asked the Chancellor of the Exchequer if he has received representations recently from the Life Offices Association, and the Associated Scottish Life Offices, about the eligibility of life assurance policies for tax relief; and if he will make a statement.

Representations have been received on this question. The Government have been advised that eligibility for relief depends on whether an enforceable contract had been established before 14 March 1984.

I am grateful to my right hon. and learned Friend for his reply. Is he aware that there is concern in a number of life offices at the attitude that the Inland Revenue appears to be taking in seeking to disallow tax relief on policies which had been transacted with life companies before the midnight deadline on 13 March 1984? Does he agree that much of that flurry of new business was occasioned by an unfortunate and improper leak by a Treasury official? Can he assure me that the Inland Revenue will adopt a trusting and fair approach towards tax relief on these policies?

I understand the concern expressed by my hon. Friend, but it is not for me to speculate about the reasons for what he described as this "flurry of new business." The Inland Revenue is charged with the duty of enforcing the law as this House, with the upper House, enacts it, and is bound by the provisions of the last Finance Act. If there are cases where the facts may be a little in doubt and my hon. Friend feels that it would be helpful for the matter to be ventilated, no doubt he will write to me giving details.

asked the Chancellor of the Exchequer if he will make a statement about the total tax liability and national insurance contributions payments of those people earning less than half the average wage.

As a result of the changes announced in the Budget, employees earning less than half of average earnings will pay about £270 million less in employees' national insurance contributions in a full year and about £400 million less in income tax.

I appreciate and welcome the significant reduction in tax liability for those on modest means, which works at about 15 per cent. less tax liability for somebody earning only £80 per week. However, will my right hon. and learned Friend use his good offices to ensure that in future Budgets priority is given to the unification of income tax and national insurance contributions, particularly since national insurance contributions are no longer really based upon the contributory principle, so that those of modest means are given the most help?

I am sure that the House is indebted to my hon. Friend for his calculations, which demonstrate the lengths to which my right hon. Friend went in his Budget to assist those on modest incomes. The amalgamation of national insurance contributions with income tax is a wider question and raises a whole range of issues. I am bound to reassert that we attach importance to the insurance principle. However, there may well be administrative advantages to be gained from the idea which my hon. Friend has trailed, and the Government will no doubt look at it. There will be ample opportunity to consider the matter after the computerisation of schedule E and cases I and 2 of schedule D and the Green Paper on transferable personal allowances.

If the Government have sincere intentions to help those on modest and low incomes, how do they justify the reduction of 23 per cent. in income tax for those on the top rate band in 1979? Would it not be better for the Government to take more positive action? What they have done is still insignificant for those on modest and low incomes.

I do not know how the hon. Gentleman defines modesty, but I should have thought that taking 800,000 people out of tax, which my right hon. Friend the Chancellor managed to achieve in the last Budget, was a significant achievement.

Does my right hon. and learned Friend agree that raising tax thresholds, reducing national insurance contributions for the lower paid and maintaining child benefit are the best ways to protect the lower paid and reduce the poverty trap?

My hon. Friend proposes a beguiling mix. Perhaps this is not the approprate moment to go into the details, but I am sure that my hon. Friend and I find common ground in thinking that the raising of tax thresholds will make a great contribution to the cause which she and I have at heart.

Is the right hon. and learned Gentleman aware that whatever relief the changes in the national insurance contributions offer to some of the low-paid, because they are ill-thought out they encourage employers to hold wages down and create three new poverty traps at £60, £90 and £130?

As I have said, the major contribution to the alleviation of the poverty trap will be taking a range of people out of tax altogether. Indeed, 10,000 people who were on means-tested benefits will be taken out of tax, and that is a positive contribution. None the less, as the hon. Lady points out, to the extent that one moves up, one shifts the problem, but I hope that over a period, as we have carried through a sustained policy of raising tax thresholds, we shall make a considerable contribution to the problem, the solution of which she and I have atheart.

asked the Chancellor of the Exchequer if he is satisfied with the efficiency of personal income tax work in Inland Revenue tax offices; and if he will make a statement.

I refer the hon. Gentleman to the answer that I gave to my hon. Friend the Member for Dorset, North (Mr. Baker) on 24 January 1985.

Is the Minister aware that many are now concerned that the work in the district tax offices will largely fall apart before computerisation is brought into effect? Does he accept that delays in replying to letters are now measured in months and that hundreds of thousands of people are paying the wrong tax because of delays in end-of-year PAYE reviews? Is the national state of work in the tax offices better or worse than this time last year, and how might things stand in six months time?

The number of letters that are outstanding nationally is some 4.8 million. I should quickly emphasise that only about one in four of those are communications from the general public. I know that the hon. Gentleman has been particularly worried about the position in Yeovil, but he will know that there have been substantial improvements there in the past six months. The number of letters that had been outstanding for more than 14 days was then 11,000, and that has now been reduced to 7,500, despite a rather virulent infectious virus in the Yeovil tax office.

Is there not an alarming trend for income tax personnel to leave their jobs, often to work in the private sector for accountants, where they show people how to pay less tax? Has my hon. Friend any plans for increasing their job satisfaction, apart from introducing commission incentives, which I assure my hon. Friend would be repugnant to almost everyone in Britain?

I well understand my hon. Friend's final point. I have seen the rather alarmist headlines in the newspapers about the alleged brain drain of Inland Revenue tax inspectors, but the challenge, opportunities and rewards of the private sector have always been an attraction to tax inspectors, and the number of those who have been leaving the Civil Service in recent months is not all that much greater in percentage terms than in the past. Nevertheless, that trend is of concern and separate discussions are taking place between my officials and the Association of Inspectors of Taxes and I hope that some helpful movements will appear from those discussions.

asked the Chancellor of the Exchequer when he expects to receive the report into the affairs of Johnson Matthey Banking.

asked the Chancellor of the Exchequer what recent discussions he has had with banks and other institutions regarding the Johnson Matthey Bankers rescue; and if he will make a statement.

My right hon. Friend expects to receive the results of the review of banking supervision at about the end of next month.

Is it not clear that, despite official bank monitoring, this bank made some stupid loans, often completely unsecured, which are now having to be covered by the indemnity guarantee arrangements? As it has been proven that a relationship existed between some of those who were lending and some of the borrowers, which must have had some bearing on the terms of which the borrowings were made, why has not the City fraud squad been brought in to carry out a full and detailed investigation so that justice in this case can be seen to be done? The public demand that justice is done in this matter.

It is clear that Johnson Matthey Bankers indulged in some extremely unwise and imprudent lending. I am advised that investigations to date do not suggest that the collapse was due to fraud.

Is it not time that we had a law that applied to everybody, not one for City crooks who operate in the casino economy and another for the rest of the population? Is it not a fact that this bank not only engaged in lending money to people who were organising lavish parties in the City and trips abroad, but that its activities have resulted in the taxpayer having to pay at least £75 million to bail it out? Does the hon. Gentleman agree that the report on the subject, which has been sat on since February, should be revealed to the public at large so that every taxpayer who has had to help bail out this uneconomic unit, Johnson Matthey Bankers, has an opportunity to see all the sordid details involved in the case? Is he aware that Mrs. Thatcher — [HON. MEMBERS: "Order."]—the Prime Minister has had a letter from me for a month asking for the report to be published but has refused to answer it? It is time that the Government came clean—[HON. MEMBERS: "Too long."]—about all their friends in the City.

I am afraid that I cannot respond to the hon. Gentleman's correspondence with other members of the Government. As for the various points that he raised in his supplementary question—

We are talking about £75 million.

As for his general questions—

The whole thing stinks.

Say that outside.

I must advise the hon. Gentleman—

1 will say it outside.

Order. The hon. Member for Bolsover (Mr. Skinner) asked a supplementary question and should be prepared to listen to the answer. I am trying to hear what the Minister has to say. Mr. Stewart.

The hon. Member for Bolsover (Mr. Skinner) misunderstands the position in relation to the taxpayers' money, to which he referred frequently during his supplementary question. The decision to rescue Johnson Matthey was made by the Bank of England, and voted money has not been involved in that. There is an agreement for an indemnity between the Bank of England and the commercial banks. The report to which he referred was commissioned by the Governor of the Bank of England, who has felt that it should not be published because it contains commercially confidential information.

On what criteria does the Minister support hailing out banking inthis way and according preferential treatment to its errors? On what criteria does he support the cover-up of the report, which details the reason why public money needs to be spent in this way?

I have already answered the question about public money. That is a decision for the Bank of England. The Governor made it clear at the time that Johnson Matthey Bankers was saved from liquidation because of the potential impact on the gold market. It is not for me to make a judgment about decisions which the Governor might make in hypothetical circumstances about other institutions. In this case, that was the basis on which the Governor made his decision.

Do not the public have a right to know exactly what took place in relation to Johnson Matthey, so that they can pass judgment on the Bank of England's decision to bail the bank out? In saying that public money is not involved, the Minister is making a wholly artificial distinction between the funds of the Bank of England and taxpayers' money. In answer to the question of my hon. Friend the Member for Workington (Mr. Campbell-Savours), the Minister has just accepted that Johnson Matthey engaged in imprudent banking practice. When are we to be told the details of that imprudent banking practice?

I am not drawing an artificial distinction about public money. On the question of information about what is happening, investigations are still under way. I cannot yet say what information can be made available or in what way.

asked the Chancellor of the Exchequer how much has been paid out of the Contingency Fund for expenditure related to the Falklands.

Since 1982–83, £13 million; all of which has been repaid.

Which fund pays for the catapulting escalation of the cost of the airport from £215 million to £360 million, according to The Sunday Times, or £430 million, according to the Sunday Post? What does the Treasury think about that?

The Treasury always regrets escalation of costs. The charge will be borne by the Ministry of Defence.

Is my right hon. and learned Friend aware that honour demanded that we should repossess the Falkland Islands, and that the cost was secondary? The hon. Member for Linlithgow (Mr. Dalyell) seems quite incapable of understanding that point.

I accept my hon. Friend's proposition about honour. As Chief Secretary to the Treasury, I cannot be entirely indifferent to questions of cost, but I believe that on this occasion the money was well spent.

Is the right hon. and learned Gentleman satisfied that we are getting value for money in spending hundreds of millions of pounds on 1,200 folk 8,000 miles away?

I am, and the Government's judgment on the matter has been endorsed many times by the House.

asked the Chancellor of the Exchequer if he will make a statement about the current level of inflation.

Over the 12 months to March 1985, the retail prices index increased by 6·1 per cent.

Will my right hon. Friend confirm that that figure does not take into account the latest increase in mortgage rates? Does he agree that that increase was premature and misguided, bearing in mind the way in which interest rates elsewhere have fallen since then?

My hon. Friend is right to say that the most recent increase in the mortgage rate does not come into effect until — I believe — 1 May and that it is therefore not included in those figures. As I made clear at the time of the Budget, we expect inflation to be above 6 per cent. for the next few months before falling to 5 per cent. by the end of the year and below 5 per cent. next year.

As to the Chancellor's financial strategy against inflation, does he find appropriate the present combination of the money growth rate and the exchange rate, or in what direction would he wish to see it adjusted?

I do not have it in my power to determine the exchange rate, as the hon. Gentleman will be aware, but I have some influence over the level of interest rates. As he is a distinguished member of the Treasury and Civil Service Select Committee, the hon. Gentleman is aware that the Government's policy is, taking exchange rates and interest rates into account, to maintain a steady downward pressure on inflation.

Will my right hon. Friend confirm that the growth rate in the economy this year is among the highest, if not the highest, in Western Europe? Does he regard that as coincidental and commensurate with our existing rate of inflation?

My hon. Friend is right. The reduction in inflation has assisted the steady growth which we have secured for nearly four years. We have had four years of steady growth at 2.5 per cent. and expect 3.5 per cent. growth in the current year. That is likely to be the highest rate of growth in the European Community and, to judge from the first quarter figures in the United States, it might be higher than growth in the United States as well.

When does the Chancellor expect to achieve the Prime Minister's forecast of inflation? When will it be down to the Prime Minister's figure?

In due course.

Although we all agree that it is important to maintain and, if possible, reduce the present level of inflation, does my right hon. Friend agree that it is just as important to compare our rate of inflation with the rates of our competitors and ensure that our level of inflation is below theirs, thus putting our industry and commerce in a better competitive position so that we may improve our exports?

My hon. Friend is right. It is essential, for many reasons, to get inflation falling steadily and to get it as low as possible. One of those reasons is the rate of inflation experienced by our competitors. It is interesting to compare our rate of inflation now with the average rate of 15.4 per cent. a year throughout the lifetime of the Labour Government.

The Chancellor says that he has no power over exchange rates, but he has power over inflation. When will he fulfil some of the promises which he keeps making when he travels the country — [Interruption.] Why do Tory Members not keep quiet? Is the right hon. Gentleman aware that industry cannot plan for the future with inflation bobbing up and down as it is? The right hon. Gentleman may laugh, but the levels of inflation show that he is the worst Chancellor that the country has ever had.

rose—

I have not finished yet. When will he retire to the plush area of Blaby and insignificance so that we may have somebody in his post who knows what to do?

I am most grateful for the plug that the hon. Gentleman has given my constituency. Blaby is indeed a place well worth visiting and I hope that he will do so. As for the rate of inflation, during the period that I have been Chancellor it has been a good deal lower than for a long time, including under a Labour Government when it was 15.4 per cent. on average and never for one month reached its present level.

Does my right hon. Friend agree that increased productivity helps to keep inflation down? In that respect, does he agree that, since 1980, our productivity has increased by 3 per cent. a year—a far better performance than during the 1970s? Does he agree also that it is important to maintain that improvement for the fight against inflation?

The growth in productivity, especially in manufacturing industry, is extremely welcome and it has a major impact on the country's competitiveness. That is important. On the whole, the economy is doing extremely well. There are two areas of great concern and they are not unconnected. One is the level of unemployment, about which I and all of my hon. and right hon. Friends are anxious—there are measures in the Budget designed to help with that—and the other is the level of real wage increases and wage costs per unit of output, on which we are not doing as well as our competitors.

Is there any level of unemployment that is not unacceptable in the pursuit of the target of 3 per cent. inflation?

It is a matter not of what level of unemployment is acceptable or unacceptable, but of what measures are best calculated to bring down the rate of unemployment. This is a problem not just for the United Kingdom but for the whole of western Europe. I am confident that the policies that we are pursuing are best calculated for that purpose.

asked the Chancellor of the Exchequer what was the revenue from (a) North sea oil and (b) North sea gas in 1979, 1980, 1981, 1982, 1983 and 1984 respectively.

Total tax take from North sea oil and gas production was £1.4 billion in 1979 and rose to £10.3 billion in 1984. I shall arrange for a table showing the figure for each year to be printed in the Official Report.

We have just listened to waffle from the Chancellor. Is it not unbelievable that this massive bonus to the Exchequer, which no other country in Europe has had, has been frittered away on unemployment benefit instead of being put to use to rebuild our economy? Is it not unbelievable also that the Government carry on trying to pretend that it is not their monetarist policies that first led us into, and then kept us in, the great difficulty in which we now find ourselves? Why do they not admit that having had this bonus they have failed to use it properly, that there is a downward slide and that there is only one way out of that—another Government?

I am sorry that the hon. Gentleman should talk such arrant rubbish. That can be proved by looking, for example, at our overseas assets. During the time that oil revenues have been coming in we have reduced our borrowings overseas and built up our assets, in the term of this Government, from £12½ billion to £75 billion. Those are profit-bringing assets, and will bring income to this country for many years and generations ahead.

Does my hon. Friend agree that there is a danger in overdependence on the revenue from one particular finite source? Would not the taxation policies of the Opposition lead to greater danger?

I agree wholeheartedly with my hon. Friend.

asked the Chancellor of the Exchequer if he has any plans to introduce self-assessment for income tax payers; and if he will make a statement.

Self-assessment will be among the matters to be discussed in the Green Paper on the reform of personal taxation, along with other possible long-term developments.

Is my hon. Friend aware that where there is a proper audit system, as in the United States of America, the system of self-assessment works very well? Is he also aware that the two main advantages are, first, that delays are reduced and, secondly, that administrative and staff costs for the Revenue can be dramatically reduced? Will he examine such a system most carefully?

This question will form part of the Green Paper and I hope that there will be widespread public debate on it. Such a system would have some of the effects to which my hon. Friend has referred. He may have seen what Mr. Roscoe Eggar, the Commissioner of the Internal Revenue Service in the United States, was saying towards the end of last year, when he was arguing that a change to something more like the British system would mean that tax payers would be spared 97 million hours in return preparation and untold amounts in preparation fees. There is a down side, in that extra administrative burdens on individuals would flow from a system of self-assessment. I agree with my hon. Friend that it requires careful consideration to get the overall balance right.

Is it not more likely that self-assessment will lead to a growth in the number of accountants in high streets, and is that not a form of privatisation?

Self-assessment in the United States has led to a considerable amount of professional advice being sought by the individual taxpayer.

Does my hon. Friend agree that as it is essential to have a public debate on the forthcoming Green Paper, it would be a good idea to set up a Select Committee to look into this question and take evidence in public?

I am sure that my right hon. Friend the Leader of the House has heard that suggestion. That would be a matter for him rather than for me.

Does the Minister agree that there is an equal case for the Secretary of State for Social Services to introduce self-assessment for those receiving supplementary benefit if self-assessment for PAYE taxpayers is introduced?

That will not figure in the proposed Green Paper on personal taxation.

asked the Chancellor of the Exchequer how many more people he expects will be employed by the end of 1986 as a result of the changes in national insurance contributions announced in his recent Budget.

I expect the changes in national insurance contributions, which will take effect from October, to lead to a significant increase in jobs over the following two years.

Has my right hon. Friend noted that independent forecasters have shown that the changes will bring about an increase in employment by as much as 350,000? Should not this change be widely welcomed by all those who are determined to reduce the unemployment statistics?

I am grateful to my hon. Friend for the welcome that he has given to these measures. I believe that they have been widely welcomed by both sides of the House, except for a small minority who seek to make party political capital out of them. There have been a number of outside estimates — some of 150,000, some of 160,000 and some higher. Those increases are in addition to the employment created by the expansion of the community programme, which was announced in the Budget, and the proposed development of the youth training scheme. The changes will reduce unemployment over the same period by between 150,000 and 200,000. I am sure that all hon. Members will be pleased to know that during the past two years the number of people in work has risen by well over 600,000. Nothing like that has occurred in any other European country.

Does the Chancellor accept the assessment by Sir John Hoskyns, the Prime Minister's former adviser, that the way in which the Chancellor has introduced these changes will lead to a loss of 10,000 jobs in senior levels of industry?

I shall not sign up on any figure at all. It is clear that, taking the whole of the national insurance contribution changes into account, the net effect will be a significant increase in employment. I am sure that the whole House will welcome that.

When will we get real figures for employment based on a count, instead of the Chancellor's estimates?

The figures that are published are the best estimates that the Government are capable of making. Many of my hon. Friends believe that the figures exaggerate the position. Many of them believe that some people in what is known as the black economy are in work but are drawing unemployment benefit and are therefore included in the figures. Nevertheless, we go by the normal published figures.

asked the Chancellor of the Exchequer when he expects the final outturn figures for the public sector borrowing requirement for 1984–85 to be available.

The provisional estimate of the PSBR for 1984–85 of £10·1 billion — equivalent to 3·1 per cent. of GDP—was published on 18 April.

Can my right hon. and learned Friend confirm that no less than one quarter of the public sector borrowing requirement last year was attributable to the effect of the Scargill coal strike? Does he agree that without that effect interest rates would be substantially lower, thus considerably benefiting all mortgage payers?

My hon. Friend is correct to draw attention to this dimension of our national affairs. The latest and best estimate of the cost of the coal strike is £2·75 billion. That has certainly had an effect on interest rates.

asked the Chancellor of the Exchequer what proposals he has for reducing the level of interest rates.

The Government's policy is to maintain monetary conditions that will bring inflation down. Short-term interest rates will be held at the level needed to achieve this. However, my hon. Friend will have noted that in the five weeks since the Budget base rates have fallen by 1½ per cent.

Will my right hon. Friend confirm that although short-term interest rates will obviously have been affected by the extraordinary fluctuations in the exchange rates during the past few days and weeks, it is still the Government's general objective, in the interests of industry and employment, to reduce interest rates as much as possible as market conditions permit?

My hon. Friend is correct. That is one of the reasons why we have consistently followed a policy of having a low public sector borrowing requirement. This year's PSBR is predicted to be as low as 2 per cent. of GDP. I am sure my hon. Friend will agree that any reduction in interest rates must be consistent with what is necessary to maintain downward pressure on inflation.

Will the Chancellor of the Exchequer take note of the fact that when the pound is low interest rates rise rapidly to a high level, but that when the pound is high they do not come down anything like as rapidly? What can he do to rectify that asymmetry?

There has been a rise in the sterling exchange rate since the Budget, but, as I pointed out a moment ago, in the five weeks since the Budget there has been a fall in short-term bank base rates of 1½ per cent.

Does my right hon. Friend agree that the proposals now being trailed by the Labour party in advance of next week's council elections — issuing blank cheques left, left and left — will undoubtedly have the effect of increasing interest rates enormously as a result of the impact that they will have on the public sector borrowing requirement, and that therefore these hollow and spurious promises are a disincentive to employment?

Of course the right hon. Gentleman agrees.

Of course I agree with that, as the hon. Member for Sheffield, Hillsborough (Mr. Flannery) said with his usual prescience. It is well known throughout the country that the Labour party is the party of inflation. As if that were not bad enough, inflation invariably means higher interest rates.

Is the Chancellor aware that his answers on exchange rate and interest rate policy have all the clarity of a riddle from the delphic oracle? Is he aware, as all parts of industry are saying to him, that what is punishing is the level of interest rates combined with uncertainty and instability in our exchange rate policy? Is it not time that we listened to those in industry who are trying to succeed, rather than to those in government who have patently failed?

The great thing is that there is certainty about the Government's policies. That is what the Opposition do not like. For six years we have consistently stuck to the policies which we said in 1979 we would bring into force. They have succeeded in bringing down inflation and in us having the highest level of output, the highest level of productivity, the highest living standards and the highest level of investment ever.

asked the Chancellor of the Exchequer when he next expects to meet the Governor of the Bank of England to discuss medium-term financial strategy.

The Governor and I regularly discuss financial developments in the context of the medium-term financial strategy.

Is it not now clear that, according to that medium-term financial strategy, the only way to stop inflation rising, as it is now doing, is to maintain monetary and fiscal policy at its currently damaging and tight level, and that the price of that is ever-increasing unemployment? Is the Chancellor, for that reason, prepared to seek an escape from the dilemma created by his policies?

There is every intention of maintaining strict monetary and financial discipline. That has secured a reduction in inflation to the lowest level since the 1960s and the longest period of sustained economic growth since the oil-price explosion of 1973. As for the correctness of those policies, I do not have time to give an economic lecture now, but the hon. Member may be interested to read the recent communiqué issued after the OECD ministerial meeting in Paris a few days ago, which gave unequivocal endorsement from the whole of the industrialised world to policies of the kind which we in this country and many other countries are pursuing. The Labour party alone is out of step.

In discussions with the Governor of the Bank of England, has my right hon. Friend considered-the possibility of keeping to a constant public debt-output ratio, so as to make more room for tax cuts in the near future?

The debt-income ratio is one of the matters which we consider carefully. One cannot regard it as a unique indicator of the appropriate PSBR. It is one of the factors that we take into account.

asked the Chancellor of the Exchequer what representations he has had in relation to the impact on the publications of charitable organisations of value added tax on advertisements.

The answer is none, Sir.

Is the Minister aware that the initial survey by the Charities Act Reform Group suggests that, on the basis of last year's advertising, the cost to charities will be £1·2 million? That may not be a significant sum for the Government, but it is a hugely significant sum for charities. Will he therefore reconsider exempting charities from VAT with regard to advertising in journals?

There is not a charge of around £1 million in connection with the question which the hon. Gentleman asked, because he was talking about the impact of value added tax on the publications of charitable organisations—that is, things like church magazines and year books for charities. Anyway, such year books were taxed before the Budget. I rather suspect that the hon. Gentleman got his question all wrong.

In the context of my right hon. Friend's recent Budget, is my hon. Friend the Minister aware that, as against the costs which some charities will suffer as a result of the imposition of VAT on advertising, many, albeit often different, charities will greatly benefit from the increased relief to be given for charitable covenants?

My hon. Friend is right. On the wider question, extending VAT to newspaper and magazine advertising will mean that charity advertising will attract tax of about £1 million, but the help given to charities in the other measures which my right hon. Friend introduced in his Budget will certainly substantially exceed that amount.

asked the Prime Minister if she will list her official engagements for 25 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.

Is it not time that the right hon. Lady came off the fence and said that the British Government will be represented in Moscow for the celebrations there of the 40th anniversary of the end of the war? While she is about it, will she tell the United States President that for him to visit a cemetery in Germany where SS mass murderers are buried is deeply insulting and offensive to the memory of their victims, and is no less insulting and offensive to all those who fought in the last war to destroy Nazi tyranny?

We shall probably be represented in Moscow by Her Majesty's ambassador. With regard to the hon. Gentleman's comments about the German cemetery, I am not responsible for the actions of the United States, but I have considerable sympathy with what the hon. Gentleman has said.

My right hon. Friend will recall that in his much discussed speech on the strategic defence initiative the Foreign Secretary disinterred the significant maxim that political decisions should not be pre-empted by the onward march of technology. Since, when we look back over the past 25 years, we find that so many major decisions, not least on the problem of unemployment, have been pre-empted by technological or scientific advance, which has been underestimated, has not my right hon. and learned Friend the Foreign Secretary made an unanswerable case for the installation of an office of technology assessment here to serve this Parliament in exactly the same way as such an institution serves the Congress of the United States?

I did not read my right hon. and learned Friend's speech in quite that way, but I am not sure that such an office would advance our cause very much. My hon. Friend is absolutely right—one cannot stop the march of technology. We have to use it, adapt it and indeed embrace it if we are to keep in the forefront of industry and in the forefront of events.

Will the Prime Minister tell us precisely why she decided that this morning's Cabinet meeting should not even discuss the proposals by the Secretary of State for Health and Social Services to end the state earnings related pension scheme, to get rid of family income supplement, not to uprate child benefit and to make many other changes which amount to a retrograde step for poor people and, indeed, for many people on average incomes?

I am sure the right hon. Gentleman will agree that it would be better not to reach conclusions before discussions have taken place, which is what he seems to have done.

I agree that it is always wise to be cautious in these matters, but, as this review has been taking place for 13 months, is it not the case that next week's county council elections have far more to do with the delay than anything else? If the Prime Minister—as the official statement says — is tying up a few loose ends, around which necks will she tie them?

Unlike the Opposition, we discuss before we reach conclusions. Unlike the Opposition, on social security matters we like the details to be worked out before they are made public.

What message will my right hon. Friend give to the ratepayers and electors of Cumbria, where, during the past four years, a Labour-controlled council has squandered its reserves and is threathening a rate increase next year of 70 per cent. to finance its profligate spending?

As my hon. Friend knows, Conservative county councils have put up their rates by far less than have Labour county councils, and that is a good message for next Thursday.

Is the Prime Minister aware that the Transport and General Workers Union is the largest union in the country and that its general secretary is one of the most influential people around? As the Leader of the Opposition is a member of that union and is sponsored in the House—

Order. We are disscussing the Prime Minister's official engagements for today. Perhaps the hon. Gentleman will direct his question to that matter.

As the national executive committee of the TGWU is today considering whether a re-run of the ballot will be held, will the Prime Minister, during the course of her day, encourage the Leader of the Opposition to break his craven silence on this matter, which is reminiscent of his silence on the miners' dispute, and join us in hoping that the TGWU—

Order. I hope that hon. Members will address themselves to matters for which the Prime Minister is responsible.

I am asking the Prime Minister whether she will today join us in welcoming a re-ballot for the general secretaryship of the TGWU, and asking that it should be run under independent supervision. Does the right hon. Lady agree with that?

I am not responsible for many of the things that the hon. Gentleman mentioned. The excellent changes in ballot rules, with which I am sure he will agree, come into force this October, under legislation passed by this Government.

asked the Prime Minister if she will list her official engagements for Thursday 25 April.

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

How can the Prime Minister expect the service sector to provide jobs when Lord Weinstock has said that there will be nothing for the service sector to service, given that the right hon. Lady's sado-monetarist economic policies have cut manufacturing investment by one-third and output by 9 per cent. since 1979, and created a trade deficit in manufactured goods of more than £3 billion last year? When will she listen to those with more experience in successful business than herself and change her policies?

In fact, as distinct from opinion, manufacturing employment has been falling since 1966. Indeed, the shift from manufacturing to service employment has already taken place and is entirely compatible with an expanding economy.

Is my right hon. Friend aware that, despite all the efforts that the Government have made, the poverty trap and the unemployment trap are worse than ever, now embracing nearly half the working population? Will she assure the House that the social security review and subsequent measures will be combined with a taxation review to create an overall coordinated system whereby nobody who pays tax receives benefit, and vice versa, to try to ensure that everybody is better off working than not working?

I have great sympathy with my hon. Friend's objective that everyone should be better off when working than when not working and receiving supplementary benefit. He will be well aware that that was the purpose of the Budget brought in by my right hon. Friend the Chancellor of the Exchequer, which will raise threshholds by twice the amount warranted by the inflation rate, and reduce the rate of national insurance contributions, particularly for the lower paid.

What action does the Prime Minister intend to take following the criticism in the annual report by the Civil Service Commission of the recruitment of highly paid managers from private industry at a time when the service is rent by dissatisfaction over low pay?

The detailed information in the Civil Service annual report shows a reasonably satisfactory picture overall, although there are specific areas of difficulty. That experience is, of course, often shared by other employers. I understand that the 4·9 per cent. pay offer has been accepted by one of the Civil Service unions.

asked the Prime Minister if she will list her official engagements for 25 April.

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

Is my right hon. Friend aware of the widespread concern about the long-term cost of the state earnings related pension scheme? As this scheme brings virtually no benefit to workers on two thirds or less of average earnings, does my right hon. Friend agree that if the Government are to succeed in their aim of ensuring that the social security budget is used to help those in real need the best thing that the Government can do is to terminate the scheme and apply the savings to increase the basic state pension?

As my hon. Friend is aware, there are problems with any scheme which is run on a pay-as-you-go basis under which the contributions now are used for benefits given now, alhough many people think that they are accumulated for benefits to be provided later. I shall, of course, take my hon. Friend's views into account when the matter is discussed.

Will the Prime Minister today recall her early upbringing, her Sunday school days and her father's insistence that the fourth commandment should be honoured? Is she, as the Head of the Government, going to besmirch her father's memory by bringing in legislation that will help to consign the sanctity of the Sabbath day to the scrapheap?

I congratulate the hon. Member on the ingenuity of his question. That is a matter for the House. The report will be brought before the House for debate and the several matters, including the jobs which would be created by Sunday opening, will be taken into account. I hope that the hon. Gentleman might even think that that is a relevant factor to be taken into account.

May we take it from the Prime Minister's last reply that there will definitely be a free vote when the Government introduce legislation on Sunday trading?

That we shall decide nearer the time, but I hope that my hon. Friend will consider the report and all its consequences very carefully.

The Prime Minister continually boasts about the success of her monetarist policies. Is she aware that redundancies in two more factories in my constituency have been revealed to me this week? Bearing in mind that revaluation in Scotland and the fact that the increases in rates will cause further closures and redundancies, will she tell the House what she intends to do about the situation, before she tells the Tory party conference in Perth?

With regard to further redundancies, especially in manufacturing industry, the hon. Gentleman will be aware that we can continue to increase production with fewer people employed. That is one of the problems of a technological revolution. As for the rate burden, the hon. Gentleman will be aware that part of the increase is due to the very high spending of Labour councils, which are much higher spenders than Conservative councils.