asked the Chancellor of the Exchequer what recent representations he has received regarding further signs of an increase in economic activity.

The latest CBI quarterly survey of manufacturing industry recorded an upsurge in business optimism, the fastest ever rise in export orders and the expectation of continued and accelerating growth in output.

For some years now Treasury Ministers have been making very optimistic noises about an economic recovery, yet unemployment continues to rise. When does my right hon. Friend expect that his economic policies will be so successful that unemployment will start to fall?

If my hon. Friend had listened carefully to the answer that I gave to his original question he would have heard that those expectations were not mine but those of the membership of the CBI, as recorded in the CBI's industrial trends survey. But my hon. Friend is quite right, in that we are all greatly concerned about the fact that unemployment is high and still rising. Equally, I am sure he will acknowledge that a remarkable recovery and upswing is now going on in the United Kingdom's economy, which has already led, over the past two years, to more new jobs being created in this country than in the rest of Europe put together. I do not know when that will lead to a reduction in unemployment, but obviously the sooner the better for both my hon. Friend and the Government.

Will the Chancellor of the Exchequer bear in mind that even if he succeeds in deluding himself about the figures, he is not deluding anyone else? Will he consider not only the selective figures that he chooses but the Government's own figures from the central statistical office, which show that the socalled economic recovery will falter next year even from its present level? What does the right hon. Gentleman intend to do about it? When will he learn the lessons, arid when will he change course?

As is customary, the hon. Gentleman is talking complete rubbish. I can remember being told in 1982 that the recovery would peter out in 1983. Then, when it continued strongly in 1983, we were told that it would peter out in 1984. But when it continued in 1984, we were told that it would peter out in 1985. Recovery is continuing strongly this year, but of course the hon. Gentleman says that it will peter out in 1986. He should learn from experience and recognise that so far the Government's forecasts have been proved right.

Has my right hon. Friend noticed that, particularly in Leicestershire, significant shortages are emerging of skilled and semi-skilled workers in manufacturing industry, as has been reported in the local newspaper? Are the Government giving that some attention, in order to see what can be done to alleviate the situation?

My hon. Friend is quite right. Incidentally, I commend the Leicester Mercury on its "jobs going begging" feature to which my hon. Friend has alluded. We are increasing expenditure on training substantially at both ends of the training spectrum. With the assistance of industry, we hope to expand the youth training scheme to a two-year scheme with a genuine training content that leads ultimately to a recognised qualification. At the same time, we are switching resources within higher and further education in order to produce more of the highly skilled technologists that industry badly needs.

The Chancellor of the Exchequer has told the House that he does not know when unemployment is likely to fall, but we all know that a forecast is made internally for the Treasury that must include such figures. Why does he not tell us the Government's estimate, even though we know that he dare not admit that there will be no significant fall in the foreseeable future?

I do not admit any such thing. We do not know precisely what the unemployment trend will be. Indeed, this Government, previous Conservative Governments and the Government in which the right hon. Gentleman served, have never forecast unemployment figures.

asked the Chancellor of the Exchequer what representations he has received from the Confederation of British industry about the number of new jobs created since May 1979.

None. But the CBI's post-Budget forecast projected a 1 million increase in jobs between March 1983 and the end of this year.

Should not that excellent news be broadcast and trumpeted throughout the land? Will it not come as a severe embarrassment to the alliance, which said in its 1983 election manifesto that the biggest early increase in employment that was foreseeable under its inflationary programme involved substantially fewer than the 1 million extra jobs which we are on target to create under this Government's proven economic policies?

My hon. Friend makes a telling point. Conservative performance on employment since the 1983 general election is better even than the promises which the alliance made at the election.

Has the CBI made any representations about the derisory £10 million which the Government are making available to NCB (Enterprise) Limited to provide alternative employment in the coalfields? Is he aware that at Horden colliery in my constituency, which it is proposed to close, there is no alternative employment and that that area alone could use £10 million for the provision of alternative employment? What advice has the Minister to offer to the 1,200 miners and their families who are facing a very dull prospect?

I am not aware of any representations from the CBI on the point raised by the hon. Gentleman. Indeed, it is a matter for my right hon. Friend the Secretary of State for Energy.

Does my hon. Friend agree that there is a growing problem with the thousands of new jobs being created in the hotel and tourist industry, especially in the south-east of England, because increasingly the industry is having to employ foreign labour? What action do the Government intend to take?

Difficulties flow from what is, to some extent, a social attitude by our fellow countrymen towards working in the hotel and catering industry. I was listening to persuasive comments by my right hon. Friend Lord Young on that very question on the radio this morning. I commend the advice that he gave.

How can the Minister claim that the Chancellor's free market solution to the problem of unemployment is successful when there were more than 25 million people in work in June 1975, but by December 1984 there were only 24 million in work?

I would have thought that the hon. Lady would wish to commend the fact that since the last general election and by the end of this year a million new jobs will have been created. If that promise had been made by Ministers during the general election campaign, Opposition Members would have laughed. The reality is that that is the forecast for the end of the year.

asked the Chancellor of the Exchequer what recent discussions he has had with his counterpart in the United States of America about concerted intervention in foreign exchange markets.

These matters will no doubt be discussed at the ministreial meeting of the G10 in Tokyo, which I shall be attending.

There was a successful innovation of concerted intervention in the foreign exchange markets at the end of February. Will the Chancellor communicate some confidence to exporters and others by ensuring that plans for concerted intervention stand ready to be used as a weapon against undue turbulence in the foreign exchange markets?

The role of concerted intervention is limited, but from time to time it can be useful. The hon. Gentleman was right to say that the concerted interventions in January and February were successful. Of course, that can be reactivated at any time that appears appropriate. The role of concerted intervention is relatively modest, although it can be and has been useful at times.

Will my right hon. Friend take steps at the G10 meeting to secure contingency arrangements to deal with the possible collapse of the dollar exchange rate, which could have most serious effects on United States interest rates, the debt crisis in South America and elsewhere and, indeed, the stability of the international system?

I listen carefully to my right hon. Friend, but I should have thought that a fall in the exchange rate of the dollar and of dollar interest rates would, on balance, be helpful to debtor countries in particular and to the world economy as a whole. As for contingency plans, every country, including the United Kingdom, bears in mind what might happen and has views on how it might react in such circumstances.

asked the Chancellor of the Exchequer, in respect of public procurement policy, what evidence has been made available to him about the influence on suppliers' prices of bulk buying by public bodies.

The matter was covered in the report on Government purchasing submitted to the Prime Minister last December.

Has the Chief Secretary considered the problem, especially for new and small businesses, of public bodies combining too much, thus being able to dictate prices in the market so much that it becomes a corporate state and small businesses are unable properly to compete in a fair market?

I do not think that there is any evidence that we are moving towards a corporate state under this Government. It is not for me to speculate about what might happen under other Administrations. It is the Government's policy to improve small firms' access to Government contracts.

Should there not at the least be a duty on each Department of State to report to the House the percentage of public procurement that has been purchased from small firms?

I am aware of American precedents on this matter, but I should like to reflect on the additional administrative costs incurred by Departments. I am sure that the House and my hon. Friend are keen that administration costs should be kept as low as possible.

asked the Chancellor of the Exchequer what is the increased cost to the Treasury in benefits paid and tax and national insurance revenue forgone for every 1 per cent. increase in unemployment.

The extra cost of benefits paid from a 1 per cent. increase in the level of unemployment is about £65 million. It is not possible to estimate the revenue forgone.

Is the right hon. and learned Gentleman aware, or will he admit, that there has been a nine percentage points increase in unmployment since 1979, when his party took office, and that there has been a massive cost to the country as well as to the people involved of keeping on the dole people who want to work? As the Government now claim that we are living with eonomic recovery and prosperity, although there is no decline in unmployment, will they seriously try to spend some of the money on creating essential jobs in the public service rather than on keeping people suffering in unemployment?

The hon. Lady has fallen into some error. There is no question of Government policies keeping people in unemployment. She might be aware that the Government are already spending more than £2 billion a year on job creation measures. The House and the hon. Lady will, I hope, be consoled, even if they will not accept the Confederation of British Industry forecast, by the fact that at least 600,000 jobs have been created since March 1983.

Is my right hon. and learned Friend aware that, between June 1983 and June 1984, an extra 30,000 jobs were created in Norfolk? Does that not show that Norfolk firms are winning the battle to create new jobs and to bring down unmployment?

I am interested to hear my hon. Friend's statistic. I am sure that the Government's measures are paying off in Norfolk as they are in other parts of the country. I am glad to congratulate Norfolk's economy on its flexibility in response to our measures.

Is the right hon. and learned Gentleman aware that, contrary to what he said about not keeping people unemployed, if the Government decided to invest about £1 billion a year in various forms of constructive activity, about 30,000 jobs could be created by that expenditure?

The right hon. Gentleman's figures are possibly a little suspect, but I hope he will take comfort from the fact that private and public sector investment was running at a record level last year and that that level is likely to be improved on this year.

asked the Chancellor of the Exchequer whether his Department is considering any changes in methods of raising revenue.

My right hon. Friend's proposals for this year are in the Finance Bill.

Will the Treasury firmly reject the halfbaked idea of some Tory Members to replace the rating system with a regressive flat rate poll or residence tax, which, whatever it might be called, would be a tax on democracy, especially if people had to pay several hundred pounds a year for the right to vote? Does the hon. Gentleman agree that that would be an even bigger afront to democracy than using a £50 million rate rebate to bribe the Scottish Tory party conference in a vain attempt to try to stop Scottish Conservative Members from becoming an endangered species?

While not for a moment accepting the points made by the hon. Gentleman in that supplementary question, I welcome his interest in the means of raising revenue. What I hear from him most of the time in the House are ways of spending taxpayers' and ratepayers' money.

Does my hon. Friend agree that one way to raise taxes would be by the method enunciated by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) in his Tribune message, namely, to soak people earning over £20,000 a year because they are supposedly rich?

Some of the proposals that have emanated from Opposition Members have been arrant nonsense.

Do the Minister's replies on this issue mean that the career of the Chancellor as a tax reformer is now effectively at an end? If not, what plans for tax reform are coming forward?

If the hon. Gentleman reflects on what my right hon. Friend said in his Budget speech —certainly in respect of national insurance contributions and his proposals on personal taxation—he will see that his reputation as a tax reformer has been enhanced by his Budget proposals.

As one who does not feel like an endangered species—[Interruption.] —and is unlikely to become one, may I ask my hon. Friend to bear in mind when considering taxation changes that the Labour party in Scotland has for decades bought votes by the way in which it has engineered the rates and the rating system?

The Labour party's record in Scotland in this respect is appalling. I am sure that my hon. Friend and many of his colleagues draw attention to that fact when they are in their native land.

asked the Chancellor of the Exchequer if he will estimate what increase would be required in the top rate of income tax to yield the same income to the Treasury as would be lost if the first £1,000 of taxable income were to be taxed at 15 per cent. instead of 30 per cent.

To finance the £3·3 billion needed for such a lower rate tax band would require a confiscatory rate, of 100 per cent. for all taxable income over £20,000, on the theoretical assumption that there would be any such income to tax.

Despite that reply, does the hon. Gentleman agree that it would be more equitable to assist those paying the lower rate of taxation, to shift the burden on to those who have more ability to pay? Does he further agree that the present taxation system is inequitable, bearing in mind that the first act of the Conservatives on taking power in 1979 was to reduce the top rate of tax from 83 to 60 per cent.?

If, instead of making absurd suggestions, the hon. Gentleman examines what has already been done in the Budget, he will see that, as opposed to his peculiar proposal, which would benefit—if it were able to be put into practice—a married couple with earnings of £85 a week by £2·88, the Budget measures, on NIC and taxation alone, without his absurd conditions, have advantaged the same family by £3·43 a week.

Does my hon. Friend recall that the top rate of tax under the last Labour Government, at 98 per cent., was equalled in the world only by the Republic of Togo? Does he agree that, admirable though that country's social system may be, it is not necessarily appropriate for this country, particularly as the Labour party has threatened to reintroduce that top rate of taxation?

It would be inappropriate for me to comment on the Republic of Togo. However, it is appropriate for me to comment on the absurdity of the taxation nostrums of Opposition Members.

Does not my hon. Friend's answer to this ill-informed and naive question show beyond doubt that the Labour party's principal concern is not redistribution but confiscation?

My hon. Friend is right. It is not only confiscation but a complete inability to understand what actually benefits those who are at the bottom of the scale.

asked the Chancellor of the Exchequer what is the current level of total overseas private investment compared with 1979.

The total value of United Kingdom private investment overseas has risen from £43 billion at the end of 1979 to £158 billion at the end of last year.

Is the Chancellor of the Exchequer aware that had that rise of over £115 billion been spent in Britain it could have provided 1,000 new general hospitals—[Interruption.] —1,000 new general hospitals, 7,000 new large comprehensive schools— —

What, 1,000 hospitals?

And almost—[Interruption.] —

Order. The hon. Gentleman has as much right to speak as anybody else.

And almost 750,000 three-bedroomed houses. Does the right hon. Gentleman not consider that working people in this country would far rather have seen alleviation in the health, education and housing sectors than the Government allowing that £115 billion to chase the super-exploited labour, the cheap labour, of South Africa, Brazil, Korea or Argentina?

I hope that I have your indulgence, Mr. Speaker, to answer the hon. Gentleman's questions fairly fully. First, the bulk of that investment has not been in the cheap labour countries to which he referred, but in the cheap labour country of the United States. Secondly, it is not just the sum of annual flows across the exchanges, but it includes the appreciation in value of the investments that have been made overseas, which has been very substantial. Thirdly, it has in no way prevented investment in this country. In fact, total United Kingdom fixed investment last year was at the all-time record of £55 billion.

Is my right hon. Friend satisfied that every Government Department is proving maximally helpful to organisations and communities in this country that are seeking to bring private investment from overseas?

A considerable amount is being done to attract foreign investment from overseas. Over the past few years it has been running at between £3 billion and £4½billion a year. However, this is a particularly important point. Our investment overseas will bring in increasing revenues and, in terms of foreign exchange, increasing invisible earnings over the years that lie ahead.

Why does the Chancellor of the Exchequer take such a contemptuous attitude towards those who believe that the profits made in this country should be reinvested in this country? Has he forgotten that the Conservative party used to claim to be the party of patriotism?

That sort of jibe is unworthy of the hon. Gentleman. The Conservative party is certainly the party of patriotism. It is also the party of the open trading system. That system applies to the capital as well as the current account.

asked the Chancellor of the Exchequer how many £2 coins are to be issued to commemorate the Commonwealth Games in Edinburgh in 1986.

As many as demand requires of the standard version, and decisions about the collectors' versions have yet to be taken.

Is my hon. Friend aware that the issue of commemorative British postage stamps makes a substantial profit? Will the Treasury emulate the Post Office and issue on a more regular basis commemorative coinage which might, if profitable, compensate the British public for having to carry around in fast-wearing-out pockets these objectionable lumps of metal instead of the popular and far more practical bank notes?

This commemorative issue will be widely welcomed. My right hon. Friend the Chancellor of the Exchequer has not ruled out the possibility of further commemorative issues. It is rather sad to muddle this matter up with the controversy about the £1 coin and the £1 note.

Since the 1979 pound is now worth 55p in real terms, would it not be more realistic to issue a rubber £5 note so that the currency could stretch a little further?

Certainly not. If the policies which the hon. Gentleman and his party espouse had been put into effect, the pound would have been worth a good deal less.

asked the Chancellor of the Exchequer what was the total cost to the Government as a result of lost taxes during the miners' strike.

After taking account of increases in revenue from, for example, heavy fuel oil duty, the direct loss of tax and national insurance contributions was of the order of £150 million net.

According to today's opinion polls, the Conservative party is suffering from a terminal bout of anorexia nervosa. I should like to ask the Government about their policies. They have just made certain confessions. The miners fought for a year against the closure of pits by the Government without any discussion with the men working in those pits. Having lost all that money, and about £7 billion on top of that, the Government are now closing pits at a terrible rate without a democratic discussion with the people working in those pits. Can the Financial Secretary justify his answer, having pushed the British people into a dilemma for 12 months because of the loss of that money?—[Interruption.] Mr. Speaker, I am asking the Economic Secretary an honourable question.

Order. The hon. Member's question had a long preamble.

The preamble and the substance of the question were rubbish and a total refutation of the efforts, not only of all the miners who worked throughout that strike, but of all the miners who have suffered from the type of brutality that we have seen because some Opposition Members supported naked Scargillism.

Does my hon. Friend agree that a far more pertinent question would be about the cost to the taxpayer of an uneconomic coal industry with the miners not on strike?

Not only is my hon. Friend right, but a far more pertinent question would be about the loss to our nation and the coal industry resulting from that type of strike. Happiness for our country lies in the fact that the strike is over. We should seek to mend the problems that the industry faces and be pleased that that industry is back at work.

asked the Chancellor of the Exchequer what is his estimate of the net capital gain and revenue loss, respectively, to the Exchequer from the privatisation of publicly owned enterprises since 1979.

Capital receipts from special sales of assets since 1979 amount to some £5 billion. The overall revenue effects cannot be calculated, but what is clear is that privatisation has invariably led to greater efficiency, better industrial performance and wider share ownership.

Given the Prime Minister's continued lectures to the effect that the United Kingdom's economy can be compared to the corner shop in which she grew up, does the Chancellor agree that the owner of a corner shop would not regard selling off capital to boost the current year's turnover as a prudent move?

The hon. Gentleman seems to have overlooked the fact that the concerns that have been privatised remain part of the United Kingdom economy, even when they cease to be owned by the state, and, indeed, become a much more successful part of the United Kingdom's economy, to the beneift of the whole country.

Has my right hon. Friend noticed the recent press interview given by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) in which he advocated the renationalisation of British Telecom? Does my right hon. Friend agree that such a move would be the most appalling waste of taxpayers' money and would deprive hundreds of thousands of workers of their first experience of share ownership?

My hon. Friend is absolutely correct. That is what the Labour party pledges it will do. All those who hold British Telecom shares should be made widely aware of that. Nevertheless, this will not be put to the test, because the Labour party will not be in government.

Does the Chancellor think that the privatisation programme has had any impact on the inflow of funds to building societies?

I do not know.

Does my right hon. Friend agree that the companies privatised since 1979 have, without exception, increased their profitability, and that they are making and will continue to make a sizeable contribution to the exchequer?

My hon. Friend is right. All those companies, without exception, have improved their profitability—some of them to a substantial extent—as a direct consequence of privatisation. They have also improved their industrial relations, and the work forces have made it clear how much better they feel now that they are in the private sector. As a result of privatisation we have also doubled the number of people who directly own shares, and that is of the first importance.

Is not the figure of £5 billion that the Chancellor gave earlier dwarfed by the sum of £12,000 million raised by the sale of council houses and other local authority assets since 1979, precious little of which has been reinvested in housing for the homeless and others in need? Is the Chancellor aware that the most recent figures for new orders for council housing for the first quarter of this year total a mere £174 million, 21 per cent. down on the first quarter of last year? When will the Government stop frittering away the nation's assets?

When will the Labour party make its policies clear? It began by opposing the sale of council houses. I was then given to understand, from a speech made by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), that the party was backing off that policy and coming to terms with the sale of council housing. Now the hon. Lady seems to oppose the sales. Will she please make her party's policy clear?

asked the Chancellor of the Exchequer what representations he has received from the Confederation of British Industry about expanding the United Kingdom manufacturing base as a means of creating service employment.

None, Sir.

Does the Minister recall his answers to questions Nos. 1 and 2, when he referred to the CBI's expectations about the creation of a million new jobs by the end of 1985? Is the Minister further aware that the leading personalities of the CBI have now broken with their past mutual admiration for the Chancellor and have become increasingly critical of him? They now support the view of the Centre Forward group that the Chancellor has totally let down manufacturing industry by his opinion that it is totally irrelevant. Is he aware that they believe that he has failed to deliver the incentives that he promised manufacturing last year, with the consequence that those million new jobs will not be delivered by the end of the year?

The CBI can speak for itself. It is obvious that the hon. Gentleman did not attend the CBI dinner earlier this week, where he might have heard a different story. If the House doubts the Government's commitment to the manufacturing sector, I repeat the words of my right hon. Friend the Chancellor of the Exchequer to a Select Committee in another place:

"the most important source of output and jobs and the more competitive it is, the better off we shall all be as a nation".

Mr. Nicholas Winterton.

I am somewhat surprised by your hesitation, Mr. Speaker. Does my right hon. and learned Friend accept, and will he assure the House, that he and his Front Bench colleagues realise that manufacturing industry is the real source of the wealth needed to create a permanent long-term increase in employment in the service sector? Will he therefore continue to promote policies that will ensure the future success of British manufacturing industry? In the textile and clothing industries, a leading industrialist has said that, given the right climate—

Order. The hon. Gentleman has demonstrated why I was hesitant.

It is not for me to come between the Chair and my hon. Friend on such delicate matters.

Is it not the case that our share of world manufactures since 1979 is down, as is our share of world trade and tradable services? Is it not about time that the Minister realised that the people want an industrial policy that addresses our problems and not an arrogant pretence that they do not exist?

I can tell the hon. Gentleman one thing that he has overlooked. We have cut, rather than piled on, expenses for manufacturing, particularly the cost of employment in the manufacturing sector.

asked the Chancellor of the Exchequer if he will list those advanced industrial countries which, compared with a year ago, have a rate of inflation which is (a) increasing faster than that in the United Kingdom and (b) increasing more slowly.

Inflation in other major industrial countries has decreased compared with a year ago.

Is the Minister not saying that we are the only major advanced industrial country which, on a year ago basis, is showing increasing inflation, and that all our competitors are doing better? Does this not show that, given that getting inflation down is a central plank of the Government's economic policy, on this as on other measures they have failed?

No, it shows that there is no comfort for the Labour party, as all the other countries have rejected the policies that it propounds.

Has my hon. Friend had the opportunity of comparing our economic performance with that of, for example, Socialist France and Spain? What conclusions has he drawn from the remarkable failure of Socialist policies there over the past few years?

My hon. Friend has underlined the point that I made a moment ago.

asked the Chancellor of the Exchequer what proportion of total Government receipts were met by taxes on income and taxes on spending, respectively, in 1984–85; and how these figures compare with 1978–79.

As a percentage of total general Government receipts, taxes on personal sector spending increased from about 27 per cent. in 1978–79 to around 28½ per cent. in 1984–85, while personal income taxes have declined from 29½ per cent. in 1978–79 to 24 per cent. in 1984–85.

I recognise that that answer is broadly in line with the Government's intentions way back in 1979, but does my hon. Friend think that the proportions are about correct, or would he like the trend to continue?

Clearly, the Government believe that it is essential, if we are to encourage initiative and enterprise, to seek further reductions in direct income tax. That must be the aim if there is to be scope for my right hon. Friend the Chancellor to reduce direct taxation.

asked the Chancellor of the Exchequer what recent representations he has received advocating taxation reliefs for employers who recruit new and additional personnel on to their payrolls.

We have received one letter about this. The costs of recruiting and employing staff are already fully allowable for tax.

Will my right hon. and learned Friend take note of the fact that in our taxation system it has been historically an orthodoxy to give tax relief to people who invest in new plant? Why could we not give some serious thought to tax relief for those who invest in new labour?

If my hon. Friend will reflect on the reforms in the Budget last year he will see that my right hon. Friend the Chancellor redressed the balance between capital-intensive industries and labour-intensive industries.

asked the Chancellor of the Exchequer to what factors he attributes recent increases in sterling M3; and what effect he expects them to have on future levels of inflation.

Accelerated borrowing to take advantage of 1984–85 level of investment allowances was clearly a major factor in the erratic increase in £M3 in April. MO remains well on track. I expect inflation to resume its downward path in the second half of the year.

In view of that reply, would the birds fall from the trees if we stopped publishing monthly figures straight away—at once?

I am not sure whether any birds would fall from the trees, but I am sure that I would be widely attacked, not least by my right hon. Friend the Member for Worthing (Mr. Higgins) for obscurantism of the worst sort if we ceased to publish figures. Even if we did not publish them, we would continue to be guided by them, among other statistics.

Does the right hon. Gentleman agree with Mr. Coleby, of the Bank of England, who said to the Select Committee on the Treasury yesterday that our domestic monetary arrangements are out of control?

I do not think that Mr. Coleby said that—

Yes, he did.

If he said that, I totally disagree with him.

asked the Chancellor of the Exchequer what factors he takes into account in determining the level of the public sector borrowing requirement.

The principal factor is the need to ensure that the public sector borrowing requirement can be financed in a non-inflationary way without crowding out private sector borrowing.

Does my right hon. and learned Friend agree that the safe reduction of interest rates is now of maximum importance? If so, does he believe that such a reduction is dependent on having a lower public sector borrowing requirement?

Certainly we would welcome a decline in interest rates, and my hon. Friend will know that they are an indispensable adjunct in controlling inflation. I recognise the connection that he draws between interest rates and the PSBR.

asked the Chancellor of the Exchequer what has been the shift in the percentage of revenues raised from indirect taxation since 1979.

Indirect taxes accounted for about the same proportion of total general Government receipts in 1984–85 as in 1978–79. Within indirect taxes, taxes on expenditure accounted for about 1 per cent. more in 1984–85 than in 1978–79.

Why are the Government so intent on steadily withdrawing rate support grant from the activities of local authorities, thereby increasing indirect taxation even more?

We seek a proper balance between the resources provided by central Government and those provided by the local electorate. We seek a local taxation sytem that is more responsive to the local electorate.

asked the Prime Minister if she will list her official engagements for Thursday 23 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 this House, I shall be having further meetings later today.

Will my right hon. Friend take this opportunity to repeat the message that she gave to the women's conference yesterday, for the benefit of those on the Opposition Benches and the country at large, and point out that the Government have consistently increased spending on health, social security, social services, transport and various other things? Will she nail the myths about cuts? Will she take the opportunity to repeat that message until the country gets it?

I am grateful to my hon. Friend for underlining the points that I made yesterday. May I point out, in regard to the National Health Service, that the only cuts that we have made are cuts in waiting lists, and they are very welcome.

On Tuesday the Prime Minister gave a forecast for the inflation rate at the end of the year. Will she be as forthcoming today about the unemployment figures? At the end of the year, will they be up or will they be down?

No one has ever given a specific forecast on unemployment when answering from this Dispatch Box, either as a Labour or as a Tory Minister. No one really can.

How can the Prime Minister be so specific about inflation rates in six months' time and so vague and evasive about unemployment rates in six months' time? How could she be so bold yesterday with the Tory ladies conference and so coy today with the House of Commons and the public? Is it not the case that she knows very well that unemployment will continue to go up and that that is a disgrace and a strain on her Government? What will she do about getting the unemployment rate down?

The real answer to the first part of the right hon. Gentleman's question is that inflation is generally easier to predict over the short term than unemployment. Every Minister has recognised that. With regard to asking me to underline the message I gave yesterday, I am delighted to do that. Doctors and dentists are up nearly 10,000, nurses and midwives are up 57,000, home helps are up 3,000, health visitors are up 900, district nurses are up 1,700, patients treated are up 3·5 million each year, and teachers' pay on average is up 9 per cent. in real terms over what it was under Labour.

I am glad that the right hon. Lady said that. There are now more nurses unemployed, more qualified doctors unemployed, and more qualified teachers unemployed than ever before. When will she get unemployment down? What will the trend be at the end of the year?

There are also 600,000 more jobs than two years ago. The way to tackle the unemployment is to create more jobs.

Has my right hon. Friend had an opportunity to read the report of the Home Affairs Select Committee on hard drugs, which was published today? Does she agree that one of the most serious problems facing the British people is the menace of hard drugs? Does she agree with the recommendations for new legislation to deal with the seizure of assets and to stop the traffickers in their tracks?

The Government will consider the report of the Select Committee carefully. As my hon. Friend knows, we have already made a statement of our strategy for drugs, and I am happy to confirm that we intend to introduce legislation to seize and confiscate the proceeds of drug traffickers.

The Prime Minister does not believe the old public opinion polls, does she?

No, Sir—whatever they say.

Does my right hon. Friend accept that "restoring standards" appears to mean—to the National Union of Teachers—raising teachers' pay, while to the rest of us it means improving standards of education, discipline and apolitical commitment to students? Will she, therefore, take time today to confirm that the unions cannot hope to achieve what they want unless they are prepared to give the country what it needs?

My right hon. Friend the Secretary of State for Education and Science has tackled education in the right way, that is, by trying to raise standards in schools. That has been most welcome among parents and most teachers. He is also tackling the pay problem in the right way by saying that we should know precisely what teachers' duties are and that, as in most other careers in the United Kingdom, teachers should be subject to an assessment of performance. That being so, we should like to be able to provide more money next year for teachers, provided that those things are satisfied.

asked the Prime Minister if she will list her official engagements for Thursday 23 May.

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

In sending in the district auditor to try to sack local authority workers, especially young workers, in Liverpool, does the Prime Minister intend to create a reserve army of part-time scarecrows to benefit her rich farming friends? In attempting further to strip workers of their dignity and self-respect, is she not becoming immortalised, like Marie Antoinette, by a new slogan, "Let them eat bird seed", or some similar epithet?

As the hon. Gentleman knows, the district auditor acts independently. I hope that Liverpool will follow the example of most other authorities and set a legal rate. I hope that the hon. Gentleman is not encouraging it to act illegally.

Does my right hon. Friend agree that it is simple to achieve a temporary improvement in unemployment, but that we need a permanent improvement in employment without increasing inflation and interest rates, and without dragging the country to its knees, as we would do if we followed the Opposition's policies?

I agree with my hon. Friend. He will be well aware that the economic policies which the Government are pursuing were affirmed by the seven industrial countries which met at the Bonn economic summit, including Socialist France.

asked the Prime Minister if she will list her official engagements for Thursday 23 May.

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

Has the Prime Minister read the latest regional trends? Is she aware that it discloses a growing gap between north and south in unemployment, redundancies, lost job opportunities, homelessness, poverty and deprivation? How does that conform with her view of a classless society?

Last year the Government spent more than £600 million in regional preferential assistance, £260 million of which went to the north, the north-west, Yorkshire and Humberside. Although unemployment is relatively high in the north, average weekly manual earnings there are the third highest in Great Britain and about equal to the British average.

May I press my right hon. Friend further on the Government's plans for legislation on the seizure of assets of drug pushers? Can she put a date to her promise, which was welcomed by the entire House?

The legislation could not be introduced before the next parliamentary Session. My right hon. and learned Friend the Home Secretary is working on its precise provisions.

Does the Prime Minister stand by her statement to the House last December that the cost of creating new jobs by capital investment in the infrastructure was between £35,000 and £50,000 each? Does she accept that that figure has been continually challenged by civil engineering contractors, who put the figure nearer to £10,000? In view of that wide discrepancy, will she produce the evidence to support her figures, or will she accept that they were a considerable exaggeration?

The cost varies according to the infrastructure or capital expenditure per job. It also varies according to whether it is provided by local government or by central Government. The hon. Gentleman will have seen the many questions and answers on this topic.

Has my right hon. Friend seen the result of the Gallup poll taken recently near Heathrow, which shows that 62percent.—[Interruption.]

Order. This takes time.

—of the residents there were in favour of terminal 5, and 24 per cent. were against? Does that not show that it is much more sensible to expand the airport in the south-east, which the airlines wish to use and to which people wish to fly, rather than Stansted, which is to be only a charter flight airport, and whose expansion would remove jobs from the north?

My hon. Friend made his point effectively. I hope that my right hon. Friend the Secretary of State for Transport will make a statement on his decision after we return from the recess.

asked the Prime Minister if she will list her official engagements for Thursday 23 May.

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

Is the Prime Minister's determination to build a classless society reinforced when she sees that the sum of money which she and her Government believe can support 30 families in unemployment benefit for a year can be spent on a birthday party by a young man of 21?

That is a highly artificial question. Perhaps the hon. Gentleman will also address his mind to some of the costs of running the House.

Having regard to the generous contribution of the British people to relief in Ethiopia, will my right hon. Friend examine reports that the Ethiopian dictatorship is levying heavy customs duty on British aid going into that country, and will the appropriate Minister make a statement at the earliest opportunity?

I shall pursue my hon. Friend's point. I am sure he agrees that it is right to continue to give aid to Ethiopia, although it is important that we ensure that it gets to those for whom it is intended.

asked the Prime Minister what representations she has received from Civil Service trade unions about the directive she issued on 22 December 1983 about trade union membership in Government communications headquarters; and if she will make a statement.

Following representations from the Council of Civil Service Unions, I met its representatives and those of the Trades Union Congress on 1 and 23 February 1984.

So has not the time come for an amnesty?

If the hon. Gentleman was listening to my first answer, I said that there will be—[Interruption.] I am so delighted with the reference from the hon. Gentleman. There will be no change in the Government's policy.

Does my right hon. Friend agree that the problems at Cheltenham have their roots in the fact that the trade union leaders in the Civil Service reneged on an unwritten agreement that Cheltenham would never be involved in industrial activity?

The action was taken, as my hon. Friend knows, because of the action taken by GCHQ when it went on strike and put very sensitive services at risk.

On a point of order Mr. Speaker.

Does it arise from questions?

I am wondering whether the Prime Minister misunderstood my question—

Order. That cannot be a point of order for me, because I do not know. The hon. Gentleman might ask that question, if he has an opportunity, when we return from the Whitsun recess.

I am trying to clear up a misunderstanding.

Order.

rose —

Order. The hon. Gentleman is a very experienced Chairman. He knows that it is not our practice to extend Question Time. There are very many right hon. and hon. Members who wish to speak in the subsequent debate.

rose —

Is this a new point of order?

It is a fresh point of order, Mr. Speaker, but it follows up the point of order of my hon. Friend the Member for Oldham, Central and Royton (Mr. Lamond). Further to the remarks of the Prime Minister in answer to my hon. Friend the Member for Oldham Central and Royton, gross discourtesy—

Order. I cannot be responsible for the questions that are asked or for any answers that are given, whether from the Front Benches or from the Back Benches.

On a further point of order, Mr. Speaker.

Is it concerned with questions?

It concerns a question which is important, Mr. Speaker, because—

Order, I shall take the hon. Gentleman's point of order later.