asked the Chancellor of the Exchequer whether he will now introduce a £1 coin.

The possibility of introducing a £1 coin has been considered, but no decision has been reached.

As the value of the pound has dropped by nearly 75 per cent. since the 50p coin was introduced, can the Minister at least assure the House that the Government are considering the various possibilities for £1 coins and the size and shape that they will have when they are introduced?

As I indicated, the Government are certainly considering the possibility. They will consider closely the size, shape and, indeed, the weight, which is an important consideration for users.

Will my hon. and learned Friend consider the advantages of bringing in a new tier of currency involving 20p, 50p and £1 coins? Does he agree that that would get rid of the present unpopular 50p piece and introduce a new 20p piece, which would be for the convenience of many people?

I am not sure how unpopular the 50p piece is. The need for an intermediate coin was recognised by the Decimal Currency Board. We shall certainly bear it in mind.

asked the Chancellor of the Exchequer if, having particular regard to the position of industry in West Yorkshire, he will immediately seek further to reduce interest rates.

I am fully aware of the problems which high interest rates have caused for industry in West Yorkshire and elsewhere. The minimum lending rate was cut by two points on 24 November. Further changes will take place as and when economic circumstances indicate.

Is the Chief Secretary aware that industrialists in West Yorkshire and elsewhere are in such grave difficulties that the 2 per cent. cut is almost an insult to their intelligence? Is he aware that they have for a long time struggled against the strength of the pound in the exporting centre of Britain and that they cannot manage for much longer unless they have help from the Government?

I do not believe that the 2 per cent. cut is an insult to the intelligence of business men in West Yorkshire or elsewhere. Any future reductions in the minimum lending rate will be widely welcomed in the business community.

Does the Chief Secretary realise that in view of the Government's known doctrinal approach business men do not know whether the next move in MLR will be up or down? In order to give them a basis for their business planning, will he issue a revised version of the Government's financial strategy?

No. I think that the business men of West Yorkshire are a damned sight more shrewd than the hon. Gentleman suggests.

Order. I do not like that sort of language here.

asked the Chancellor of the Exchequer which measures in his statement of 24 November will most benefit manufacturing industry.

The two percentage point reduction in the minimum lending rate.

Within the boundaries of a monetarism which is characterised by soaring Government borrowing and a money supply figure which is out of relationship with what the Government want, does the Chancellor accept the need to restore output and demand in the economy? Is not that the root of the problem which has put nearly 1 million people out of work in the last 18 months.?

The hon. Gentleman must understand, as more people are coming to understand, chat the way to restore the health of our economy is not by the Government seeking to reflate demand and generate a false surge of output in that way. The reduction of inflation, to which the Government are committed, and the other changes in the fiscal system are the right methods of securing a healthy and sustainable growth in output.

Are the figures in the medium-term financial strategy achievable in the light of my right hon. and learned Friend's announcement on 24 November? If not, when may we expect a re-basing of the sterling M3 and PSBR monetary targets?

My hon. Friend will recall that at the time of my statement on 24 November I said that I should be considering and making announcements about the monetary target at the time of the Budget, when I shall also make announcements about the prospective size of the borrowing requirement next year.

Why did the Chancellor on 24 November seek to give the misleading impression that he was increasing Government tax revenues from North Sea oil and gas by £1 billion on top of the levels previously forecast, saying that there was

"scope for a further increase in oil taxation"? — [Official Report, 24 November 1980; Vol. 994, c. 317.]

The hon. Gentleman gives me an opportunity to correct at once the entirely false report on the front page of today's issue of The Times to the effect that the position about the yield from North Sea oil was not fully presented to the House on 24 November. He will recall that I said in my statement that the changes proposed in the oil tax regime would

"together yield around £1 billion in 1981–82, mostly from the new tax."—[Official Report, 24 November 1980; Vol. 994, c. 317.]

"After taking account of the proposed tax changes announced on 24 November, revenues from North Sea oil and gas in 1981–82 are expected to be in the range of £4½-5 billion, a little higher than forecast at the time of the Budget."

In view of the money supply figures for the past two months, will my right hon. and learned Friend explain the technical, as opposed to the political, arguments for reducing minimum lending rate by 2 per cent. without there being compensating and contemporaneous cuts in public expenditure and increases in taxation?

I explained to the House as well as to my hon. Friend that the well-justified reasons for the welcome reduction in minimum lending rate were, first, the prospect of declining monetary growth, particularly when the public sector moves into surplus in the new year, and, secondly, the fact that the inflation rate has been coming down and is continuing to come down very sharply, so that the real rate of interest has been rising at the same time. In those circumstances, for monetary and other reasons, I have no doubt about the justification for the reduction in MLR.

Following the Chancellor's initial reply that he thought that the benefit of his measures was embodied in the reduction of MLR by 2 per cent., does he really think that that is a satisfactory move, taking account of the plight of British manufacturing industry and the fact that in his own forecasts introduced at the same time as his mini-budget he expected a further fall in manufacturing output next year of another 5 per cent.? Does not that suggest to the Chancellor something far more dramatic—that the basic problem is indeed a lack of effective demand in the economy? Will he not be concerned with the kind of points made by his hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) about whether he is achieving or under-achieving his so-called money supply targets? In our view, these are matters which are totally irrelevant to the successful management of the economy.

May I take the opportunity of welcoming the right hon. Gentleman to his new Shadow portfolio and wish him a long tenure of that role?

The Chancellor is absolutely right in what he attributes to me as my attitude towards monetary policy. But what the House would like to know in the light of the Chief Secretary's speech to Conservative Back Benchers yesterday is whether the Government themselves have at last seen sense and are prepared to abandon their obsession with money supply targets.

The Government are united in their determination not to follow the right hon. Gentleman down the path of economic irresponsibility.

asked the Chancellor of the Exchequer what was the average recovery in under-declared value added tax achieved in the most recent year by Customs and Excise control visits to large business organisations.

Precise information is not readily obtainable. In broad terms, however, Customs and Excise identified, on average, about £1,000 additional VAT per control visit to the larger businesses in 1979, compared with an overall average of about £200.

Does not that figure show the incompetence of the Government's housekeeping? Does not the hon. and learned Gentleman agree that if Customs and Excise visits to large organisations can yield an income to the Revenue of £1,000 per visit it is the height of folly to cut staff, because the consequence will be a net loss of money?

No doubt the hon. Gentleman is in sympathy with the aspirations of the Society of Civil and Public Servants Although it is pressing for 1,000 extra VAT control officers, it recognises that, despite the moral justification for seeking to eliminate tax evasion completely, there must be a threshold on the level of control beyond which extra staff would be non-productive and uneconomic.

asked the Chancellor of the Exchequer when he expects the inflation rate to return to single figures.

As I indicated in reply to a similar question from the hon. Gentleman on 6 November, inflation is falling, but I do not wish to anticipate when the rate of inflation will, reach single figures.

If the Chancellor does not know when he will reduce inflation to the level that he inherited from the Labour Government more than 20 months ago, can the right hon. Gentleman at least explain how he expects employees of the National Health Service and local authorities to accept an increase of 6 per cent. when inflation is more than two and a half times that level and probably will increase next year?

The cash limits for local authorities, which contain a pay factor of 6 per cent., are deemed to be consistent with a prudent public expenditure policy. The hon. Gentleman may like to reflect that there was a time when pay increases of that sort could be secured against a background of much lower inflation.

Does not my right hon. Friend accept that one of the main factors leading to the lower rate of inflation is the strength of the pound, which has led to cheaper raw materials and other imports?

That is undoubtedly so. In particular, the strength of the pound can be reflected in the wholesale price index, which suggest that the trend in retail prices can be continued in an advantageous direction for some time to come.

Cannot the Chancellor justifiably claim one unique record of having inflated the money supply, the borrowing requirement and unemployment all at the same time?

I have no doubt that those three indicators will be in such a relationship that we shall fight the next election in good heart.

While the decline in inflation is obviously very welcome, will my right hon. Friend confirm that one of the main factors; still affecting inflation is price increases imposed by nationalised industries, and that we expect those industries to absorb increases as much as they can and not simply pass them on?

I can confirm both parts of my hon. Friend's question.

asked the Chancellor of the Exchequer whether United Kingdom applications for European Economic Community funding now correspond with the sums available under the revised European Economic Community budget arrangements negotiated by the Prime Minister.

Yes, Sir. Expenditure on the programmes for which the Government have invited Community support is more than sufficient to cover the refunds to which the United Kingdom is estimated to be entitled under the 30 May agreement.

Is my right hon. and learned Friend aware that that reply will satisfactorily answer allegations that the Government are prejudicing their chances of getting a full refund by dogmatic opposition to increases in the total EEC budget?

I am glad to confirm my hon. Friend's point.

Why have not the Government published the applications of the programmes to which the Chancellor has referred? When will the Government announce what the Commission or Council has decided to do with our money?

As soon as the decisions have been taken, they will be announced. I can assure the hon. Gentleman that the agreement of 30 May will be fulfilled.

asked the Chancellor of the Exchequer what representations he has received regarding the recent national insurance surcharges which be announced on Monday 24 November.

I have received representations from three bodies and a larger number from individuals and businesses about the effects on employers of the changes in national insurance contributions.

Is it not true that the representations have been concerned, in common with representations from Labour Benches, with the enormous loss of jobs caused by the insurance charges? Does not the speech of the Chief Secretary, in which he said that the Government should be more flexible about public borrowing and money targets to combat the grave recession, mean that the Chief Secretary at least recognises that the Government's monetary and borrowing targets are a combination of disastrous catastrophe for the manufacturing sector?

If the hon. Gentleman believes that, he will believe anything. My right hon. Friend is devoted, as are the Government, to the reduction of the undue burden of public sector borrowing and the achievement of monetary control. The increases in national insurance surcharges as part of the national insurance contribution changes are a necessary part of putting the public sector in balance in the next financial year to ensure the achievement of conditions that will work to the benefit of British industry.

Does my right hon. and learned Friend understand the resentment in industry at the fact that the public sector borrowing requirement is being brought under control at the expense of private industry by increasing levies on it? What consideration was given to the capacity of industry to pay additional national insurance charges?

Very close attention was given to that. It is for that reason that the measures that I have announced to restore balance to the nation's accounts next year are directed first, at the revenue from the North Sea and, secondly, at raising additional revenue from the employees' side of the national insurance account. The changes for employers are the consequence of inflation and inflation alone. However, they represent a reduction in the real burden. The increase on that side is about 8·3 per cent. while the increase on the employees' side is about 27 per cent. I am sure that my hon. Friend will remember that these changes have enabled me to announce substantial reductions in the burden of the stock relief arrangements.

I understand that the Chancellor is raising the national insurance surcharge by £1,000 million. That is roughly the global sum. What is his prime objective in raising this additional and unwelcome sum? Does he think that it will help to diminish or to increase unemployment next year?

The right hon. Gentleman would do well to remember that the national insurance surcharge was the invention of the Government of whom he was a member. He would do well to remember also that the additional income being raised by the changes that I made on 24 November is coming, as I have emphasised, not only from the surcharge but from national insurance contributions on which the surcharge is imposed. The burden beyond inflation there imposed will be on employees. The reason for making the changes is to ensure that the borrowing requirement is moving towards balance so that there is some prospect of interest rates coming down rather than going up. That is a matter of prime concern to industry.

asked the Chancellor of the Exchequer what evidence he has that the opportunities and incentives provided to business and to individuals in his 12 June 1979 Budget are working as intended.

The large income tax cuts in my first Budget, together with later improvements in the taxation of enterprise, have greatly helped business and industry.

Is the right hon. and learned Gentleman aware that he is the only person in the House who believes that answer?

No.

Who believes it? Hands up those who believe it.

indicated assent

Will the right hon. and learned Gentleman publish in the Official Report details of the evidence that suggests that these incentives are helping business? Is the absence of such real evidence the reason why the Chief Secretary came out with his extraordinary about-turn before the Conservative finance committee on Monday? For the third time, will the right hon. and learned Gentleman confirm or deny that the Chief Secretary said that the time had come to abandon monetary targets in favour of a flexible policy to help meet the grave economic recession? Did the right hon. Gentleman use those words?

My right hon. Friend will no doubt answer the question himself if he has the opportunity to do so. [HON. MEMBERS: "Get up".] However, I am happy to repeat his assertion that he did not use those words. The Government, including my right hon. Friend as much as myself, are committed to the maintenance of firm monetary policy by the measures that we have outlined.

"financial incentives … play an important part".

"in the last four years … the whole nation has been enmeshed … far more deeply in the tax net than anyone planned or indeed wished."

Is my right hon. and learned Friend aware of the considerable unease of manufacturing industry in the interpretation that the Revenue is placing upon his excellent idea of helping industry with the new stock relief scheme? I can quote a company that may lose £8 million as a result of the new scheme, which is supposed to help manufacturing companies. If companies suffer losses in this way, will my right hon. and learned Friend examine the scheme and consult the Revenue to ensure that the benefit accrues not only to storage and service industries but to the sector that needs most to benefit—namely, manufacturing industry—which, I believe, was his intention?

I am happy to confirm to my hon. Friend the Government's concern for manufacturing industry and the need to restore success and profitability in that part of the economy. The stock relief changes that I announced were designed to provide that sort of help. A substantial part of the help that is intended to result from the changes is designed to go to manufacturing industry. My proposals were deliberately put out in consultative form. The Revenue will be prepared to listen to representations from my hon. Friend or anyone else. It is not possible to give an assurance that the changes are bound to have an automatic effect of the same sort in every company. There are different circumstances in different cases.

Does the right hon. and learned Gentleman recall that before the 1979 election he and his right hon. Friend the Prime Minister held out as their main incentive the prospect that they would leave more money in people's pockets for them to spend as they wished? Is it not a fact that over these past 18 months people have had less money left in their pockets to spend and that they are having to spend out more of it in higher prices, higher VAT and other increased taxes on products?

No. The proportion of tax being raised by the direct tax system is lower now than when we came into office. The change was designed precisely to give people a greater choice as to how they spent their money.

asked the Chancellor of the Exchequer what has been the annualised rate of inflation based on the last four months.

The increase in the retail price index over the four months to October was 7·2 per cent. on an annualised basis.

Will my right hon. Friend accept that that is very encouraging news, as it is well below the rate of inflation? Bearing in mind that the right hon. Member for Leeds, East (Mr. Healey), on the basis of three months, talked about a rate of inflation some years ago of 9 per cent., will my right hon. Friend accept that the House is massively impressed by the success of a major plank of the Government's economic policy?

My hon. Friend is right to be encouraged, but I hope that he will recollect that there were certain reservations about the statistical techniques of the right hon. Member for Leeds, East (Mr. Healey)—although I must say that we are learning to miss him already. Therefore, I hope that we would try to avoid taking three months' figures and annualising them as a means of talking about rates of inflation.

When the Chief Secretary looks at the figures over the past 12 months, will he acknowledge that the public sector component of the RPI has risen at a level of 25 per cent., nearly double the level for the private sector, as a direct consequence of his policy in public expenditure? Will he grasp the fact that it flies in the face of reason to argue that cuts in public expenditure cut inflation when they are achieved by putting rents up by 30 per cent., electricity by 33 per cent. and rail fares by 38 per cent.?

The point that the hon. Gentleman makes is not unlike that made earlier by my hon. Friend the Member for Melton (Mr. Latham). The reason why there has been such a sharp rise in those component parts of the retail price index is that we inherited nationalised industries whose finances had been plundered in the pre-election period by the previous Government.

I welcome the recent fall in the rate of inflation, but can my right hon. Friend tell the House what steps he intends to take to ensure that the revival of demand that the Government expect next year is not preempted by inflation, as has happened so many times in the past?

The prudent pursuit of fiscal and monetary policies.

If the Chief Secretary is predicting a major economic U-turn by the Government, do they still believe that there is much connection between the money supply and the rate of inflation? If so, what is his estimate of the rate of inflation in about two years' time, with sterling M3 now escalating at 20 per cent. a year?

In respect of the first and more tantalising part of the hon. Gentleman's question, despite the unquestioned reputation of the author of the article in The Guardian today I must tell the House that it does not accurately reflect the speech that I gave to a private meeting of the Conservative Party finance committee—and I have the modest advantage of having been there. As far as the second part of the question is concerned, those who like myself, have been deeply committed to the policy of the Government have always been extremely chary of trying to make mechanical relationships between money supply and rates of inflation. We have stated our cautionary position from the very outset.

Is the Chief Secretary aware that the whole House will accept what he says — that the words reported in The Guardian were not the words that he used at that meeting of Back Benchers last night? However, in view of the great interest that there is—properly—bound to be in what he said, will he tell us what he did say about monetary supply targets?

I believe that what I said was of sufficient moment not to be contained in a mere answer to a question. Since the right hon. Gentleman now sits in the distinguished position that he does, I look forward to many months of economic debate with him, when all the issues will be debated and measured in a proper forum.

asked the Chancellor of the Exchequer what is the latest estimate of the taxes and prices index.

The value of the tax and price index for October is 137·3, based on a January 1978 figure of 100.

With over 12,000 notified price increases this year alone, is not the gimmick of a tax and price index that the Government put forward backfiring? Will the hon. and learned Gentleman accept that while the annual rate of the RPI has increased by over 50 per cent. since the Conservative Government took office, the annual rate of TPI is at 16·8 per cent.? With national insurance contributions increasing and with possible tax increases in the Budget, would it not be preferable to have a prices and unemployment index rather than a tax and price index, which would truly reflect the economic situation in the country?

I am glad that the hon. Gentleman has become reconciled to the tax and price index. I hope that it has enlarged his perception of the problem. Quite how one could incorporate unemployment into an index I do not know, but we shall certainly consider the point.

Will my hon. and learned Friend merely ask the Opposition whether they are glad or sorry that inflation is falling rapidly?

I am sure that the Opposition will take note of my hon. Friend's question and answer it in their own way in their own time.

Who has ministerial responsibility for prices? Is the hon. and learned Gentleman aware that my questions have been passed from the Department of Trade to the Department of Employment and then to the Treasury and from one Minister in the Treasury to another, and even then he could not tell me the increase in the prices of turkey and Christmas pudding?

I condole with the hon. Gentleman. However, the allocation of functions is not a matter for me. It is a matter for my right hon. Friend the Prime Minister.

asked the Chancellor of the Exchequer if he will take steps to give compensatory relief to employers to offset the effects of the increase to be paid in national insurance charges in consequence of his recent financial statement.

While I appreciate the current difficulties of employers, I believe that the provisions of the Social Security (Contributions) Bill strike a fair balance in respect of their contributions.

I thank my right hon. Friend for that reply, but does he agree that, as the employers' share of the national insurance contribution has grown steadily over the past few years, the additional surcharge imposed on them should be abolished, because they gain nothing whatsoever from it?

I have noted my hon. Friend's recommendation. The House should know that the national insurance surcharge now yields £3,500 million a year. Doubtless any assessment made will be undertaken by my right hon. and learned Friend the Chancellor when he frames his Budget.

Will the Minister tell employers in my constituency and elsewhere in the country in what way the recent measures, which were not in fact announced but which are to take effect, aid the competitiveness of British industry?

I am sure that the hon. Gentleman will realise that the measures are intended to finance social expenditure. If he denies the end, he can complain about the means.

I fully appreciate the very astute responses of my right hon. Friend. Does he agree that industry at present is suffering from a severe cash flow problem? Was it not very unfortunate of the Government, having reduced the minimum lending rate by 2 per cent., which was very welcome and provided relief for industry, to take back a great deal of that by increasing national insurance contributions from April next year and putting industry almost back to square one? When will we help the manufacturing base of the country to survive?

I thank my hon. Friend for his kind words about the reduction in MLR, but I have to say to him that I believe that the financing of the welfare benefits that has been decided upon in the current legislation is wholly legitimate. It is in keeping with past practice. I can see no way of departing from it that would not otherwise require additional revenue. Givern that, the alternatives for business could be equally damaging.

asked the Chancellor of the Exchequer what is the underlying rate of growth of sterling M3 since the beginning of the present target period.

Sterling M3 grew by about 17 per cent. between February and November. After allowing for corset distortions, this is probably equivalent to an underlying annual rate of about 20 per cent.

Will my right hon. and learned Friend confirm that he does not expect a similar percentage inflation rate at some time in 18 to 30 months from now? If so, does that not cast some doubt on the theory of monetarism?

One has to have regard to monetary growth over a long period. The prospects are for a slower rate of monetary growth for the remainder of the financial year. Bank lending is showing signs of deceleration. The borrowing requirement, particularly in the new year, will be running at a lower rate, and the new index-linked savings certificates will yield substantial sums to fund the borrowing requirement. Those factors will make changes that will avoid the consequences suggested by my hon. Friend.

Is the right hon. and learned Gentleman aware that the figures for the growth of money supply and public borrowing and the share of taxation are so contrary to his published financial strategy as to destroy its credibility? In order to assist business planning, will he replace the discredited strategy with a revised version?

The figures underline the importance of pursuing the thrust of that strategy. It is crucial to achieve effective control of the size of the borrowing requirement if interest rates are also to be controlled. I shall welcome the hon. Gentleman's support in pursuing that strategy.

Is my right hon. and learned Friend aware that most of my constituents comprise one of the most intelligent communities in the country? Most of them think of M3 as the name of a motorway. Is he further aware that they are very pleased by the falling rate of price increases and the fact that there are fewer strikes?

I am delighted to join my hon. Friend in paying tribute to the supreme wisdom of his constituents and endorsing their wisdom in that respect. Price inflation is coming down and is likely to continue to fall. We are facing the lowest level of industrial disputes for 30 years, and realism and common sense are spreading widely throughout British industry.

The Chancellor's reply of 20 per cent. is, the House recognises, a matter of obvious embarrassment to him. May I ask him, however, to be neither heartened nor depressed by the movements of the money supply? May I ask him once again to turn his attention away from what is now generally accepted as an exploded obsession to the real economy, to the level of unemployment and to the actual measures of output of the economy?

The real economy is no less important than monetary statistics, and in the real economy we see inflation falling, interest rates recently reduced and wage bargaining at a much more sensible level. It is now crucial to achieve the same moderation in pay settlements in the public sector in order to diminish that burden on the trading economy.

asked the Chancellor of the Exchequer if he will make a statement on his proposed changes in taxation on North Sea oil, giving his estimates of the "Government take" from each of the fields affected and the anticipated revenues in the next five years.

Forecasts of Government take from the North Sea depend on a number of factors — including changes in the price of oil, costs and the production programme — which cannot be precisely estimated. Looking one year ahead, I expect total Government revenues in 1981–82 from oil and gas production to be in the range of £4½ billion to £5 billion at 1980–81 prices with about £900 million attributable to the proposals outlined in the statement of my right hon. and learned Friend the Chancellor on 24 November. For reasons of confidentiality, I cannot provide estimates for individual fields.

Will the hon. and learned Gentleman confirm that the estimates that he has just given show no change from the forecast he made some months ago? Does he agree that his Government are being extremely profligate with this finite resource by using all these revenues to sustain social expenditure, unemployment benefits and so on instead of putting them aside to sustain our manufacturing base?

My right hon. and learned Friend made it clear in the documents published alongside his statement of 24 November that there had been a diminution in our expectation of the take next year apart from the new tax. On the question of profligacy, North Sea oil revenues are not hypothecated to any particular form of activity. We could just as easily pray in aid the additional sums being put into various employment measures and the capital requirements of the nationalised industries.

What is the net increase in the Government take as a result of the 24 November announcement about a windfall profits tax?

We hope about £900 million.

In view of the large take from the North Sea, and since British industry now has to buy the most expensive fuel in Europe, will the Government consider taking the tax off oil?

I cannot anticipate my right hon. and learned Friend's Budget.

Does the Minister of State accept that the whole of the Government's take from North Sea oil revenues in the current year and next year is already being swallowed up by unemployment benefits?

I do not. The figures do not match up in the way suggested by the hon. Gentleman.

asked the Chancellor of the Exchequer what steps he is taking to monitor the effects of the economic measures he announced to the House on Monday 24 November.

I shall continue to watch the relevant economic indicators closely and to review other evidence about developments in the economy.

Does the right hon. and learned Gentleman admit that the increased national insurance contributions will cut the living standards of those in work end, with the cuts in public expenditure, will increase the number of people out of work? In view of forecasts that unemployment may reach 3 million some time next year and that the financial cost of unemployment will be bigger than the total public sector borrowing requirement, how much worse are things to get before the Chancellor changes course and invests more money to provide more real jobs?

The increase in national insurance contributions is a fair and sensible way to secure revenue to maintain social benefits and social services upon which the nation insists.

asked the Prime Minister if she will list her offical engagements for Thursday 11 December.

This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I have also held further meetings with ministerial colleagues and others. This evening I have been invited to speak at the Welsh CBI dinner in Cardiff.

Is my right hon. Friend aware that business men in my constituency, while welcoming the reduction in MLR and the announcement of a 6 per cent. cash limit for public sector pay, still regard public expenditure as an enormous millstone round their necks and express complete support for the Government's intention to reduce it further?

I wholly agree with my hon. Friend that we cannot continue putting increasing burdens on the wealth-producing sector of the economy. That would result in fewer wealth-producing firms. We must, therefore, have regard for public expenditure, and I hope that the local authorities will think twice before they make severe increases in local rates.

Would it not be both better and more honest for the people of Wales if the Prime Minister clarified the position of the steel industry before going to South Wales today? I always welcome meaningful and proper consultation with the trade unions, but will the Prime Minister tell us the basis upon which Mr. MacGregor is having his consultations today before he talks to the steel board? What is the purpose of the steel board today?

Mr. MacGregor is charged with the duty of producing a plan for the future of the British Steel Corporation. He is carrying out the duties of consultation, and he would be under very severe criticism if he did not consult before that plan went to the board for approval. I have not seen the plan. I do not know its content. I shall not see it until it is presented to the Government, and that will not be until after the board has approved it.

Will my right hon. Friend have any chance today to consider whether it is possible for her to make an official statement on her discussions in Dublin with the Irish Prime Minister? The feeling is that whilst no one in the House dreams for a moment that she would agree to anything that would weaken the longstanding and historic link between Great Britain and Northern Ireland, the interpretation of the talks that is coming from Dublin alone means that a somewhat misleading point of view is now being received.

There never have been statements on bilateral talks such as these between the United Kingdom and Ireland. I think it most unwise to set a precedent. That would elevate the meeting far beyond its importance or significance. The agreement was set out in a communiqué. There is nothing behind the communiqué—it is all there.

May I plead once again with the Prime Minister to give her report to the House of Commons on her discussions in Dublin so that hon. Members on all sides will be able to question her? Will she take into account before she replies the full debate that is taking place in the Dail? We ask her to return to the subject next week.

On the right hon. Gentleman's point about the talks between the United Kingdom and the Republic of Ireland, the agreed statements are in the communiqué. If the right hon. Gentleman has any particular question to put to me, I hope that he will do so. I am here for a quarter of an hour every Tuesday and Thursday. Although everyone is asking for a statement, precious few hon. Members have put pertinent questions about the agreed communiqué which has already been issued and published.

The two matters are important for the people of this country. Does the right hon. Lady realise that it is not satisfactory for her to say that we should leave the steel issue until after Christmas? We demand a debate on that subject in the House next week. Will the Government provide the time? On the Dublin meeting, as the right hon. Lady has put it in those terms, does she agree with the statement made in the Irish Parliament this morning that it was the most important visit to the Republic since the foundation of the State? Does she agree with that statement made by the Taoiseach in the Dail, and, if so, why?

It is the first time that four members of the Cabinet, in pursuit of the bilateral talks that we now have between fellow members of the EEC, have attended such talks in Dublin. It is the first time that they have been held in Dublin. Last time they were held at No. 10 Downing Street between similar Ministers. That does not seem to me to be unusual.

On the question—[Interruption.]

Order. The sooner we have order, the more likely I shall be to call other hon. Members.

On the question of steel, if the right hon. Lady will not provide a debate, we shall have to force one. That is our answer to her on that issue. On the Dublin meeting, which is a matter of great importance, does the right hon. Lady agree that if four Ministers think that it is important to go to Dublin to take part in the talks, at least one of them should have the courage to come and report to the House?

On the right hon. Gentleman's latter point, four Ministers is the usual number that we take to bilateral talks. It is far more natural than the right hon. Gentleman is willing to concede for this Government to have regular talks with the Government of the Republic of Ireland in the same way as we have regular talks with France, Germany and Italy. We have been trying to establish that regularity and trying to achieve better co-operation and understanding. We have received excellent security co-operation along the border.

Has my right hon. Friend's attention been drawn to the action of the Norwegian authorities yesterday in banning 18 trawlers fishing legally in proper waters? If it has, will she hold urgent talks with her right hon. Friend the Minister of Agriculture, Fisheries and Food to get something done about that matter before we have another Icelandic position, which would do nothing towards the completion of the common fisheries policy?

I understand the importance that my hon. Friend attaches to the issue. I shall draw my right hon. Friend's attention to the matter so that he can give urgent attention to it.

asked the Prime Minister what are her official engagements for 11 December.

I refer the hon. Gentleman to the reply which I gave a short time ago.

Will the Prime Minister please reconsider her refusal to tell us anything about the widespread speculation about steel closures? Does she truly understand the awesome scale and the distressing consequences of a major steel closure? Does she really wish to go down in history as the Premier who turned No. 10 into the slaughterhouse of the steel industry and the abattoir of British manufacturing industry?

It would be futile and irresponsible to make statements on a report that I have not seen. I do not intend to do so.

Is my right hon. Friend aware that we are approaching a critical stage in the formation of the British Leyland five-year corporate plan, which is of great importance to the whole country? Can she assure me that she will use hex powers to enable the Leader of the House to allocate a day's debate when the corporate plan is released?

The corporate plan has been presented to the Government. It will shortly be considered. When decisions have been reached, they will be announced to the House. I imagine that my hon. Friend will make representations to the Leader of the House to have a debate on these important matters.

Does the Prime Minister understand that those of us who wish to applaud the initiative that she took in going to Dublin and in having wide open talks with the Irish Government on new relationships between our two countries — having noted the Irish Premier's statement that it was the most important meeting since the creation of the Republic—are absolutely baffled by her refusal to make a statement to the House and also at her insult to the House in pretending that it was a routine Common Market discussion?

Equally, does the right hon. Gentleman understand that I am baffled by the fact that, after about 10 questions about whether I will make a statement, few hon. Members have asked substantive questions about the communiqué?

Has my right hon. Friend seen the report that two British cars were among the three cars of the year? Is that not an encouragement to British industry?

I was pleased to hear that two British cars were included. I hope that it will raise the proportion of the car market that goes to British cars. In so doing, it will also raise the proportion of steel bought from British Steel and the components and other items bought from Britain.

Is the Prime Minister aware of the widely divergent versions of the Dublin meeting both in Dublin and in London? Is she further aware that unless the matter is clarified by a statement or a debate the Dublin version will pass into history in Eire?

I am responsible in part for the agreed communiqué. Upon that communiqué I stand. Upon that communiqué the right hon. Gentleman may ask me any questions that he wishes.

Will my right hon. Friend find time today to warn the country of the attempts by the British Communist Party to increase its influence in the Labour Party? [Interruption.] Was she not appalled to read the article in this morning's Daily Mail pointing out that a Communist played a leading role in the party political broadcast on behalf of the Labour Party on Tuesday right?

To many of us it seems that there is precious little difference between the policies of the Communist Party and the policies of the Labour Party.

On a point of order, Mr. Speaker. Will you give some guidance to me and to hon. Members in all parts of the House? We appreciate that the Leader of the Opposition is anxious to make his points at Question Time, but I think that the whole House is surprised and upset at the way in which he seems to be occupying well over half of Question Time—and, indeed, keeping out many of his own Back Benchers.

I have said on previous occasions that I always allow extra latitude to the Leader of the Opposition. It is a matter for his judgment and for mine —[Interruption.] Order. I am not handing that over.