Object.

The House will wish to know that the Chairman of Ways and Means has directed that this motion should be set down for Seven o'clock on Monday 21 October.

asked the Chancellor of the Exchequer what is the range of estimates he has received from major outside forecasters for the likely rate of inflation by the end of 1985.

asked the Chancellor of the Exchequer what is the range of estimates by major outside forecasters available to him for the likely rate of inflation by the end of 1985.

The main outside forecasters on average estimate that inflation as measured by the retail prices index will fall from 7 per cent. now to below 6 per cent. by the end of the year and to 4½ per cent. by the middle of next year.

Is this not good news for pensioners, for those looking for work, and for the low-paid, remembering that inflation fuels panic in the elderly, disrupts our competitiveness and gives rise to disputes in pay bargaining? May we be told the average rate of inflation during the past six years compared with the previous five, which included the Lib-Lab pact? Can my right hon. Friend confirm that countries with low rates of inflation also achieve low rates of unemployment?

I agree entirely with what my hon. Friend said—she put it exceptionally well. The answer to the question that my hon. Friend was kind enough to include in her supplementary is that since the Conservative Government took office in 1979 inflation has averaged 9½ per cent. as against 15½ per cent. during the lifetime of the previous Labour Government.

In the light of my right hon. Friend's sensible response to the question put by my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley), if he were to increase public sector expenditure by putting more money into capital expenditure and the infrastructure, what response would he get from the forecasters of the rate of inflation in the short-term, medium-term and long-term?

There would be no problem if the increased expenditure on infrastructure were on projects which brought a satisfactory rate of return and were offset by reductions in current expenditure, but those who put forward such proposals seldom, if ever, specify which expenditure should be reduced.

When will the Chancellor of the Exchequer respond to the CBI's request today to come out of his bunker and attack inflation by dynamic means rather than giving the country the worst of all worlds by sticking to negative and purely defensive measures?

I note that the director general of the CBI has temporarily recovered the use of his bare-knuckle script writer. I assure the hon. Gentleman that, as I said in my answer, the rate of inflation is coming down, and coming down well. Whether or not that is dynamic, it is certainly not static.

If the Chancellor of the Exchequer feels it necessary to brag about the rate of inflation being lower than previously, why is it necessary for the Government to give Sir Robert Armstrong an extra £24,000?

That matter has been fully debated in the House and has nothing whatever to do with the rate of inflation.

Will my right hon. Friend confirm that the Government's principal objective is still to reduce inflation by monetary means? Will he reassure the House that the Government have no intention of joining the fashionable cry for internationally co-ordinated reflation, justified by the desire to reduce the value of the dollar against other currencies?

I am not quite sure about all the ins and outs of my hon. Friend's unusually convoluted question. He is normally direct and succinct. As for the question of the dollar, on which my hon. Friend ended, I think that it would be healthier for the world economy if the disequilibrium in the United States were to be corrected by some further fall in the Foreign exchange parity of the dollar. Indeed, that appears to be the view of the American Government also.

Is the Chancellor aware that his knockabout replies are no answer to the serious questions put to him by the CBI? If he really thinks that inflation is falling, why does he not, in the words of Sir Terence Beckett,

"abandon economic policies which harm our exports and encourage imports"?

Exports are at an all-time high. Indeed, the latest figures for non-oil exports are running at 10 per cent., in real terms, above a year ago. The hon. Lady should withdraw her ill-informed question.

asked the Chancellor of the Exchequer what representations he has received advocating a revision of the present limit of 1·8 litres for company car tax purposes to 2 litres.

A number of such representations have been received from motor manufacturers and others.

Will my right hon. Friend accept that when the original 1800 cc cut-off point was fixed, a British manufacturer, namely, BL, had an engine which coincided with a figure just below that? BL does not have that engine now, but has engines of 1·6 and just under 2 litres. Why can we not do something thoroughly chauvinistic, nationalistic and dynamic and make it possible for the cut-off point to help our sole remaining British manufacturer by fixing the point at just under 2 litres?

My hon. Friend is asking whether we will give careful consideration to the now fairly uniform view of British motor manufacturers that changes should be made. Of course consideration will be given to the request, but, as ever, when changes are made some will gain and some will lose as a result.

asked the Chancellor of the Exchequer whether he is planning any changes in the level of public expenditure.

No, Sir. The Government have agreed to stick to the public expenditure totals of £139 billion for 1986–87 and £144 billion for 1987–88 published with the Budget.

When the Government next publish new figures on public spending in the Autumn Statement, does my right hon. and learned Friend think that they will publish a fiscal adjustment? Does he agree that fiscal adjustment is given importance way above its merits, that it sometimes sets hares running round in all directions and that it can be damaging to confidence in the economy?

I agree with my hon. Friend's analysis. If he and the House look at the Government's response to the eighth report of the Treasury and Civil Service Select Committee, they will see that we state that the published figure for fiscal adjustment is assigned a significance out of all proportion to its very limited value.

Does the Chancellor of the Exchequer recall that in his first speech from the Dispatch Box as Chancellor of the Exchequer on that bright confident morning he said:

"an essential ingredient in providing the right balance between fiscal and monetary policies"—

Order. Not quoting, paraphrasing, please.

On that bright confident morning the right hon. Gentleman said that an essential ingredient of the economy was to keep the public sector borrowing requirement under control. Is that the reason why, year in and year out, since he became Chancellor, £3,000 million to £4,000 million worth of national assets have had to be sold? Is that why he is selling them?

The hon. Gentleman directed his question at my right hon. Friend, but I hope that he will allow me to answer it, because it arises from a question that I answered earlier. If the hon. Gentleman studies the public sector borrowing requirement, he will see that, apart from the impact of the miners' strike, it has fallen consistently since 1981. That is a very creditable record.

When will the Government cut public expenditure in real terms?

Although some individual items have been cut, that is not our declared policy. Our declared policy is to maintain public expenditure broadly stable in real terms.

To revert to the Chief Secretary's original answer, does that not confirm—indeed, it does — that the only way in which the Government can finance future tax cuts is by selling more national assets?

It seems that the right hon. Gentleman underestimates the merits of privatisation for its own sake. Certainly it is true that the sale of public sector assets has been clearly reflected as an item in the accounts, but as I said, we have achieved significant cuts in direct taxation by other means as well.

asked the Chancellor of the Exchequer when he next expects to attend a meeting of the interim committee of the International Monetary Fund.

In the first half of 1986.

Are not Treasury Ministers ashamed that they and the Chancellor of the Exchequer are not attending the annual meetings of the International Monetary Fund and the World Bank? Why will they dally in the bunker of the Conservative party conference when the world is crying out for a lead to bring it out of financial anarchy?

The United Kingdom will be fully represented at those meetings. Surely, the hon. Gentleman would expect the leaders of his own party to be present at his party conference. I would agree with that sentiment. Despite the rather aggressive nature of the hon. Gentleman's question, and as this may be the last time that he will appear as the economic spokesman for the Liberal party, may I say that we wish him well in his job in employment. I hope that he will take an early opportunity to say how glad he is to see the rapid rise in new jobs that has occurred during the past two years.

When my hon. Friend—or my right hon. Friend the Chancellor of the Exchequer — next meets his friends—or enemies—in the IMF, will he remind them that employment in Britain rose by 650,000 in the past two years—more than in the rest of the EEC put together? Will he proffer advice to other countries on how to manage their economy?

I am sure that my right hon. Friend has noted my hon. Friend's suggestion. It is indeed true that this country's successful economic policies have generated a much more rapid rise in employment than has taken place in most other industrial countries. The proportion of people of working age at work is higher in this country than in any other industrial countries, except Japan and America.

asked the Chancellor of the Exchequer what is the lowest income at which a single person with only a personal allowance is currently paying less income tax than in 1978–79.

With the exception of those earning between £2,720 and £5,330 a year, all single taxpayers whose earnings have increased in line with the national average are currently paying less income tax as a proportion of their earnings than in 1978–79.

But is it not the case that a person has to earn over £22,000 a year before he pays a smaller proportion of his salary in tax and national insurance? Why do the Government give benefits to people who earn more than that amount, instead of giving benefits to those who earn less than that? Surely that is highly objectionable when we are trying to make people conform with policies to control the serious economic problems of this country?

I think that most people are concerned about their real take-home pay. There has been a real increase in take-home pay for all those whose pay has risen in line with national average earnings since 1978–79.

Notwithstanding the increase in income tax thresholds that the Government have achieved, does my hon. Friend agree that the burden of taxation still rests heavily on the lowest paid? Does he further agree that people—for example, members of the alliance parties—who call for higher public expenditure on a cause—however worthy it may be—are calling for an increase in taxation of the poorest members of our society?

I endorse what my hon. Friend says. In reply to what he said about the burden on the low-paid, may I point out that, as a result of the changes in recent Budgets, personal allowances have been increased by 20 per cent. in real terms. Moreover, the changes in the national insurance regime announced by my right hon. Friend the Chancellor of the Exchequer in his last Budget were of particular help to the low-paid.

asked the Chancellor of the Exchequer what further discussions he has had with the Bank of England concerning Johnson Matthey Bankers.

asked the Chancellor of the Exchequer if he will make a further statement regarding Johnson Matthey Bankers.

My right hon. Friend discussed with the Governor the terms of his statement of 17 July, to which I refer the hon. Members.

Will the Economic Secretary tell the House how many heads have rolled at the Bank of England as a result of the Johnson Matthey fiasco? As his right hon. Friend told the House that the Bank was too busy to investigate the gaps in the Johnson Matthey records, will he tell us why he did not call in outside assistance?

Staff appointments at the Bank of England are a matter for the Governor of the bank. My right hon. Friend did not say that the present management of JMB was too busy. He said that the affairs of the bank were in a chaotic state and that it took a long time to establish that there were gaps in the documentation.

Will the Minister tell the Chancellor of the Exchequer that, in view of the dilatoriness shown by the Chancellor, the Governor of the Bank of England and all the others in this affair, it would not be taken well if the taxpayer had to foot the legal bill incurred by the Chancellor because of recent events? If the Chancellor is prepared to use more than £100 million of taxpayers: money for this rescue, is it not wrong for the taxpayer also to have to foot the bill for the legal expenses arising out of the writ?

Contrary to what the hon. Gentleman suggests, my right hon. Friend has been punctillious in reporting to the House on the JMB affair. Indeed, last week he made a statement as soon as it became clear that the JMB management wished to invite the City of London police to conduct a preliminary inquiry. As to the writ, I should point out that a writ was served on the auditors on Tuesday, and in response a writ was served by the auditors on my right hon. Friend. That writ will be vigorously contested.

Does my hon. Friend agree that the most important aspect of this affair is the confidence of the City of London and that it was right for the Bank of England to intervene? Is it not also right for the Government to uncover what went wrong so that it does not recur? Is it not least important to make political capital?

There is a lot to be said for my hon. Friend's remarks. Clearly, important lessons have been learnt about banking supervision, and that was the subject of my right hon. Friend's statement to the House on 20 June.

Will the Minister accept that some of us do not think that the technical officers of the Bank of England were at fault? Will he confirm his total confidence in Mr. Walker and Mr. McMahon?

I do not propose to be led into making comments from the Dispatch Box on any individual official.

asked the Chancellor of the Exchequer what consideration he has given to the future of the present Customs and Excise area office at Wick.

As I told the hon. Member in my letter of 15 July, the Wick office is to remain fully operational.

In view of the excellent facilities at Wick airport and the desire of local development agencies, local authorities and business men to develop links with Scandinavia to promote commerce and tourism, will the Minister view with favour any request to increase customs services at the airport to meet those desirable objectives?

The question of customs facilities at the airport is rather different from the question that the hon. Gentleman placed on the Order Paper. When I last reviewed the position at the airport, the amount of traffic did not meet the criteria laid down for customs attendance.

Is the Minister aware that during a recent Transport Question Time the Minister with responsibility for aviation said that he would be willing to look at the position at Wick and Inverness airports? Is he also aware that in a letter to me of this week he confirmed that the 12 per cent. cut in the number of customs officials since 1979 is only now beginning to be reversed? Is not one of the difficulties the fact that the Government, even if the Treasury makes that welcome facility available, will only be beginning to reverse the problems generated by their policies?

Discussions have been going on for a long time about customs attendance at both Wick and Inverness airports. If the criteria for attendance are met, the customs will be in attendance.

Will my right hon. Friend bear in mind that proper customs facilities for a wide range of airports in the United Kingdom, including Wick, are necessary for the good conduct of business? Will he make it a Government priority to maximise the use of provincial airports, including those in the Highlands, to which this question refers?

Yes. I am all for maximising the use of airports and of resources. Because I am concerned with the maximisation and utilisation of customs resources, I do not want to see them deployed where they will not be fully efficient.

asked the Chancellor of the Exchequer what is the most recent estimate of the percentage of national income represented by the black economy.

Recent estimates of the size of the black economy have varied from 2 to 16 per cent. of gross domestic product. This very wide range tends to confirm the Government's view that it is not possible to form any reliable estimate of its size.

I thank my right hon. and learned Friend for that reply. Does he agree that the long overdue bonfire controls on small businesses, recommended by the recent White Paper, "Lifting the Burden", will do much to reduce the size of the black economy? Will he give some thought now to introducing a two-year honeymoon, free of corporation tax, to encourage all new business to become better established?

I note my hon. Friend's suggestion about a two-year honeymoon. I doubt whether it would be the most effective way of helping small businesses. Indeed, many new businesses do not make much profit in the first two years. The most positive assistance that the Government can give to the smaller end of the economy, as my hon. Friend has perceptively pointed out, is our firm determination to lift the burden on it. As the House will know, measures will be co-ordinated by a committee presided over by my noble Friend the Minister without Portfolio.

Is my right hon. and learned Friend aware that because of the Government's enthusiasm to tackle the informal economy many reputable small firms are being unfairly victimised? Is he not aware that those people are the real wealth creators? Will he ensure that before their accounts are investigated someone very senior satisfies himself that there are reasonable grounds for suspicion?

If my hon. Friend will draw our attention to any cases where there has been victimisation. I am sure that we shall make the fullest possible investigation. As he will see from the latest report of the Board of Inland Revenue, the board has concentrated on the larger, rather than the smaller, accounts.

asked the Chancellor of the Exchequer if he will make a statement about the exchange rate.

At noon today the sterling index stood at 84·3.

Has the Chancellor of the Exchequer read in today's press the criticism by the director general of the CBI, Sir Terence Beckett, of the rise in the exchange rate? He says that if the exchange rate goes any higher it will unfairly threaten the competitive position of British firms in foreign markets. Does the right hon. Gentleman recall that a few years ago, because of a sharp rise in the exchange rate, which was totally artificial, many soundly based firms in this country ran into serious difficulties? Will the Chancellor tell the House whether he has an exchange rate policy and what it is?

I recall that when sterling was temporarily falling during the early part of this year I was called to the House to answer a private notice question tabled by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who was complaining about the fall. Now I see that the Labour party is complaining about the subsequent recovery.

In retrospect, does my right hon. Friend not think that a good time to have joined the exchange rate mechanism of the EMS might have been around the end of January, when the pound-deutschmark exchange rate was about 3·5?

The fundamental question about the EMS is not particularly the exchange rate at which one joins, although that is obviously a matter of significance, but whether it is in the interests of this country to join at all. As my hon. Friend will know, we keep that matter constantly under review, but at the present time we do not think that it is in this country's interests to join.

The Chancellor seems intent on using the rising pound and record real interest rates to recreate the economic disaster of 1979 to 1981. Is he aware that the pound is now more than 50 per cent. undervalued in real terms against the deutschmark compared to the average of 1973 to 1976, and that our deficit in manufactured trade with the EEC is now higher than the entire EEC deficit in manufactured trade with Japan? How can we improve the situation with the pound at that valuation?

The plain fact is that our exports, including our non-oil exports, are at records levels and that our balance of payments on current account is in surplus for the fifth or sixth — I think the fifth — year in succession. We are also in our fifth year of steady growth. We have the highest expected growth rate of any country in the Common Market, and it is also higher than that of the United States. If that is a disaster, it is the sort of disaster which the previous Labour Government would have given their eye teeth to get.

Given the present monetary conditions, as measured by MO, what possible reason is there for not reducing interest rates and thus influencing exchange rates?

My hon. Friend will be aware that interest rates have already fallen by 2 per cent. from their peak earlier this year, and the future course of interest rates will be affected by what happens on the foreign exchange markets.

Will the Chancellor tell us whether the value of the pound is the result of a deliberate policy decision by the Government, or whether it is simply due to drift?

This is the first time that I have heard of such a recovery being attributed to drift. Although I am happy to accept the Government's responsibility for taking the exchange rate into account in their monetary and financial policy, as they must, they do not have the power to set a particular exchange rate. That is set by the foreign exchange markets.

Does the Chancellor accept that the levels of domestic interest rates are influencing the exchange rate? Will he listen to the widespread anxieties of industry about increased levels of unemployment and about liquidations later this year if the present levels of interest rates and the present exchange rate continue?

The present exchange rate is almost exactly what it was at the time of the last general election in 1983. Had we taken the advice given during the election campaign by the Social Democratic party and joined the EMS at the then rate, that would have been a fixed rate and we should have remained at it until now. I fail to see what the hon. Gentleman is complaining about.

asked the Chancellor of the Exchequer if he will estimate the impact of the current levels of interest rates on inflation.

The current level of interest rates is maintaining downward pressure on the rate of inflation.

Is it not time that the Minister tried to examine yet again the economic policies that the Government are pursuing? Is he aware that hon. Members on both sides of the House are expressing the alarm and concern that was expressed earlier this week in the Division on the top salary increases? What effect wall the top salary increases have on demands by the trade union movement for an increase in wages and salaries? When will the Minister try to get his calculations right and get his predictions out of a twist? Is it not time that the Minister seriously considered the effect of the Budget, which his right hon. Friend called a Budget for employment, but which, especially in my constituency, turned out to be a Budget for unemployment?

I am sorry that the hon. Gentleman underestimates the importance of the changes in the tax threshold and in national insurance contributions which my right hon. Friend announced in the Budget. They have important implications for jobs and, as I remarked earlier this afternoon, the numbers of people in employment are rising rapidly.

Following his royal highness' remarks on the ITN news at lunchtime, does my hon. Friend accept that we are moving towards a home-ownership democracy in this country and that, as such——

Order. The question must be related to inflation.

It is. Does my hon. Friend agree that the tax relief on mortgage interest payments is an important part of the encouragement given to people to stand on their own feet and to own the house in which they live? That being so, will my hon. Friend take this opportunity to tell people today— —

Order. The hon. Gentleman should have thought about his question before he asked it.

What price does the Economic Secretary say that we shall have to pay for this high interest rate policy in terms of mortgage costs, company liquidations and the cost to industry? As Treasury forces, not market forces, are keeping interest rates at their present artificially high levels, can the hon. Gentleman tell us when they will be reduced to the levels enjoyed by our main competitors?

I remind the hon. Gentleman that interest rates have already been reduced by 2 per cent. from their level at the time of the Budget. There are always difficulties that raising interest rates cause in the short run, but the difficulties caused in the long run by a failure to take appropriate action on monetary conditions are far greater.

asked the Chancellor of the Exchequer if he will estimate the overall change in the level of the nation's wealth since 1979.

By the time of the Budget, the nation's real output was 6 per cent. higher than in 1979, and growth this year is expected to be the fastest in the European Community and to exceed that of the United States as well.

I congratulate my right hon. Friend on those substantial achievements. Is it not a fact that more schools, hospitals and nurses, and higher pay for everyone, are best achieved by increased wealth, rather than by much higher personal taxation and the punitive taxation of ordinary people's pension funds which have been earned through a lifetime of work, which is proposed by the Labour party?

The Labour party's proposals on pension funds are as obscure as its proposals on a number of other policies, such as the compulsory repurchase of shares in privatisation issues and the unfettered right to buy council homes. No doubt they will be made clear in due course.

How much of the increase in our wealth since 1979 has been due to North sea oil?

A very small part. Of the rate of growth of about 3 per cent. a year that we have seen since the trough of the recession, about ½ per cent. has been due to North sea oil. The other 2½ per cent. has been due to the onshore economy.

Does my right hon. Friend agree that the growth rate in this country would have been greater if the tax burden had been lower, but that that could have been achieved only if the burden of public spending had been lower? Does he therefore agree that it would be a jolly good thing if our right hon. Friend the Chief Whip were to call the spending Ministers into his office in groups of six and give them a good talking to about loyalty to the Government's objectives?

I note that that particular tactic by my right hon. Friend the Chief Whip did not have much effect on my hon. Friend.

asked the Chancellor of the Exchequer when he will next be having discussions with the Governor of the Bank of England about interest rates; and if he will make a statement.

asked the Chancellor of the Exchequer if he will make a statement on the current level of interest rates.

The Governor and I regularly discuss interest rates in the context of the monetary policy and conditions. Short-term interest rates have fallen by around 2 per cent. since January. Rates will continue to be held at whatever level is needed to maintain monetary conditions that will keep steady downward pressure on inflation, but no higher than that.

Does my right hon. Friend agree that an attitude of excessive caution towards interest rates can only damage prospects for employment and economic recovery? Does he further agree that a 2 per cent. cut in mortgage rates would cut inflation by 0·6 per cent. and help industry to contain its costs?

It is the responsibility of industry to contain its own costs. It must accept that responsibility, and it cannot look to advantageous reductions in mortgage rates—much as we would wish to see those—to do the job for it.

While I welcome the recent reduction in interest rates, may I ask my right hon. Friend whether he agrees that real interest rates are still too high and constitute a severe disincentive to businesses and home buyers? In view of the more encouraging predictions about inflation and the recovery of sterling, what hope does he hold out for a reduction in interest rates later this year?

I hold out hope that there will be a reduction in interest rates at the appropriate time. However, if there is one thing substantially worse than the present, relatively high real rates of interest—although they are not so very much higher than in other countries —it is the negative real rates of interest that obtained during the inflationary 1970s. No capitalist society or economy can survive with rates such as those.

Will the Chancellor explain why our interest rates are not only at record real levels but are one third higher than those in the EEC and double those in Japan? Will he further explain why every mortgage, hire purchase contract, overdraft and unit of local government is being crippled by high interest rates just to keep the pound at an overvalued level?

There is no way of controlling monetary policy without holding interest rates at a level high enough to keep that control; and there is no way of controlling inflation without having proper control of monetary conditions.

Does my right hon. Friend agree that a 1 per cent. cut in interest rates would improve the competitiveness of British industry to the extent of £250 million in a year? Does he further agree that if we could achieve a 1 per cent. cut in labour costs the benefits to British industry would exceed £1,000 million a year?

I agree with my hon. Friend's comparison. Indeed, I recall drawing that comparison myself on an earlier occasion, but it certainly bears repetition. His remarks point to an important problem in our economy— the high rate of growth in labour costs per unit of output in this country compared with that of our main competitors overseas.

asked the Chancellor of the Exchequer when he next intends to meet the National Economic Development Council to discuss the management of the economy.

My right hon. Friend will chair the meeting of the NEDC on 25 September next.

Will the Chancellor tell the National Economic Development Council that the Government have abandoned manufacturing industry, thereby abandoning regions such as the north of England, Scotland, the midlands, Wales and Northern Ireland, all of which have traditionally depended on that industry? When will the Government take seriously the plight of the unemployed in those areas?

My right hon. Friend will give no such message to the NEDC, because it would be totally inaccurate. For example, I remind the House that the investment survey of the Department of Trade and Industry shows that there will be a 10 per cent. increase in manufacturing investment in 1985.

A central feature of economic management that has always been required by the medium-term financial strategy has been that the PSBR should represent an ever-falling proportion of GDP. When our right hon. Friend the Chancellor next meets the National Economic Development Council, will he explain both to it and to the country why we now have a PSBR that is proportionately among the lowest of any industrial country, combined with an interest rate structure that is double that of most of our industrial competitors?

As a matter of fact, my hon. Friend should note that the German deficit as a proportion of GDP is lower than ours. Their industrial performance—and it gives me no pleasure to say so—is also rather better than ours.

asked the Chancellor of the Exchequer what representations he has received from the Confederation of British Industry in 1985 on the United Kingdom joining the European exchange rate mechanism.

The CBI has stated that its present view is that the United Kingdom should join the exchange rate mechanism of the European monetary system.

Does my hon. Friend agree that our excellent export performance can be improved only if business men believe that we have stable interest rates, particularly in relation to our European partners? Does he also agree that one way of achieving stable exchange rates is for Britain to announce at an early moment that we will join the exchange rate mechanism?

My right hon. Friend the Chancellor explained a while ago that the Government's policy is to keep the question of membership of the EMS under review and that we have not judged that circumstances are right for us to join. My hon. Friend referred to both interest and exchange rates. The greater the stability with one, the greater the likelihood of instability with the other.

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

This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. Following my duties in the House, I shall be leaving for a brief visit to Washington.

In view of what happened at the trials of mineworkers in Sheffield recently, and in view of the right hon. Lady's statement that it would be better to go down in history as a compassionate lady rather than as the iron lady, should she not use her good offices now to persuade the National Coal Board to use the board's time-tested, time-tried and time-trusted conciliation and consultation machinery, which dealt with similar cases prior to the

I believe that we have plenty of machinery for the Coal Board to deal with colliery closures or with appeals against dismissals, as the hon. Gentleman is well aware. With regard to his earlier remark, one sometimes needs a touch of steel. There is nothing wrong with that. Sometimes one needs a good deal of compassion, and there is nothing wrong with that either.

Is my right hon. Friend aware that tomorrow, while the media of Bristol are occupied with the Queen's visit, the Secretary of State for the Environment will be announcing his decision on the Avon county structure plan? This decision is not likely to be acceptable to the people of the county of Avon, and especially to my constituents. Will my right hon. Friend instruct her Ministers to listen, and perhaps set an example herself by listening, with much greater care to the views of her supporters? Otherwise, she will not have so many of them.

I know that my hon. Friend feels strongly about the Avon structure plan, and also about certain matters of planning and development. I think that he and my colleagues will be the first to understand that it is difficult to strike a balance between those who do not wish there to be much more planning permission in a particular area, and those who wish to make provision for more jobs and more housing for certain purposes. My right hon. Friend the Secretary of State will have to strike that balance, and I hope that my hon. Friend will be satisfied with what he does when the announcement is made.

While the Prime Minister is in America, will she tell Vice President Bush why we, unlike the United States, have not withdrawn our ambassador from South Africa? Will she tell him why we, unlike the Congress and Senate of the United States, have not attempted to ban new investment in that apartheid regime?

While these events are taking place in South Africa, it is important that we have first hand reviews of them from our ambassador there. We cart carry out a considerable duty in doing that.

"Many are presently under consideration with disinvestment and sanctions much to the fore. Campaigns and such actions have indeed reached tidal wave proportions in the United States of America. If I thought that these would work, they would have my unconditional support."

"Not only do I not believe these campaigns would be effective; I believe they would be counter-productive."

At first hearing that seems like the feeblest sort of excuse, but I have no doubt that the Prime Minister believes her answer, because she is wholly incapable of understanding the importance of giving a moral lead on this or any other matter.

I do not think that the right hon. Gentleman could, likewise, accuse Mrs. Helen Suzman of failing to give a moral lead. She was very clear in the advice that she gave. The Government believe that it is correct, and that sanctions would hit the black population of South Africa very badly and, as Mrs. Suzman said, be counter-productive. That is the view that we shall continue to hold.

Will my right hon. Friend note with satisfaction that last year this country gave £95 million for famine relief aid, without reducing other aid programmes? Nevertheless, does she agree that our long-term aid programme is for development, and will she say that she will not allow that programme to suffer?

My hon. Friend is correct. The greater part of the aid programme goes to capital development and is tied to jobs in this country. I believe that most people in the House would agree with that. We also give a considerable amount to the poorer countries. Nevertheless, a considerable fund is set aside for disaster relief, and there is a contingency fund. I believe that we have very good arrangements for aid. The amount of aid that we give, coupled with the amount that goes privately and with private investment, gives this country an excellent record on its all-round aid programme.

When the Government Chief Whip on Tuesday night offered the prospect of the Prime Minister's resignation, did he do so with, or without, her authority?

I have to disappoint the right hon. Gentleman. I am here, and will remain here. I am delighted to suffer attacks from the right hon. Gentleman. It means that I am usually right.

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

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

Before the Prime Minister leaves this afternoon to address the Capitalist Internationale, will she comment on today's report on the inquiry into British housing, which specifically criticises the Government's single-minded emphasis on owner-occupation as having certain dangers? [HON. MEMBERS: "Reading".] Does she not recognise that it is at least true for working-class families in areas such as Coventry and Liverpool, and for others whose councils' funding will be cut later this afternoon? Before the Prime Minister leaves the country, will she give a guarantee that she will meet the wives and families of Liverpool councillors, who are in the House this afternoon and who handed in such a request to No. 10 Downing street at 2 o'clock?

Before I leave this afternoon I shall be happy to respond to the hon. Gentleman by giving some of our record on housing. Since May 1979, more than 450,000 local authority and new town dwellings have been renovated — a higher number than in previous years. Secondly, 50 per cent. more homes were renovated with the help of grants between 1979 and 1984 than in the previous five years. Thirdly, during our time the dwelling stock has risen by 1·1 million houses, and 1·25 million new homes have been built since 1979. I can go on longer if the hon. Gentleman wishes me to do so.

Will my right hon. Friend take this opportunity to confirm that the Government have no intention of tampering with the tax relief given on mortgage interest payments?

I am happy to repeat what I have frequently said from this Dispatch Box and shall be saying many times in the future. So long as I am here, tax relief on mortgages will continue.

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

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

In view of the opposition in Scotland to the sale of the Trustee Savings bank in Scotland, and in the light of the litigation before the Court of Session, will the Prime Minister give a categorical undertaking to the House that no legislation in this place will pre-empt or stultify the findings of the Scottish court?

As the right hon. Gentleman knows, the findings of the Scottish court must be obeyed. If the House wished to bring forward any further legislation, that would be a matter for the House.

Is my right hon. Friend aware that out of about 4,500 people in my constituency who are claiming unemployment benefit, only 418, fewer than one in 10, have bothered to register their skills with the jobcentre, where more than 800 vacancies are available? Will she discuss with our right hon. Friend the Secretary of State for Employment the advisability of reintroducing the registration of the unemployed at jobcentres, especially in areas such as my constituency of Slough, where there are serious skill shortages?

I am very much aware of the position in my hon. Friend's constituency, where, although there are considerable numbers of unemployed, there are, nevertheless, considerable skill shortages. We are considering how best to deal with this matter and at present it is not our intention to require registration at jobcentres. One of the problems is that many of the jobs which are available are not registered at jobcentres, as employers prefer to fill them direct. However, we are reviewing the whole matter and I am grateful for my hon. Friend's views.

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

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

Before the Prime Minister leaves the country today, will she reflect on the fact that the majority of my constituents hope that she will never come back?

I hope that they will be disappointed, but I cannot believe that the hon. Lady would necessarily say that of the majority of her constituents, who, I believe, would relish political debate.

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

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

With regard to the United Kingdom's relationship with the Turkish Government, I wonder whether my right hon. Friend, notwithstanding the disappointment that we had when we failed to get the contract for the Bosphoros bridge, will acknowledge that a letter sent to her by the Prime Minister of Turkey shows that there is tremendous trade potential over a number of projects? Would my right hon. Friend care to share with the House the view that tremendous business opportunities exist between this country and Turkey?

As I think my hon. Friend is aware, exports to Turkey rose last year and continued to rise in the first five to six months of this year. We believe that there are good export opportunities and we are, therefore, keeping under review the amount of medium-term credit.

Is the Prime Minister aware that the minutes of the report of the Foreign Affairs Committee yesterday, and the events surrounding the weekend of 1 and 2 May 1982, show that some members of the Committee prevented others from putting questions to her in writing? Will she now answer one of them, namely, what was the purpose and object of the second visit of the then Foreign Secretary, the right hon. Member for Cambridgeshire, South-East (Mr. Pym), to Washington and New York over the period of that second fateful weekend?

I have given very full answers on this matter in the past. I have nothing more to add except to say that we debated the matter on 18 February 1985 when the House voted by 351 votes to nil

"That this House recognises that the sinking of the General Belgrano was a necessary and legitimate action in the Falklands Campaign; and agrees that the protection of our Armed Forces must be the prime consideration in determining how far matters involving national security and the conduct of military operations can be disclosed."—[Official Report, 18 February 1985; Vol. 73, c. 737.]