remind the House that this is a Supply day and that we are to have two truncated debates. It is hoped to take the vote on the first of them at 7 pm. There is also a statement to follow business questions. In view of this, I am proposing to spend less on business questions today, in the interests of the House as a whole.

Will my right hon. Friend make clear to the House that, despite what he has announced today, it was perfectly proper to introduce the Local Government Planning and Land Bill into the Lords, pursuant to Standing Order No. 58A, which was accepted unanimously by the House on 8 August 1972, and on the recommendation, on behalf of the Labour Party, of Lord Houghton?

I agree with that declaration of principle, but in this House we have to go on practice and on the expression of feeling. If there is a very strong feeling that is reasonably based from a part of the House, I must take that into account. That is what I have done.

The right hon. Gentleman will be aware of the serious situation in the steel industry in South Wales, where thousands of people will be losing their livelihood. He will be aware of the representations that have been made to have the subject debated in the Welsh Grand Committee next Wednesday. Will he say whether we can have an early debate on this subject on the Floor of the House?

It would be more appropriate to have a debate on the Floor of the House on this matter before it is discussed in the Welsh Grand Com- mittee. I shall consider the matter, but we are now very short of time.

Is my right hon. Friend aware that the State of Israel has many friends on both sides of the House? In view of the disturbing reports in today's newspapers, will he get a Foreign Office Minister to confirm next week that there has been no change in Government policy towards the PLO?

There has certainly been no change in Government policy towards the PLO. The purpose of our policy in that part of the Middle East is to bring peace.

Will the Leader of the House arrange for a general debate on fishing, particularly on the progress of negotiations on a common fisheries policy, as soon as possible, and at any rate early in the new year?

That is an important point, but I cannot promise a debate. I think that a statement is the most appropriate way to deal with that sort of point.

Will the right hon. Gentleman arrange for an early statement to be made either in this House or in another place on the death overnight of a constituent of mine, Mr. George Wilkinson, who was in prison in Walton, Liverpool?

I fully understand the hon. Gentleman's concern in regard to this case, and I shall pass his request on to my right hon. Friend the Home Secretary.

My right hon. Friend will be aware that my request for a debate on microelectronics has been strengthened by the motion that appeared on the Order Paper yesterday morning. He will also be aware, as are many other hon. Members, that recently there has been some difficulty over the delivery of the Vote.

By way of bringing those two subjects together, may I point out that my right hon. Friend and others may be interested to learn that the Order Paper for Tuesday is illustrated on Tele text in the microelectronics exhibition upstairs? I hope that that will help him to make up his mind.

I should very much like to accommodate my hon. Friend if I possibly could. However, if he continues to raise this question during business questions, we shall perhaps have had the equivalent of a debate by the time of the recess. As to the printing of parliamentary papers, I have looked into that matter. There is an acute staff shortage, and that is the root of the difficulty.

Has the Leader of the House seen the proposals of British Shipbuilders in relation to shiprepairing activities by which it plans to axe 500 jobs on the Tyne, the majority of which will fall on my constituency, where already one man in six is without work? Is the right hon. Gentleman aware that the Minister responsible declines to come to the House to make a statement? Will he prevail upon the Minister, because we are a little tired of his Pontius Pilate attitude on this issue?

I shall certainly put the hon. Gentleman's point to my right hon. Friend.

Has my right hon. Friend had drawn to his attention early-day motion 241, dealing with the proposed sale of the Laxton estate?

[That this House requests Her Majesty's Government not to sell Laxton Estate because it is the only remaining example of the mediaeval three-field system left in the United Kingdom; and requests Her Majesty's Governtnent not to end this unique example of the way of life of mediaeval England for purely commercial reasons.]

Bearing in mind that the motion is signed by hon. Members from both the Labour and Liberal Parties, will he find time for a debate on the subject?

As my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food has said in a recent written reply, the sale of this estate is included in the programme of land sales which form part of the Government's recently announced expenditure plans for 1980–81. My right hon. Friend the Minister of Agriculture, Fisheries and Food regards this sale as a special case. Any purchaser will be required to give the necessary assurances about the continuation of the ancient open field system and the welfare of the tenants.

With regard to the right hon. Gentleman's inconclusive reply to my hon. Friend the Member for Neath (Mr. Coleman) about the need for a steel industry debate, will he bear in mind that many thousands of redundancies will now be created in the steel industry and that they will affect steel communities very badly indeed? Bearing in mind that most of those redundancies are a direct result of Government policy, does he not think that the Government are now duty bound to grant an early debate on the subject?

The decision about closures is not a matter for the Government. It is a matter for the British Steel Corporation. I shall certainly discuss with my right hon. Friend the Secretary of State for Wales the important matter which the hon. Gentleman has raised.

Is my right hon. Friend aware that tens of thousands of public sector tenants in Scotland are eagerly awaiting the passage of the Tenants' Rights, Etc. (Scotland) Bill which was published yesterday? Will he arrange for the Second Reading of that Bill at the earliest possible date?

I hope that we will make good progress with that important Bill.

Will the right hon. Gentleman investigate the way in which proceedings in the Committee on the Abortion (Amendment) Bill are being conducted? Is he aware that yesterday there was all-party resentment at the continued absence of the Minister for Health. The result was that yesterday the Bill's sponsor had to adjourn the sitting until next Wednesday, when the Minister will be able to attend. Does not the right hon. Gentleman think that that is intolerable, and will he consult the Prime Minister to ensure that the prime importance attached to the House of Commons overrides every other engagement outside?

I shall, of course, look into the matter, but not too closely because I understand that the reason for my hon. Friend's absence is that he has mumps.

rose—

I am sorry, I misled the hon. Gentleman. It is the sponsor of the Bill who has mumps.

That is not true either.

In view of the Prime Minister's traumatic experience at Dublin last weekend, and in the light of the undoubted seven-year itch of the British electorate with regard to separation from the EEC, will the right hon. Gentleman persuade his colleagues to publish a White Paper showing a cost-benefit analysis of Britain's membership of the Community, even if that shows all cost and no benefit?

I do not think that it is necessary to publish such a White Paper. I thought that my right hon. Friend the Prime Minister managed to combine commitment to the Community with championing of the British interest, which was admirable.

With respect to my hon. Friend the Member for Melton (Mr. Latham), there is a lot more to our foreign policy than whether or not we speak to the PLO. Once we have got over Rhodesia, and bearing in mind that that will go on for some time yet, will my right hon. Friend at least bear in mind that there is a vital foreign affairs debate to be had upon the Middle East and our oil supplies?

I certainly agree that there are a number of foreign affairs topics that need discussion. However, we now have very little time before the recess.

I should tell the hon. Member for Fife, Central (Mr. Hamilton) that I shall look into the matter he has raised and find out exactly what has gone wrong on the Committee.

Three weeks ago the right hon. Gentleman said that he hoped that next week—that is, two weeks ago—we would have a liaison committee of the representatives of all the Select Committees of the House. These Committees are now in existence and must now appoint their staffs and organise themselves, yet the body that is supposed to assist them has not yet been created. When will that be done?

I am well aware of my obligation both to the House and to the hon. Gentleman, who tabled an amendment on the subject. I hope that I shall be able to satisfy him by tabling a motion later today.