asked the Chancellor of the Exchequer what is the present rate of growth of the United Kingdom economy.

Output this year is expected to be about 3 per cent. higher than last year.

Is there not a note of complacency in what the Chancellor has just told the House? Does he agree that, if the CBI figures are right, next year's growth could be only 2 per cent., which will inevitably mean that we will stabilise the present level of unemployment? Given that there are now more than 3 million people out of work, does the right hon. Gentleman agree that we need to improve the level of growth? Is he not worried that too much of this year's growth was based on personal borrowing, not on genuine manufacturing improvements?

The hon. Gentleman has asked a number of questions. Of course there is great concern about the level of unemployment, but there is room for cautious satisfaction that the rate of unemployment appears to have levelled off and that employment is rising for the first time since the recession began.

In the context of the comments on the radio this moring on the very favourable OECD report on Britain's economic performance, did my right hon. Friend by any chance hear the grotesque piece of economic blasphemy from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), in which he referred to the Labour party's ragbag of discredited policies as being the equivalent of the Sermon on the Mount? If any comparison is to be made, surely the only comparison would be with Mount Desolation.

My hon. Friend is absolutely right. The record of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) as a forecaster is wed known to the House. My right hon. and hon. Friends will remember, for example, that during the election campaign he said:

"There is no doubt that inflation will be in double figures by the end of this year if this Government remains in office."

Does the Chancellor agree that no country among the major industrialised countries has suffered a greater collapse in industrial and manufacturing output than Britain under this Conservative Administration betweeen 1979 and 1983? As the right hon. Gentleman is so full of seasonal good cheer, will he say when manufacturing output will return to the level of May 1979? Will that be before, or after, 1990?

I do not know when manufacturing output will be at the 1979 level. What is encouraging is that output as a whole is already back to the level that it was at the peak in 1979 and is continuing to rise.

With regard to the present rate of growth in the United Kingdom economy, I note that my right hon. Friend recently happily assumed the duties of Father Christmas. Having regard to prospective rates of growth, will he now go further and, as fairy godmother, wave his wand so as to endow our friends in the United State of America, in the interests of us all, with a medium-term financial strategy?

I do not have a magic wand, so I am unable to perform that miracle, although it would be desirable if it were brought about. However, I am grateful for the role in which my hon. Friend casts me. It is rather better than the role of The Ghost of Christmas Past, which was the role adopted by the right hon. Member for Sparkbrook on the radio this morning.

asked the Chancellor of the Exchequer what is the current annual rate of revenue from the following taxes: (a) special car tax,(b) vehicle excise duty, and (c) excise duty on hydrocarbon fuels.

The estimates included in table 1.8 of the Autumn Statement for 1983–84 are: (a) car tax £625 million, (b) vehicle excise duty £1,968 million, and (c) excise duty on hydrocarbon oils £5,625 million.

Will my hon. Friend acknowledge the contribution that the motor industry is making to the economy and to the Exchequer? Will he, in the coming weeks, carefully reflect on whether that contribution might increase if the rate of tax is slightly reduced?

My right hon. Friend and I will be reflecting on all these matters in the coming weeks. I am happy to acknowledge the performance of the motor industry, in recent years, after a very difficult period, and I acknowledge the interest and assistance that my hon. Friend has given in that direction. However, the level of taxation on motoring, although it is substantial, cannot be too great a disincentive, since in the first 11 months of this year car sales were an all-time record of 1·72 million.

asked the Chancellor of the Exchequer what is the estimated annual contribution to the Exchequer of the gas and electricity industries.

Both industries make payments of VAT and other taxes and duties in common with industry generally. The British Gas Corporation also incurred liability for £523 million in respect of gas levy and £208 million in respect of corporation tax for the financial year 1982–83. None of the electricity industries is currently paying corporation tax.

Can the Chief Secretary explain what happened to the Secretary of State for Energy who before the election was fighting to keep electricity prices down but since being transferred to become Chancellor of the Exchequer has been fighting to put them up? It was not just the fact, was it, of taking up residence in a taxpayer-funded house?

The hon. Gentleman is straining a little to achieve a rather meretricious effect. Electricity prices will have been frozen for a year by April of next year, at a time when the retail price index will probably have gone up by about 5 per cent., which indicates a fall in electricity prices in real terms.

Has the right hon. and learned Gentleman had my experience since the beginning of October at advice bureaux for constituents of not a week going by without an elderly person, because of the housing benefit impact, coming in with an electricity or gas bill which he or she is unable to meet and one has to intervene to prevent the service being cut off? Will the Minister—as a good new year's gift, as it were—do something in conjuction with the Secretary of State for Energy to achieve a more equitable arrangement for energy prices?

I have not yet had the same experience as the hon. Gentleman, but if such a person were to come into my advice bureau I should say that we were contributing about £350 million a year to assist the less well off with their heating costs and that that benefited about 1 million gas consumers and 2 million electricity consumers, half of whom were old-age pensioners. I should also emphasise to such a hypothetical visitor that that was about three times what the last Labour Government ever did.

Is my right hon. and learned Friend aware that those who visit my advice surgeries always complain about any increase in prices, but that as they leave they remark that it is better to have level price increases than to have the old distortion which was in favour of the domestic consumer and very much against industry, on which they know they depend?

I know that my hon. Friend gives his constituents sound economic advice. He may care to add to the information that he imparts to them the fact that during the last Labour Government domestic electricity prices went up by 170 per cent.

asked the Chancellor of the Exchequer if he is satisfied that current economic indicators confirm he will be able to achieve reductions in tax.

Provided that we maintain firm control of public expenditure, I remain confident that we shall be able to reduce the level of taxation during the lifetime of this Parliament.

Is not the truth that the Cabinet is going through desperate contortions in an effort to reduce taxes next April and that if that is achieved it will be at the expense of pensioners who cannot afford to pay their electricity bills, people who are in receipt of housing benefit and people who are desperately in need of decent local government services, which will be cut as a result of the Government's policies?

The Government have published public expenditure plans for 1984–85, and I am sure that the House agrees that they are a prudent compromise between what is necessary to maintain essential public services and what is necessary to maintain a gradually declining proportion of our total national output accounted for by public expenditure, for the benefit of the economy as a whole and to give headroom for tax decreases, especially in the lifetime of this Parliament.

Did my right hon. Friend hear on the radio this morning the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) advocating not only a reduction in taxation but, at the same time, an increase in public expenditure? Does my right hon. Friend agree that such a policy would be disastrous for the economy, as it would increase not only overspending but interest rates, which would hit industry and cause the loss of many more jobs?

My hon. Friend is right in saying that such an action would lead to a resurgence of the inflationary spiral which occurred when the Labour party was last in office.

Will the prospective increases in gross domestic product enable the Chancellor, even on his terms, to allow a larger amount of public sector borrowing than he had intended? If that is so, will that not provide leeway for urgently needed reductions in taxes on jobs and low pay?

I am glad that the hon. Gentleman, in contrast to right hon. and hon. Members of the official Opposition, seeks to achieve lower taxation. I am sure that that is what the economy and the nation need. Public borrowing as a proportion of GDP must still be decreased.

Does my right hon. Friend agree that, now that the economy is showing signs of growth and he is giving his mind to tax reductions, it is important to raise the tax threshold so that those on the lowest incomes are relieved of some of their problems?

I agree with my hon. Friend. There is a strong case for raising the tax threshold as soon as we can do so responsibly. It is especially bad that the poor pay such a large proportion of their income in taxation as they do at present. The only solution to that problem is to maintain firm control of public expenditure, and that is something to which the Opposition are antipathetic.

asked the Chancellor of the Exchequer what is the estimated yield from all sources of taxation,

The estimated total of taxes, rates, and national insurance contributions is £117 billion in 1983–84; the yield in 1978–79 revalued to 1983–84 prices using the GDP deflator was £100 billion.

Are not those figures, which show that under this Government taxation has increased by £17 billion a year in real terms, a staggering indictment of the economic record of mismanagement by the Government who promised in 1979 and 1983 that taxes would be reduced? Do they not show also that, whatever so-called pledges the Chancellor may now be making, there is no prospect of getting taxation back to the 1979 level during the lifetime of this Government?

The figures show that, apart from facing such problems as the world recession, the Government, when they first came into office four and a half years ago, had to break the pattern of Socialist inflation and repay the absurd level of international external debt with which the Labour Government had saddled this country.

asked the Chancellor of the Exchequer when he expects to publish the discussion document on long-term public expenditure options.

The Government welcome the current public debate on the prospects for public expenditure and are considering the precise form and timing of their further contribution to that debate.

Does my right hon. and learned Friend agree that it is essential that the public debate occurs on a Treasury document which sets out realistically the options open to the Government? That is essential, not only so that the level of public participation is increased, but so that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) realises what the reality is. It is obvious, after listening to his radio interview today, that he has no idea of the reality.

I entirely agree with my hon. Friend. If there is to be a meaningful debate on the subject it should be on a proper factual basis rather than on the hysterical misinformation which the right hon. Gentleman demonstrated this morning.

Will my right hon. and learned Friend assure the House that the options to be considered by him include the original Beveridge concept of the welfare state, which still exists today, but is based on conditions in the 1930s and may not match the needs of society half a century later?

Many assumptions made immediately after the war may have to be revised, but I should not like to forecast the precise course of the debate.

asked the Chancellor of the Exchequer if he will publish figures to compare the progress of the recovery in the United Kingdom with that of each other European country.

The European Commission expects faster growth in the United Kingdom than in any other member country both this year and next. I will circulate the Commission's figures in the Official Report.

Does my right hon. Friend agree that we could accelerate our lead over much of the rest of the Community by reducing Government expenditure still further? Is it not better for the taxpayer, rather than the Government, to decide how money should be spent, especially in relation to regional aid and grants to bodies such as the Arts Council, the Sports Council and so on?

My hon. Friend will be aware of the Government's new proposals for regional assistance recently outlined by my right hon. Friend the Secretary of State for Trade and Industry. I confirm that it is our policy to maintain firm control of public expenditure fat- the purposes that he mentioned, I am hopeful that in the next three years we shall be able to maintain total public expenditure broadly constant in real terms.

Does the Chancellor agree that the United Kingdom lead in European recovery as shown in the OECD report is largely based on the natural bounty of North sea oil? What do the Government intend to eo about the state of our manufacturing industry and the supply side of the economy, which the OECD severely criticised?

The criticism was a gross overstatement. North sea oil accounts for about 5 per cent. of the economy, so it must be kept in perspective, important though it is. The performance of the supply side of the economy is, of course, vital. That is why we are so determined to reduce the burden of taxation, because high taxation is inimical to the efficient working of the supply side. That is also why we are reforming trade union law, to make the labour market work better, and pursuing policies of privatisation and competition.

Does my right hon. Friend agree that anyone with reservations about the success of the Government's recovery programme has only to look across the Channel to France, where Socialist management really equates with inflation?

That is not true.

Sadly, it is indeed true that at present the worst performance among the major European countries is that of Socialist France, because when the Socialist Government came to power they embarked on policies of the type advocated by the British Labour party. After little more than a year, however, they had the wisdom to recognise the folly of their ways, They have now changed to policies much closer to those pursued by the United Kingdom and I hope that in clue course there will be an improvement in their economic performance.

Would it not be better to make comparisons with the rate of growth in the United States, which is expected to be 5 per cent. next year as a result of policies which the Prime Minister so viciously condemned at Question Time recently? Is it not time that the Government abandoned policies which resulted in a nil rate of growth between 1979 and September 1983, stopped fantasising about the rate of the growth in the United Kingdom next year, followed an American-type boom and allowed us to experience the growth now being enjoyed by the United States?

I am pleased, if a little surprised, at the hon. Lady's enthusiasm for President Reagan and his policies. That is not evident every day in the House of Commons. The Americans have pursued a policy of tight control of the money supply, though not of the fiscal deficit. They also have another advantage—there is no Socialist party in the United States.

asked the Chancellor of the Exchequer if he will make a statement on the recent meeting of the National Economic Development Council about the creation of new jobs.

For the council meeting on 7 December I submitted a paper on this subject, as did the TUC. At the meeting there was a wide measure of agreement, and discussions are taking place about a programme of further work.

It is suggested that at the meeting of the NEDC the Chancellor put forward a proposition that new jobs would come primarily from the service sector. As we have lost 2·5 million jobs during the recession, mostly in manufacturing, how on earth does he expect to replace those jobs from the service sector? Is it not the case that during a brilliant exposition on the radio this morning —[Interruption.]—supported by the CBI no less, it was shown that unless there is increased public expenditure on the infrastructure, on housing, transport and the rest, we shall not return to the employment and opportunities that we had even in 1979?

The hon. Gentleman is becoming one of the best stand-up comics in the House.

Bettered only by the right hon. Gentleman.

I am glad to be able to tell the hon. Gentleman that the despair which seems to inform his views on employment was not shared by anyone around the NEDC table, which included the TUC, which did not feel that there was a lack of hope or any feeling of despair. Employment in manufacturing has been declining since 1966. It now accounts for about 25 per cent. of this country's employment. The hon. Gentleman should also be aware that employment is now rising. The most up-to-date figures show an increase in employment during the second quarter of this year for the first time since the recession began.

In view of the expectation of growth in the service sector, will my right hon. Friend give greater recognition in taxation terms in the forthcoming Budget to insurance, banking and tourism?

My hon. Friend is asking me about the forthcoming Budget, about which I cannot speak. Certainly the contribution made by the service industries to the economy is of first importance.

Since one of the Government's few job creation strategies is the creation of experimental free ports, will the Chancellor tell the House when he expects to announce which areas are to be created free ports? Will he confirm that one is to be in Scotland, preferably at Prestwick airport?

I believe that there is a later question on the Order Paper about free ports.

Is my right hon. Friend aware that I thought his paper to the NEDC was extremely good, and that the statement on regional policy by my right hon. Friend the Secretary of State for Trade and Industry was also good, because it at last recognised the importance of the service industry,in the economy? May we take it,therefore, that the Government have, once and for all, buried the myth that manufacturing jobs are the only worthwhile ones?

The Government have buried all myths. They are prosecuting the conduct of economic policy in a spirit of realism. I should like to take the opportunity to pay tribute to my hon. Friend for the sterling work that he has done over the years to ensure that successive Governments do not overlook the performance of the service industries.

asked the Chancellor of the Exchequer how many contracts with Mercury have been entered into by Her Majesty's Government or by publicly-owned bodies.

Mercury's service has only just become available, on a limited geographical basis. As yet, therefore, no contracts with Mercury have been entered into by Government Departments. Where Mercury can offer the particular services required it will be given the opportunity to tender in the normal way.

I thank my hon. Friend for that reply. Is he satisfied that the Central Computer Telecommunications Agency is operating in a sufficiently entrepreneurial form? Will he direct it to seek competitive tenders at all times and improve its performance in what appears to be a somewhat bureaucratic form of ordering?

I am happy to assure my hon. Friend that it is normal Government practice to secure competitive tenders. To the extent to which the CCTA already follows normal Government practice, I am sure that my hon. Friend will be satisfied.

asked the Chancellor of the Exchequer if he will make a statement on the implication for the Northern region of the policies in the Autumn Statement.

The Government's economic policies, which are confirmed in the Autumn Statement, offer the best hope for sustainable non-inflationary growth, from which the Northern region should benefit.

That is a very complacent reply. Is the right hon. and learned Gentleman aware that the Autumn Statement provided little Christmas cheer for the region and little long-term hope for the future? Is he further aware that areas such as my own in west Cumberland and the county of Cumbria have failed miserably to attract the high technology industries that have been the salvation of many areas in the south of England? When the Chancellor introduces his next Budget, will he incorporate some tax measures wth a regional base that will enable us to attract those industries for our future?

I cannot anticipate the Budget of my right hon. Friend the Chancellor, but I remind the House that my right hon. Friend the Secretary of State for Trade and Industry emphasised that the Government remain firmly committed to an effective regional policy. If the hon. Gentleman wishes to take back a message of cheer to his constituency, I remind him and the House that steel production in the third quarter of 1983 was 21 per cent. higher than a year earlier—

We do not produce steel.

I remind the hon. Gentleman and the House that the British Steel Corporation in Workington recently won a £10 million order and supplied 34,000 tonnes of track to the New Zealand railway. That is a better message than the hon. Gentleman has given.

Does my right hon. and learned Friend accept that the whingeing pessimism of Opposition Members does no service to the Northern region? Does he further accept that nationally imposed wage levels and excessive business rates have done as much harm to the Northern region as anything else?

My hon. Friend conveys a much more robust message to the Northern region than Opposition Members. I believe that the Northern region would welcome it. I agree that the rigidities of the Labour party need to be eliminated if real jobs are to be created again.

Does the Minister recall the welcome suggestion by the Minister of State, Department of Trade and Industry, some time ago that companies should transfer their research and development to the regions? As exhortation has manifestly failed, will the Chancellor now introduce a financial incentive for that purpose? Such activity and employment would be valuable to the Northern region.

I would be the last to underestimate the importance of research and development. The Government would not resort to the tactics employed by the Labour Government. With regard to fiscal measures, the hon. Gentleman must await the Chancellor's Budget.

asked the Chancellor of the Exchequer if he will introduce the same scheme for value added tax payment for outside contractors for local authority school meals services as has been introduced for outside contractors for hospital meals.

Local authorities can already reclaim the tax on the meals they purchase from outside contractors for supply to their pupils.

I am grateful to my right hon. and learned Friend for his reply, so far as it goes —

Declare your interest.

Will my right hon. and learned Friend confirm that when the outside contractor wishes to deliver a meal direct to the pupil it is not so straightforward? Will he state what can be done about the incidence of value added tax in those circumstances? For the benefit of all hon. Members, I can say that I have no interest in this matter whatsoever, other than as a ratepayer and someone who is concerned about reducing costs.

My hon. Friend's concern for this problem inside and outside his constituency is rightly well known and applauded. He is right. If a contractor supplies meals direct to pupils, that is subject to VAT. If, however, there are any problems in my hon. Friend's constituency that he would like to draw to our attention, we shall see what proper advice can be given.

Before the Government show any generosity in this direction, will they reflect that they are forcing local authorities to increase school meal charges dramatically next April, and that they should be using any spare money to reduce the pressure on local authorities to increase the charges for school meals?

We have to be concerned with the overall level of local authority spending. It is for authorities to determine their own priorities within the parameters set by the Government.

Does my right hon. and learned Friend accept that the school meal for many children is their only substantial meal of the day and that they should be given food that has maximum calorific value? Does he further agree that the absence of VAT relief should facilitate this without making Billy Bunters of them?

I hope that the presence or absence of VAT will not make Billy Bunters of them. I note what my hon. Friend says, but I think that he slightly exaggerates the problem.

asked the Chancellor of the Exchequer if he will revise his estimates of revenue from the specific duties on tobacco and alcohol in view of current health education campaigns.

The effects of health education campaigns on the trends of consumption are among the factors that have been taken into account in the estimates.

I am grateful to my hon. Friend for that answer. Will he take this opportunity to repudiate the mischievous suggestions by the London stockbrokers., Buckmaster and Moore—no relation—who suggest that the revenue that will be available from tobacco and alcohol was underestimated in the Autumn Statement?

I have seen the comments to which my hon. Friend refers. The criticism of our estimates, suggesting that they are too low, does not seem to have allowed for any fall in demand for cigarettes or beer as a result of an increase in tax. The Exchequer would, of course, lose all the tax caused by any loss of volume and not just the incremental amount. We also allow for a switch by consumers into or out of items whose price has been changed. That, of course, alters the expected tax revenue from all other goods.

Is it not true that during past years tobacco and alcohol have been getting cheaper in real terms? In setting the duties on those products, to what extent does the hon. Gentleman take the health hazards into account?

During the past four years the duty on cigarettes and beer has risen respectively by 25 per cent. and 31 per cent. Obviously, the health factors are among those taken into account when we consider these matters. I draw the attentiion of the hon. Gentleman to a document produced by the Department of Health and Social Security entitled "Drinking Sensibly", which produces several arguments suggesting that tax should not be used systematically as a regulator. On the other hand, with the Christmas season approaching, I hope that the other messages about drinking sensibly will be taken seriously and that people will be conscious of the dangers of drinking and driving in the coming days.

Will our right hon. Friend bear in mind our economic health as well as our personal health in assessing the excise duty on alcohol? Will he resist demands from Europe to raise the tax on beer and cider in line with the tax on wine? British jobs and tastes, and my constituents, demand that beer and, especially, cider are not penalised.

I take my hon. Friend's point about the duties on beer and cider and the importance of those interests in this country. Speaking generally, we must have regard to the impact of such taxes on revenue. We know that sometimes increased duty can lead to diminishing returns.

asked the Chancellor of the Exchequer whether he has any proposals to remove existing fiscal restraints with a view to stimulating future economic growth.

The Government intend to maintain the balanced fiscal, monetary and supply side policies which are already creating sustainable non-inflationary growth.

Has the Minister had a chance to study the lucid and penetrating article published by his right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) on 7 December in which he argued that there should be a further relaxation of the Government's strict monetary policy and an increase in public investment, which, as a proportion of GNP, is at its lowest level since the first world war? Could the right hon. Gentleman possibly be wrong?

I noted my right hon. Friend's contribution on that subject in the papers and in our recent debate on the Autumn Statement. However, he and the hon. Gentleman overlook the fact that the resurgence of growth in this country started in 1981, so whatever view one may take of the tightness or otherwise of the Government's fiscal policy, that cannot have been a major factor.

Does my right hon. and learned Friend agree that if money supply is growing at 8 or 9 per cent. a year, the decisions taken by people in the economy will determine how much of that increase is inflation and how much is growth?

Myriad individual decisions are important in that regard, but I stress that, overall, it is the Government's dedication to the containment and reversal of inflationary pressures which has made growth possible for a number of investors and entrepreneurs in the private sector.

Will the Minister estimate what economic growth has resulted from the fact that, since the lifting of exchange controls, so-called patriotic industrialists and financiers are sending £32 million a day out of this country for investment abroad?

Perhaps the hon. Gentleman's remarks should be directed to a wide range of investors, including the trustees of the NCB's pension fund. I stress that our overseas investments are making a massive contribution to our invisibles.

asked the Chancellor of the Exchequer whether he has any further evidence of a recovery in investment in the United Kingdom.

Total investment in the first three quarters of this year is estimated to have been about 4·5 per cent. higher than in the same period last year. The December Department of Trade and Industry intentions survey points to a 7 per cent. increase in industrial investment next year, including a 9 per cent. increase in manufacturing investment.

That is an encouraging reply. Does my right hon. Friend agree that if that trend is to be consolidated in the new year, not only will profits have to continue to increase, but it will be essential that interest rates start to come down again?

I share my hon. Friend's view about the importance to be attached to interest rates. That is one of the main reasons why the Government are so determined to keep public borrowing under control and to keep it falling as a proportion of GDP. One of the most encouraging aspects of this recovery, unlike previous recoveries, has been the sharp increase in company profitability.

Does not the reduced level of the United Kingdom's surplus on current account in 1983 indicate that less British capital was being exported in that year than previously?

The right hon. Gentleman is correct. The balance of payments has to add up to zero overall. His assertion must follow as a logical necessity. However, the right hon. Gentleman will have noticed the recent sharp upward revision by the Central Statistical Office of its estimate of invisible earnings in the first nine months of this year, which makes it clear that the current account surplus this year will be significantly higher than was forecast in the Autumn Statement.

If the Chancellor of the Exchequer is so certain that we are to see an economic recovery led by investment, will he tell us the industries in which that investment will take place?

The one thing that I am certain about is that the recovery in the British economy is giving great cheer to the British people and causing great despondency among the official Opposition.

asked the Chancellor of the Exchequer if he is planning to introduce new guidelines to tax offices on the procedure for classifying people as working on contracts for services or working on a contract of service.

The guidelines and advice issued to inspectors of taxes by the Board of Inland Revenue are based on criteria which the courts have independently decided are relevant for distinguishing between contracts for services and contracts of service.

As my hon. Friend kindly met a delegation from the Institute of Directors, including myself, last Tuesday, he will be aware that there is considerable disquiet among the self-employed and in the small business community about the Inland Revenue's policy on reclassification. Will he instruct the Inland Revenue not to seek to reclassify taxpayers out of self-employment, thus imposing the burdens of PAYE upon them, purely for reasons of the Revenue's administrative convenience? One of the best ways to counter unemployment is to encourage self-employment. Any tax policy which would counteract that trend would be counter-productive.

My hon. Friend will be aware from the meeting to which he referred that the duty of the Revenue is to interpret the law correctly. I know that he will also be delighted that the figures for self-employment for the past four and a half years show that the number of the self-employed has increased from 1·9 million to 2·3 million.

asked the Prime Minister if she will pay an official visit to Newham.

I have at present no plans to do so.

It is a pity that the Prime Minister will not be able to visit Newham, where she might see at first hand the devastating effects of her economic and social policies. There is an unmployment rate of 19 per cent. and 27,000 people are on social security. Sixty-five per cent. of tenants receive income support because of housing costs. If the Prime Minister cannot visit Newham, will she at least think, when she is eating her Christmas dinner—[HON. MEMBERS: "Spam."]—no doubt including Spam — of those in Newham who cannot afford to keep warm? Will the Prime Minister express some remorse about those people and about the 44,000 who will die of hypothermia next year?

By what he said earlier, the hon. Gentleman gave evidence that those who are in need are provided for. The pension is higher than previously, and under the Conservative Government pensioners get a Christmas bonus, which they did not always get under Labour. There is higher spending on the National Health Service and a record amount of help with fuel for those who need it.

The Prime Minister constantly emphasises the value of personal thrift. We were all brought up to respect and practise prudence. If the Prime Minister, after a lifetime of economy, or as a consequence of a small occupational pension, lost between £1 and £5 a week in housing benefit, how would she feel this Christmas?

The hon. Gentleman forgets that we now spend £3,400 million on housing benefit, which is received by one household in three. Further, the Opposition never mention the million pensioners who gained £1 when housing benefit was introduced. The majority of them will not be affected by changes next April, and no one on supplementary benefit will be affected by the changes in housing benefit.

The Prime Minister again refuses to answer the question. Will she admit that the rise in social security expenditure is almost entirely attributable to the demographic change, as a result of which there are now more pensioners, and to the vast increase in unemployment and under-employment, which is the result of her policies? How would the right hon. Lady feel if, for no other reason than the dogma of the Government and their obedience to unreaslistic spending targets, she lost between £1 and £5 a week after scrimping and saving and showing frugality in order to provide for her old age?

Occupational pensioners will lose, especially through the taper. The amounts have been given in the reply to a question which the right hon. Gentleman has seen. Nevertheless, the taxpayers, through the Government, are giving housing benefit to one household in three. That money is not Government money. It comes from those who are already providing for their own housing costs and are also having to provide for the housing benefit of others. The right hon. Gentleman frequently asks about reductions in rates and taxation. He should accept that we need good management of resources and that we need to live within a budget.

rose—

Order. I remind the House that the question relates to Newham.

Is the Prime Minister aware that, whatever happens in Calcutta, responsibility for the sick, disabled and handicapped in the London borough of Newham lies with the Newham health authority? Is she further aware that the Government are cutting the funds available to that authority by nearly £500,000 next year? How does she reconcile that with her well-advertised view to be like Mother Teresa?

I think that the hon. Gentleman does not accurately reflect the quotation, but then I do not expect him to do so. I remind the hon. Gentleman that the previous Labour Government reduced provision for the Health Service in real terms in two of the five years that they were in office. We shall not accept lectures from the Labour party on the National Health Service.

asked the Prime Minister if she will list her official engagements for Thursday 22 December.

This morning I shall preside at a meeting of the Cabinet and in addition to my duties in the House I shall be having meetings with ministerial colleagues and others.

Is my right hon. Friend aware that the public have been immensely reassured by the increased number of police on the streets in central London in the past few days? Is she also aware that, on Tuesday, CND deliberately staged a public demonstration, thus taking many police officers away from street patrol? Could not the country and the House have expected a slightly more responsible attitude on the part of CND?

We should all like, especially at Christmas time, to put on record our thanks for the bravery and courage of the police, and especially to remember those families who will not have a loved one with them this Christmas because of the bombing last Saturday. I agree with my hon. Friend that it would have been a nice gesture if those who had planned demonstrations had cancelled them in favour of fighting terrorism and remembered that the police have an overwhelming job to do and are in the front line in that fight.

While wishing the Prime Minister a happy Christmas—

Humbug.

—may I ask whether she is aware that 15 million people in Britain—that is the official figure—will be living at or below the poverty line this Christmas? Will she make a new year's resolution that, if the economy recovers next year, she will cut taxes by increasing child benefit? Is she further aware that if she were to concentrate a 1p reduction in the standard rate on child benefit that could increase the half-average family earnings by £3·90; that if she concentrated it on tax allowances those earnings would be increased by only 92p, and that if she concentrated it on the standard rate those earnings would be increased only by a miserable 35p?

I recognise the right hon. Gentleman's very studied question. Before I answer him, may I ask him which defnition of poverty he is using to reach that figure?

It is the official Government statistic relating to the 3 million unemployed families, the 6 million families that are living on low wages and pensioners who face high costs for rented accommodation. If the right hon. Lady checks that total she will find that 15 million Britons are at or below the poverty line.

There is no Government definition of poverty. There are some 7 million people who live in families that are supported by supplementary benefit. There are many other different definitions of poverty, which is why I asked the right hon. Gentleman to say which definition he was using. Many of the low-paid on supplementary benefit have incomes about 40 per cent. above that level. They are wholly artificial definitions. The fact remains that people who are living in need are fully and properly provided for. As to the right hon. Gentleman's question, I am not sure whether he is arguing that taxation should be increased or reduced.

Child benefit.

I am delighted to be able to tell the right hon. Gentleman that child benefit is now higher than it has ever been.

Although I want my right hon. Friend to have a relaxing holiday, will she take time during the recess to consider my Adjournment debate of this week on keeping the British £1 note? Does she agree that only as a last resort should the £1 coin be universally introduced? If the risk of forgery can be dealt with, is she aware that a plastic £1 note is acceptable?

I heard my hon. Friend on the radio during breakfast time this week. I rather share his views on the £1 coin. It is not very popular yet and I have reason to believe that the £1 note will be retained.

Will the Prime Minister find time today to attend the Adjournment debate initiated by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) on shipbuilding in his constituency? If she does, will she reflect on the fact that the Minister of State's statement has caused a great deal of anxiety on Clydeside? The arrogance of its presentation has been distinctly unhelpful. Finally, will she accept responsibility as Prime Minister to intervene in this most delicate situation to save taxpayers the cost of maintaining 8,000 people on the dole who would prefer to be working for shipbuilding and their communities?

There will be no Government intervention. I share the hon. Gentleman's belief that it will be a tragedy if the workers go on strike, thereby doing themselves out of jobs. Shipbuilding orders are extremely difficult to get. There is a great deal of competition for them throughout the world, and when one has them it is a tragedy if people strike themselves out of jobs at a difficult time. I think that the Government have already shown how much they are prepared to do for shipbuilding. Since 1979 British Shipbuilders has received £850 million of taxpayers' money. Merchant shipbuilding has been subsidised by about £6,000 per job per year.

asked the Prime Minister if she will list her official engagements for 22 December.

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

Does the Prime Minister believe that it is consistent with her duty of upholding the rule of law by ensuring that the judiciary is seen clearly to be independent of the Executive that senior Government officials, at ministerial behest, should have held a clandestine meeting to seek political advice from a senior judge, whatever his previously known political affiliations before his elevation? If that is consistent with her duty, why was so much effort made to keep secret the meeting that was held between Mr. Michael Quinland and Sir John Donaldson?

The hon. Gentleman is aware that the judiciary is absolutely independent. The person who was going to be head of the Department of Employment sought the views of a judge on a certain matter. It is not a bad idea to know how legislation works out if one is thinking again of legislating. Is the hon. Gentleman suggesting that every meeting that is held under the auspices of a Department has to be public? If he is, he is bonkers.

At this Christmas time will my right hon. Friend join me in expressing sympathy to two of my constituents, Mr. and Mrs. Proctor, whose son Timothy was killed in a road accident last year? Does she agree that the House should think about introducing legislation for minimum sentencing when death results from such accidents so that the general public may know that their elected representatives in this place value human life?

I join my hon. Friend in expressing sympathy for her constituents and all others who have suffered similarly. It is very rare for us to have minimum sentences. If such sentences were to be introduced, there would have to be loopholes for the exceptional case. I think that we are making it clear that we believe in strong sentencing for offences that justify it. As my hon. Friend knows, we shall introduce legislation, which we hope will go through the House, which will enable certain sentences, if they are felt to be insufficient, to be referred to the Court of Appeal for that court to pronounce upon them. That would be guidance in future.

In view of the Prime Minister's earlier reply, will she find time today to make a new year resolution to start doing things for Scotland? Will she get her Ministers to knock heads together over the Scott Lithgow yard. instead of wringing their hands in indifference?

In answer to the hon. Gentleman's question about Scott Lithgow, I gave the annual subsidy that has gone from the taxpayer to merchant shipbuilding. If one translates that to the Scott Lithgow yards, it is equal not to £6,000 per year per employee, but to £13,000.

asked the Prime Minister if she will pay an official visit to Billericay.

I have at present no plans to do so

Is my right hon. Friend aware that she would receive a festive and warm welcome in Billericay from my ratepayers, if not my rate spenders? Is she further aware that 60 per cent. of rates come from non-domestic ratepayers who have no direct influence on local elections, and that only 35 per cent. of people eligible to vote in local elections actually pay full rates? In the light of that, does my right hon. Friend agree that the Government have an ultimate responsibility to protect business, commerce and householders from excessive rate burdens imposed by wildly extravagant local councils such as the Socialist Basildon district council?

My hon. Friend is right in his conclusion that only a minority of the electorate pay rates. That is one of the very worrying aspects of that system. My hon. Friend is also right in thinking that many industrial and commercial enterprises are not represented in any way on the voting registers of those authorities to which they pay rates. I wholeheartedly agree that the Bill to cap rates is overwhelmingly popular among ratepayers.