asked the Chancellor of the Exchequer what new fiscal and monetary measures he plans to achieve a higher level of employment.

Employment is already rising. Our policies offer the best chance of sustained growth of output and employment.

Does my right hon. and learned Friend agree with the statement in the 1944 White Paper on employment that a country will not suffer from mass unemployment as long as total demand for its goods and services is maintained at a high level?

I prefer to direct my hon. Friend to the measures introduced by this Government to improve the supply side of the economy, which will make a more lasting impact on this problem.

What evidence is there that the Government's economic policies are working, when unemployment is rising, and all the signs are that it will continue to rise in the coming years?

The hon. Gentleman is taking counsel of his fears. I can cheer him up by reminding him that the number of people in work has increased by 250,000 over the year to June 1984.

Would it not be constructive to encourage a reduction in interest rates in London, which would have the effect of reducing the exchange rate, thereby making our goods more competitive overseas and imports more expensive, and putting us on purchasing power parity with the Common Market?

My hon. Friend, with his knowledge of these matters, will know not only that interest rates have come down, but that the policies of my right hon. Friend the Chancellor of the Exchequer are designed to reduce interest rates. Therefore, I am sure that my hon. Friend will support the Government's policies to contain public expenditure.

Do Treasury Ministers repudiate the Treasury's economic model, which shows that increasing public expenditure by £1·5 billion would generate more jobs than using the same amount of money to reduce income tax? Will the Chief Secretary come clean and tell the House that the Government care more about cutting income tax than about cutting unemployment?

The hon. Gentleman is obviously referring to some assumptions fed into the Treasury model by various commentators with whom he is in sympathy. Therefore, I do not necessarily accept that conclusion. If the hon. Gentleman will reflect a little, he will realise that cutting taxes by raising thresholds could make a considerable impact on the labour market. Therefore, I hope that we shall have his support for any measures that we wish to carry out in that direction.

asked the Chancellor of the Exchequer if he will make a statement on the impact of current economic trends upon the creation of new jobs.

The number of people in work has risen by about a quarter of a million in the year to June 1984. Growth in employment is set to continue in 1985.

I thank my right hon. Friend for that most heartening of replies. Does he feel that, to an important extent, this rise in employment is due to the growth of new and smaller businesses, which in itself is a reflection of the Government's introduction of policies for enterprise?

My hon. Friend is right. Self-employment, for example, has increased by some 400,000 between the middle of 1979 and the middle of last year, and the recent CBI survey suggests that prospects are best in the small firms and services sectors. The importance of small firms was marked by the reduction in the small firms rate of corporation tax, which was reduced substantially in this year's Budget. I hope that there will be further progress in the small firms sector next year.

Is the Chancellor of the Exchequer aware that many of those new jobs are part-time only and involve relatively low skills? What will he do to enhance public demand for the skilled labour that is now on the scrap-heap because of his policies? Will he give those people a chance to get back into the labour market, by Government investment in public works?

I do not think that many of the self-employed are part-time, as they are working full-time and very hard indeed. Of course there is a need to create more jobs, and that is why I am determined to find room within the scope of our public expenditure policy to reduce taxation in such a way that it will create greatly increased job opportunities in the years ahead.

Does my right hon. Friend agree that abolition of the wages councils would do a tremendous amount to increase employment opportunities? Is he aware that the electricians' union has already slashed the rate of pay for apprentices from 37 per cent. of adult wages to 23 per cent., and that, as a result, the number of apprentices has doubled?

My hon. Friend's example is correct and important. Clearly, the Government will have to consider the question of wages councils very seriously.

Is the Chancellor of the Exchequer aware that he has failed to convince even business economists that his policies are working? They do not believe his forecasts for inflation—they think that it will be higher — or for the rate of growth — which they believe will be lower—and they say that the outlook is depressing, as unemployment will continue to rise.

The hon. Lady always finds everything very depressing — and I am not surprised, given the company she keeps. But the CBI forecasts are very much in line with those of the Treasury.

asked the Chancellor of the Exchequer what is the most recent estimate for the public sector borrowing requirement for 1984–85.

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

The PSBR for 1984–85 is projected at around £8½ billion.

Does my right hon. and learned Friend agree that the effect of the coal strike this year has been to increase the public sector borrowing requirement and, therefore, that the consequence of Arthur Scargill has been to reduce the scope for job-creating tax and national insurance cuts in next year's Budget?

My hon. Friend is absolutely right. The coal strike has made a very considerable difference, in that it may add, over the financial year as a whole, about £1½ billion to total borrowing.

Does my right hon. and learned Friend agree with the wise words of my right hon. Friend the Member for Hertsmere (Mr. Parkinson) in the debate on the autumn statement last week, to the effect that losing control of the PSBR in a vain attempt to create jobs would be to fail to address the fundamental cause of our problem, which is not shortage of demand, but failure to meet it? That would be a cruel deception on the unemployed, as President Mitterrand found to his cost.

My hon. Friend is absolutely right. The only way to create sustained long-lasting jobs is to contain inflation, which is a principal strand in the Government's policies.

How much will have to be added to the PSBR as a result of the abolition of the GLC?

Nothing.

Will the right hon. and learned Gentleman confirm that since the coal strike began orders for more than £1,000 million have had to be laid before Parliament to finance the deficit of the NCB and that there is the prospect that an order for more than £600 million will be laid before Parliament? Does he accept the Chancellor's view that the strike was a worthwhile investment, given that some of his own Back Benchers now refuse to support those orders? Why will the Government not admit that they have caused the economy to run down as a result of the miners' strike and have kept the strike going because they would not negotiate and wanted MacGregor to smash the NUM?

The hon. Gentleman has entirely misquoted my right hon. Friend the Chancellor. My right hon. Friend never said that the miners' strike was a good investment —[Interruption] He said that the restructuring of the coal industry was a worthwhile investment, and any hon. Member who cares about the long-term future of this country's coal industry should adopt that point of view.

What detrimental effects would there be for the PSBR if finance were made available to ensure that certain major contracts to sell aircraft abroad did not make a loss? Does my right hon. and learned Friend recognise that the creation and containment of jobs that would result from making such finance available would more than offset any potential losses to the PSBR?

I assume that my hon. Friend is referring to the exposure of the Export Credits Guarantee Department. He will know that, in the current state of the world market, that exposure is considerable. He will also know that the ECGD covers a range of Airbus orders. It may even have a favourable impact in my hon. Friend's constituency.

What is the Treasury's latest price tag for the Falklands?

It will not add to the public sector borrowing requirement this year, which was the original question put to me.

asked the Chancellor of the Exchequer what recent representations he has received about the imposition of value added tax on books and periodicals; and if he will make a statement.

Over 500 representations from individuals and organisations have been received by Treasury Ministers during the last two months opposing VAT on books, newspapers and periodicals. Although the Government favour a shift in the burden of taxation from taxes on earnings to taxes on spending, we have no set views at present on how this might best be done. However, the representations on this subject are being carefully considered.

Are the Government aware that extensive damage will be done to educatiom, libraries and the book trade generally if VAT is imposed, and that that damage will extend to newspapers and periodicals? Will the Chancellor of the Exchequer bear in mind that there is no more support for the imposition of VAT on those items than there would be if it were to be imposed on food?

A great deal of exaggerated speculation and comment is taking place. As I have said, representations have been received, and they are being considered carefully.

Why does my hon. Friend not end damaging speculation and prevent a major revolt—one that would make last night's Tory revolt look like a storm in a teacup—by saying that such a monstrous proposal will not be considered.

My hon. Friend, who is a helpful supporter of the Government, must know that it is a well-established and accepted principle that we should not anticipate my right hon. Friend's Budget statement.

How many of the representations received are in favour of the proposals? Can the Minister tell us whether such a tax was ever contemplated in time of war, let alone in peace? Does he understand that there is almost unanimous hostility to such a proposal from both sides of the House and throughout the country?

I have seen the early-day motions on this subject which have been signed by hon. Members from both sides of the House. As I said, 500 representations have been received, and all are opposed to the proposal.

Will my hon. Friend state simply what factors, other than financial, tend to influence a Chancellor of the Exchequer—indeed, this Chancellor of the Exchequer—in reaching difficult decisions, such as that referred to on the Order Paper?

I am sure that my right hon. Friend will take account of financial, social, economic and political considerations in forming his judgment.

The Minister said that he cannot anticipate the Budget. However, the Prime Minister has already done so by promising that there would be no VAT on new buildings or food. Why cannot the Budget be anticipated in this respect? Otherwise, it confirms our suspicion that it is the Treasury's intention to impose VAT on books and periodicals.

The comments by my right hon. Friend the Prime Minister were made in June and July, and they have been reiterated many times—[Hon. Members: "Yesterday."] The ignorance of Opposition Members is extraordinary. My right hon. Friend yesterday reiterated, in precisely the same words, what she wrote in a letter to the House Builders Federation on 5 July, and which Treasury Ministers have confirmed on many occasions.

asked the Chancellor of the Exchequer if he will make it his policy that all items at present zero rated for value added tax will remain zero rated.

No, Sir, I cannot give such a wide-ranging undertaking.

Does the Minister accept that there is great concern about the fact that switching to indirect taxation penalises the low-paid and those on fixed incomes and that we should take more income from the higher paid? Does he also accept that any introduction of VAT on newspapers, food, gas, electricity or children's clothing and footwear will be totally unacceptable? The Minister should give categorical assurances that VAT will not be imposed on any of those items.

Any reasonable commentator looking back on my right hon. Friend's Budget earlier this year, with its substantial increase in income tax thresholds and modest extension of the VAT base, will have seen that the Budget was not regressive, but was in fact helpful to low-income families.

In the light of Her Majesty's Inspectorate's estimate that 33 per cent. of educational books are bought by parents, does my hon. Friend not feel that the imposition of VAT on books would be a catastrophe for education?

My right hon. Friend will certainly take those facts into account in forming his Budget judgment.

Is it not possible for the EEC—to our membership of which I am no friend—to argue logically that, since own resources are raised on the basis of a percentage of VAT in the respective member states, it is a demand of equity that the base should be the same in all the member countries?

The theoretical base upon which the calculation is made is the same for all countries, and any extension of the VAT base does not change the amount that we pay under our EEC obligations.

Does my hon. Friend agree that many, if not most, European countries manage to survive and prosper with a much wider range of items subject to VAT than Britain? Does my hon. Friend further agree that that is another item that should be considered when my right hon. Friend the Chancellor makes his Budget dispositions?

My hon. Friend's comments are perfectly true. Most member states of the Community have a wider VAT base than this country.

asked the Chancellor of the Exchequer how many jobs he estimates would be created by an across-the-board 10 per cent. reduction in wages; and if he will indicate those sections of the economy which would respond most to such a policy.

Each 1 per cent. reduction in the rate of increase of real pay would be likely, in time, to add between 150,000 and 200,000 new jobs.

Does the Chancellor recollect that on 30 November he proposed the idea that a 1 per cent. reduction in wages would produce 200,000 jobs? Since then, most industrial analysts have said that it is deceitful gibberish to present such ideas when there is not one scrap of evidence to associate reduced wages with job creation? Will the right hon. Gentleman now stop this deceitful performance and tell the nation the truth? The fact is that many of the jobs created since the end of the war have come from firms which pay far above the national average.

Every reputable economist is aware of the straightforward proposition that, just as people can price themselves out of work, so they can price themselves into work. The figures which I have cited are based on an examination of all the available evidence, which I shall publish in due course.

Does my right hon. Friend agree that, to the extent that reductions in real wages encourage employers to employ more people, a similar effect could be created by reducing the employers' national insurance contributions, and that that would be a good deal easier to achieve?

I am not too sure about my hon. Friend's last point about it being easier to achieve that effect. I should have thought that it was also a straightforward matter for employers, particularly those in the private sector, to be concerned about the level of pay settlements for which they are responsible.

Does the Chancellor accept that there is no short-term solution in pay cuts to beat the market leaders of the world in Japan, Germany, and similar economies, where high pay, high productivity and competitiveness are the rules of the day?

As the hon. Gentleman must know, wage costs per unit of output have been going down in Germany and Japan. If we do not achieve the same type of performance, we shall find things increasingly difficult. One of the elements in the equation is an improvement in productivity. That is something that we have been achieving to a remarkable extent. The other side of the equation—moderation in wage settlements—has so far eluded us.

My right hon. Friend tells the House that it is up to private employers to have wage levels that encourage employment. Is it not therefore important that, without any further delay, the Government should announce that they will abolish wages councils.

I understand my hon. Friend's point. As I said earlier, that is a factor that the Government must take seriously.

Is the Chancellor advocating a reduction in real wages as a serious way of reducing unemployment, or is it simply a debating point? Will he confirm that a return to the unemployment level which the Conservative Government inherited from their predecessors—on his formula— would require a real wage reduction of 13 per cent.? That is very unlikely.

I do not accept the right hon. Gentleman's figures on this or anything else. I am not calling for a cut in real wages. I am calling for real wages to go up less rapidly than they have hitherto. That is what I have made clear time and again.

asked the Chancellor of the Exchequer if he is satisfied with the current state of the economy.

In spite of the coal strike, GDP rose by 3 per cent. in the year to the second quarter of 1984, inflation was about 5 per cent. and employment was up some quarter of a million.

If the Minister is so confident about the state of the economy, why, within the next few hours, are the Government proposing to introduce regulations in the House to cut housing benefit for up to 16,000 single, striking miners, and tens of thousands of other people who live with relatives? The impact of that, in economic terms, may be a few million pounds, but it will be disastrous for individuals. Does not that type of cut pale into insignificance when compared with the £4·5 billion that the Government have spent trying to destroy the National Union of Mineworkers?

I am not aware that the Government have spent any money trying to destroy the National Union of Mineworkers. On housing benefit, the rest of the House, if not the hon. Gentleman, will be aware that claims have been made which were not envisaged when housing benefit was introduced.

Would it be possible to make a modest but significant improvement in the state of the economy by implementing, at an early date, the recommendations of the recent Management and Personnel Office report on Government purchasing, which showed that savings of between £400 million and £1·5 billion could be made if they were followed through?

My hon. Friend is right. We are considering urgently how those measures could properly and practicably be introduced. Significant economies could be made if those proposals were adopted.

Does the Chief Secretary accept that to cut wages is no way to bring about an economic revival? Does he appreciate how nauseating it is to see well-paid business men on the Conservative Benches advocating the abolition of wages councils? Why does the Chancellor not accept that the wages councils offer minimum protection for the lowest paid in our country?

I shall not comment on the hon. Gentleman's nausea. He has his own tastes and approach to these problems. I suspect that those of my hon. Friends who have been advocating that course feel that it would enable people who are at present excluded to be priced back into employment.

asked the Chancellor of the Exchequer whether he has any plans to change the tax treatment of contributions to occupational pension funds.

I am well aware of the speculation on this subject, which I can assure my hon. Friend did not emanate from Treasury Ministers. As my hon. Friend also knows, it has not normally been the practice of any Chancellor to comment on pre-Budget speculation.

Does my right hon. Friend agree that those who wish to provide for their own retirement should not in any way be deterred from doing so? Does he accept that it is important for those at work to be able to plan with reasonable certainty?

My hon. Friend will understand that I can neither confirm nor deny rumours about the contents of my Budget. I am concerned, however, about reports that some people may be contemplating premature retirement on the basis of rumours about the tax treatment of pension lump sums. I can assure the House that there is no reason for anyone to retire early on account of such rumours. This Government would not propose and the House would not accept retrospective legislation of that kind.

Will the Chancellor of the Exchequer accept that his answer will give some encouragement to those who might be making their decisions in such a way as to cover themselves against a legislative change that is contrary to what he intends? Is the Chancellor of the Exchequer aware that the task of the tax reformer is a very difficult one? If he gets it wrong he is in difficulty, and even if he gets it right the benefit will accrue only to his successor— and it is very unlikely that he will get this one right?

There is a kernel of truth in what the right hon. Gentleman says. The task of the tax reformer is indeed a very difficult one.

Will my right hon. Friend accept that his statement will be welcome, at least on the Government Benches? Does he agree that if there is any change in the tax arrangements for pension funds, and if the pension that has been promised is to be maintained, contributions to the fund must inevitably increase? Does my right hon. Friend agree that if there were an increase in contributions that would add to the unit cost of labour, which is contrary to Conservative policy?

I have noted carefully what my hon. Friend has said. He will understand, as an experienced Member of the House of Commons — and being particularly experienced in financial and budgetary matters — that it is impossible for a Chancellor of the Exchequer to confirm or deny or comment in any way on rumours as to what may or may not be in a forthcoming Budget.

From the Liberal Benches I concur with the welcome that has been given to the right hon. Gentleman's statement. He has probably gone as far as he can go. If I am asked by my local police, for example, whether they should retire early to avoid tax, am I secure in saying no?

Yes.

Does my right hon. Friend recall that when some of us first entered public life it was one of the prime aims of the Conservative party to ensure that as many people as possible in the years ahead would come to enjoy two pensions — the state pension and an occupational pension? Enormous improvements have been made in that respect in the past 25 years. Will my right hon. Friend be careful to take no steps that will reverse that trend?

On this occasion I entirely agree with my hon. Friend. He knows that I do not agree with him on every occasion. I, too, want to see a further expansion of private occupational pensions. That is the policy of the Government as a whole, and it is one of the reasons why my right hon. Friend the Secretary of State for Social Services has put forward his proposals on personal portable pensions.

The Chancellor of the Exchequer appears to have recognised that many people on modest occupational pensions are seriously alarmed at reports of his proposals. When he says that there will be no retrospective legislation, is he saying that those who are currently in occupational pension schemes will not have their position changed, or is he simply saying that any such proposals would not be retrospective to the coming Budget?

If the hon. Gentleman studies the Official Report tomorrow, he will see precisely what I said.

May I press my right hon. Friend to go a little further than his welcome statement of a few minutes ago? As the tax-free lump sum under pension schemes is frequently seen as a nest-egg by millions of people, and as plans are made well in advance with regard to the use of the nest-egg, would it not relieve a great deal of anxiety if, in addition to what he has told us this afternoon, my right hon. Friend were able to say that any tax change would apply only to membership of pension schemes which began after the presentation of his Budget?

I have noted carefully what my hon. Friend said. I am grateful to him for the words of welcome with which he began his question.

Does the Chancellor of the Exchequer accept that many people on modest incomes have been making provision for retirement along these lines and would welcome a categorical statement now, not with-standing the convention of not saying things in advance of the Budget? In this instance, surely there is every case for saying categorically that such a scheme will not go forward.

I am quite sure that the hon. Gentleman is right. I am sure that many people would welcome categorical statements about several matters in advance of the Budget, but, for the reasons that are well known and well hallowed, I shall not make any such statements. However, there was a particular problem in this case, in that there was a possibility that people might take premature retirement on the basis of the premise of retrospective legislation taking effect, which was wholly false. I should not like to see that happen. That is why I made my statement, which will be important to many people in both the private sector and public services.

I welcome my right hon. Friend's condemnation of retrospective legislation, but does he agree that it would also be retrospective if changes were made in future taxation of lump sum pensions in relation to contributions that had been made in the past?

I am not quite sure of the precise point that my right hon. Friend is making—[HON. MEMBERS: "Oh!"]—but I think that the answer is yes.

In his carefully prepared and read supplementary answer, the Chancellor promised no retrospection in this particular. He must know—or at least he should know — that what has caused the uncertainty, particularly in the public service, and the early retirement, is not the fear of retrospection, but the fear that the new regulations will be applied for a period after the Budget. Is the right hon. Gentleman prepared to end that uncertainty now, or is he prepared to see early retirements and the damage caused thereby going on?

As usual, the right hon. Gentleman does not understand the point. The point is that several people were concerned that if they retired after the Budget they would be disadvantaged, as compared with retiring before the Budget. Therefore, they sought to retire prematurely. The assurance that I have given them means that they no longer have to make that disposition of their affairs.

asked the Chancellor of the Exchequer if he will estimate what proportion of total public expenditure in 1984–85 will be represented by capital investment programmes.

Total capital spending by the public sector in 1984–85 is expected to be about one fifth of the public expenditure planning total.

Is that proportion planned to decline in the next financial year and, if so, will it be in the construction and civil engineering sector of the planned capital investment programme? If so, by how much?

My hon. Friend must await the table that we shall produce in the public expenditure White Paper, which mirrors table 1.13 in the previous public expenditure White Paper. Let me assure my hon. Friend and the House that the latest Department of Trade and Industry investment survey suggests a 10 per cent. increase and, indeed, a new high in construction and service industry investment in 1984 and a 9 per cent. increase in 1985.

asked the Chancellor of the Exchequer how much more he expects to receive in oil revenues in the current year as a result of changes in the sterling-dollar exchange rate in 1984.

The autumn statement forecast of total tax take from the North sea in 1984–85 is £12 billion, £1·8 billion higher than expected earlier this year. Most of that increase is attributable to changes in the sterling-dollar exchange rate.

Will the Minister confirm that the fall in the pound and the rise in oil revenues is the only reason why the Government can contemplate tax cuts in the next Budget? Now that the Minister has this windfall from oil revenues to spend, will he confirm that public investment of those revenues could create up to 150,000 jobs throughout this country?

No, Sir, I shall not confirm the premise on which the hon. Gentleman makes his point. The figures that I gave reflect one facet of many aspects of the autumn statement. One cannot take just that one facet in isolation and extrapolate such conclusions from it, as the hon. Gentleman did.

Does the Minister realise that, having confessed that this windfall from North sea oil has occurred, he cannot escape the language of choice and priority? When will the Government choose to make the unemployed their priority?

There is no confession, but there should be recognition in all parts of the House of the unbelievable bounty that the nation has received because of the successful investment, essentially by the private sector, in the North sea, and the benefits and jobs accruing from that.

asked the Chancellor of the Exchequer whether he will take further steps to reduce the tax burden on small businesses.

The Government have already provided substantial help to small businesses through tax reductions and other measures designed to encourage their growth. In particular, the tax reliefs available in the business expansion scheme enabled more than 400 small companies to raise about £80 million of new equity in 1983–84. I hope that further reductions in taxation will also be of benefit to small businesses.

Does my hon. Friend agree that small rather than large businesses will be the major source of new jobs in the future? Will he confirm the rumour that my right hon. Friend the Chancellor intends to offer a continuing programme of tax relief to small businesses?

I am delighted at my hon. Friend's welcome for the Government's measures in relation to small businesses, but big businesses must also be successful to increase employment. I confirm that my right hon. Friend the Chancellor will seek in the Budget to help employment in small and large businesses alike through the tax system.

As the greatest difficulty faced by small businesses is high interest rates, what plans have the Government to lower interest rates for small businesses? Will they introduce a differential, with lower rates for small businesses to give them a chance of succeeding?

The hon. Gentleman is quite right to say that lower interest rates help. The reduction from more than 16 per cent. when the Government took office to 9½ per cent. today is a clear sign of our success. I know that the hon. Gentleman will not seek to press upon the Government demands for further public expenditure, which would drive interest rates up and deter small businesses.

asked the Chancellor of the Exchequer how many representations he has received concerning the possible introduction of value added tax on children's shoes.

Treasury Ministers have received some 250 letters.

I thank my hon. Friend for that reply. I appreciate that no commitment can be made one way or the other, but will he note that for many families, especially those on low incomes, the imposition of VAT on children's shoes would represent a real cost to their living standards? [Interruption.]

took his seat.

The whole House has shown how very pleased it is to see my right hon. Friend the Parliamentary Secretary to the Treasury in his place at Treasury Question Time. I am afraid that I have forgotten what the supplementary question was.

I echo the Minister's statement. I, too, have forgotten the supplementary question.

asked the Chancellor of the Exchequer what are the current estimated savings for 1984–85 as a result of privatisation schemes for which his Department is responsible.

The Treasury is responsible for co-ordinating the Government's privatisation programme. Special sales of assets receipts this year should be not less than £2 billion, but the overall benefit to the economy in terms of increased efficiency and better services will be far greater than this.

Will my hon. Friend comment on yesterday's radio statement by the hon. Member for Birmingham, Hodge Hill (Mr. Davis), who said that a Labour Government would seek to renationalise British Telecom?

My attention was drawn to that broadcast. The Opposition clearly have an innate desire to stay firmly in opposition and have no interest in Government.

asked the Chancellor of the Exchequer if he will make a statement on his consideration of the possible imposition of value added tax on books, magazines and newspapers.

I refer the hon. Member to the answer I gave earlier to the hon. Member for Walsall, North (Mr. Winnick).

Is the hon. Gentleman aware that the price of many of the major newspapers is already beyond many millions of people? Is he also aware that if VAT is introduced, as has been suggested, many local newspapers will be put out of business and many local communities denied the knowledge that they provide?

I have met a deputation from the Newspaper Society, which made many of those points in greater detail. The Government are well aware of the representations that are being made, and those representations will be given careful consideration.

asked the Chancellor of the Exchequer if he has yet met the Publishers' Association or its representatives to discuss his forthcoming Budget; and what was discussed.

No, Sir.

May I assume that my right hon. Friend, with his usual courtesy, would be willing to meet them if requested?

I think that the arrangements have been made and a date has been fixed.

asked the Prime Minister if she will list her official engagements for Thursday 13 December.

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.

What forecast has the right hon. Lady made of a reduction in unemployment, and when is such a reduction likely to take place?

I follow the example of successive Ministers and Prime Ministers in not making forecasts about the rate of unemployment.

Has my right hon. Friend noticed that an order for the biggest oil rig ever to be built has been obtained on Clydebank? Is it not true that that has happened because the firm concerned has had a 12-year strike-free record? Is my right hon. Friend aware that, as a result, the firm will now be able to take on 500 men?

I have noted that the oil rig order has gone to that shipyard. I congratulate the yard on its record and on winning the order. I hope that others will take the hint that strikes destroy jobs and that a good working record wins new orders.

First, may I welcome the Parliamentary Secretary to the Treasury back to his place on the Treasury Bench? The right hon. Gentleman represents — indeed, personifies — the triumph of democracy over terrorism. [HON. MEMBERS: "Hear, hear."]

No, I do not accept some of the findings of those three reports or the right hon. Gentleman's specific description of them. Other findings point to other conclusions. As the right hon. Gentleman will know, we realise by now that one cannot spend one's way out of recession. That has been tried before. It leads to higher inflation and ultimately to higher unemployment. There are some 12 million taxpayers with an income of £8,000 a year or less. They, too, have a right to look to the Government to raise thresholds so that they pay less tax. They will never get equity from Labour; they will get it only from us.

It should be obvious even to the Prime Minister that money invested directly in the United Kingdom is more likely to create jobs than money devoted to increasing consumption, which, by its nature, is likely to result in higher imports and to create jobs abroad. On the Labour side of the House and, I believe, widely throughout the country, it is understood that the right hon. Lady's obsession with a cut in direct taxes is matched and mirrored by the increased indirect taxation that has more than compensated for the reduction in that particular over the past five years.

The right hon. Gentleman is not correct. Increasing infrastructure is not a cost-effective way in which to increase the number of jobs. The cost per job through increasing infrastructure can vary from £35,000 to £55,000. It is an expensive method, which tends to lead to a lot of hire of plant but not much hire of men. Reduction of tax can lead to extra jobs, as it leads to extra demand. The right hon. Gentleman's thesis that investment always leads to purchases from home sources while reduction of tax leads to purchases from abroad is not correct. In an age of specialisation, much of the investment in equipment and machinery goes abroad.

In her worthy enthusiasm for reducing unemployment, will my right hon. Friend concentrate on the unincorporated sector of the self-employed and bring home to many of her Ministers the fact that it is not just reducing tax rates but reducing the burden of non-productive administrative work—dealing with tax returns such as VAT and national insurance — that discourages them from taking on new employees?

My hon. Friend is absolutely right. There are still many restrictions that inhibit the self-employed from taking on more employees and inhibit small businesses from taking on extra people. Each of them raises difficult issues, but we are examining the regulations. My right hon. and hon. Friends in the Department of Trade and Industry hope to bring proposals before the House.

We on the alliance Benches also welcome the Patronage Secretary, although he will understand our not wishing him great success, as we hope that the rebellions will continue at the pace that has been set during the past few months. The Prime Minister is rumoured in the press now to be contemplating increased expenditure on the community programme and a restructuring of employees' insurance contributions. Why should we wait for the Budget? Many hundreds of thousands of people want action, and now. Why not action this day?

I should have thought that the right hon. Gentleman would know that there is a time for public expenditure surveys and a time for the Budget. I confess that there are many occasions when I wish that they happened together so that the choices that have to be made were more clearly put. Of course, my right hon. Friend the Secretary of State for Employment and my right hon. and noble Friend the Minister without Portfolio are seeing whether we can better spend the £2 billion that we spend on special employment measures.

asked the Prime Minister if she will list her official engagements for Thursday 13 December.

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

In the discussions about the BBC's licence fee, will my right hon. Friend recognise that introductin of advertising would change the nature of the BBC? Will she also examine carefully the recent introduction of early morning television and BBC local radio stations? Will she please ask the BBC why it cannot concentrate on those things that are most important to it?

I think that a number of people will agree with my hon. Friend and wonder why the BBC has to take on so many new programmes when their needs can be fulfilled by other programmes. My right hon. and learned Friend the Home Secretary has to take into account the fact that the BBC licence fee is a sort of compulsory levy on the television viewer, irrespective of whether he watches BBC programmes a great deal. He will wish to balance the needs of the BBC with the interests of the licence fee payer. For that, he will need to take many things into account, but I doubt whether, this time, he will consider the introduction of advertising, although, in the longer term, we might have to consider other methods of raising the requisite revenue for the BBC.

asked the Prime Minister if she will list her official engagements for Thursday 13 December.

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

Is the right hon. Lady aware that her Parliamentary Under-Secretary at the Department of Transport has written a letter to all Conservative Members of Parliament promising them preferential treatment from himself, his Department and his civil servants in dealing with parliamentary inquiries — [Interruption.] — from their constituents? Has that letter been written with the authority or knowledge of the Prime Minister? If so, does it mark a change of policy, in that the Government are prepared to use Government funds to advance the cause of the Conservative party?

I do not know of the letter to which the hon. Gentleman refers, and there seems to be a good deal of dissent in the House to the interpretation that he gave of it. Inquiries from all Members of Parliament are dealt with expeditiously and courteously.

asked the Prime Minister if she will list her official engagements for Thursday 13 December.

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

Is my right hon. Friend aware that some of our Common Market partners are seeking to use bogus methods to prevent our exports penetrating their markets? Will she take this opportunity to reassure our exporters, be they in industry, agriculture or commerce, that she will use her best offices to make sure that our exporters can compete in Europe on equal terms?

I am grateful to my hon. Friend. That is the purpose of the Dooge committee of the Common Market. We are urging the completion of the internal market. The Common Market treaty prohibits barriers to trade, and my hon. Friend will have special reason to know of the success of my right hon. Friend the Minister of Agriculture, Fisheries and Food in getting rid of the barriers to the importation of whisky by Italy—something on which he is to be congratulated.

asked the Prime Minister if she will list her official engagements for Thursday 13 December.

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

Knowing that the Prime Minister places a high priority on conforming to the letter of the law, will she join me in condemning the Conservative-controlled Trafford borough council, which is refusing to conform with both the spirit and the letter of the Chronically Sick and Disabled Persons Act by not providing adaptations for handicapped people until July next year? Will she have a quiet word with the Secretary of State for Social Services and ask him to use his powers to make that council conform?

I seem to remember that in that Act there is a good deal of discretion as to how it is applied. It is not absolutely mandatory. Any question arising from the case to which the hon. Gentleman referred would not be for me but would be a matter for the courts to decide.

Does my right hon. Friend recall that Mr. Justice Glidewell, the inquiry inspector into the fourth terminal at Heathrow, said that if permission were granted for that it would be essential for the Government to reiterate that there would be neither a fifth terminal nor any other major expansion of Heathrow? Do the Government accept that Mr. Justice Glidewell was a distinguished inquiry inspector, whose views should carry at least as much weight as those of Mr. Graham Eyre?

I recognise my hon. Friend's very special interest in this matter. He will also recognise that, as the inspector's report is in front of us, I am unable to do other than note his question.

asked the Prime Minister if she will list her official engagements for Thursday 13 December.

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

In respect of the right hon. Lady's reply to me on Tuesday, does she agree that she gave a very good answer to a question that I did not ask? Will she now answer that question and say whether she thinks it sensible and reasonable to include in the costs apportioned to pits when they close costs that will continue for years afterwards, whether or not a pit closes? Will she be good enough to answer that question?

I am not an expert on accountancy—[Interruption.]—and neither, I believe, is the hon. Gentleman. It is not for me or for him to distinguish between, or pontificate upon, different specific methods of accountancy. The National Coal Board cost taxpayers £1·3 billion last year. That is not a matter of accountancy, but something that taxpayers have to find. If the hon. Gentleman is saying that there is no need for a subsidy for the coal industry, his remarks are most welcome.

asked the Prime Minister if she will list her official engagements for Thursday 13 December.

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

Is my right hon. Friend aware that one of the most unpopular acts that the Government can commit is the transfer of additional resources to the European Community, with the loss of sovereignty that such an act would entail?

The decision to join the EC was made many years ago. I believe that it is and remains in the interests of the United Kingdom to remain part of that Community and to make a great success of it. It gives us tremendous opportunities in trade, and, when the internal market is complete, it will give our financial and insurance services greater opportunities than they have now.

On a point of order, Mr. Speaker.

Order. I shall follow my usual practice. In the interests of the whole House, I shall take points of order now only if they arise directly from questions.

On a point of order, Mr. Speaker. You will have heard the answer to the question I put to the Prime Minister when, in effect, she denied the existence of the letter to which I referred. Can you advise me how I can pursue this matter? I believe that it is clear that the rules of the House have been breached by the Parliamentary Under-Secretary of State for Transport. Preferential treatment has been promised to Conservative Members in a matter of vital importance to all hon. Members in the discharge of their parliamentary duties. Will you, Mr. Speaker, advise me how that matter is best pursued?

Order. I have not seen this letter. I cannot be responsible for letters that Ministers write to hon. Members.

Further to that point of order, Mr. Speaker. As the Prime Minister seemed to indicate in her reply to my hon. Friend that the letter might be capable of different interpretations, would it not clear the atmosphere if she and the Government gave authority for it to be printed in Hansard?

Further to that point of order, Mr. Speaker. May we ask you how we can protect the House when there is a clear indication that the facilities of a Ministry are being used in a specific political way? As the Leader of the House is present, may we ask him to make a statement about whether it is now the intention of the Conservative party to use all the facilities of the Civil Service to promulgate its own highly individual and extremely prejudiced views?

Further to that point of order, Mr. Speaker. When you consider this matter, can you also advise the House how I and other Lancashire colleagues can raise the fact that the Labour-controlled Lancashire county council is spending £134,000 of ratepayers' money—

Order. The House can go on for ever on a subject such as this. It is plainly not a matter for me.