asked the Chancellor of the Exchequer whether there have been any further signs that the economy is recovering from the recession.

Activity is higher than in the first half of last year. Industrial profits are beginning to recover. Productivity—output per head—in manufacturing has risen 12 per cent. from the fourth quarter of 1980. The latest CBI economic situation report shows the recovery continuing into 1983. Interest rates have continued the welcome decline seen earlier in the year, and inflation is coming down faster than expected, providing the best possible basis for achieving, and sustaining, continued recovery.

Is my right hon. and learned Friend sure that the economy is recovering, rather than just bobbing along the bottom?

I am confident of that. In addition to the facts that I have just recited to the House, all the forecasts—not just those from my Department—confirm that proposition.

In the pursuit of economic recovery, when does the Chancellor expect to enable efficient British exporters to get back to the level of cost-competitiveness that they enjoyed when he took office?

Progress in that direction depends entirely upon the success achieved in reducing unit labour costs and improving competitiveness in British industry. The experience of the previous Government showed that, despite a substantial decline in the value of the pound, that course contributed only insignificantly to the restoration of competitiveness.

Does my right hon. and learned Friend agree that if National Health Service employees receive a pay increase of 12 per cent., or anything rear that, it will lead to the return of inflation, far greater unemployment, and reduce prospects for economic growth?

Rubbish.

I entirely agree with my hon. Friend that it is important throughout the economy to continue the progressive reduction in the rate of increase of costs, whether expressed in terms of prices or pay awards.

Is the Chancellor aware that many people in the country and in the House will have been astonished by his reply to his hon. Friend the Member for Leek (Mr. Knox)? The Chancellor cited the latest CBI monthly report. Does he agree that the key phrase is that the economy "remains in the doldrums"? That is how it was described in the newspapers at the time. Is the Chancellor aware that the May issue of the index of industrial production showed that production in the economy was ½ per cent. down on the previous quarter? Does the Chancellor agree that this recovery resembles the Scarlet Pimpernel—it is oglimpsed rather than seen and is largely a work of fiction?

I can imagine that it is a work of fiction which the right hon. Gentleman might like to write. The reality is that the gross domestic product is up significantly since last spring. Production has risen in the last three months by 1 per cent. Productivity and profits have improved on the lines that I have indicated. There are many indicators of steady but sustainable economic growth. I should like to enlist the support of the right hon. Gentleman in seeking to persuade all those concerned with pay bargaining to understand the importance of a continued reduction in unit labour costs if we are to continue progress in that direction.

asked the Chancellor of the Exchequer whether he will make a statement on the level of the public sector borrowing requirement.

Latest estimates suggest that the PSBR outturn for 1981–82 was £8·9 billion. The Budget forecast for 1982–83 was £9·5 billion. I have no reason to change that forecast.

Does my right hon. and learned Friend accept that Treasury predictions on the future level of the PSBR have not always rivalled those of horse racing tipsters for accuracy? Will he carefully bear that in mind before taking any deflationary action, through tax increases, to pay for the Falklands conflict?

I have no doubt that my hon. Friend's knowledge of the accuracy of racing tipsters is much greater than mine. I shall certainly bear in mind the limitations in Treasury forecasts when considering any further action.

Putting forecasts to one side, will the right hon. and learned Gentleman confirm that the latest OECD figures show that our public sector borrowing requirement as a percentage of GNP is about half the equivalent for Germany and barely two-thirds that of Japan—two successful economies? Does that not tend to suggest that we have a far too restrictive financial position?

I do not think that the OECD figures lead to that conclusion. The contrast that I draw is with France. I draw a sharp contrast between the success that we are having emerging from recession compared with the difficulties that France, with a different economic policy which is closer to that supported by Labour Members, now seems to be experiencing.

The term PSBR is often used as a synonym and a cover title for public expenditure generally. Does my right hon. and learned Friend accept the suggestion that if he or any people for whom he is responsible—we can compare the various papers on this subject with which the House is sometimes edified—think that they can set their sights on or restrict defence spending to repair defects that may have been thrown up in purchasing and procurement over the last few years, the party, the Services and the public would not accept it?

My hon. Friend is tilting at a windmill that I cannot see.

asked the Chancellor of the Exchequer if he will examine the possibility of co-ordinating more effectively public expenditure in the North of England so as to stimulate an early recovery of the economy in the Northern region.

Levels of public expenditure are primarily determined on the basis of functional expenditure programmes rather than by territorial areas, but, where appropriate, the needs of areas such as the North of England, which has been experiencing particular difficulties, are taken into account.

Is not the loss of output and the growth of unemployment in the Northern region now so fundamental that a completely different approach is required, such as a development plan for growth? Does the Minister accept that, far from crowding out private investment, there is a complementarity between public and private sector investment? Should this not be co-ordinated in such a fashion that there would be an inducement for private investment, which is something that even this Government do in Northern Ireland?

I am not persuaded that the best interests of the North would be served by the creation of another agency. The powers in respect of Scotland and Wales, for example, are held through different agencies in the North. To add such an agency to the North would provide no extra power, merely an increase in bureaucracy.

Has my hon. Friend heard the news that of all the towns in Great Britain that provide good value for money, the town that provides the best value for money is the holiday town of Morecambe? Does he agree that were the Government to carry out proposals of the kind suggested by Members from the Northern region for special arrangements for the area, much resentment would be entertained by people who live on the fringes of that area?

I congratulate my hon. Friend on getting up early in the morning to listen to the radio after two late nights in the House and taking this opportunity of advertising his constituency, which I am sure industrialists and those thinking of setting up business will bear in mind. My hon. Friend points to the real difficulty of areas that lie just outside any special development area.

Will the Minister assess the response to the Chancellor's welcome initiative of last year, when financial incentives were provided from the scheme for the conversion of oil-fired boilers to coal? Has not the take-up of that scheme been much less than was expected? Will the Chancellor provide more money and widen the scope of the scheme? I assure the Minister that if that were done the effect on the coal industry in the North of England would be quite considerable.

My right hon. and learned Friend widened the scope in the last Budget, and one of the reasons was that the take-up had not been as large as he had anticipated. We shall bear this whole question in mind, because we are anxious that the scheme should be used as much as possible.

Is it not time that there was at least a mechanism in the Treasury for co-ordinating public expenditure, not only functionally, but by regions? At present there is no such mechanism, which is why the Minister cannot give a proper answer to the two points made from the Opposition Benches.

I am surprised that the hon. Gentleman believes that an additional agency—

Not an additional agency.

—will assist in these matters. The present bureaucracy is quite sufficient, and we would sooner see it reduced than increased.

asked the Chancellor of the Exchequer what are the prospects for the level of inflation at the end of the year.

asked the Chancellor of the Exchequer what is his latest assessment of prospects for the rate of inflation by the end of 1982.

asked the Chancellor of the Exchequer if he will make a statement on the progress being made towards reducing the rate of inflation.

asked the Chancellor of the Exchequer if he will make a statement on the trend of inflation.

Inflation is now in single figures. At the time of the Budget we forecast a year-on-year rate of 9 per cent. by the end of this year and 7½ per cent. by the middle of next, but we could well make rather faster progress than that.

rose—

Order. I propose to call first the four hon. Members whose questions are being answered.

Will my right hon. and learned Friend confirm that the Government are on target for a lower average rate of inflation than they inherited and that they are the first Government in 30 years to achieve that? Will he also confirm that the cost of the Falklands operation will not be allowed to increase inflationary pressures in the economy?

The answer to my hon. Friend's second question is "Yes", and there are later questions on the Order Paper dealing with that subject.

Is it not true that for the first time for many years Britain's inflation rate is lower than those of many of our competitors? Does my right hon. and learned Friend also agree that inflation must go even lower if we are to become even more competitive and to provide the best climate for investment, both of which are needed to secure more jobs? What are the prospects for inflation continuing to fall next year?

The forecast that we have given indicates the prospect of a lower level of inflation next year. As I have indicated, the forecast points to 7½ per cent. by next spring. However, beyond that I entirely agree with my hon. Friend that although we have improved our performance, so that it is now better than that of many of our international competitors, we must go on making further substantial progress if, for example, we are to begin to match the levels of inflation achieved in Germany and Japan.

I congratulate my right hon. and learned Friend on the Government's achievement in reducing inflation to single figures. What further proposals does he have in mind to reduce public expenditure still further so that the rate of inflation can fall even more?

My hon. Friend is entirely right to point to the importance of continued control of public borrowing and public expenditure if we are to achieve further success in reducing inflation and, equally important, interest rates alongside that.

Does my right hon. and learned Friend not agree that it is clear from the Government's achievement—

These questions are all planted.

The hon. Gentleman makes a serious allegation. I therefore restrict myself to asking my right hon. and learned Friend whether he accepts that my question was not planted? Is he able to draw some satisfaction from the fact that four of his hon. Friends voluntarily and separately chose to raise the subject of inflation at this time?

I draw much comfort from the fact that our success has been acclaimed with such uniform enthusiasm by my hon. Friends. I notice the reluctance of Opposition parties to table questions on this matter.

Is the Chancellor's message to the nation that, owing to the huge success of the Tory policies, we now have 3 million unemployed?

My message to the nation is precisely that which is encapsulated in every communiqué of every international gathering of recent months, and most recently in the communiqué of the Paris summit, to the effect that growth and employment must be increased. This will be attained on a durable basis only if we are successful in our continuing fight against inflation. I note, as the House should note, the extent to which policies that have been adopted in France are now being brought more closely into line with ours to achieve that objective.

Is not the truth of the real world, away from the Treasury mandarins, that redundancies are still increasing? Has tie Chancellor seen the announcements by BP and ICI this morning? All that is on account of the right hon. and learned Gentleman's disastrous economic policy. Is not the best service that he can do for the nation to resign forthwith?

The unreality of the world inhabited by the hon. Gentleman is demonstrated by the absurdity of his last proposition. He will find that in the real world every other country is facing comparable rises in unemployment—

No.

—and recognises the need to maintain effective policies to fight inflation. The House must realise that the unemployment that we face today is not the price that we pay for fighting inflation now, but the price that we pay for having put off the fight against inflation for so long in the past.

Has my right hon. and learned Friend noticed the tendency of those in the Labour Party to compare the rate of inflation now with that which existed when we came into office, while ignoring the fact that when we came into office the rate of inflation was accelerating, whereas it is now declining? Does he agree that the main reason for that change is the difference in attitude on public sector pay? Is it not essential for us to resist inflationary pay claims in both the public and private sectors if we are further to reduce the rate of inflation?

My right hon. Friend is correct. Over the past year, the year-on-year rate of inflation fell from 12 per cent. in April 1981 to 9·4 per cent. in April this year. Over the last year of the Labour Government, the year-on-year rate of inflation increased from 7·7 per cent. in May 1978 to 10·3 per cent. in May 1979, and was going up.

Is the Chancellor aware that this measly performance of bringing inflation down to the level that the Government inherited from the Labour Government three years ago has been achieved at the cost of 3 million and more jobless and that there is no prospect of unemployment decreasing in the next year, even if inflation decreases a little more? Has the Chancellor forgotten the major pre-election interview that he gave to The Times and the promise that he would bring inflation down

"to between 2 or 3 per cent. in about three years' time",

The hon. Gentleman may have overlooked the fact that two months after we were elected into office there was a second massive oil price explosion, taking the price of oil to 26 times what it had been in 1970. He may also have overlooked the fact that we inherited from his Government a rapidly accelerating rate of inflation, sustained by the explosive collapse of the Labour Party's pay policy.

asked the Chancellor if he is yet in a position to announce whether supplementary provision will need to be made to meet the cost of the Falkland Islands operations.

asked the Chancellor of the Exchequer if he will make a statement on the national financial means by which he proposes to finance any additional public expenditure resulting from the Falkland Islands expedition.

It is not yet possible to say what the costs of the Falklands operation will be and therefore to what extent supplementary provision may be necessary. The costs will be met in ways consistent wth the Government's economic strategy.

Is it not clear that this £1 billion adventure will have to be paid for sooner or later? Will it, as usual, be the working people of the country who will pay for it, or will the Government surcharge those companies who were selling arms to both sides? I pointed out what those companies were doing. If there is any morality in this country, a surcharge should be applied.

As my right hon. and learned Friend the Chief Secretary has made clear, it is the intention and the determination of the Government that the Falkland Islands campaign will be met in ways that are wholly consistent with the overall economic counter-inflation policies of the Government.

Does the hon. Gentleman accept that many of us refuse to believe that the Government have not yet got the best estimate of the full cost to United Kingdom funds of the operation in the Falklands? If the Contingency Reserve, which is a reserve almost entirely used up each year, is to be used to finance part of this operation, how will other contingencies be met?

The hon. Gentleman's recollections of last year are not entirely correct. The Contingency Fund was only half used last year. We are at an early stage of the current financial year. The Contingency Reserve is available to meet unexpected charges that occur during the year. That does not mean that that is necessarily or exclusively the answer to the question of the cost of the Falklands' campaign. Contrary to what the hon. Gentleman appears to believe, it is not possible to give the House any estimate of the cost at the moment.

As Argentine aggression caused this heavy expenditure, is it the Government's intention to claim reparations from Argentina?

That question should be addressed to my right hon. Friend the Foreign Secretary.

I am sure that the House was surprised that of all the Treasury team, the Economic Secretary was left to answer this question. However, as he has replied, I am also surprised that he was not able to give a more forthcoming reply to my hon. Friend the Member for Goolw (Dr. Marshall) at this stage of development.

The right hon. Gentleman has a slightly exaggerated notion of any conceivable cost arising from the campaign and the impact that it may have on the general issue of management of the economy. I assure the right hon. Gentleman, as I have already assured his hon. Friend, that the campaign and what follows from it will be financed in a manner that is wholly consistent with the general economic and counter-inflation policies of the Government.

What does that mean?

Does my hon. Friend agree that it is wrong to measure the defence of freedom and the maintenance of international law in purely monetary terms? Does he agree that immense long-term benefits will accrue to this country from the example that we have set in the South Atlantic?

I assure my hon. Friend, if he needs to be assured on this score, that the Government have put no cash ceiling on the costs of this operation. We cannot say at this stage what extra costs are involved. However, the extra costs represent, in any case, only a small proportion of the defence budget of £14,000 million. Therefore, there is no immediate cash problem. I am sure that the general proposition put by my hon. Friend is one that will command acceptance throughout the House.

asked the Chancellor of the Exchequer if he anticipates an increase in the volume of investment in the current year.

asked the Chancellor of the Exchequer what has been the volume of investment for each year since May 1979 at constant prices.

I shall arrange for detailed figures for the volume of investment since May 1979 to be published in the Official Report. For 1982, the latest survey of investment intentions conducted by the Department of Industry suggested that there would be little change, compared with 1981, in the volume of investment in manufacturing industry, including leased assets. Investment in distribution and services should rise by some 4 per cent.

I am rather depressed by that news. Bearing in mind the heavy fall in investment in 1980 and 1981, does the Chancellor accept that there will have to be a massive surge of investment in manufacturing industry this year if we are to retain our manufacturing base? Given the Chancellor's increasing tendency to live in cloud-cuckoo-land and to lose touch with economic reality, will he tell us how he expects British industry to survive in a highly competitive world when investment in our manufacturing industry is being cut, in contrast to that of our competitors, who have always invested more than us?

The hon. Gentleman seems not to realise that the latest investment intentions survey shows a recovery of investment in manufacturing this year, probably sufficient fully to offset the decline in 1981. An even stronger growth should be seen in 1983. I venture to suggest that one of the reasons for the growing confidence of investors in Britain's future is to be found in the declining prospects of the Labour Party.

Is not that information rather worrying? Is not the lack of confidence and investment in British manufacturing industry a conclusive indictment of the Government's economic policy?

I have explained to the House that the facts are exactly the opposite of what the hon. Gentleman says. The prospective recovery of investment in manufacturing this year should fully offset the decline last year and is likely to increase next year. Moreover, distributive and service sectors can look forward to 12·5 per cent. additional investment in the first half of this year compared with last year. We are planning a substantial increase of 26 per cent. in investment in nationalised industries. I repeat that the main reason for the growing confidence of investors in the future of the economy is their growing certainty about the decline in the prospects of the Labour Party.

Will my right hon. and learned Friend assure the House that he will continue to treat with the utmost circumspection any request to increase even further than the figure that he has just announced the investment

As I have already told the House, we are planning a substantial increase of 26 per cent. in investment in nationalised:industries. My hon. Friend correctly underlines the importance of ensuring that that investment is well managed and fully used by those who work with it.

Has the Chancellor seen the statistics released a fortnight ago by his Government's Department of Industry? Is he not aware that they show that in 1979—the year in which his party took office—investment in manufacturing industry was at its highest level for 10 years, and that in 1982, three years into the Government's period of office, investment is expected to be at its lowest level for 10 yeas? Does that not more adequately summarise industry's confidence in Government policies than any excuse that he can offer the House?

If the hon. Gentleman had listened to what had said he would know that, for example, that in the first quarter of this year investment in manufacturing, distributive and service industries was up by 5 per cent. on last year. The decline has come to an end in manufacturing industry and there are prospects of an increase in investment in the year ahead. Moreover, investment in plan: and machinery in the first half of this year is up 8 per cent. on what it was in 1979.

In view of the many schemes for public investment being pressed upon the Chancellor, will he give the House his opinion of the attempts by such bodies as the British Airports Authority and British Rail to attract private investment? Is he generally approving of such approaches, or is the Treasury concerned at the lack of control over the investment that may ensue?

My hon. Friend makes an important point. The report that was prepared last year by the Treasury and Civil Service Select Committee, and the two reports that were produced for the National Economic Development Council, drew attention to the scope for increasing private investment in nationalised industries, provided that the rewards of that investment are related to the risks undertaken and the success achieved, and provided that such investment does not cost more than it should. In that context it is important to be sure of the point made by my hon. Friend.

asked the Chancellor of the Exchequer what is the latest purchasing power of the £ sterling compared with May 1979, taking the May 1979 value as 100.

Sixty-eight pence in April 1982.

Is the Minister proud of the Government's record in the falling value of the pound, together with the nearly 4 million unemployed, high inflation and squeezes in the public sector? When does he expect the 1979 value of the pound to drop to 50p?

The Government are not complacent about the inflation performance. I am bound to point out to the hon. Gentleman that when his party was last in power, in the corresponding first two years and 11 months of the last Labour Government the value of the pound fell from 100p when they took office to 59p. The Labour Party is in no position to speak about such matters. We can say that the trend of inflation is downwards, is progressing, if anything, faster than we foresaw, and that we are fully on course to achieve our objectives for inflation at the end of this year, next year and ahead.

Does my hon. Friend agree that a significant factor in that figure was the explosion of public sector pay in the Government's first year of office? One of the most important factors in that regard was the work of the Clegg Commission and the Pay Research Unit, which we inherited from the Labour Government.

The answer to that must be "Yes, indeed". We have learnt a great deal from that experience. .

asked the Chancellor of the Exchequer when he expects his policies to result in a reduction in unemployment.

The monthly rate of increase in unemployment has slowed considerably in recent months. Vacancies have been higher this year, short-time working has fallen sharply and overtime working has increased. However, progress will be faster the more rapidly we bring down inflation and secure greater responsibility in wage bargaining.

The Minister has answered every question except that which is on the Order Paper.

The—

Answer.

The hon. Gentleman is suggesting that an increase in expansionary, monetary and fiscal policy would produce greater economic growth, when all the evidence is that it feeds through into higher inflation. Higher inflation inhibits growth and damages the longterm prospects of reducing inflation.

Does my hon. Friend agree that the present level of unemployment has its roots in the policies of the Labour Government, who believed that they could spend their way out of their problems? All that they were doing was passing on the problems to those following. The present taxpayer is footing the bill for the profligate policies of the past.

A substantial cause of Britain's high level of unemployment is the long-term uncompetitiveness of the British economy. In the past year we have seen for the first time a substantial improvement in competitiveness and thus we have some confidence for the future.

Will the Minister explain why, when unemployment rose to 2 million, the Chancellor of the Exchequer blamed it on the high level of inflation, which was then running in excess of 20 per cent., and yet now, when it is expected to be in single figures, the Chancellor of the Exchequer's public expenditure White Paper expects unemployment to continue to be higher this year, next year and the year after?

The right hon. Gentleman is experienced in such matters. He knows very well that the White Paper projections are not projections of unemployment, they are forecasts. [Interruption.] They are working assumptions—[Interruption]—for social security planning purposes. It is not the Government's policy, nor was it the policy of the Labour Government, to forecast unemployment.

asked the Chancellor of the Exchequer if, on the basis of the most recent economic indicators, he remains satisfied with the outlook for the economy.

Lower inflation, the resumed decline in interest rates, business surveys, most outside forecasts and other indicators all point to a continuation in the recovery in the course of this year and in 1983.

Will the Minister now answer the question that his hon. Friend failed to answer earlier and which the Prime Minister and other Ministers have consistently failed to answer? What is the total estimated cost to the economy of the Falklands operation? Does the Treasury intend to recover that cost by increased taxation, increased borrowing or further savage cuts in public expenditure, which will cripple essential services such as housing, health and education?

I have nothing to add to the earlier answer by my hon. Friend on the subject, particularly since the supplementary question does not relate to the original question. I am happy to reaffirm my hon. Friend's answer. What he said is a significant statement of Government policy. It would be possible to finance the expenditure caused by the Falklands operation in an inflationary way by printing money. Other Governments might have done that, but we shall not.

If my right hon and learned Friend is to build on the achievements that he has outlined and at the same time increase public sector investment, which we all desire, will he confirm that the essential prerequisite to further progress is the control of current public expenditure and, in particular, of public sector wage settlements?

That is so. The message is getting across that the benefit of lower wage settlements is to be found not only in lower inflation rates, which lead to improving the prospects of recovery, but in reducing unemployment difficulties.

Since the growth in unemployment and its grim outlook go side by side with the increasing dilapidation and obsolescence of essential public assets, when will the Government tackle both problems by proposing projects for repairing the country's infrastructure?

I agree that projects for repairing our country's infrastructure have an important part to play to the extent that they can be financed in a way that does not lead to inflation.

Mr. Squire. No. 11.

rose—

I did not realise that the Opposition Front Bench spokesman wanted to ask a question, or I should have called him earlier.

I have to come back to the question of the outlook of the economy and the evidence of recovery. I have in my hand the Index of Industrial Production published half-an-hour ago. It is one of the major indicators of the state of the economy. Does the Chief Secretary confirm that it shows, once one leaves out oil and gas, that there has been no improvement whatever in the past year? If that is so, will the right hon. and learned Gentleman explain why that important piece of information, which is normally available in the Library at 2 o'clock has beer withheld until after 3 o'clock? Will he now make a real effort to tell the truth about the state of the economy?

I cannot help thinking that there is something a little synthetic in that. The figures were published at 2.30 pm as normal. They show an increase in industrial production for all industries from 100.3 to 101.

asked the Chancellor of the Exchequer if, in view of his assessment, Official Report, 13 May, c. 312, that it might be desirable to legislate with respect to building societies, he will list the areas in which he judges additional provision to be necessary.

As my right hon. and learned Friend said in his recent speech to the Building Societies Association, it seems increasingly likely that there will need to be a major re-examination of building society matters, and possibly legislation, during the course of the next Parliament. The contents of the legislation will depend on the conclusions of the Government on that reexamination. Two of the major topics for re-examination, and so possibly legislation, are those of the powers of societies, and of the constitution of societies, including the accountability of their boards.

Is my hon. Friend aware that many who congratulate building societies on their role in widening home ownership are none the less concerned about the actions of a few societies, the directors of which appear to try to restrict their accountability to their members? Will he confirm that, without question, should that practice continue and not be regulated by the movement, legislation will be produced to counter it?

It is important not to get the matter out of perspective. One or two well-publicised incidents naturally cause anxiety. I can assure my hon. Friend that it wound be suitable for us to cover such matters in legislation, if there is such provision, in the next Parliament.

Does the Minister accept that if the Government want to put up inflation by increasing the price of petrol by 20p they have to come to the House and do that in the Budget, but if the building societies want to put up mortgages by £20 a month they do not have to ask anybody? Surely the House should decide when mortgage interest rates should go up, not a tiny handful of men in the building societies?

On the whole, our experience of Government trying to regulate the price mechanism in the private sector is that it does not have much to recommend it.

asked the Prime Minister if she will list her official engagements for 17 June.

This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Can the Prime Minister tell the House whether the ceasefire agreed in the South Atlantic has been extended to cover all military activities in that area? How many prisoners are held by British forces in the South Atlantic? Does she agree that the callous indifference shown by the Argentine junta towards its own men demonstrates very eloquently indeed its indifference to life and dignity?

We have not yet been able to procure a complete ceasefire in the South Atlantic. We seek such a ceasefire for the reasons that I explained last time I answered questions. It is important for us in the future.

Will my right hon. Friend find time today to consider the plight of the journalists still imprisoned in Argentina? Can she assure the House that their immediate and unconditional release will form part of any arrangements that we are eventually able to arrive at with Argentina?

We have already made further representations about the journalists, through the Swiss embassy, asking that they be restored to Britain as part of the arrangements for the repatriation of prisoners.

I thank the right hon. Lady for the representations that she has made on that matter. The Opposition hope that the ceasefire can be made as effective as possible as swiftly as possible.

No, Sir. That is a matter for the British Railways Board. We regard it as important that it secures the increases in productivity which so far have not been forthcoming.

Does the right hon. Lady mean that she and the Government are to stand idly by and do nothing whatever on the subject? I urge her once again to look at the facts afresh. If she will do that she will see that the unions have a strong case to put. I hope that she will try to get the Department of Employment to do its proper job, to try to prevent industrial disputes of this nature rising to a crisis. That is what the Department ought to be doing.

The management of British Rail is a matter for the management and the board, and not for the Government. The Government set the external financing limit for British Rail, which this year is about £950 million, the highest ever.

Is the right hon. Lady aware that the report has now been received from the public analyst on a certain substance recently subjected to analysis and that I have obtained a copy of the report? It shows that the substance under test consisted of ferrous matter of the highest quality, that it is of exceptional tensile strength, is highly resistant to wear and tear and to stress, and may be used with advantage for all national purposes?

Mr. Speaker, I think that I am very grateful indeed to the right hon. Gentleman. I agree with every word that he said.

Bearing in mind that the Falklands conflict has been the direct result of criminal irresponsibility by a Fascist dictatorship, which has defied the United Nations, has not hesitated to use outlawed weapons and, at this moment, is refusing to declare hostilities at an end, thereby increasing the anxieties of the prisoners in our hands, would not my right hon. Friend think it right and humane to inform each prisoner by letter of our concern for his welfare and our wish for his early and safe return to his country, and for such a letter to make it plain where the responsibility for delaying such an end lies?

I realise the very worthy purpose behind what my hon. Friend has said, but our first concern is to get some of the young Argentine conscripts repatriated. We are trying to do that with all possible speed and his valuable suggestion would, I am afraid, hold that up.

asked the Prime Minister if she will list her official engagements for Thursday 17 June.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Further to my question to the right hon. Lady on Tuesday, is she aware that a strike took place yesterday of 26,000 Welsh miners who were protesting against the Government's miserable and mean offer of 4 per cent. to the National Health Service workers? Will the Prime Minister now put pressure on her Minister at least to offer them a fair and reasonable amount? Surely she has enough blood on her hands?

Withdraw.

The answer is "No, Sir".

Leaving aside the ridiculous question that we have just heard, will my right hon. Friend turn to the Northern Ireland Bill what the right hon. Member for Down, South (Mr. Powell) calls her golden talents and ask him whether he will drop his opposition to it?

That is not for me to ask.

asked the Prime Minister if she will list her official engagements for Thursday 17 June.

I refer the hon. and learned Gentleman to the reply that I gave some moments ago.

Will the right hon. Lady find time today to turn her attention to the long-term unemployed, the growing, vast and sad army of people whose prospects—

What about genocide in the Lebanon? What about the Palestinians? Tell us about that.

Does the Prime Minister agree that there are problems at home that are causing vast worry, including the 50 per cent. of constituents in some parts of Leicester who are unemployed? What specific steps will she take to assist those people?

The hon. and learned Gentleman began his question by asking specifically about the longterm unemployed. It was with those people in mind, and because we were anxious to relieve that unemployment, that my right hon. and learned Friend the Chancellor of the Exchequer, during the Budget, set aside £150 million to see whether we could find useful work for those people. That £150 million has not yet been used, but the Manpower Services Commission is, I hope, shortly to put forward proposals for the best way in which it could be used to help the very many people whom the hon. and learned Gentleman has in mind.

In view of the great compliment that the right hon. Member for Down, South (Mr. Powell) paid to my right hon. Friend, could she tell the House whether she has recently fought any battle on his behalf in Cabinet?

I fight both the battles of war and the battles of peace frequently.

In view of the Israeli invasion of Lebanon and the subsequent deaths of thousands of innocent civilians, will the Prime Minister seek an urgent meeting with her European partners with a view to achieving, on a European basis, military and economic sanctions against Israel?

Statements have been issued by the European Foreign Ministers and political heads condemning vigorously the occupation of, and the intrusion into, the Lebanon by Israeli forces. The Foreign Ministers will be meeting again shortly. I do not believe that there is very much likelihood of sanctions against Israel. I join the hon. Gentleman in saying that what has happened is, in a way, a double tragedy. First, there is the invasion of the Lebanon itself with all the deaths, devastation and suffering that it has caused and, secondly, the fact that that invasion was made by a country which has itself suffered so much in the past and whose suffering we have always tried to alleviate.

Further to the exchanges on the end of hostilities in the Falklands and the internal position in Argentina, will my right hon. Friend examine the rumours about the long-term detention in Argentine gaols of British nationals, who have been illegally imprisoned for many years and been tortured by the secret police or by the other agencies of the regime without justification? Will she press for their immediate release?

Of course we would press for the release of any de:ained British citizens about which we knew and would make representations to the Argentine junta. It is partly because of the nature of the Argentine junta and the total lack of human rights in Argentina that we were so anxious to get the Argentines to leave the Falklands, and were prepared to use force to do so.

Will the Prime Minister give some time during her busy day to comment further on the statements that she made on Tuesday about the nature and content of the inquiry that might be made into the Falklands dispute? In particular, does she take the view that it can be done under existing legislation, such as the Tribunals of Inquiry (Evidence) Act 1921 or does it require further legislation and a specific role for the House of Commons?

It is not necessary to carry out an inquiry under the Tribunals of Inquiry (Evidence) Act. Indeed, I think that a number of people would say that it would be most undesirable to pursue that particular form of inquiry. I shall, as I indicated, shortly be writing with suggested terms of reference and the form of the inquiry to the Leader of the Opposition and to the leaders of other political parties in the House.

asked the Prime Minister if she will list her official engagements for Thursday 17 June.

I refer my hon. Friend to the reply that I gave some moments ago.

Not least because the World Cup is being held in Spain, would my right hon. Friend consider today appealing to the many thousands of young British football fans, whatever the provocation, not to behave in a way that might detract from the outstanding heroism shown by our young soldiers in the Falklands, who are their contemporaries?

I warmly endorse what my hon. Friend has said. I hope that those young people will be as good representatives of this country as our Armed Forces have been in the South Atlantic.

Will the Prime Minister reflect on her earlier reply concerning Health Service workers, because they are a far mole deserving case than, say, judges or top civil servants—

And the House of Lords.

Or the House of Lords. Does the right hon. Lady agree that the cost of helping the Health Service workers would be only a fraction of what the Falkland Islands operations have cost?

We increased the cash limit of the National Health Service to make a higher offer to the nurses. The hon. Gentleman will know that the amount being spent on the Health Service this year is 6 per cent. in real terms above what it was in 1979. Beyond that, I leave the matter to my right hon. Friend the Secretary of State.

On a point of order, Mr. Speaker. You will have noticed during questions to the Chancellor of the Exchequer that four questions, Nos. 4, 15, 16 and 20, were couched in identical terms. As I recall, Mr. Speaker, you have deprecated that practice in questions other than to the Prime Minister, and have been critical of such identical questions to the Prime Minister. When the Chancellor of the Exchequer replied, he appeared, in a curious manner, to read ready-written replies to anticipated questions. I therefore ask you to investigate the possibility that the questions were planted so that the Chancellor could produce ready-written replies to bolster the otherwise rather barren replies that he normally gives.

Order. Hon. Members who table questions take responsibility for them, and the Minister takes responsibility for the answers.

Further to that point of order, Mr. Speaker.

It was not a point of order.

On a point of order, Mr. Speaker. During Prime Minister's Question Time the hon. Member for Ogmore (Mr. Powell) accused the Prime Minister of having blood on her hands. Do you not agree that that was a disgusting accusation?

Order. Personal abuse adds nothing to anyone's argument. I let the matter go, as did the Prime Minister, and I think that we had better leave it there