asked the Chancellor of the Exchequer if he will introduce measures to control the use of credit cards.

No.

Is my hon. Friend aware of the plethora of plastic that dominates the country's economy? Does he not agree that it would be a good idea if a small taxation charge were levied on outstanding credit card debts every month? It would be a way of raising revenue and reducing the amount of credit floating round the country.

I assure my hon. Friend that the Government are always grateful for suggestions to fortify the Revenue. Unfortunately, a tax on credit card borrowing would be rather difficult to justify or to administer if no such tax were charged on overdrafts, hire purchase agreements, budget accounts or other forms of consumer credit. The likely outcome of such a tax on one form of credit, unfortunately, would be to shift the business to another form of credit.

Is not the Minister in a bit of a predicament when he talks about controlling the use of credit cards and introducing a tax element, particularly as the Government in the past few months, prodded by the Prime Minister, have allowed a wide credit card system, to the tune of $600 million, to be used by Argentina? Instead of putting a tax on the credit card system, the Government have suggested that the banks should get tax relief on the debts that have been incurred from the countries whose loans are being rescheduled.

There is later on the Order Paper a question that is more germane to the point that the hon. Gentleman is trying to raise. Perhaps it will he better to discuss it then.

Is my hon. Friend aware that about 30 million cheque and guarantee cards are circulating in this country? In view of the frightening and growing incidence of the fraudulent use of credit cards, is my hon. Friend satisfied that the scrutiny and control exercised by the Government, the police, the clearing banks and primarily the credit card issuers are satisfactory?

The answer to my hon. Friend's question is basically no. There is a serious problem of fraud. However, that is a matter for the banks and the credit card companies. The companies are making determined efforts to combat fraud and are continually exploring new means of doing that. Responsibility, in the first instance, must rest with them.

asked the Chancellor of the Exchequer what representations he has received on the effect of his Budget on the recovery of the economy from the recession.

asked the Chancellor of the Exchequer if he will make a statement on the representations he has received since his Budget statement.

asked the Chancellor of the Exchequer what representations he has received as to the impact of his Budget proposals on the prospects for the recovery of the economy.

The Budget has been widely welcomed for its help to business, to people and for recovery and jobs.

As my right hon. and learned Friend has for some time expressed confidence that the economy is recovering from the recession, is he not disappointed that there are as yet no signs of a reduction in the number of unemployed? When does he expect that to happen?

My hon. Friend knows that the Government's policies are directed to securing just such a reduction, but that unemployment is the last of the features of economic activity to respond. I am sure that my hon. Friend will take encouragement from the fact that demand in the United Kingdom has risen by 4·5 per cent. since the spring of 1981, that manufacturing output rose by 3·5 per cent. between November and January, that activity in the construction industry has substantially increased and that there are many other such signs.

Does my right hon. and learned Friend agree that the best tribute that could be paid to the solid, sensible and realistic Budget that he has just introduced is to compare it with the economic crisis in France? The crisis brought the President to the television screen last night to announce drastic new measures after he had spent two years following policies that are constantly being advocated, with increasing fervour, by the Opposition.

My hon. Friend has made a very impressive point. It is most striking that many of the policies still espoused by the Labour party are being wisely rejected by a Socialist Government in France.

Given the Chancellor of the Exchequer's strong statements about the Labour party's proposal to devalue the pound if it came to power, does the pound's latest position cause the right hon. and learned Gentleman concern?

The important feature to remember about the pound and its position in relation to our economic policies is that we have in place policies governing the growth of the money supply, the growth of Government borrowing, and fiscal balance, which are sound and firmly based. It is also worth remembering that although one is sometimes inclined to concentrate on the exchange rate between the pound and the dollar, any inspection of the relationship between the pound and the other currencies in Europe shows that the pound has strengthened very substantially against most of them and has fallen since the inception of the EMS by only 7 per cent. even against the deutschmark, which is the strongest of those currencies.

Is the Chancellor of the Exchequer not aware that Government borrowing, as a percentage of gross domestic product, has increased over the past two years in all the major European economies—with the exception of ours—and also in the United States of America? The Chancellor's Budget Red Book this year comments on the economies of the rest of the world showing signs of moderate recovery, falling interest rates and falling inflation. Why does not the right hon. and learned Gentleman take a lesson from that for the Government's borrowing requirement?

The important lesson to be drawn is that my counterpart in France was last week seeking to claim credit for the fact that his public sector deficit was the second largest in the industrial countries, but that this week, for the second time in less than 12 months, he is taking a series of measures to reduce that deficit substantially.

Does my right hon. and learned Friend accept that most manufacturing industry accepts that the pound is now at a much more realistic level that will enable our industry to compete? Does he further accept that most people would agree, that he was quite right not to make hasty interventions in the foreign exchange markets, which would only damage this country's financial credibility?

I take careful note of my hon. Friend's observations and advice.

The Chancellor's initial response contained the staggering statement that the Budget had been widely welcomed. Were there any representatives of retirement pensioners or the unemployed among those who widely welcomed it? Given the recent and further devaluation of the pound—in the absence of any price offsetting measures—does not the right hon. and learned Gentleman now think that the figure of 6 per cent. for the rate of inflation at the end of this year should probably be at least 7 per cent? If so, does it not make it even more outrageous that the Chancellor should still stick to his decision to underpay 9 million or more pensioners by giving them a 4 per cent. increase in November of this year?

There is no reason whatever to take the view offered by the right hon. Gentleman about the prospect of inflation by the end of the year. Pensioners are grateful for the fact that the method for uprating pensions will now be put on a firm basis and will not be dependent on forecasts. They also take note of the fact that under this Government the real value of pensions will have increased by 5 per cent., and that the real value of child benefit will have increased by 12 per cent. The main thrust of the Budget has been warmly and specifically welcomed by all the representatives of British industry. One sign of that welcome is to be seen in the decisions now being taken in relation to future investment in the North Sea.

asked the Chancellor of the Exchequer what impact his policies have had on the creation of employment opportunities.

The Government's balanced fiscal and monetary policies, along with lower pay settlements, are the essential prerequisites for sustainable improvements in employment.

Is it not true that the average person's tax burden is higher under this Government than it was under the Labour Government in 1979? Is it not also true that the only people to benefit from the Government's tax policies are the wealthy, who have been busy shovelling money abroad at the rate of over £9 billion in less than three years due to the removal of exchange controls? Instead of investing in British manufacturing industry, they have invested their money anywhere for a fast buck. Do not those policies mean—on the Chancellor's own figures—that 1,000 people per day will join the dole queue in the next 12 months?

If the hon. Gentleman wants to make comparisons, he should note that real net income after tax and national insurance contributions is up on the 1979 figure at all levels, assuming that earnings have risen in line with the average. He should also bear in mind that, in terms of percentage points, the tax burden under the Labour Government greatly exceeded that of the present Government.

Is my right hon. and learned Friend aware of the importance of creating employment opportunities for part-time work? Is he further aware that the Chancellor's recent Budget, with its part-time job release scheme, was very much a step in the right direction? Will my right hon. and learned Friend see to it that his Department does even more to encourage part-time work?

I am grateful to my hon. Friend for his remarks about that aspect of the Chancellor's Budget and I entirely agree that the move to facilitate and encourage part-time employment in that way is to be welcomed, both in terms of employment and as a reflection of social trends.

Is it not now painfully clear that the Government's blunder in abolishing exchange controls is keeping interest rates much too high?

That is a strange observation from a party that takes the right hon. Gentleman's view about the exchange rate.

What is the Chief Secretary's view of the impact on unemployment of the slump in the value of the pound against the basket of currencies? It is standing at the lowest level for six years. Does he propose to take measures to offset the ensuing price impact?

The hon. Gentleman will have heard my right hon. and learned Friend the Chancellor of the Exchequer give the true position of the value of the pound. He will also have heard the view expressed that, whatever the total advantages and disadvantages, if British industry avails itself of the opportunity provided by a fall in the value of the pound there are advantages to be gained in terms of jobs.

Does my right hon. and learned Friend agree that there is now quite a variety of schemes to help the unemployed and that one of the best is the enterprise allowance? It makes sense to give those starting businesses on their own help with their living expenses for the first year. Is my right hon. and learned Friend aware that we welcome the fact that the scheme is being extended to the whole country?

The enterprise allowance, which was originally introduced on a pilot basis, has proved successful. There have been about 2,000 successful applications in the very small pilot area. As my right hon. and learned Friend the Chancellor said, the time has come to extend this scheme more widely throughout the country.

asked the Chancellor of the Exchequer what representations he has received as to the effect the Budget measures have had upon the level of taxation as a proportion of earnings in respect of those on average earnings and below and as compared with the relevant proportions in 1978–79.

For those on average earnings, income tax is a lower proportion now than in 1978–79. For some of those below average earnings, the proportion taken in tax is higher, but the Budget will benefit those on lower pay. Income tax and national insurance contributions together take a higher proportion than in 1978–79, but the real take-home pay of all those whose earnings have increased in line with the national average has increased.

Is the Minister aware that even his first answer does not tally with calculations made by the Library, which show that a family man on average earnings is still bearing a higher burden in terms of income tax alone—let alone the burden of national insurance and income tax combined—compared with 1978–79? Has the Chief Secretary seen the figures published by the Institute of Fiscal Studies, which show that a jobless man has lost £15 in real terms under this Government, that a man on £130 per week has lost £8, while someone earning £45,000 per year has benefited by the obscene sum of £120 per week? Is that the sort of fair society that the Government were elected to produce?

Thresholds are up by some 5 per cent. since my right hon. and learned Friend's first Budget. The standard rate of tax is some 3 per cent. down. The figures that were reported widely in the press yesterday were after the large increases made by my right hon. and learned Friend in 1979–80 and before the increases made in the last Budget.

asked the Chancellor of the Exchequer how many people are currently employed in Her Majesty's Treasury; and of them how many have any personal professional experience of manufacture or of commerce.

At 1 March 1983 there were 3,995 staff employed in the Treasury. A substantial proportion of staff employed at all grades have had personal professional experience of manufacture or commerce. At principal level or above, some 18 per cent. have had or are currently getting this experience. The Government greatly welcome this growing trend.

Is my right hon. and learned Friend aware that those figures show a welcome improvement over the last time that I asked that question? Will he encourage the Treasury staff department to ensure that more Treasury officials have the experience of being out in the cold, competitive world of commerce and manufacturing?

That is important and I agree with my hon. Friend.

How many professional accountants are there in the Treasury?

I shall write to my hon. Friend to give him that answer.

asked the Chancellor of the Exchequer whether he has given any advice to British banks about their involvement in a consortium of foreign banks which is seeking to negotiate the new medium term loan to Argentina following the Argentine decision to suspend repayment on nearly £1,000 million of its foreign debt.

No, Sir. This must be a matter for the individual banks concerned. The swap facilities, to which I assume the hon. Gentleman refers in the latter part of his question, form part of the foreign debt obligations of Argentina which are the subject of negotiations currently in progress between that country and international banks.

Will the hon. Gentleman confirm that there are no conditions attached to the loan to prevent the Argentine Government from using it to purchase arms, and that recently the Almirante Brown has been delivered, replete with British components, along with 70 Mirage III or Dagger jet fighters? Numerous other items are on order. Is it not a disgrace that the Government are prepared to finance the rearming of Fascist Argentina?

The part of the hon. Gentleman's question relating to Argentina's recent acquisition of frigates is not a matter for the Treasury—[HON. MEMBERS: "Oh".] There is no shortage of arms sellers around the world. We would not deny the Argentines the opportunity of purchasing arms by driving Argentina into default.

Really. What a disgrace.

It is clear that this loan is an integral part of the IMF programme for Argentina which puts tight controls on Argentina's public finances. If Argentina diverted money to buy more arms that could jeopardise the IMF programme and hence Argentina's ability for future drawings.

Disgraceful.

On the more general point, is it the Government's view that no one economy can be allowed to disintegrate without a substantial knock-on effect on its neighbours and, ultimately, on the whole international economic scene? In those circumstances, does my hon. Friend agree that the Government have no alternative but to pursue their policies irrespective of their views of the regime in Buenos Aires?

My hon. Friend is entirely right. We are a major trading nation and we depend upon exports for a larger proportion of our total output than do most other major trading nations and upon a steady expansion of international trade. A default that was triggered in Argentina by a failure to resolve the immediate problems of Argentina's indebtedness could have repercussions in other countries and serious implications for international trade that would be seriously to our disadvantage.

To borrow the Minister's graphic phrase of last year, is not this a mug's game?

No, Sir. It would be a mug's game to perform otherwise.

If Argentina were to default, would that not mean that British banks would have to write off considerable loans? [Interruption.] Before the Opposition jump for joy, will my hon. Friend confirm that the effect would be a reduction in their capital base which would mean that they would find difficulty in lending to domestic companies? Would that not mean a reduction in jobs?

I think that the hon. Gentleman is a merchant banker.

My hon. Friend is entirely right. The propositions advanced by the Opposition would be damaging to international trade and to the structure of international banking and would ultimately have repercussions on employment.

Is the hon. Gentleman aware of Tuesday's report in the Financial Times, that despite Argentina's reduction in interest arrears, the conditions for the $1.5 billion loan have not yet been settled? As the Prime Minister has stated categorically that the money is not being lent to purchase armaments, why is that not to be a condition of the loan?

As the right hon. Gentleman knows well, international arms trading is conducted on credit which is not necessarily pervious to the consequences of such banking negotiations. All the arrangements that are being conducted by the IMF are designed to ensure that Argentina, like other countries with debt problems, pursues correction policies that will enable it to settle its debts and not involve itself in additional outgoings that it could not meet.

On a point of order, Mr. Speaker. In view of that disgraceful Pontius Pilate-like reply, I shall seek to raise the matter on the Adjournment.

Further to that point of order, Mr. Speaker.

Order. There can be no further point of order on that point of order except to the extent that it was not expressed in the usual language.

Further to that point of order, Mr. Speaker. I give notice that I intend to raise this matter tonight on the Consolidated Fund (No. 2) Bill.

asked the Chancellor of the Exchequer what representations he has received following his Budget about the personal tax thresholds.

My right hon. and learned Friend's proposals have been welcomed warmly by my hon. Friends and, I believe, by the country as a whole.

Is my right hon. and learned Friend aware that the increase in thresholds has been welcomed by the low-paid and widows? Will he confirm that a major objectivee of the next Conservative Government will be to take further action against the unemployment and poverty traps?

I have observed the warm welcome given to these proposals by those to whom my hon. Friend referred. I agree that our objectives should be to make further progress in that direction.

Is the reality that, despite the change thresholds for people on average earnings are still lower in real terms than they were when the Government came to power? The burden of direct taxation for the poorest families in work—those on half-average earnings—has increased by nearly 50 per cent. in real terms since the Government came to power. How does that square with the promises in the Chief Secretary's election manifesto that there would be reductions in taxation at all levels of income?

The hon. Gentleman, as always, is highly selective and not entirely accurate. The thresholds are 5 per cent. in real terms above the 1978–79 level.

While I agree with my right hon. and learned Friend the Chancellor that the problems of the unemployment and poverty trap have been getting worse for the past 30 years, is he aware that many Conservative Members are not satisfied that sufficient progress is being made in this area? Can my right hon. and learned Friend assure us that he will find a way out of this problem in less than 30 years?

Sufficient progress is rarely made, but substantial progress has been made. As for the next 30 years, that is perhaps five years longer than the time scale on which I think we should operate.

asked the Chancellor of the Exchequer when he anticipates that national income will return to its level of May 1979.

GDP is likely to return to its level of the first half of 1979 before the end of this year. Real national disposable income, which takes into account changes in the terms of trade, was already well above the level of the first half of 1979 by the second half of last year.

Will the Chancellor accept that the compromise wage average of the three GDP indexes shows a 4 per cent. fall in the past four years? Will he accept that talk of recovery is misplaced until the economy at least recovers to the point where it was before he got to work on it? Will he confirm that every previous post-war Government achieved a substantial growth in GDP? As he is given to blaming his predecessors, will he say how content he is about doing so much worse than the Administration of the right hon. Member for Sidcup (Mr. Heath), whom he is given to rebuking at length in the House?

The hon. Gentleman understands very well that GDP growth has either come to a halt or fallen in almost every other industrial country in the Western world. In our economy we offer the prospect of an increase of about 2 per cent. this year, which is ahead of what is on offer in many other countries. A number of indicators suggest that growth is moving forward. I have drawn attention to the substantial increase of 3½ per cent. in manufacturing output in the two months from November to January.

asked the Chancellor of the Exchequer what representations he has received about the effect of his Budget statement on unemployment; and if he will make a statement.

There have, as always, been a wide variety of comments on all aspects of the Budget, most of which have been made publicly rather than in the form of specific representations to my right hon. and learned Friend the Chancellor of the Excehequer.

Will the Chief Secretary and the Chancellor of the Exchequer recognise that, faced with the worst recession since the 1930s and with 3·2 million plus unemployed, many living below the poverty level, the measures taken are a sham and will not, under any circumstances, solve unemployment, which is devastating for many people?

I do not accept that analysis of the Budget. The vast majority of people will accept that, within a responsible fiscal framework, my right hon. and learned Friend has been able to put forward measures to assist the construction industry and to encourage small businesses. The measures have already led to further investment in the North sea. At the same time, the Budget has reduced business costs. I regard that not as a sham but as a substantial contribution to recovery.

Will my right hon. and learned Friend acknowledge the good response to the encouragement given in the Budget by his right hon. and learned Friend to company employee share schemes? Is he aware that there is sound evidence, especially from the United States, that companies with such incentive schemes perform better than those that do not have them and that they can offer better employment opportunities for the future?

That evidence is, I believe, real. It is certainly a direction in which we want to move. I am glad that we have been able to take steps in that direction this year.

Will the right hon. and learned Gentleman accept that last week there was great bitterness in Stockport about the unfairness of the Budget towards the unemployed, but that this week there is even greater bitterness because redundancies have continued to rise, with 300 announced at Bowater in Stockport? Why did the Government not include in the Budget some help for what remains of the paper industry, through a favourable fuelling price?

I am not pretending that the Budget was able to prevent every unfavourable development in every part of the country. On unemployment, there is no doubt that the measures to assist industry directly in the case of the construction industry, through the tax system in the case of North sea oil, and the encouragement of investment through the business expansion scheme, the reduction of the national insurance surcharge and the reduction in corporation tax for smaller businesses, are all supremely relevant to job opportunities.

Is my right hon. and learned Friend aware of the considerable support given to his proposals for free ports? As these will entail considerable nurnbers of new real jobs, can he say how soon a free port will he established in the United Kingdom?

I am well aware of the considerable interest in that aspect of my right hon. and learned Friend's proposals. I am not able to give any further information about dates at this stage.

The substance of the question of my hon. Friend the Member for Bothwell (Mr. Hamilton) was about the impact of the Budget on unemployment. Will the Chief Secretary now confirm that, even if the growth targets in the Red Book are achieved, the number of people out of work in Britain after his Budget and by the end of this year will be an additional 300,000 over and above the present 3½ million unemployed?

I do not accept those figures at all. I do not believe, faced with what on any view is serious unemployment, that a useful contribution is made tc the discussion by presenting, as Opposition Members have consistently done, grossly inflated figures of the reality.

asked the Chancellor of the Exchequer whether his policy on exchange rates has been affected by recent falls in oil prices.

No, Sir.

Does the Minister agree that the Government's policy on exchange rates has vacillated over the past 12 months between keeping sterling steady and letting it slide? What is his present view, and why?

I do not for one moment accept what the hon. Gentleman says. My right hon. and learned Friend's policy throughout has been that we should pursue domestic monetary and fiscal policies that ensure a coherent and solid basis for future Government finance, which will be reflected over the medium term in the level of the exchange rate. Of course, the exchange rate is subject to passing fluctuations due to speculation about oil prices and the like. It is not within the power of this Government or any other Government to determine precisely how those short-term fluctuations will move. What we have to ensure—and we have done it—is that the basic fiscal and monetary postures of the Government are such as to ensure, in the long run, that the exchange rate remains firm.

Do not Treasury Ministers hug themselves with delight and relief when they recall that Britain has a freely floating currency and is therefore exempt from the crises and quarrels by which those who have not, such as members of the EMS, have been wracked?

I am not sure that I agree with the right hon. Gentleman that Treasury Ministers should hug themselves with relief over anything. I agree with him that the recent experience of the European exchange rate mechanism exposes the fragility of attempts to maintain particular exchange rates against the current market pressures.

Will my hon. Friend bear in mind, when some right hon. and hon. Members suggest that we are exempt from such crises, that one reason why interest rates in this country are not only very high in real terms, but are substantially above the current and prospective rate of inflation, is that we have had to maintain the exchange value of sterling? Does he accept that if it were not for that, there would be some prospect of earlier economic and industrial recovery and that there is therefore a case for us joining the European monetary system and having some mechanism other than interest rates alone to ensure that the value of sterling is maintained?

I am not sure that I agree with my hon. Friend that the experience of the French, for example, suggests that membership of the monetary mechanism enables one to avoid interest rates being higher than they otherwise would be. The policy of the Government towards interest rates, as my right hon. and learned Friend the Chancellor has consistently made clear, is that they are determined by our assessment of domestic monetary conditions. That remains the case.

I thought that the Government's policy was basically to leave the oil price and, indeed, the exchange rate to underlying market forces, allowing for temporary action. Will he confirm that this is the case? Does he agree that the pursuit of these policies over the past 12 months means that we have depreciated against the dollar by 18 per cent., against the yen by 20 per cent. and against the deutschmark by 17 per cent? Will he give the assurance that it is not his intention artificially to prop up the level of the pound, as his hon. Friend the Member for Chichester (Mr. Nelson) suggests, by artificially high interest rates?

I assure the right hon. Gentleman that the Government do not intend to follow the example of his right hon. Friend the Member for Leeds, East (Mr. Healey) who, in 1977, attempted to use domestic monetary policy to organise the exchange rate. Of course, it is true that the exchange rate in the short term is substantially influenced by a wide range of factors, including expectations of oil prices and expectations of United States interest rates policy, over which we have no control. It is clear that the Government will not pursue the right hon. Gentleman's advice and try artificially to lower the exchange rate by promising policies of complete economic irresponsibility, because the market would draw its own conclusions.

asked the Chancellor of the Exchequer what recent representations he has received about the tax treatment of individuals who invest in theatrical enterprises.

I am aware that the report of the Select Committee on public and private funding of the arts has recommended that a loss from casual investment in the theatre by an individual should be allowed for tax against his other income.

Is my hon. Friend aware of the critical state of the British theatre? Rather than changing VAT rules, does he agree that there would be a substantial incentive for people to invest if losses from investments in theatrical enterprises could be offset against other income and if profits were treated as earned rather than unearned?

My hon. Friend's proposition would not assist the subsidised theatre, because charitable trusts are not able to attract private investment, as they cannot distribute the profits. I recommend that the commercial theatre carefully examines my right hon. and learned Friend's recent Budget, which provides considerable assistance to small businesses which, I believe, could be used well by the theatre.

Will the Minister confirm that if he introduces any measures to grant tax relief to people who invest in theatrical enterprises he will not include the latest developments of those who are engaged in breakfast television, such as his hon. Friend the Member for Thanet, East (Mr. Aitken) who is now the boss of TV-AM? But then again, that is not theatre, but has turned out to be farce.

The hon. Gentleman asks a hypothetical question.

Has my hon. Friend noticed the number of empty theatres in the west end of London? Does that not show the problem that producers are having in raising the necessary money? Does he agree that a more helpful policy, allowing losses to be offset, would be of enormous benefit to west end theatres?

I understand my hon. Friend's point, but the fact remains that the investor is not carrying on a trade but simply advancing money in the hope of obtaining a return. Any loss is therefore from investment, not trading. To widen that would cause a substantial problem.

Is it not high time that that type of activity was regarded as carrying on a trade?

When such activity can justifiably be considered as carrying on a trade, it is treated as such. That does not apply to the "angels" as they are referred to in the theatrical world. I see no prospect of changing that.

asked the Chancellor of the Exchequer whether he has received any representations from the construction industry concerning his Budget proposals; and if he will make a statement.

I received a number of such representations, which I took into account in reaching my Budget judgment.

I welcome the measures that my right hon. and learned Friend has taken in his Budget to help the construction industry. Will he reconsider the imposition of VAT on house maintenance and repairs, because removal of that would stimulate employment in the construction industry and help the Government's excellent home improvement programme?

Of course I shall consider any suggestions that my hon. Friend advances but I should not like to give rise to any expectations of that type. I am grateful to him for his tribute to the improving performance of the construction industry. In the year to the end of 1982, construction output increased by 6·5 per cent., new orders increased by 15 per cent. and private housing output increased by 33 per cent. Total housing starts have risen by 47 per cent. since the last quarter of 1981 and are now above the level that was reached at the beginning of 1979.

asked the Prime Minister if she will make a statement on the future of the coal industry.

There is an excellent future for the coal industry provided that it can tackle its fundamental problems and produce coal at a competitive price. Our proven coal reserves will last 300 years at present rates of extraction.

Does not my right hon. Friend's answer show that the Government have stuck rigidly by their obligations under "Plan for Coal"? Is it not unfortunate that Mr. Scargill and the National Union of Mineworkers have agreed to less than one third of the proposed closures in "Plan for Coal"? Is it reasonable to expect the taxpayer to go on subsidising the coal industry to that extent if the union is not prepared to honour its undertakings?

My hon. Friend is quite right. There were two parts to "Plan for Coal" which was published in 1974. One part concerned investment, which the Government have more than honoured, the other was an agreement that exhausted capacity should be closed at about the rate of 3 million tonnes a year. So far, such capacity has been closed at a rate of only 1 million tonnes a year and the productivity expectations have yet to be fulfilled.

Is the Prime Minister aware that it is suggested that there is a contractual arrangement between the National Coal Board and Mr. MacGregor by which Mr. MacGregor, in return for offering some 5,000 hours of work, will receive a payment of £1–5 million, which seems to work out at about £5 a minute? Does the Prime Minister consider that to be above or below the going rate for the job?

I have, as yet, no statement to make about Mr. MacGregor. One will be made as soon as possible. The figure that the hon. Gentleman mentioned is about the same as the losses of the Coal Board per day.

Since my right hon. Friend returned from her successful mission for our country—

Order. I ought to remind the hon. Gentleman that this question is about the coal industry. It is not an open question.

Is my right hon. Friend aware that the Government's decision about Asfordby has been widely welcomed locally and that we must now get on to sort out environmental problems?

I am grateful to my hon. Friend. I believe that the decision takes full account of the environmental problems and the need to provide new jobs. It is the best decision under all the circumstances.

Will the Prime Minister initiate a full-scale top-level inquiry into the future of Thorne colliery in my constituency, where the recommencement of coal production would provide many jobs in an area which the right hon. Lady knows is an unemployment black spot? Is she aware that I received a letter today from the chairman of the NCB saying that the underground redevelopment of that colliery has come to a full stop and that one of the reasons for that is the constraint on capital expenditure available to the board?

Where investment goes and into which collieries is a matter for the National Coal Board. As the hon. Gentleman will be aware, this Government's record in providing new investment for coal exceeds that of the Labour Government and is quite excellent.

asked the Prime Minister if she will pay an official visit to Pratt's Bottom.

I have at present no plans to do so, although I know Pratts Bottom well because I used to live within walking distance. Will my hon. Friend please give my warm regards to the people there?

Is my right hon. Friend aware that her reply, notwithstanding her good wishes, will be deeply disappointing to the villagers of Pratt's Bottom? Is she aware that they seek an early opportunity to express to her their appreciation of the benefits of the Budget—[Interruption.]—in which they are keenly interested, especially the raising of the tax threshold and the further relief given to mortgagees?

I am grateful for my hon. Friend's warm and fully justified praise for my right hon. and learned Friend's Budget. I am especially grateful for his praise of the extra relief on mortgages. In the Greater London area, about 23 per cent. of first-time house purchasers, and about 30 per cent. of those not buying for the first time, have mortgage loans above the former tax relief limit. The extra relief is well deserved.

Is the Prime Minister aware that, were she to visit Pratt's Bottom, she would be in P district of the Metropolitan police area and that, to get there, she would have to drive through my constituency down the Bromley road? Is she aware that if she happened to stop on Bromley road, get out of her car and talk to my constituents about the Police and Criminal Evidence Bill, she would find them enormously encouraged by the remarks of her right hon. Friend the Home Secretary from the Dispatch Box on Tuesday—when she was, unhappily, away—to the effect that the Government intend to withdraw two clauses from the Bill because they know that it will be rejected by the bishops and judges in the House of Lords? Will she tell us about the Government's exact intentions in respect of that Bill now that it has fallen into such contempt on both sides of the House?

My right hon. Friend the Home Secretary has audibly dissented from the hon. Gentleman's interpretation of his remarks when I was away on Tuesday. The hon. Gentleman will accept that the Bill was based on the findings of a Royal Commission. He will also accept that we wish to fight crime with every possible legitimate weapon, and it is important that we should be denied neither the means of identification nor the means of proof for fighting those crimes.

asked the Prime Minister if she will list her official engagements for Thursday 24 March.

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. This evening I shall be attending a dinner given by President Kaunda.

Does my right hon. Friend agree that for far too long teacher training courses have contained too many irrelevant and spurious subjects such as sociology and psychology? Does she agree that the timely announcement earlier this week by my right hon. Friend the Secretary of State for Education and Science will better equip teachers to teach children real subjects that will be of practical benefit to them in the real world? Will she undertake to bring forward the White Paper proposals as early as possible?

I welcome my right hon. Friend's White Paper on the training of teachers. There is an opportunity to improve teaching in our schools, to secure a match of teachers' qualifications with the shortage subjects, which is most important, and to assess what really matters, which is their competence in the classroom. Those things will be done and will be warmly welcomed in the country.

Perhaps the Prime Minister can help us by clearing up the confusion created by some answers that we heard earlier this afternoon from Treasury spokesmen about loans to Argentina. Can she confirm that talks on the legal conditions of the loan have proved difficult, as was reported in a newspaper a few days ago? Have those difficulties been created by the British Government because they are trying, at last, to lay down conditions about the expenditure of that money on arms?

I remember the right hon. Gentleman saying from that Dispatch Box that it was no earthly good trying to lay down such conditions, but his question now is completely different. We supported the loans from the IMF to Argentina on certain stringent conditions. There are two commercial loans to which different conditions apply. We supported the loans for two reasons. First, in the absence of either an IMF loan or commercial loans there was a possibility that Argentina would default. If it did so, it would have far more money to spend on arms than if it met the debt. [Interruption.] I am afraid that that is a fact of life. Furthermore, unless Argentina receives some help, it could default to third countries and, therefore, trigger off the collapse of the difficult and delicate packages that were agreed between the IMF and those countries. Therefore, it was in our interests to do what we did, both through the IMF and through the agreement of two commercial loans under different circumstances.

Does the right hon. Lady stand by her statement of 27 January that the money has not been lent for arms? Is it not the case that, under the plans that she is now apparently allowing to go ahead, the money may be spent on arms? Does she take account of the fact that, according to recent reports, up to £6 million of Argentina's £38 million foreign debt is believed to have been spent on defence? Is she aware that Argentina has greatly increased its arms supplies, some of which may have been paid for with British money?

The right hon. Gentleman has still not taken note of my first point. The alternative was that Argentina may default. [Interruption.] The right hon. Gentleman may not like it, but if a country defaults on all its debts, much more money is released that could pay for arms than would have been the case if that country was held to repaying its debts. That is obvious.

Has the Prime Minister had time to see the study by the Association for the Conservation of Energy, which suggested that 150,000 new jobs could be created in energy conservation? Is it not deplorable that the Secretary of State for Energy is suppressing the policy unit report from his Department? Will she ensure that the Select Committee on Energy receives a proper Government reply to this proposal?

I do not believe that 150,000 new jobs could be created in that way. There is already much conservation of energy in Britain, for good and obvious reasons. With the sharp increases in the price of oil, coal and electricity that we have had, people must insulate their houses and industrialists must introduce processes that require less energy and equipment that conserves energy to a much greater extent. That conservation has led to a substantial reduction in the use of energy in this country. There are special grants to old people to insulate their homes.

Since my right hon. Friend's highly successful mission abroad for our country, has her attention been drawn to the deportation last week of a young Romanian, especially to the way in which he was forcibly returned, despite last-minute pleas from Members of Parliament? Is she further aware that he could not speak English when he first arrived here in April 1982, but that it was months before the British-Romanian Association was told of his existence and that that association believes his case? Is she also aware that there appears to have been no consultation with the Foreign Office, which knows about the conditions in iron curtain countries and which may even consider that there has been a breach of the international convention on refugees? Does not my right hon. Friend think that these circumstances warrant the most careful review and examination of what happened to ensure that it does not happen again?

I know that my hon. Friend feels very strongly about this.

And the rest of us, too.

I read what my right hon. Friend the Home Secretary said and noticed that at the outset he made the point that this country has an excellent record in awarding refugee status, and will continue to have an excellent record, as has been shown by our treatment of the Polish people who have come here since military law was declared in Poland. My right hon. Friend the Home Secretary said that, having looked carefully at the conditions of the case, he decided that it was not one for refugee status. I understand, and am advised, that refugee status should be limited to cases that meet the criteria set out in the United Nations convention on refugees. This particular case was considered in that light and apparently did not meet those criteria.