asked the Chancellor of the Exchequer what is the level of output for manufacturing industry at the latest available date compared with 12 months previously.

Manufacturing output in the three months to January 1984 is estimated to have been about 3·5 per cent. up on the level of the same period a year earlier.

I thank my right hon. and learned Friend the Chief Secretary for that good news, but is he aware of the growing concern that that welcome upturn in manufacturing and in other sectors of the economy is not yet leading to any increase in the number of jobs? Therefore, will he consider taking further steps which will directly reduce unemployment?

My hon. Friend will be aware that the abolition of the national insurance surcharge was specifically designed to help in that area. Indeed, I should emphasise to the House that the abolition of the national insurance surcharge has relieved private sector employers of employment costs of about £3 billion a year. I hope that my hon. Friend will recognise that as a positive contribution to dealing with the problem.

How does the level of manufacturing output compare with that of 1979? Will the right hon. and learned Gentleman tell the people of the west midlands when the Government aim to return them to the levels of output and employment of 1979?

The hon. Lady will be aware that the GDP average is now above the 1979 peak. She will also be aware of the dramatic increase in manufacturing exports over the past three months.

Does my right hon. and learned Friend agree that at long last there is a real sign of a recovery in midlands industry and that the foundry industry there is beginning to recover? However, does he further agree that if coking coal cannot get through to the foundries because of the miners' dispute many thousands of jobs will be lost because of that dispute, which has nothing to do with midlands industry?

It is a regrettable facet of that dispute that it is putting jobs at risk not only in the west midlands but in other parts of the country.

Will the right hon. and learned Gentleman confirm that he expects employment in Britain's manufacturing industry to be lower at the end of the year than it is now?

No Administration have ever made forecasts of unemployment, because the variables are so enormous. If he reflects on the record of the Administration that he supported, he will find that they, too, were naturally prudent about making such forecasts.

asked the Chancellor of the Exchequer what representations he has received from trade associations, companies and members of the public concerning the value added tax proposals in his Budget statement of 13 March.

I have received 729 letters from trade associations, companies and members of the public concerning the value added tax proposals in the Budget.

If major renovations or reconstructions of old buildings do not remain zero rated, is my right hon. Friend not worried that old buildings outside the highest value areas of London and elsewhere could suffer accelerated decay and decline and not receive the refurbishment and renovation that they get now? Will my right hon. Friend seriously reconsider the problem?

I appreciate that there is anxiety in some quarters, for the reason that my hon. Friend has given, but I do not believe that those fears are justified. It will still be economic, in many cases, to refurbish and improve buildings, and generous improvement grants are also available.

Can the right hon. Gentleman give a clear undertaking that he has no intention of imposing VAT on basic foods?

I have no present intention— [HON.MEMBERS: "Oh!"]—of extending VAT beyond the areas to which it was extended in the Budget three weeks ago.

Is my right hon. Friend aware that, according to information published in Regional Trends recently, more black puddings and potatoes are eaten in the north west than in other parts of the country, and that his proposal to put VAT on take-away foods will put those living in the north west at a disadvantage?

That is rubbish, because black puddings are served cold.

As my right hon. Friend has muttered from a sedentary position, on most occasions black puddings are sold cold and they would therefore not be affected by the tax. I realise that there is some concern in the north west about this matter. No one likes the introduction of a new tax. In Manchester on Friday I met a delegation from the Chinese community who own a large number of fish and chip shops as well as Chinese takeaway establishments in the Greater Manchester area. I do not believe that the measure will lead to any serious loss of trade for those businesses. My hon. Friend must remember that what I sought to do was to decrease the amount of income tax paid by large numbers of people. I have sought to raise the tax threshold so that the average married couple will pay £2 a week less in income tax. That has to be done at the cost of increasing some taxes elsewhere.

Is the right hon. Gentleman aware that there is a strong feeling among the leaders of charitable organisations, not least those for the disabled, against the cruel new burden imposed by the doubling of VAT? What representations has the right hon. Gentleman received on that matter, and what action is he taking?

As the right hon. Gentleman will be aware, my hon. Friend the Minister of State announced only last week that zero rating would be applied for certain building alterations for the benefit of the handicapped.

The change in the tax on building and repairs has caused considerable confusion in the building industry. In the wake of a situation in which grants were available, we are now levying a tax on the same area. Is that not likely to lead to further unemployment in the construction industry, which already accounts for a quarter of all jobs lost?

On the contrary, the construction industry not only had a very much better year last year, but has been further assisted on two fronts by the Budget. The abolition of the national insurance surcharge has assisted it as a conspicuously labour-intensive industry, and there has also been the halving of stamp duty to 1 per cent. and the raising of the tax threshold for stamp duty from £25,000 to £30,000. The industry is confident that these changes will give it a tremendous fillip during the coming year. It was under the old system that confusion arose, because repairs and maintenance were liable to VAT, whereas alterations were zero rated. There was tremendous abuse, as that borderline was almost impossible to police properly.

asked the Chancellor of the Exchequer what representations he has received from industry about the effect of his Budget proposals on small businesses.

Most organisations representing industry have welcomed the Budget proposals, particularly the effect on small business of the abolition of the national insurance surcharge and the immediate reduction in the small companies corporation tax rate to 30 per cent.

I thank my hon. Friend for that reply. I am also grateful to my right hon. Friend the Chancellor for the many measures in the Budget, which are of considerable help to the small business sector. I should like to ask about one measure which was not mentioned in the Budget—the loan guarantee scheme. May I urge him, when it comes up for consideration, to do everything possible to keep that excellent scheme, which is supported by many people in the small business sector?

I thank my hon. Friend for his commendation of the Budget measures relating to small business. I am sure he will have read the press today and seen that the Department of Trade and Industry published the Robson Rhodes report yesterday. The matter is therefore under review and I cannot anticipate the outcome. Decisions on the future of the scheme will be announced in due course by my right hon. Friend the Secretary of State for Trade and Industry.

Does the Financial Secretary agree that many small building firms do most of their work for housing associations and local authorities in housing refurbishment? Does he further agree that when the budgets of housing associations and local authorities are cash limited, the imposition of VAT on refurbishment work will result in a considerable reduction in the amount of such work done by small builders?

I am sure that the right hon. Gentleman will want to draw the attention of small firms to the enormous advantages that they will receive from other parts of the Budget, especially the abolition of the NIS and the reduction of corporation tax to 30 per cent. for small companies, up to £100,000. Those are significant improvements for small businesses, including construction companies. Moreover, 75 per cent. of the business in the construction industry is new construction.

I understand that my hon. Friend cannot comment yet on the results of his review of the loan guarantee scheme, but will he bear in mind that the failure rate among new businesses, irrespective of whether they are supported by a loan guarantee, is high and will inevitably be higher with the loan guarantee scheme in its present form, as banks tend to put more than they should of their less good risks into that scheme?

I hear what my hon. Friend says. I remind him that it is my right hon. Friend the Secretary of State for Trade and Industry's review, and I shall draw his attention to what my hon. Friend has said.

As none of the measures that the Government have so far taken has stopped the ever-accelerating number of small businesses going bankrupt, is there anything in the Budget that will stop that tide?

Yes, Sir.

The reaction of my hon. Friend the Member for Macclesfield (Mr. Winterton) from a sedentary position and of people outside the House who represent small businesses seem to me to be a much clearer sign of the potential. I draw the hon. Gentleman's attention to what the chairman of the CBI smaller firms council said. He talked about my right hon. Friend the Chancellor producing a "small business Budget". It is more important to remember those words than those of the hon. Gentleman.

Does the Financial Secretary agree with the National Federation of Self-Employed and Small Businesses Ltd. that this is a Budget for big business, not for small business? That being so, does he think that the Kentucky Fried Chicken organisation is a big or a small business, in view of its decision to freeze the opening this year of 350 new outlets because of the Chancellor's policies?

With regard to the first part of the hon. Gentleman's question, no, I do not agree with such comments. I agree with the observations from the outside world that this is an opportunity budget. I hope that companies, including the one which the hon. Gentleman mentioned, will, on further consideration, understand the opportunities presented by the Budget to small and big businesses.

asked the Chancellor of the Exchequer what representations he has received concerning the Green Paper, "The Next Ten Years: Public Expenditure and Taxation into the 1990s", Cmnd. 9189; and if he will make a statement.

No formal representations have been received to date. I understand that the Treasury and Civil Service Select Committee will he examining the Green Paper, and I look forward to its views.

Will my right hon. Friend ensure that he is not blown off his declared course by making certain that finance determines expenditure, and not the other way around?

That is my firm intention. Too often expenditure has been allowed to grow in response to perceived needs and this has led to far greater total expenditure than the economy can safely carry, thus creating many of the problems that we have had. That is why it is our firm intention to ensure that public expenditure in total is maintained within what the economy can afford, allowing for further reductions in public borrowing and in taxation.

Will the Chancellor soon satisfy the demand for a second Green Paper, "Into the 1990s", in which he will set out all the measures necessary, or which he considers necessary, to accomplish economic growth, in spite of far less North sea oil, at the rate of 2·25 per cent. into the 1990s which is the precarious assumption on which all the speculations in the present Green Paper are balanced?

The hon. Gentleman's appetite for Green Papers is insatiable, but then, of course, he represents a green party. I have to tell him that the Green Paper on the next 10 years explicitly allowed for declining North sea oil revenues. That is fully taken into account.

Will my right hon. Friend give the House an undertaking that there will be no agreement with the European Community about own resources unless he can also give an undertaking to the House that the average net contribution at today's prices to the Community over the next 10 years will be less than over the last 10 years?

Although I am not quite sure that that really arises on this question, I am happy to answer by saying that my right hon. Friend the Prime Minister and my right hon. and learned Friend the Chancellor of the Exchequer have made the Government's position perfectly clear on this.—[Laughter.] I am sorry, I meant my right hon. and learned Friend the Foreign Secretary.

Is the Chancellor aware that the Federation of Building and Civil Engineering Contractors and other industrialists in similar spheres are extremely concerned at the low level of public capital spending? Will he now take action to rescue that form of spending from its historically low levels, both in the interests of the economy as a whole and for the purpose of maintaining our industrial infrastructure?

I am confident that the Budget measures that I introduced on 13 March will give the British economy the best chance of sustaining and continuing the very sound recovery that is now under way, the soundest recovery that we have had for a long time, from which various sectors of the economy will benefit. To single out one sector and argue for special measures for it is not an approach that I favour.

Does the Chancellor recall that on page 26 of the Green Paper there is a list of assumptions which the Government have made for the next three or four years? Missing from that list is an assumption about unemployment during the next three years. What assumptions have the Government made about that?

The assumptions in the Green Paper are consistent with the continuing decline in unemployment over the 10-year period as a whole.

asked the Chancellor of the Exchequer what he expects to be the overall financial benefit to industry of the tax proposals in his Budget.

The Budget measures directly affecting business will reduce its tax burden over the next two years, taken together, by about £900 million, compared with an indexed base.

Is my hon. Friend aware that the abolition of the national insurance surcharge and the new corporation tax structure have been widely welcomed as bold and imaginitive, and that one particularly attractive aspect of this is the fact that companies will be able to plan ahead for three years with certainty because the Chancellor has announced the corporation tax rates for that far ahead?

My hon. Friend is, of course, right. It is the certainty that companies now have about the long-term pattern of changes that will be introduced in the Finance Bill that will give them a unique opportunity. The reductions in corporation tax rates to 35 per cent. will produce a lasting cut in companies' tax burdens as well as the lasting reduction for them of taxation through the abolition of the NIS.

Will the Minister explain to the double-glazing industry how the imposition of VAT can assist it to increase its production, bearing in mind that this will lead to increased cost to purchasers and, therefore, to an expected decrease in sales? Perhaps he will explain to them and to those who work in the industry how the Budget will help them.

First, 75 per cent. of all new construction is not subject to VAT, and the double glazing industry is critically involved in new construction. Secondly, about 95 per cent. of companies will pay corporation tax at the rate of 30 per cent. from now on, which will be a unique advantage. Thirdly, there is the removal of the national insurance surcharge. That will remove a direct burden on the double-glazing industry, which is employment-intensive.

Is the Minister aware that the president-elect of the CBI described the Budget and the tax changes as "painful for some", that is for companies in the manufacturing industry, whose tax bill, in some instances, will increase by 25 per cent. in two years' time? Is he further aware that the tax changes will do nothing for jobs or investment in manufacturing industry and that the Budget confirms people's belief that the Government are deeply prejudiced against manufacturing industry?

I am sure that the hon. Lady will wish me to complete the quotation from Sir James Cleminson, which contains many good points. In describing the Budget he said:

"It is radical but it will be painful for some. It is a challenging Budget for business and we look forward to playing our part in this, a medium-term strategy for business, to help in the recovery."

asked the Chancellor of the Exchequer how many letters he has received since introducing his Budget.

More than 2,000 letters have been received.

The authors were probably wasting their time. Is it not right that the Government do not expect any reduction in unemployment during the next financial year? Is the Minister aware that any Budget that does not lead to a reduction in the misery of mass unemployment must be considered a failure?

The hon. Gentleman and the Labour party should regard themselves as miserable failures for having imposed a tax—the national insurance surcharge —on jobs. The removal of that tax by the Government will be the equivalent of benefiting industry and employers by £3,000 million a year. It is downright effrontery for the hon. Gentleman to criticise the Government for the effect of the Budget on jobs.

Is my hon. Friend aware that many of us are very much in favour of the imposition of VAT on building extensions and alterations, but have great reservations about the introduction of the imposition by June as it will have an effect on existing contracts for which private individuals have already budgeted closely?

I take my hon. Friend's point. It is always difficult to establish a cut-off date for such a change. However, there are various means open to those who will be affected. For example, they can pay for the work under contract before 1 June. If the work is completed before 1 June, it will be relieved of VAT. There will be apportionment of time for work that spans that date.

What is the Minister doing for small unincorporated companies which do not pay corporation tax but benefit from capital allowances? Their investment will suffer as a result of the Budget.

The right hon. Gentleman may have overlooked the fact that the Budget contains measures to reduce the burden of income tax for all. The removal of the national insurance surcharge will help unincorporated businesses as well as the incorporated.

Were there some letters among the correspondence received by my right hon. Friend the Chancellor of the Exchequer in which it was stated that the Budget would be good for employment? Were there letters in which it was stated that there was a need to do more for the long-term unemployed — specifically, the need to extend the long-term rate of supplementary benefit to the long-term unemployed?

There were many letters among the total to which I referred which gave a strong welcome to the Budget, both for what it has done for the prospects for jobs and for economic recovery. Social security matters are normally dealt with by my right hon. Friend the Secretary of State for Social Services.

How many letters drew attention to the fact that this Budget gives most to the people who already have most and does nothing for the people who have least? When Ministers reply to the letters do they explain this as being inevitable, accidental or a direct result of Government decision?

It was a direct result of Government decision that we concentrated proportionately the greatest help on those who are lowest paid. It is something of which Conservative Members are proud.

asked the Chancellor of the Exchequer what further discussions he has had with Finance Ministers, and others, regarding international debt rescheduling; and if he will make a statement.

I will be attending a meeting of the interim committee of the International Monetary Fund next Thursday at which international debt may well be discussed.

Will the Chancellor of the Exchequer confirm that during the past six months the amount of rescheduling that has had to take place has increased by 35 per cent. and that the Brazilian ambassador said yesterday that the rescheduling being imposed upon Brazil was likely to lead to malnutrition and urban violence in a period of austerity? Will he also confirm that during this year, prior to the American presidential election, there will be an increase in interest rates as a result of which there will be greater restrictions on those countries that have rescheduled their debts——

Order. In fairness, the hon. Gentleman has had a very good run.

If the Government can take part in an exercise to reschedule so as to bail out banks that have been imprudent, will the Chancellor of the Exchequer tell us why they do not bail out the pits which they say are uneconomic?

The hon. Gentleman is rather losing his touch. In regard to the problems of international debt, the international financial community — that includes the United Kingdom—is following a two-pronged approach. One is to give assistance to these countries; the other is to make sure that they put their own houses in order. Both elements are important.

Is my right hon. Friend aware that an awful lot of nonsense is talked about rescheduling these debts, not least by the hon. Member for Bolsover (Mr. Skinner) but also by the right hon. Member for Leeds, East (Mr. Healey)? Is it not a fact that the British banks have behaved completely responsibly in this matter and in accordance with the best banking practice to reach agreement on the basis on which they have done.

My hon. Friend is right. If there is scope for criticism of banks throughout the world — this applies more to American banks than to British banks—it is that they have allowed themselves to become overextended in these countries. Having had to face such a situation. they have behaved with considerable responsibility.

asked the Chancellor of the Exchequer if he is satisfied with the administrative arrangements for the withdrawal of the tax relief on life assurance premiums with effect from midnight on 13 March 1984.

Yes, Sir.

Is my hon. Friend aware that many thousands of people completed proposals for life assurance that could not be accepted by 13 March because a medical examination had not taken place? Does he accept that many of these people are genuinely hard luck cases? Is he prepared to review the arrangements for withdrawal of tax relief so as to give relief to people who applied for life assurance prior to the deplorable leak by The Guardian?

I am afraid that it would not be possible to make a change of the kind that my hon. Friend is seeking. Any cut-off date causes problems, but to set a later date or to impose conditions of the kind mentioned would not be practicable.

Does the Minster agree that what should be done in cases like this is either to make sure that there are no more leaks from Whitehall in relation to Budget proposals or to leak them earlier?

The announcements made by my right hon. Friend in the Budget were operative from that date. Of course, if speculation takes place before that the market has to react in its own way.

asked the Chancellor of the Exchequer if he will make a statement on the progress of computerisation of the pay-as-you-earn system; and when he expects it to be fully implemented.

I am pleased to say that the programme is proceeding to time and costs. It is expected to be fully implemented, as planned, by the end of 1987 or early 1988.

I thank my hon. Friend for that reply. Has the system the capacity to keep the nation's records of national insurance contributions?

When fully installed, the system will have the capacity, and that service could be provided. However, there would need to be an operational need for it.

Is the hon. Gentleman aware that by blocking all major income tax reform for six years, the income tax computerisation programme is the biggest menace to the sovereignty of Parliament since King Charles I? Will he guarantee that, by the end of 1987, no Treasury Minister will persist in using the argument that tax reform has to be deferred until these machines are in order?

I shall not endorse the hon. Gentleman's earlier question, but I know that he will be delighted at the way that the proposals are proceeding to cost and time. When they are fully implemented, structural changes in personal taxation will be easier to impose.

Is my hon. Friend broadly satisfied with the choice of hardware and software used for this computerisation?

Speaking on behalf of the Inland Revenue, I can say that it is well satisfied with the level of collaborative effort with ICL. This collaboration between the private and public sectors is an excellent example of what good work can be achieved in Britain.

asked the Chancellor of the Exchequer what is the expected total revenue from vehicle excise duty, duty on petrol, special car tax and value added tax on the purchase of motor vehicles in 1984–85.

It is estimated that the total yield will be about £8·9 billion.

I thank my right hon. and learned Friend for that answer. Does it not show the wide gap between what the Government raise in revenue from the motor industry and the motorist and what is spent on behalf of the road user? Can my right hon. and learned Friend explain the relationship between the 25 per cent. tax payable on. a British-made Austin Metro car and the 15 per cent. tax paid on an imported Japanese video?

My hon. Friend should recognise that capital expenditure on roads will be up by 20 per cent. next year. As for the relationships between the duties on videos and cars, that is an interesting question, but we should not draw any general conclusions about the way that that might affect the motor industry.

Will my right hon. and learned Friend make sure—when dealing with tax arising from motor cars—that the excellent and humane suggestion in the Budget about vehicles for disabled people is not ruined by the Customs and Excise? Is he aware that the revenue wishes to thwart the Chancellor's proposal that cars for disabled people should not be taxed?

My hon. Friend is rather harsh on a distinguished and historic Department of State. He has drawn attention to the fact that there will be a vehicle excise duty exemption for the recipients of war pensions and mobility supplement and that there will also be zero rating for VAT and relief from car tax for cars able to take disabled people in wheelchairs.

Does the right hon. and learned Gentleman fully understand that the Customs and Excise is saying that to put into operation the Chancellor's Budget promise the vehicle has to be able to take a stretcher? Is that not ridiculous?

The hon. Gentleman is a little confused. This covers cars designed to take both people who are in wheelchairs and those who are on stretchers.

asked the Chancellor of the Exchequer if he will make a statement on the public sector borrowing requirement following recent changes in interest rates.

The Budget estimate for the PSBR for 1983–84 was £10 billion or 3·5 per cent. of GDP. The outturn will be published on Tuesday 17 April. The PSBR forecast for 1984–85 is £7·25 billion or 2·5 per cent. of GDP.

Given that the PSBR as a proportion of GDP has declined from 5·4 per cent. in 1979 to 3·25 per cent. today and that interest rates have declined from 12 per cent. to 8 per cent., will my right hon. Friend confirm the devastating effect that high Government borrowing has on industry's ability to borrow—in other words, the more that the Government borrow the harder it is for anyone else?

My hon. Friend is right. One of the Government's main objectives in bringing the borrowing requirement down, as they have done, is to ensure that the continued reduction in inflation can be achieved alongside a steady reduction in interest rates. It is interesting to note that, since 1979, long-term interest rates in the United Kingdom have decreased by 3 per cent. while in the United States they have increased by 3 per cent.

Is it not more than coincidence that when the building societies wanted to increase interest rates last spring they deferred that action until after the June election and, now that they wish to reduce interest rates, they will do so in May? That will affect the rate of increase of pensioners' pay rises in November. How does the Secretary of State manage to train his poodles so well?

The building societies make their own decisions in their own time. This Government, unlike the previous Labour Government, do not seek to interfere. I am sure that the House will welcome the 1 per cent. reduction in the mortgage rate announced after the Budget.

How will the sale later this year of £2 billion worth of BT stock and other public sector stock affect the market? Will that sale not cause crowding out as well?

It will not cause crowding out. There is ample capacity for reduced Government borrowing and for equity issues in the private and public sector. That sale will assist in reducing the demands the Government must make on the gilt-edged market.

How can finance determine expenditure when so much expenditure in Britain and in the EEC generally is demand-led?

A great deal of expenditure is not demand-led.

If there is the simple relationship between Government borrowing and interest rates that the right hon. Gentleman has just described, why is it that in Germany, Japan, Austria, Switzerland and the Netherlands there are higher levels of Government borrowing but lower long-term interest rates?

Those countries have been successful in reducing inflation to lower levels than Britain has so far done. Interest rates are affected by the level of inflation. The Government's policy is, therefore, a combination of getting public borrowing and inflation down.

rose——

Order. No. I call Mr. Winterton to ask question 14.

asked the Chancellor of the Exchequer what representations he has received on his decision to bring house extensions and alterations within the scope of value added tax.

My right hon. Friend has received representations from many trade bodies engaged in the construction industry, from individual firms and from members of the public.

I am grateful to my hon. Friend for that reply. I appreciate that the Government are aware of many of the complications that that proposal will bring about. Will he accept from me, as a person who has worked for many years in the construction industry, that the proposal to bring house extensions and alterations within the scope of VAT is likely to increase the black economy and encourage the cowboys within the building industry, which, sadly, will be to the detriment of the qualified registered builder, who is desperately in need of work?

My hon. Friend's anxieties are not justified. The construction industry is experiencing rising output and is participating strongly in the recovery. Irregular operators and cowboys had much more scope in the days when it was possible to classify repairs and maintenance as zero rate alterations than they will have under the new regime.

How many further jobs in the construction industry, especially on Merseyside, will be lost because of the extension of that tax?

I shall not speculate about the effect on jobs in particular industries or particular areas. I do not doubt that the Budget as a whole, considering all the measures for companies and individuals, will assist the economic recovery, and that is the best way to look after future employment.

asked the Chancellor of the Exchequer by what percentage the increase in average wages has exceeded the rate of inflation in the most recent 12-month period for which figures are available.

Over the 12 months to January 1984 the increase in the retail price index was 5·1 per cent., and the underlying increase in the whole economy average earnings index was about 7·75 per cent. The underlying increase in average earnings has therefore exceeded the rate of inflation by more than about 2·5 per cent. over the year to January.

I am grateful to my right hon. and learned Friend for that reply. Does he agree that it is bad news for employment? If average wages continue to increase faster than prices, are not fewer people likely to be employed? Will my right hon. and learned Friend accept the need to moderate the rise in real wages in the interests of easing unemployment? Will he do that by public education and persuasion and by direct action in the public sector?

I accept the conclusion that my hon. Friend draws. The picture, however, is not one of unrelieved gloom. Unit wage costs are not increasing remotely as fast as earnings, because productivity increases have been sustained.

asked the Prime Minister if she will list her official engagements for Thursday 5 April.

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.

Did the right hon. Lady hear the lunchtime news today, which carried a report of a death in unexplained circumstances of an employee at GCHQ Cheltenham? Can she give the House any further information on that matter?

I am not certain to which matter the hon. Gentleman is referring. I know a number of—but they will be reported in due time when all the information is known.

If my right hon. Friend has a chance today, will she consider the position facing some local authorities which are having to meet additional bills for police expenditure because of the miners' strike? Is she aware that in Leicestershire the bill so far is an additional £2 million? It will be difficult for local authorities to meet that sort of money out of their funds.

I understand that my right hon. and learned Friend the Home Secretary met certain local authorities recently and has said that when we know the full extent of the bill he will generously and sympathetically consider applications for help.

On the specific subject of local authorities, is the Prime Minister not ashamed to be bringing before Parliament a Bill that will remove voting rights from 13 million electors in Greater London and the metropolitan counties? Will she, in the name of basic British democracy, ensure that the Bill is withdrawn?

No, Sir. [Laughter.]

I note the humour of Conservative Members at the removal of those democratic rights. Is that not exactly the misuse of Government power and abuse of democratic values of which the right hon. Member for Cambridgeshire, South-East (Mr. Pym) warned during the general election? At some stage, will the Prime Minister try to provide the facts that are supposed to support her case for taking them away? When, in any democratic country, have any democratic Government given satellite status to the council of their capital city?

The policy was endorsed by the votes of 13 million people at the last general election.

If the right hon. Lady is referring to her manifesto, there is no mention in it of the abolition of the right to vote in any circumstances. The right hon. Lady may have a mandate for some things; she has no mandate for imposing puppet councils on London and the metropolitan counties.

The abolition of the GLC and the metropolitan counties was a foremost part of our manifesto. We intend to carry out those abolitions.

asked the Prime Minister if she will list her official engagements for Thursday 5 April.

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

Will the Prime Minister confirm that her Office has already confirmed the report that, within the last day or two, a GCHQ employee has committed suicide; that that has been confirmed by GCHQ: that a note was left and that note confirmed that the suicide was attributable to the pressure put on that employee as a result of the Government's policy of taking away the right to belong to a trade union? Will the inquest be in public? Will the report be made available to the House? What was the rank of that GCHQ official? Will the Prime Minister make a statement about the matter?

Any suicide—I am aware of the suicide to which the hon. Gentleman refers, which was accompanied by a suicide note—will be a matter for the coroner. I expect that that note is in his possession.

Is my right hon. Friend aware that the announcement by the hard-nosed General Motors Corporation of America that it intends to invest £100 million in this country because of the changed circumstances here is a considerable vindication of the policy that she has pursued over the past four and a half years? Is she further aware that other policies of that kind will lead to further successful investment?

I saw the news to which my hon. Friend refers. It is very good news and augurs well for the future of General Motors in Britain and prospects for jobs.

In giving permission to the Metropolitan police to acquire sub-machine guns, have the Government considered the impact of this serious further step in arming the police on the relationship between the police and the public, and on the very nature of the police service? I recognise the Government's dilemma in protecting foreign Heads of Government, but would it not be preferable in those circumstances to give that responsibility to the regular armed services when the Government are faced with short-term need? If the Metropolitan police are armed with sub-machine guns, that could change the character of the force and sacrifice a long-term beneficial system of policing to a short-term need.

As the right hon. Gentleman knows, my right hon. Friend the Home Secretary agreed to a request from the Metropolitan police for the purchase of a small number of sub-machine guns, as I said on Tuesday. The right hon. Gentleman may recollect, as it is within public knowledge, that as long ago as 1976 the Labour Administration approved the acquisition by the Metropolitan police of a small number of conventional sub-machine guns — [HON. MEMBERS: "Ah".] — for possible use in a terrorist emergency—a cause which I feel sure the right hon. Gentleman and the then Home Secretary had very much in mind when they approved that purchase.

rose——

Reverting to the question raised by the former Prime Minister, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), is my right hon. Friend aware that the authorisation for the purchase of sub-machine guns by the police was given by the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) when he was Home Secretary? Is she further aware that when the Leader of the Opposition seeks to make mischief and to attack the British police for doing what the Labour Government authorised them to do he is stabbing in the back the best police service in the world?

I am sure that any Home Secretary would have considered such a request very carefully, as I am sure my right hon. and learned Friend did, and had good reason for granting it.

rose——

Order. I think that we should move on. I think that the House will consider it fair if I call the next question, as the Leader of the Opposition has had three opportunities to ask a question.

On a point of order, Mr. Speaker. I should like to raise with you a point of order relating to remarks made by the hon. Member for Bury St. Edmunds (Mr. Griffiths), which you and the House will have heard during the Prime Ministr's Question Time. The hon. Gentleman said that I made an attack on the police. That has never been true, is not true, and never will be true.

Order. I have called the right hon. Gentleman on a point of order, and I want to hear him.

My references to the provision of submachine guns for body guarding purposes are anything but an attack on the police, for whom I have every respect. The hon. Gentleman is sponsored in the House by the Police Federation, but my opinions are held in common with my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan); the editor of Gun Review, himself a former police inspector, who called the Government's decision "horrendous"; and the editor of The Times this morning.

rose——

Order. Many provocative things are said in the Chamber from both sides of the House. I hope that we shall not have an extension of Question Time through points of order. I called the Leader of the Opposition, and I wanted to hear what he had to say.

Further to that point of order, Mr. Speaker. The Leader of the Opposition raised what he claimed to be a point of order. To protect Back Benchers, will you declare that spuriously to raise as a point of order something that in no sense is a point of order is just as unacceptable from the Front Benches as it is from the Back Benches—[HON. MEMBERS: "Hear, hear."]

The hon. Gentleman is a great expert on procedural matters and I entirely agree with what he has said. I called the Leader of the Opposition, and to that extent it is my responsibility, not his. I do not think that we should take this matter any further.

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

I have at present no plans to do so.

On behalf of the residents of Kingswood, may I extend an invitation to my right hon. Friend to visit that area, where she will find extreme concern among many of my constituents who, in view of United States' unwillingness to export high technology in the form of extra-territoriality, cannot understand why the Government are considering the purchase of a United States ship-to-ship guided weapon, when an equivalent is available in Britain?

As I indicated a few days ago, a decision will be taken fairly soon as to which surface-to-surface guided weapon will be purchased for the needs of the Royal Navy. The factors that my hon. Friend has mentioned, with a number of others, will be taken fully into account.

If the Prime Minister visits Kingswood, will she explain to the hon. Gentleman's constituents how she reconciles her statement of May 1979 that the public have a right to look to the Government for protection from crime with the fact that since then robberies have increase by well over 50 per cent.?

The hon. Gentleman will be aware of the vastly increased police resources now compared with that time. He will also be aware that the latest crime figures show a small but welcome overall reduction in crime.

asked the Prime Minister if she will list her official engagements for Thursday 5 April.

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

Will the Prime Minister now give a simple yes or no answer to the following question? When she went to the palace of the Sultan of Oman to discuss the Cementation contract, was she then aware that her son was working for Cementation? Will she confirm or deny that the fee of £85,000 was paid to Mark, as reported in the press last Sunday?

I have answered many questions about my visit to Oman, the Oman university project and official meetings and discussions with representatives of the Government of Oman and others connected with the project. I have nothing further to add to those answers.

Will my right hon. Friend spare a moment today to plan with the Foreign Secretary a follow-up of British initiatives on the banning of chemical weapons and support for the new American initiatives in that sphere?

We welcome the recent initiatives by President Reagan to table further proposals. That initiative was foreshadowed in a speech by Mr. Shultz at the Stockholm conference recently. As my hon. Friend knows, we had previously tabled an initiative on chemical warfare, including the right to challenge inspection. We warmly support President Reagan's present initiative. At a time when chemical weapons have been used, it is extremely important that we should secure a comprehensive ban on their manufacture, stockpiling and use.

In standing up for British interests, how does the Prime Minister justify the sudden severe cut in milk production inflicted on Britain, when we are less than self-sufficient, whereas the French, who overproduce, will have only one third of those cuts? Is she aware that that policy could spell financial disaster, especially for small dairy farmers?

As the right hon. Gentleman knows, we are self-sufficient in liquid milk and almost self-sufficient in dairy products, perhaps more so when one takes into account the imports that we have in support from New Zealand. I had thought, perhaps mistakenly, that the right hon. Gentleman was in favour of the European Community and the common agricultural policy, although I would not necessarily have deduced that from what he has said today. I hope he will agree that the recent decisions to reduce the overall surpluses are in the interests of the Community and especially of those who pay for so many of the surpluses to be subsidised and sold cheaply to other countries.

asked the Prime Minister if she will list her official engagements for Thursday 5 April.

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

My right hon. Friend has an outstanding reputation for visiting all parts of the United Kingdom. Will she try to find time in the not-too-distant future to visit some of the dairy farmers in my constituency and explain to them why the full burden of the irresponsibility of successive Governments and of the European Community is being placed on their shoulders? Bearing in mind that schemes have been introduced for the coal industry and the steel industry, in which restructuring has taken place, will the Government introduce a United Kingdom Government-funded scheme to help dairy farmers——

Order. The hon. Gentleman must not make a speech.

Other dairy farmers in other Community countries are taking just as big a cut in production as we are. In fact, in Germany and Holland the cut is slightly larger. I am sure my hon. Friend will agree that it was necessary to try to reduce the surpluses that have been produced year after year and have been stockpiled. For example, there is nearly a year's stockpile of butter in the Community.