asked the Chancellor of the Exchequer what recent meetings he has had with other Finance Ministers regarding countries rescheduling of debt; and if he will make a statement.

I attended the meeting of the IMF interim committee on April 12, where international debt problems were among the matters discussed. It is likely that this is one of the subjects we shall be discussing at the London economic summit next month.

Will the Chancellor of the Exchequer confirm that, in view of the recent rise in interest rates, especially in the United States, and mirrored over here, the rescheduling debt of those countries could be increased by as much as $3.5 billion for every 1 per cent. rise? Will he also confirm that at the economic summit there is likely to be discussion of a proposal for two-tier interest rates, so that the bankers can save their own skins? If the bankers and Governments together are prepared to distort market forces to look after themselves, why can we not have lower interest rates on a two-tier basis for worthy causes at home, to reduce the dole queue?

The hon. Gentleman is not altogether accurate when he says that the rise in American interest rates has been mirrored over here. There has been a rise in this country, but it has been very much less. Since 14 March, when the base rate went down to 8 1/2 per cent. in this country, United States interest rates have risen by 1 1/2 per cent.; here they have risen by between 1/2 and 3/4 per cent. Our interest rates are well below American interest rates for the first time ever. Nevertheless, it is an unwelcome increase, small as it is.

Does my right hon. Friend accept, with regard to the Argentine debts, that the Americans may have been seeking to preserve the future of the international banking system and perhaps also to reflect on the emergent democracy in Buenos Aires, or does he think that these debts ought to be marked by the commercial banks as non-performing in default?

I think that what the Americans had in mind, among other things, was to try to coax the Argentines into an agreement with the International Monetary Fund. It is most important that there should be an agreement and I am afraid there is no sign of one at present. The British Government are clear that Argentina will have to abide by the rules which other debtor countries have had to abide by if it wishes to receive assistance from the Western countries.

asked the Chancellor of the Exchequer what representations he has received on the effect of the withdrawal of overseas earnings tax concessions on British merchant seamen.

I have met representatives of the General Council of British Shipping and the seamen's unions. I and my colleagues have received some 300 letters from seafarers and their families.

Is my hon. Friend aware that the withdrawal of the overseas tax concessions will result in a net reduction in the incomes of many merchant seamen? In view of the acceleration that this may give to the already alarming decline in the size of our Merchant Navy, will he consider trying to find some way of extending to merchant seamen the concessions enjoyed by British overseas residents, who have to be abroad for only 302 days to qualify for full relief?

I am aware of the difficulties facing our shipping industry. We all have respect and sympathy for seafarers, but I hope my hon. Friend will appreciate that it would be difficult to ask the tax system—that means taxpayers—specifically to seek to help a particular work force. To that extent, we must get the figures in perspective. We are talking about 3+ per cent. of the total wage costs of the shipping industry, which is about half of 1 per cent. of the industry's total costs. We must get that figure in perspective. It does impact negatively on seafarers.

In view of the Chancellor's avowed intention to reduce tax levels, is not it inconsistent that an able-bodied seaman in the next tax year may lose £10 per week of income? That figure will rise to £35-£40 for senior masters. Is the Minister aware that that will put us at a disadvantage with our competitors in other merchant navies? Can the Chancellor at least make an increase in the fixed allowance to take into account the fact that these men are away from home most of the year and lack the social and educational advantages that other members of the community enjoy?

I shall not try to answer all those points, but I remind the House that the combined effects of the Budget in 1984–85 on a married rating who is on average pay and is spending 200 qualifying days away, will result in an increase of £1.10 per week. I recognise the difficulties, but the reliefs were the product of high marginal tax rates which were sought to be relieved in this way. No one in the House wants to see reliefs of this sort, as opposed to people being paid properly by employers.

Why cannot members of the Merchant Navy be treated in the same way as members of the Royal Navy?

My hon. Friend is right to draw attention to the fact that members of the Royal Navy do not benefit in any way from these reliefs. In fact, the reliefs affect only 45,000 of the 65,000 members of the merchant marine.

Is the Financial Secretary aware that one of my young constituents—a seaman—will lose more than £500 a year because of the proposals? Is it not disgraceful that seaman—men who work abroad to earn their living—are bracketed with the idle rich who spend half their time on world cruises or in their villas abroad?

Nobody is seeking in any way to deny the respect that we all have for the seafarers of our country. However, the reliefs were introduced at a time of high marginal rates, to help the export drive in 1977. The abolition of those high marginal rates has associated with it the removal of reliefs that are not now regarded as necessary. I remind the House of the figures in relation to an average able seaman, who is earning £155 per week. The combined effects of the Budget will mean a difference to him of £1.10 per week.

In view of the representations that have been made from all quarters of the House, and the undesirability of the work of our merchant seamen passing into the hands of merchant seamen of other countries over whose conditions of employment we have so little influence, will the Minister undertake to reconsider the matter and, if necessary, to treat merchant seamen as a special category?

The House has spent a long time trying to remove special categories from the tax system. I draw to the hon. Gentleman's attention the fact that whether our seamen work for foreign or United Kingdom flags the tax system relates to their residency, and equal tax systems apply.

asked the Chancellor of the Exchequer what estimate he has made of the consequences

Detailed estimates cannot be made.

Does my hon. Friend accept that it is likely that the Government could lose a considerable amount of revenue because a number of cowboy builders may take advantage of the new circumstances? Ought he not to consider detailed estimates, because the measure may mean that the Government will lose, rather than raise, revenue?

The fears that have been expressed, as I understand them, are very exaggerated. For example, home extension work is unlikely to go to the black economy, and the Budget changes made by my right hon. Friend will end the evasion of tax by the misdescription of repairs—which were, and still are, standard-rated—as alterations, which are zero-rated. Those misdescriptions must have cost the Revenue considerable amounts in the past, and that sort of evasion will, I hope, not now take place at all.

How many extra Customs and Excise staff will be employed to collect this duty? How does this compare with the reduction in the number of Customs and Excise staff over the past five years, and in particular, of the staff who have been employed to ensure that hard drugs are not imported?

The number of Customs and Excise staff involved in this change will be very small. What it will mean is that the staff already concerned with these matters will be able to spend more of their time on VAT control, rather than in sorting out some of the very difficult marginal cases between repairs and alterations.

Would it not be fair to exempt from this tax at least those householders who signed contracts for the work to be done before 1 June and who have, unfortunately, not been able to get the work done before that date?

As my hon. Friend may know, this matter was debated in the House during the Committee stage of the Finance Bill on 30 April, and I gave an indication then that my right hon. Friend, myself and others will be considering the points made in the debate. I made it clear that I said that without any commitment to any change in taxation arrangements.

Does not the initial answer that no detailed estimate can be made mean that the Government have no idea of the real consequences of the tax? Can the Government tell us, for instance, how many small business men they anticipate will be made bankrupt? Can they tell us whether they share the view of the industry that it will result in at least 35,000 unemployed men and women who were previously working in the industry?

The fact that one cannot make a detailed estimate of tax evasion should not come as something strange to the right hon. Gentleman, who has had some experience of government. If one knew precisely where all the tax evasion was going on, of course the resources of the Customs, and of the Revenue department, would be deployed against that evasion. What I do know, from the careful judgments that we have made, is that overall one

asked the Chancellor of the Exchequer what use he makes of forecasts by other economic forecasters.

The Treasury monitors a wide range of outside forecasts.

Is it not true that of the 19 forecasters who have recently published their findings in the Financial Times, only four forecast a reduction in inflation in 1985, and that one of those was the Treasury itself and another its sycophantic supporters at Liverpool university? Why do the Government not take more notice of Professor Wynne Godley and the Cambridge school, because they, every year since 1978, have been absolutely right in their predictions about the level of unemployment and the reduction in manufacturing output? Why do Government supporters laugh when they know that that is the truth?

As the hon. GentLeman has singled out one forecaster, I am bound to say that Professor Wynne Godley's forecasts do not compare favourably with those of the Treasury and that in fact most outside forecasts since the autumn statement have been moving closer to that of the Treasury. The Treasury was a little over-pessimistic about the reduction of inflation last year. Other outside forecasters were a good deal more pessimistic. The Treasury has been proved more right than them.

While talking about forecasts, will my right hon. and learned Friend take this opportunity to refute the forecast that the Government have any intention of altering the tax arrangements for pensions during the passage of the Finance Bill through Standing Committee?

I am happy to give my hon. Friend that assurance.

Does the Treasury study these forecasts in respect of the effect on the British economy of the movement of the pound sterling on the various foreign exchanges and, if so, will the Treasury now make more plain the Government's exchange rate policy so that business confidence here is not shattered by sudden and erratic movements in exchange rates?

I and my right hon. Friends have made the Government's policy on exchange rates very clear.

Did not the economic forecast on the rate of inflation made at the last general election by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), leave a good deal to be desired?

That is certainly a forecast to which we did not pay a great deal of attention, but, in case the right hon. Gentleman would prefer the House to forget it, I remind the House that he forecast that if a Conservative Government were returned inflation would double by the end of 1983.

What changes in the Treasury forecast will have to be made as a result of the rise in interest rates?

That depends on how long that change persists. It may be a temporary fluctuation.

asked the Chancellor of the Exchequer what representations he has received since the Budget on the increase in tax on company cars.

Since Budget day my right hon. Friend has received 40 letters and representations on this subject.

Does the Minister understand the widespread resentment among salesmen and managers over the special tax treatment of a tool of their trade as a perk, especially when so many other perks go untaxed, such as coal for miners and travel concessions? Will he therefore examine the possibility either of introducing a staged tax relating to the number of miles of business use, or of putting an upper limit on this seemingly unending increase in taxation?

I am always ready to consider points made by my hon. Friend, who has a tremendous interest in and commitment to the car industry. However, the benefits concerned are quite obviously seen in advertisements as being attractive. For example, today a basic rate taxpayer receiving from his firm a 1600 Sierra would pay tax of £144 a year on that benefit, which does not seem to be the real value. We are seeking to move towards realistic levels of all benefits as regards their tax equality with ordinary cash remuneration.

When will the Government stop using the car industry as a milch cow? The Government continue to allow adverse tariffs against our exports, a to apply a special tax only to cars and motor bikes, and to tax customers who, in the main, buy British cars. When will the Government change their policy?

In so far as the question relates to the taxation of perks on cars, I have covered the relatively low taxation in relation to the value of the perk. However, I am sure that the hon. Gentleman would want to join us in welcoming the enormous current success of our car industry and, like him, I would encourage people to buy British cars. Car production in 1983 was over 1 million for the first time since 1979. I am sure that hon. Members on both sides of the House will welcome that, as well as the successful launch of the Metro, Maestro and Montego, and the fact that BL's productivity is now comparable, again, with the best in Europe.

Does my hon. Friend agree that these tax changes bear heavily on middle management, who are so vital to our industrial recovery? Does he accept that this increased burden would be much more readily acceptable if the Treasury was even-handed in its taxation of perks? Is there not particular resentment that coal miners' free coal is not taxed? May we assume from his earlier reply that my hon. Friend is considering taxing those other perks in future Budgets?

The Government's policy is quite clear. Let me remind my hon. Friend of what I said a few moments ago. Our policy is to move gradually towards realistic taxation of perks to ensure that all benefits in kind are taxed equally with cash remuneration.

Will the Minister ask his right hon. Friend the Chancellor whether he will receive a delegation from

I have acknowledged the point of my hon. Friend the Member for Bromsgrove (Mr. Miller), and I recognise the aspect of the question to which the hon. Member has addressed himself. If approached by delegations, I shall certainly consider what is obviously an important topic to those who regard company cars as a vital tool of their trade.

asked the Chancellor of the Exchequer what is the latest forecast for the rate of inflation over the next 12 months.

The latest forecast suggests retail price inflation will fall to around 4 per cent. by this time next year.

Does my right hon. Friend accept that we must keep the present low and stable rate of inflation if industry is to have the confidence to invest and provide jobs? Is it not disturbing, therefore, that material costs to industry have increased by over 8 per cent. in the last year, and is that not a timely reminder that we simply cannot relax our efforts in the fight against rising prices?

I strongly agree with my hon. Friend's last point. That is indeed a central plank of the Government's economic policy. The increase in input prices to which he referred is largely a reflection of the rise in the value of the dollar, which means that certain commodities that manufacturers have had to import, particularly oil, have cost more. However, unit labour costs have risen very little, because of the large increase in the productivity of British industry generally and manufacturing industry in particular. Of course, considerable restraint must be imposed on pay increases, because the unit labour costs of some of our major competitors have actually fallen.

What will be the cause of this 4 per cent. inflation? Will it have anything to do with money supply?

Yes.

Does my right hon. Friend agree that if he is to achieve his inflation forecast for the coming year it is vital to continue public sector pay restraint, especially in central and local government?

Yes, that is indeed the case. The Government are anxious to keep a firm grip on public expenditure, of which public sector pay is an important part.

Would not a massive cut in electricity prices bring down inflation even faster, keep jobs open in the coal industry and help industry in general? Should we not stop talking nonsense about coal industry support putting 1p on income tax when electricity is making massive profits? Does not any business man with surplus stocks cut the price to get rid of them? The Government should stop taxing electricity, when miners are being pushed out of work.

Subsidies are no route to bringing down inflation. However, I agree with the hon. Gentleman that low-cost energy is important, and that means low-cost coal in particular.

Is my right hon. Friend concerned that the recent rise in interest rates, the continued strength of the dollar and the high level of private sector lending may have adverse consequences for inflation, or is he still confident about his forecast?

I am never wholly confident about any forecast, although, as my right hon. and learned Friend the Chief Secretary has pointed out, the Treasury's track record is considerably better than those of most, if not all, outside forecasting bodies. To that extent, I am confident about the forecast. The money supply—both broad and narrow—is well within the target range. There is no cause for concern on that score. Focusing exclusively on bank lending, which is only one component of the money supply, is likely to lead to a mistaken conclusion.

In view of the importance attached to the level of interest rates by the Chancellor and by this Administration, is not the point raised by the hon. Member for Lewisham, West (Mr. Maples) a bitter blow to the Government's strategy? Will not the forecast of higher interest rates lead to lower investment and higher prices, and what does the Chancellor intend to do about it?

I have made no forecast of higher interest rates to come. Of course the recent increase in base rates is unwelcome, but it is not a bitter blow. There will always be fluctuations in interest rates if the Government are concerned, as this Government are, to maintain control of monetary conditions, especially in the light of what has been happening in the United States. We have been able to keep our interest rates well below those of the United States, but we cannot be wholly immune to what has been happening there. The hon. Gentleman asked about the prospect for investment. I was very glad to see that the most recent CBI forecast suggested that there would be a 7 per cent. increase in manufacturing investment this year.

asked the Chancellor of the Exchequer if he is satisfied with the progress of the economy; and if he will make a statement.

The combination of steady growth and low inflation that we are currently enjoying has not been seen since the 1960s.

Is it not a fact that the economy is already being affected by the dispute in the coal mining industry and that that is likely to cause a rapid deterioration before long? Does the Chancellor not agree that it would therefore be financially and economically advantageous at least to consider, if not to meet, the present demands of the miners—[HON. MEMBERS: "No."]—especially as the other coal-producing countries in the EC receive greater subsidies? Will the right hon. Gentleman make the strongest possible representations to the Prime Minister on this aspect of the economy?

The effects on the economy are very slight and will continue to be very slight, largely because of the substantial stocks of coal at the power stations. The treatment of the miners by the National Coal Board has been very fair—some would even say generous. The levels of pay are high, the increase offered is very generous, and the redundancy terms for those made redundant as a result of pit closures are extremely generous.

As movements in the United Kingdom monetary aggregates are satisfactory, and as my right hon. Friend has made it quite clear in his evidence to the Select Committee that he has no target for the exchange rate and no intention of acting to protect it against external factors, why does he think interest rates are rising, and what effect does he think this it will have on the economy?

As I said, we, any more than any other country, cannot be wholly immune to what is happening to interest rates in the United States if we are concerned to maintain proper control of monetary conditions. I was interested to read that Herr Karl Otto Pùhl; of the German Bundesbank had made a similar remark in London yesterday. As I said in my evidence to the very eminent Select Committee that my right hon. Friend chairs, although we do not have a target for the exchange rate, we take it into account in pursuing our monetary policy.

While thanking the Chancellor for his tribute to my Chancellorship in the 1960s when there was steady growth, high investment and a much higher sterling rate than there is today, may I ask him to take into account the fact that at that time unemployment was at record low levels? Will he accept that he cannot take credit for his Chancellorship until he can do something about the present disastrous unemployment figures?

I entirely agree with the right hon. Gentleman that unemployment at present is appallingly high, but he is a fair man and knows full well that the rise in unemployment over the past 20 years has occurred throughout the world and not simply in this country. He was referring to the 1960s which was 20 years ago. [Interruption.] I do not know whether Opposition Members can count or not, but I know that the right hon. Gentleman, as a former Chancellor of the Exchequer, can, because he had to for that job.

In view of the importance of the United States interest rates to the level of our base rates, what action will my right hon. Friend take in conjunction with other European countries, to try to persuade the United States to reduce its deficit?

There have been a number of discussions with the United States authorities about that. There is some sign of a welcome change in the attitude of the American Government towards their deficit. As my hon. Friend will know, they have now decided to make what they call a downpayment, a $150 billion reduction in the deficit over three years. Their description of it as a downpayment leads to the inference that further reductions are yet to come. The matter may well be discussed at the London summit next month.

Why did the Chancellor of the Exchequer, when considering the exchange rate policy which he announced earlier, not ensure that the exchange rates took some of the strain, rather than allowing interest rates to rise, to the disadvantage of industry in general?

I am sure that if the right hon. Gentleman were ever again a Treasury Minister he would indeed have the satisfaction — to him — of seeing a substantial devaluation of the pound. I should have thought that his experience as a Treasury Minister would have taught him that there is no satisfaction through that route.

Does my right hon. Friend recall that there has never been a Labour Government who have succeeded in bringing about a reduction in unemployment? Does he agree that it therefore must he a source of considerable comfort to those looking for work that a Conservative Government are in power?

My hon. Friend is right. Moreover, there has not been a Labour Government who have not had an average rate of inflation during their term of office higher than the rate of inflation of the preceding Government. This Government have broken that trend. Inflation has come down. The economy is recovering and the employment picture is now gradually improving, although I readily agree that it has a lot further to go.

Is the Chancellor aware that industralists do not share his complacency about the rise in interest rates and that yesterday the chairman of the CBI said that the rise in interest rates could shatter the fragile recovery—as he described it—which is taking place this year? When will the Chancellor accept real responsibility for the control of this country's economy? When, instead of constantly blaming America, will he start to control interest rates himself and bring them down so that industry may continue to recover?

I could be interested to learn how the hon. Lady imagines that she can precisely control interest rates and, indeed, what she thinks the consequences of that would be. The more considered verdict of British industry was that contained in the CBI April survey, which showed the most widespread improvement in manufacturing orders and output for seven years.

asked the Chancellor of the Exchequer what was the estimated income from stamp duty during the year 1983–84 (a) from property and (b) from other sources.

:£550 million from transactions in real property; and £590 million from other types of transactions.

Does my right hon. and learned Friend agree that the measures in the Budget will improve

I am happy to confirm my hon. Friend's comments on the measure. In fact, about 600,000 home buyers should benefit from the measure during the next year, and about 90 per cent. of them should be first—time home buyers.

asked the Chancellor of the Exchequer how many firms were operating employee share—owning schemes in 1974, 1979, and at the latest date for which figures are available; and if he will make a statement.

By the end of April the number of employee share schemes approved by the Revenue for the purposes of tax relief had increased from 30—the comparable figure in 1979—to 689. Most of these schemes relate to a group of companies and the number of participating companies is estimated at well over 6,000— benefiting around 500,000 employees.

Is my hon. Friend aware that I warmly welcome the increasing spread of wealth that is indicated by his reply? The figures are excellent. Does he agree that employee share—owning schemes are a much better way of increasing the distribution of wealth than Socialist state monopoly and nationalisation, which bring only higher taxes for each of us and which are advocated by the Labour party?

I could not agree more with my hon. Friend. The ways in which 500,000 employees are now not only benefiting financially but have a much better relationship and commitment to their place of work should be welcomed by all right hon. and hon. Members.

Does not the Minister agree that the biggest single handicap to the development of employee share schemes will be the restrictive guidelines issued by pension funds, life assurance companies and other institutional investors through the investment protection committee, which are so restrictive as severely to limit the extent to which companies can develop employee share schemes? Will the Minister make it clear to those institutions that that is against the public interest?

Without further details, I should not want to dictate to the IPC its role. I shall examine any points raised by the hon. Gentleman. I think that he will welcome, as all hon. Members should, the extension beyond the original 1·5 million shareholders of the additional 500,000 shareholders through employee share schemes in the past four years.

asked the Chancellor of the Exchequer what recent payments have been made out of the Contingency Fund in relation to health services in the Falklands.

None, Sir.

Is the Treasury's estimated replacement cost of the Falklands hospital—the right hon. and learned Gentleman has the estimate in his brief—over £10 million?

The hon. Gentleman's eyesight has obviously improved in the past week. He is not reading from my brief. I must tell the House that it is too soon to say what the cost of replacing the hospital will be. An architect is now in the Falklands to advise the Falkland Islands Government if the options available to them. The question of funding is still under consideration.

asked the Chancellor of the Exchequer what percentage of earnings is now paid by the average wage earner (a) in direct taxation and (b) in indirect taxation; and how this compares with 1978–79.

For a married man on average earnings with two children the percentage of earnings taken in income tax and national insurance contributions less child benefit is expected to be 21·7 per cent. in 1984–85, compared to 21·2 per cent. in 1978–79. Assuming that he has the consumption pattern of a typical family man at average earnings, he will pay 12·2 per cent. of his gross earnings in indirect taxes, excluding local authority rates, this year compared to 10·8 per cent. in 1978–79.

Will the Minister accept that the majority of those on average or lower than average wages, and certainly those who are not earning, are now paying more in taxes as a result of the Government's change in policies on direct taxation since they were elected? Will he accept that it is time for a change of direction to benefit the lower-paid and average—paid rather than retaining the present Government policy, which benefits those earning well above the average?

By concentrating the income tax changes on raising the basic allowance, my right hon. Friend has helped the lower paid. Moreover, it must be remembered that the real rise in earnings that has been taking place means that all those whose earnings have risen in line with the national average have real take—home pay now that is 8 per cent. higher than in 1978–79.

Does my hon. Friend agree that it will not assist the wage earner and the entrepreneur if the Chancellor decides to take into tax private pension schemes, which will discriminate against those who want to protect their families and, furthermore, not allow them to be a burden on the state? Moreover, will my hon. Friend deny the rumours that he intends to do that?

My right hon. and learned Friend the Chief Secretary gave a categorical assurance on the matter earlier this afternoon.

Will the Minister say when he expects the tax burden, either indirectly or directly, measured in either real terms or as a proportion, to get back to what it was in 1978–79?

No. I cannot give the hon. Gentleman that estimate, but I can give him the clear prophecy that if ever a labour Government are returned there will be higher taxes, higher borrowing and higher interest rates.

asked the Chancellor of the Exchequer what mechanisms exist for lending money to the European Economic Community.

The Commission has no general powers to borrow. It has, however, been empowered by the Council to borrow in the markets on behalf of the Community in order to on—lend for certain specific projects.

Will my right hon. and learned Friend give a simple and clear undertaking to the House today that in no circumstances will Her Majesty's Government consider or agree to a loan to the European Community to pay this year's financial over run, because if he does not give such an undertaking today people will assume that we would be prepared to consider such a loan?

No such assumption should be made. As, in the present circumstances, it has not been demonstrated that savings could not be made, it is far too early, in the Government's view, to consider such a loan.

asked the Prime Minister if she will list her official engagements for 10 May.

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.

Will my right hon. Friend, at this critical time in the coal industry dispute, reiterate her confidence in and commitment to the long—term future of the coal industry? Does she agree that customers, not subsidies, will guarantee success?

Yes, my hon. Friend is right. This Government want a prosperous coal industry. To that end, we believe that the pay offer that has been made, amounting to wages of 25 per cent. above average industrial wages, the excellent investment record, amounting to £2 million a day in good new coal mines, and the good voluntary redundancy payments are the best ever and offer very good prospects for the future of the coal industry if people will go to work and cut the coal to meet the orders that have recently been obtained.

Is not the Prime Minister not troubled by the growing violence this week at Ravenscraig and Hunterston between pickets and the police, and by the warnings from the British Steel chairman about the long—term threat to the steel industry if the disruption goes on? Does she accept that Ministers have a responsibility in this deteriorating climate to try to bring the parties together, rather than to act as idle spectators at a tug—of—war in which the British economy is the rope?

I agree with the right hon. Gentleman that we must wholly and utterly condemn violence and its use to further industrial ends. We hope that it will be reduced. We must also congratulate the police on the way in which they have carried out their duty of seeing that those who wish to get to their place of work shall be able to get there. The way ahead is to condemn the violence and to see that those who practise it cease to do so.

Is my right hon. Friend aware that applications by industry for the coal conversion scheme have fallen from about 20 a month before the troubles to just three a month now? Is it not just another proof that if our coal industry is to have a secure future it is essential that markets be first won and then secured?

Yes. As my hon. Friend knows, the Government have macte available a subsidy for industries which wish to turn to coal as a means of providing the energy that they require. Clearly, industries which turn to coal must have the guarantee of security of supply or they will not make the change. Indeed, ICI has deferred until the end of the strike a decision on whether to use coal. Should that company agree to use coal, it will mean another 1,000 jobs in coalpits in Durham—exactly where the jobs are needed. It is another instance of an order waiting to be picked up, if those in the coal industry will only do so.

When will the Prime Minister realise that she will never starve the miners into accepting a programme of mass pit closures that will deny the nation the coal that it needs for the prosperity of our industry?

During 11 years the Labour Government closed 300 pits. The Conservative Government have closed only 92. Is the right hon. Gentleman disowning previous Labour Governments? Many miners, fortunately, are exercising their right to go to work and are producing coal. If others exercise their right to work, we shall have a good, prosperous industry. Apart from that, those who are not working have so far lost about £220 million in wages, and I hope that they will soon return to work.

asked the Prime Minister if she will list her official engagements for 10 May.

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

Will the Prime Minister confirm that police experts have now identified one of the guns found at the Libyan People's Bureau as the weapon used in the killing of a Libyan in this country some time ago? In those circumstances, will she establish an independent inquiry into the activities of diplomats at the bureau and the circumstances which led to the siege? In the same context, will she cancel her meeting with the Prime Minister of South Africa in protest at the unacceptable activities of South African diplomats, because the vast majority of people in this country are repelled by the evils of apartheid?

The answer with regard to both the independent inquiry and South Africa is no in each case.

After another night of mindless violence on the Continent—this time in Brussels—will my right hon. Friend send a message of apology to the Belgian Government? Will she also send a message to the Belgian magistrates that, when these thugs come up before them, they should show no mercy towards them and that, if they consider it necessary, they should keep these thugs in custody for yet another football season, as that would certainly please the British people?

I think that we are all deeply concerned about the violence displayed in Brussels last night and wholly and utterly condemn it. There have been a number of cases of violence. This time it was not in the stadium, but took place both before and after the match. A special committee was set up after previous examples of violence in Luxembourg. It will report shortly. I am happy to take my hon. Friend's invitation and condemn the violence. It was a disgrace to Britain and we deeply apologise for it.

asked the Prime Minister if she will list her official engagements for Thursday 10 May.

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

Will the Prime Minister confirm that a line in a well—known prayer, which she recited to the nation in 1979,

"grant that I may seek … to understand rather than to be understood"

I seek both to understand and to be understood. I hope that I do not have great difficulty in either. I believe that the way to end the coal dispute is by taking advantage of the consultation procedures which exist and which are being attended by some of the miners unions.

In the course of today, will my right hon. Friend reflect on the answer to the written question tabled by my hon. Friend the Member for Southend, East (Mr. Taylor) regarding the vast quantities of surpluses still being exported to Soviet Russia? In particular, will she consider the vast quantities of wine sold at only 2½p a pint? So long as wine is sent to Russia at 2½p a pint on such a vast scale, can we say that there is any reason for an increase in the own resources of the EEC?

As my hon. Friend is aware, decisions on the export of surplus foodstuffs and wine in Europe are taken by a management committee. Those decisions are taken by a majority. Although we vote against them, we are not able to stop exports at highly subsidised prices. We disagree with those decisions and hope eventually to persuade others likewise. In the meantime, what my hon. Friend says reinforces the Government's present attitude and approach. This time, as part of the budget settlement, we must have strict financial guidelines on expenditure for ensuing years, including for agricultural expenditure.

As the Government have had the report and recommendations of the independent review body on nurses pay since early April, will the Prime Minister say why she is making the nurses wait for several more weeks before telling them whether she will honour the report's recommendations?

I believe that the time taken to decide on review bodies' reports in general is in keeping with what happened previously. Obviously, we like to consider them all together.

But that still does not explain why it will be two months or more between the time of the submission of the report and when the Prime Minister says she may make an announcement. Does the right hon. Lady not understand that nurses deserve a higher pay rise—one well above the current rate of inflation—and that she has no plausible reason whatever for denying that or continuing the delay? Why does the Prime Minister not announce now that she will honour the report and the figure recommended in it?

If the right hon. Gentleman had listened, he would have heard my reply. We now have all the reports of the top salary review body and the special review bodies. We like to consider them together and to ensure that we know where the money will come from to meet whatever recommendations are made. That is a sound financial principle.

I am sure that you, Mr. Speaker, and the Prime Minister would agree that nurses are worth everything that they can get. In her answer, was the Prime Minister suggesting that nurses' pay is in any way dependent on the allocations which she may choose to make to people on some of the highest salaries in the land? If so, things are much worse than we thought. It really is time that the Prime Minister made it absolutely clear that no other considerations about top salaries can inhibit the proper pay settlement which nurses deserve.

No. The right hon. Gentleman attempts to put words in my mouth, but he will not succeed. I merely suggest that we shall examine all the review bodies' reports together. Before we make a pronouncement, we shall know exactly where the resources will come from.

asked the Prime Minister if she will list her official engagements for Thursday 10 May.

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

Will my right hon. Friend confirm her support for the refusal of the Secretary of State for Trade and Industry to intervene in the recent dispute between the owner and editor of The Observer, despite the urgings of the Opposition, whose noisy clamour on that contrasts deafeningly with their silence on the current issue of freedom of the press at the Daily Express in the light of the SOGAT issue?

I confirm that I wholly agree with the line taken by my right hon. Friend the Secretary of State for Trade and Industry on the matter relating to The Observer. We stand four square behind the freedom of the press. That freedom would soon be lost if threats to production succeeded in obtaining space in a newspaper for the propagation of particular points of view.

In view of recent press speculation, will my right hon. Friend tell me what respective importance she places on fiscal neutrality and the continuing encouragement to the self—employed and others to make provision for their own retirement through tax relief on their contributions?

The two are not mutually exclusive and can be accommodated together.

asked the Prime Minister if she will list her official engagements for Thursday 10 May.

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

In the light of recent announcements by the Soviet Union, Algeria and Bulgaria, and in view of the bad example that the Prime Minister set the world with her own botched—up attempt at an Olympic boycott in 1980, will she now give Government support to the setting up of a permanent Olympic site in Greece, perhaps with United Nations status?

Conditions for the Olympics were different in 1980. The hon. Gentleman may recall that they took place soon after the Soviet Union had entered Afghanistan, which it still occupies. That is different from the conditions under which the Olympics are to be held this year in Los Angeles. We greatly regret the apparent decision by the Soviet national Olympics committee not to participate in the Olympics. We hope that it will reconsider it.