asked the Chancellor of the Exchequer if he will set up a public inquiry into the Johnson Matthey banking affair.

No. The City of London police announced this morning that its investigations had discovered evidence of fraud upon JMB in 1981, and a fraud investigation group has accordingly been set up.

Given this morning's developments, and given what the Bank of England, the Director of Public Prosecutions and the Attorney-General knew, why did it take Ministers from October 1984 until July 1985 to call in the fraud squad? Why were they so tardy?

It is not for Ministers to call in the fraud squad. I remind the hon. Gentleman of what my right hon. Friend the Chancellor of the Exchequer said in July when he made the announcement that a preliminary police investigation was to take place. He said that there was not, strictly speaking, prima facie evidence of fraud, even at that stage, although deficiencies of documentation created sufficient suspicion.

Is my hon. Friend aware that criticism of this wretched banking company is not confined to the Opposition Benches? Is he aware that many of us deeply deplore the great worry caused to many decent people working in the Johnson Matthey company as a whole? To preserve the good name of the City, will he ensure that the matter is pursued with the utmost rigour?

I believe that the police, and the fraud investigation group that is now in being, will pursue the matter with the utmost vigour, but I am glad that my hon. Friend has had the opportunity to say what he has said.

Does the Minister believe that the public have the right to express some outrage at the fact that offences in the City rarely appear to result in anyone going to gaol, whereas people are often successfully prosecuted for minor offences in their own community?

I take the hon. Gentleman's point. It is an unfortunate fact that the standard of evidence required to obtain conviction in cases of financial fraud has to be very high. My hon. Friend the Parliamentary Under-Secretary of State for Trade and Industry commented on that fact in a speech yesterday. As the hon. Gentleman will know, Lord Roskill has, with his committee, been charged with considering the conduct of fraud trials.

Instead of constantly demanding inquiries into these matters, should we not be concentrating on the need to give fraud investigators much more power to obtain the evidence to bring to book the people concerned? Will the Government ensure that such powers are introduced in the Financial Services Bill?

I note what my hon. Friend said. The Financial Services Bill is not a matter for the Treasury, but I am sure that note will be taken of what my hon. Friend said. Indeed, my hon. Friend the Parliamentary Under-Secretary said yesterday that further powers would be contained in the Financial Services Bills to assist investigators.

Does the hon. Gentleman accept that all hon. Members will be pleased with today's announcement, especially if it leads to criminals being brought to book, and allows me to get on next week with investigating the Lloyd's scandal? Should not the Chancellor of the Exchequer come to the Dispatch Box to explain how he said in statements on 20 June and 17 July this year that there was no prima facie evidence of fraud, yet parliamentary answers to me in the past two weeks have shown conclusively that the Attorney-General and the Bank of England could have advised him that those statements were untrue?

I am glad to hear the hon. Gentleman's welcome for today's announcement. The statements in June and July by my right hon. Friend the Chancellor were absolutely true. Had prima facie evidence of fraud been available earlier, no doubt the whole process could have begun at that time.

Does my hon. Friend accept that calls for a public inquiry have always been inappropriate, because an inquiry would have precluded the institution of criminal proceedings? Will my hon. Friend do what he can to ensure that the City of London fraud squad has sufficient resources to investigate frauds of this kind properly?

The Government fully recognise that adequate resources are needed for the fraud investigation group. The proper way of investigating criminal offences is investigation through the police and not through a public inquiry—a point that was made clear not long ago by my hon. and learned Friend the Solicitor-General.

Should not the Chancellor of the Exchequer answer these questions? Is he evading giving these answers? He knows that full responsibility at the end of the day should fall on him because as far back as 23 October 1984 and 11 November 1984, when I specifically called for the fraud squad to come in, he and the Attorney-General were dodging giving the answers. Is it not a scandal that the parent company, Johnson Matthey plc, has been able today to announce a dividend of £700,000 for a few of its shareholders, but it refused to bear the burden of its errant child, Johnson Matthey Bankers? The parent company allowed the brat, Johnson Matthey Bankers, to make money and to become involved in fraud, yet it got off scot free. Is it not time that the Chancellor resigned?

Order. That was too long.

The Johnson Matthey group had to inject a large sum—£50 million—at the time of the rescue. It would not be in its present condition if it, in turn, had not had a very large injection of cash by its own major shareholder, Charter Consolidated.

That is right: Charter Consolidated.

The hon. Gentleman may not like the answer, but it is necessary to put the record straight. As for the allegations against my right hon. Friend, it behoved anyone at any stage in this story to make available for investigation any available evidence. Random allegations by the hon. Members for Hackney, South and Shoreditch (Mr. Sedgemore) and for Bolsover (Mr. Skinner) do not amount to evidence.

Does my hon. Friend accept that many of us are concerned about the Johnson Matthey affair, especially about the handling of the matter by the Bank of England? However, it is an abuse of the privilege of the House for hon. Members to make insinuations in the House, whether about colleagues in the House or persons outside, when they have every opportunity to take their evidence to the appropriate authorities.

I hope that Opposition Members will note what my hon. Friend has said about their conduct.

Is the hon. Gentleman aware that the Government cannot be let off the hook as easily as that? Does not today's news underline the need for a full public inquiry, for which I called as far back as July and which the Prime Minister refused five days before the Chancellor's announcement of a fraud investigation? Is the hon. Gentleman aware that what is at stake is not just the issue of fraud, but, more important, the gross incompetence of the Bank of England in its supervision of the Johnson Matthey Bank and gross negligence by that bank? Will the hon. Gentleman ensure that a public inquiry is instituted into those aspects?

Had the hon. Lady been listening earlier, she would have heard me answer her point by saying that the appropriate method for investigating criminal offences in this country is a police investigation, not a public inquiry. The hon. Lady can make any allegations that she cares to make about the behaviour and conduct of the Bank of England, but there is no obligation upon anyone else to do so.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

asked the Chancellor of the Exchequer which factors he takes into account in calculating the extent to which public expenditure is to be funded by taxation on tobacco products.

Many factors contribute to the Chancellor's judgment at Budget time in relation both to the overall amount to be raised in taxation and to the contribution to that of individual taxes, such as those on tobacco.

Is the Minister aware that the dumping of German cigarettes on the British market reduces the amount of revenue that is available to the Exchequer and also brings cigarettes within the price range of young people, to which both the Government and the British industry say they are opposed? Will the Minister say what steps the Government intend to take to prevent this abuse, or tell the House what alternative proposals he has in mind for raising revenue other than by the tax on tobacco?

The hon. Gentleman's latter point must be a matter for the Chancellor of the Exchequer at each Budget time. As for the hon. Gentleman's first point, whether or not there is evidence of dumping is a matter for my right hon. Friend the Secretary of State for Trade and Industry. I am informed that there is no such evidence and that imported products are subject to the same excise duties.

Has my right hon. Friend had the opportunity to examine the statistics in the document entitled "The Big Kill", which was issued a couple of days ago by the British Medical Association? Does he agree that an increase in the duty on tobacco products, even if it produced a lower revenue for the Exchequer, would be money well spent on reducing disease and death and that it would reduce the £111 million spent each year by the National Health Service on dealing with smoking-related diseases?

The health factor is one among several that my right hon. Friend the Chancellor of the Exchequer takes into account at each Budget time. However, I think my hon. Friend knows that the consumption of cigarettes has declined during the last five years by about 20 per cent. I guess that it is the perception of consumers about the health risk that has caused a decline in consumption.

asked the Chancellor of the Exchequer what are the current estimated savings per year from computerising the Inland Revenue; and if he will make a statement.

Major computerisation projects should produce staff savings over the next three years of 350 by April 1986, a further 1,900 by April 1987 and another 2,200 by April 1988, making a total of 4,450.

Can my hon. Friend say whether this programme is running to schedule and when we can expect completion in the north-west?

My hon. Friend will be delighted to know—as, I am sure, will the whole House—that the computerisation programme is running to time and to cost. It is a good illustration of the excellent co-operation between the public sector and ICL on this contract. The expectation is that the computerisation programme in the north-west will be completed in August 1987.

asked the Chancellor of the Exchequer what information he has as to how the level of income tax threshold for the single man in the United Kingdom compares with equivalent thresholds in other developed countries.

The United Kingdom tax threshold for a single person is close to the average for European Community and OECD countries as a whole.

I am grateful to my hon. Friend for his answer, but is it not a fact that in the United Kingdom people start to pay tax at a very much higher basic rate than is the case in other countries, such as the United States, where they begin at 11 per cent.? Does not the combination of high basic rates of tax and means-tested benefits result in a very high effective rate of tax on the low-paid, which results in increased unemployment? Will my hon. Friends therefore concentrate on cutting rates, rather than on raising thresholds, to deal with this problem?

My hon. Friend is right to draw the attention of the House to the fact that thresholds are only part of the story. Relative earnings are a key factor. My hon. Friend is also right to draw our attention to the starting rate. Hon. Members will be interested to know that, among our main competitor countries, the United States and Japan have a starting rate of 11 per cent. and France starts at 10 per cent., while our starting rate is 30 per cent. That shows that there is a clear difference in this area. That is unlike our average position on thresholds, where we are the second highest in the OECD.

Can the hon. Gentleman assure the House that he will not be preoccupied only with single men when he considers tax thresholds, and that he will also take account of the problems of women and married couples? They have grave problems as well, especially those who are on low pay, and therefore need more help than those in the upper brackets.

I note what the right hon. Gentleman says. He will be aware that I was asked specifically about single men. I know that he will be delighted with the Government's record over the past three years of raising the tax thresholds by 20 per cent.

Does my hon. Friend agree that single men start paying tax at 30 per cent. as soon as they earn £42·40 a week? Does he also agree that, as the national average wage is now well over £170 a week, this threshold is derisory and that the first priority for any tax cuts must be an increase in the threshold?

I know that my right hon. Friend the Chancellor is listening with great care and will consider that point when drawing up the Budget for 1986. The point that my hon. Friend was seeking to make was that both thresholds and rates can be a deterrent to the work ethic.

Before the Financial Secretary gets carried away by the prospect of tax cuts, will he admit that were it not for the sale of £5,000 million worth of assets and special assets, as well as other sales, last year alone, the Government would be talking not about cutting taxes but about raising them?

The hon. Gentleman is aware that the Government's ability or inability to raise taxation is a reflection of their overall ability to run a successful economy.

asked the Chancellor of the Exchequer which economic indicators confirm his assessment of the progress of the economy.

Inflation is currently 5·4 per cent. and will continue to fall. Growth of national output is likely to be 3½ per cent. this year and is forecast to reach a further 3 per cent. next year. The number of people in work has risen by some 600,000 last year and is expected to go on rising.

When will the Chancellor stop deceiving the British public about the economy? Does he not agree that, compared with 1979 when the Conservatives took over, output and employment are down, and the only thing that is up is unemployment?

The hon. Gentleman has obviously forgotten that during the earlier period of this Government's office there was the worst world recession since the 1930s. Since then, we have had the strongest recovery that the nation has had since the first oil shock. Living standards are at an all-time record level and so are manufacturing exports and productivity, national output and investment. Those are facts.

Will my right hon. Friend take the opportunity to spell out to the House and the country the extent to which the excellent prospects for inflation and improving prospects for employment would be vulnerable to another take off of unit pay costs?

My hon. Friend is right. Among the threats to our economic success, one of the biggest is an excessive rise in unit labour costs. As it is, unit labour costs are rising more rapidly than those of our major competitors, some of which have had a slight fall in such costs.

Has the Chancellor seen the latest quarterly survey from the Manchester chamber of commerce and industry? Is he aware that it points out that there will be an especially sharp fall in manufactured exports as a result of the high exchange rate? The Manchester chamber of commerce and industry knows little about monetary matters and other such factors, but it does know something about the state of its members' order books. Will the Chancellor listen to what is happening to industry, rather than listening too closely, as he does, to what is happening in the City of London?

I listen closely to the voice of industry and to what the CBI has to say. The right hon. Gentleman will know that the most recent CBI survey showed a further growth in manufacturing exports and manufacturing output in the coming year.

Does my right hon. Friend accept that with the entry of the main player—the United States—the group of five's concerted action in the foreign exchange markets was apparently a success? Will he now agree to persuade the United States to lead the group of five again in concerted action, this time to bring down US dollar and other major currency interest rates?

My hon. Friend is right in saying that the shift in the United States policy on intervention in the foreign currency markets enabled the Plaza accord in September to be effective. I assure my hon. Friend that the accord is still in being.

Will the right hon. Gentleman tell us what is the real rate of growth, defined by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in his speech yesterday, and what he thinks of that real statement to the country?

The right hon. Gentleman is correct in that over the period that the Government have been in office the average rate of growth has been slightly less than it was during the time the Labour Government, in which he served, were in office. However, if one leaves out North sea oil, the rate of growth is the same. The rate of growth under this Government has been as great as that under the Labour Government, despite the fact that we have had to undergo the worst world recession since the 1930s. Since that time, we have had the strongest recovery at any time since the first oil shock.

May I ask my right hon. Friend to ignore the advice that he has received from ex-Prime Ministers and others and to use all the funds that he can find to raise tax thresholds? Is he aware that it is scandalous that we are taking £5 from the single pensioner with an income of £70 per week and giving over £100 tax free to 16-year-olds who deliberately make themselves homeless?

My hon. Friend is right to point to the importance of getting income tax down. The Government have done that and we intend to continue to do so when the opportunity arises. However, it is clear that if, by any mischance, there were to be a Labour Government, income tax would be increased very substantially.

If the Chancellor is as concerned about wage costs as he said a moment ago, why did the Conservative party's most recent party political broadcast boast that during its six years in office wages had risen more quickly than prices?

Because they have—very substantially indeed. That is why.

asked the Chancellor of the Exchequer what is his estimate of the proportion of national income represented by the black economy.

asked the Chancellor of the Exchequer how much revenue in personal taxation and value added tax is estimated to be lost through the black economy.

It is not possible to form any reliable estimate of the size of the black economy or, therefore, of the consequential revenue loss in personal taxation as outside estimates of its size vary very widely from 2 per cent. to 16 per cent. of GDP.

Does my hon. Friend agree that there will be a sizeable black economy for as long as personal taxation remains as high as it is and the bureaucratic impediments remain a numerous as they are? What hope can he offer that taxation will soon come down to the levels that he referred to in answer to a previous question, enjoyed by other countries? What progress is being made in amending the sixth directive on VAT within the Community to raise thresholds for registration?

I shall try to concentrate on one of the questions. I recognise, as does my hon. Friend, that the reasons for the black economy are complex and uncertain and involve many social factors, but I do not think that any hon. Member would deny that a history of high taxation and high levels of bureaucracy have obviously been factors in encouraging the black economy. The degree to which we can reduce the levels of taxation and remove the burden of regulation on business will play a part in reducing the black economy.

What can my hon. Friend do to remove some of the bureaucratic burdens, particularly in connection with VAT, which at present drive people into the black economy? Has he seen the survey published in The Times of 28 October, which shows not only the party political allegiance of those in the black economy, but that members of the Social Democratic and Liberal parties are among those most likely to be on the fiddle?

My hon. Friend will remember the White Paper entitled "Lifting the Burden", which I had the privilege of introducing in the House in July. He will know of the commitment of my noble Friend the Secretary of State for Employment and that of the Government to reducing the burdens.

Does the Minister regard fraud in the City as part of the black economy, or what colour is it?

The Government regard all fraud, of whatever character, as completely unacceptable.

Why should more civil servants be involved in pursuing social security fraud than Inland Revenue fraud?

The pursuit of fraud is not simply a reflection of the numbers involved. Despite reductions in the number of Inland Revenue staff over the past six years, there has been an increased commitment to Inland Revenue staff in that area. Specifically, 920 were committed to that work in November 1983. The key to the detection of fraud and evasion is better targeting and greater cost-effectiveness. [Interruption.] If the hon. Gentleman will listen for a moment, he will be happy to hear that the yield from investigating evasion went up from £111 million in 1979 to £371 million in 1983–84.

Would my hon. Friend care to estimate the effect on the size of the black economy of the SDP proposal to increase the basic rate to 39p, if it were ever to be implemented?

It is clear from an earlier response that as our starting rate is so much higher than that of our competitor countries, it must have a significant impact as a deterrent to honest declaration of income.

Does the Minister agree that a great deal of the black economy is in the building industry, especially building contracts of small value? Does he further agree that that is caused by the steep rate of VAT on home improvements and extensions? Does he accept that VAT of 15 per cent. on such things is a retrogressive imposition, especially when the construction industry is flat on the floor in so many such places?

I cannot begin to believe that one could make such a subjective and negative judgment about the building industry. It is difficult to understand why, when the rate of VAT is exactly the same for that industry as for others, that should be supposed to encourage evasion.

Does the Chancellor of the Exchequer appreciate that if those who employ a person did not have to pay income tax out of already taxed income on behalf of that employee, the number of people tempted into the black economy would be vastly reduced?

I have the distinct impression that that is one of our first Budget submissions, and I am sure that my right hon. Friend the Chancellor will have heard it.

asked the Chancellor of the Exchequer what criteria he uses in forecasting the level of inflation.

The details of the inflation forecast are set out in the autumn statement.

Has the Chancellor seen the report of the Institute of Fiscal Studies, which shows that pensioners' cost of living is going up more than the retail prices index, thereby pushing down pensioners' buying power? Since the Government have allowed for only a 1 per cent.—1p in the pound—increase for pensioners next year, what action will he take to remedy that?

The increase that pensioners get in the next uprating will be geared precisely to the increase in the retail prices index. If that increase is low, the whole nation, particularly pensioners, should welcome it. Pensioners had an increase of 7 per cent. this month. The pensioner prices index at 5 per cent. is less than the retail prices index at 5·4 per cent.

Will my right hon. Friend direct the attention of Labour Members to a fact that they seem to have a curious amnesia about—that the forecast rate of inflation at 4 per cent. is exactly half the rate of inflation achieved in the best month of the best year of the previous Labour Government?

My hon. Friend is right to point to that contrast. The highest monthly rate of inflation during this Parliament is lower than the lowest monthly rate of inflation in the previous Labour Government. It is extraordinary that Labour Members should wish for a high rate of increase in the pension, because, as that is geared to the RPI, it could only mean a high rate of inflation. Is that what they want?

As this year profits are expected to increase by 28 per cent. and wages by only 7 or 8 per cent. and as since 1981 profits have gone up in total by 96 per cent. and wages by 46 per cent., why does the right hon. Gentleman continue to demand cuts in wages to keep down inflation?

What has that to do with the question?

As my right hon. and hon. Friends point out, that has little to do with the question. Nevertheless, I am happy to answer it if you, Mr. Speaker, are happy that I should do so.

Does my right hon. Friend agree that the combination of low and falling inflation with steady growth and a good level of company profitability offers the most favourable circumstances for creating new jobs?

My hon. Friend is correct. It is that combination that we have secured. It is a prize which has eluded previous Governments and which we intend to continue to secure by continuing with the policies on which we have embarked.

May I get the Government's view, position and policy on wages and inflation clear? A moment ago the Chancellor endorsed the party-political boast that wage settlements were running ahead of inflation. Is he glad about that, and does he want it to continue for the rest of the Government's lifetime?

I am sorry that the right hon. Gentleman has such difficulty in understanding elementary economic facts. Under this Government, growth in living standards generally has risen far more than it did under the previous Labour Government. However, I regret that too much has gone to those in work, as a result of which those out of work have increased in numbers. Therefore, greater restraint by employers in awarding wage increases would lead to more people being in work. However, the total rise in living standards overall is three or four times as great as it was under the previous Labour Government.

asked the Chancellor of the Exchequer what was the trade weighted value of the pound sterling in October 1985 compared with October 1979.

The average value of the sterling index in October 1985 was 80·4 compared with 88·0 in October 1979.

Is that not a further indictment of the Government's incompetence and a denial of all the promises made in 1979? Does it not underline the categorical statement made by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) that the country is now in a parlous state and that, if the trend continues, the pound will soon become confetti?

I am glad to note the hon. Gentleman's interest in these matters, but I have to tell him that the main reason for the change has been a sharp increase in the dollar against all currencies over that period which has not fully unwound, despite recent events. It would be kinder to my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) if I did not comment on the economic policies during his tenure of office. However, I can assure the hon. Gentleman that there is no chance under this Government of the pound becoming confetti money.

Should we assume from the previous supplementary question that the Labour party wishes to push up the exchange rate and thereby bankrupt British exporters?

It is difficult to discern the Opposition's policy on the exchange rate. Half the time they want a higher exchange rate, and the other half they want a lower exchange rate. Half the time they complain about the borrowing requirement being too high, and the other half they complain about it being too low. It would be instructive if, at some stage, the Opposition cleared their mind and said what their policy was.

asked the Chancellor of the Exchequer what was the cost to his Department of the increase in the age allowance for the last financial year for which figures are available.

The increases announced in the 1985 Budget will cost about £160 million in a full year.

Does my hon. Friend accept that increases in the age allowance are an excellent way of helping millions of pensioners? Will he urge the Chancellor to ensure in next April's Budget that the age allowance is increased at least in line with personal allowances?

My hon. Friend has a long and successful record of trying to ensure real increases for the elderly, especially pensioners, so he will be pleased to hear me remind the House that since 1978–79 we have increased the threshold for the elderly by 10 per cent. in real terms. The threshold for an elderly married couple is the highest in real terms since the second world war. That is in startling contrast to the position under the Labour Government, when the tax threshold for the elderly fell in real terms.

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

During the 12 months to October 1985, the retail prices index increased by 5·4 per cent.

Does my right hon. Friend agree that some pay increases in the private sector, which have been excessive and not linked to productivity, will not only increase inflation but will affect our efficiency and productivity and the drive for jobs?

I agree with my hon. Friend that if private employers had a firmer grip on their costs, especially wage costs, it would benefit their companies, the ecomony, and, above all, the creation of employment. I was glad to hear the CBI preach that message loud and clear.

Is not one of the most worrying aspects of inflation the fact that, according to the Government's figures, inflation is running at 5·4 per cent., yet interest rates remain in double figures? In some markets, 13 and 14 per cent. rates are obtainable. Is not the real inflation rate the difference between the Government's figure and real interest rates? That is the problem that the Government must handle. During their tenure of office that gap has been twice as large as it was under the Labour Government.

It is perfectly true that although the Government have succeeded in reducing inflation to a low rate, which is coming down even further, under the Labour Government inflation went up so high that real interest rates were negative. That is nothing to be proud of.

Does my right hon. Friend agree that under SDP policies—the SDP is not represented in the Chamber this afternoon—the current rate of inflation would increase significantly? If we reflated, we would not reach a maximum rate of inflation of 7½ per cent., as the SDP forecasts, but a rate substantially greater than that.

My hon. Friend is right. The chief economic spokesman for the SDP said recently that an increase in inflation to 7½ per cent. would be a good idea. My hon. Friend is right to say that it would not stop there, but would go much higher. The only question that I cannot answer is: where are SDP Members today?

It is abundantly clear that the Government have not solved the inflation problem. Is the Chancellor aware that his 1979 pound is now worth 53p? He seems to believe in mini-Budgets, mini-wages and mini-money.

Inflation has not yet been reduced to zero, but I am glad to say that we are heading gradually in that direction.

asked the Chancellor of the Exchequer if he will list the individual nationalised industries and their respective assets that combine to produce the £90 billion referred to in his speech on the address, Official Report 13 November, column 585.

The electricity supply, gas and water industries account for about four fifths of nationalised industry aggregate current cost net asset values. We shall continue to return businesses to the private sector in accordance with our stated and highly beneficial policy.

How much of the £90 billion does the Minister regard as saleable, and for how much?

It has already been made clear in the autumn statement that over the next three years we estimate the proceeds of privatisation to be £4¾ billion each year. We have already announced plans for British Gas, British Airways and the British Airports Authority. It is clear that these policies are sensible and right, for a wide variety of reasons.

asked the Prime Minister if she will list her official engagements for Thursday 28 November.

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.

Does my right hon. Friend agree that far too little publicity is given to northern industrial towns, such as Stockport, where rates are kept down, free enterprise is encouraged and new industry, commerce and jobs are attracted, and that far too much publicity is given to northern citadels of Socialism, such as Liverpool, which do little else but stand around with arms outstretched for Government handouts?

Yes, Sir. I warmly congratulate Stockport on its splendid efforts and the magnificent cooperation between the metropolitan borough council, the chamber of commerce and all the organisations concerned with getting more small and more new business into the area. They have been very successful.

Does the Prime Minister realise that our closest EEC partners and our friends in the Commonwealth supported a resolution at the United Nations calling for negotiations on the future of the Falklands? Does she accept that that was because Argentina made a major concession by dropping its insistence on discussions on sovereignty and instead substituted

"all aspects of the future of the Falklands"?

Anyone who thinks that a motion that contains the phrase

"negotiations on all aspects of the future of the Falklands"

asked the Prime Minister if she will list her official engagements for Thursday 28 November 1985.

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

Will my right hon. Friend confirm that the Government will not seek, nor encourage anyone else, to set obstacles in the way of the Ulster Unionists who wish to resign their seats to provide an opportunity for the people of Northern Ireland to express their opinion on the Anglo-Irish Agreement?

I can reassure my hon. Friend that my right hon. Friend the Chancellor of the Exchequer will follow the habit and custom of his predecessors and accede to any relevant request that he may receive.

Is the Prime Minister aware that during the Falklands war—

The right hon. Gentleman has only just walked into the Chamber.

The Prime Minister has only just walked in, I might add—[Interruption.]

Order. I call the right hon. Member for Plymouth, Devonport (Dr. Owen).

Is the Prime Minister aware that during the war against the Argentines in the Falklands she used the United Nations charter as the reason why we resisted the aggression of the Argentines? Is she further aware that that same United Nations charter imposes an obligation on Britain, as on all other countries, to try to settle their disputes by the use of negotiations—

Surrender!

Negotiation does not mean surrender. It is perfectly possible to enter into negotiations on all aspects while reserving our position on sovereignty.

The right hon. Gentleman will be aware that we have tried to negotiate with the Argentines on other matters. Indeed, we have tried to restore normal commercial relations, but they have refused. Nevertheless, we have permitted imports into this country from Argentina. Thus, there is nothing about which to criticise this Government.

asked the Prime Minister if she will list her official engagements for Thursday 28 November.

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

Will my right hon. Friend find time today to reflect on the sense of despair and outrage that will be felt by the ratepayers of Southwark when they learn that Southwark council has allowed rent arrears to rise to a record £23 million?

I agree with my hon. Friend that such high arrears are absolutely inexcusable, especially in view of the advice recently given by the Audit Commission. I hope that councils with such large arrears will soon take steps to diminish them.

The Gas Bill is published today—[Interruption.] Is it not now clear that the Prime Minister, having frittered away the bonus of North Sea oil, is about to do the same with a great national asset that has provided the British people with a steady income and excellent service for many years? Why is the Prime Minister still insisting on giving away the public good of all for the sake of the private profit of a few?

If the right hon. Gentleman has actually been able to read all of the Gas Bill today, I congratulate him. Privatisation is this Government's policy. The assets will be sold to those who wish to purchase them. In particular, the employees will have an excellent chance to purchase shares—a chance that they have never had under any previous Government.

The Prime Minister knows as well as I do that the sell-offs that she has undertaken and the one that she now proposes will not bring people's capitalism. Only institutions and rich individuals have made a substantial killing. If the right hon. Lady is so concerned about the general welfare, will she put the interests of 16 million gas users before the interests of a small number of shareholders, whatever their current status?

Most industries that have been denationalised have done far better under privatisation, and I believe that this one will do so. I believe in employees having a chance to have a stake in their business. I know that the right hon. Gentleman cannot stand it.

asked the Prime Minister if she will list her official engagements for Thursday 28 November.

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

During her busy day, will my right hon. Friend have time to look at The Observer for last Sunday, and particularly at the reference to a secret report to the national executive of the Labour party which expressed deep gloom at Labour's prospects of winning the next general election? Is that not proof, if proof were needed, that the successes—

Order. The Prime Minister may be asked questions only on matters for which she has responsibility.

I was coming to that, Mr. Speaker. Does my right hon. Friend agree that that shows, if it needed showing, that even in the Labour party there are people, such as their policy director, who know that the Conservatives will win the next general election?

I welcome any conversion to realism and any conversion to the knowledge that this Government's policies, which are keeping down inflation, creating jobs, standing up to strikes and to places such as Liverpool are producing the right results.

Did the Prime Minister hear about the military style coup that took place in the House last night, when members of the Scottish Back-Bench committee were ousted—or at least the chairman, the hon. Member for Dumfries (Sir H. Monro) was ousted—by those right hon. and hon. elements from south of the border who were brought in as Lobby fodder—

Order. Again, that is not a matter for which the Prime Minister is responsible.

In that case, may I ask whether the Prime Minister is aware that such antics are regarded by Scottish voters as demonstrating a lack of democracy? Will the Government take steps to stop it?

I think that that is more a matter for the Leader of the House than for me.

Will my right hon. Friend remind the House that the institutional investor who has put money into British Telecom and who may invest in British Gas is using the savings of millions of small people who depend on that investment for their pensions?

My hon. Friend will be aware that we firmly believe in the privatisation programme. It brings benefits to employees and investors, and a good income to those who invest in such companies.

Will the Prime Minister answer the question that she failed to answer on Tuesday: when will the effective cut in the real value of child benefit be restored?

The right hon. Gentleman knows the increases that have taken place over the whole social security system. He must wait until a White Paper is published to see what any future plans contain.

If the hoped for improvement in cross-border security does not result in good time from the Hillsborough agreement, will the Government allow the agreement to lapse and pursue friendly and close relations with the Irish Republic through diplomatic channels and the Anglo-Irish Intergovernmental Council which my right hon. Friend did so much to set up?

We earnestly hope that there will be an improvement in cross-border co-operation which will lead to an improvement in security in Northern Ireland. My hon. Friend will understand why I say that this agreement must be given a chance to work.

asked the Prime Minister if she will list her official engagements for Thursday 28 November.

I refer the hon. Lady to the answer that I gave some minutes ago.

Has the Prime Minister read the report in today's Daily Mail, which claims that the 4 million unemployed will be able to work on Sundays without loss of unemployment benefit if the Sunday trading laws are changed? Will she give an assurance that, if the laws are changed, she will not change the rules?

I have not read that report, but I do not accept that there are 4 million unemployed—[Interruption.] That figure is constantly being put about, but it is not correct. I hope that the Sunday trading Bill, which has yet to be debated by the other place and this House, will be passed. However, matters concerning any changes to the laws affecting unemployment benefit are the responsibility of my right hon. Friend the Secretary of State for Employment.

Has my right hon. Friend had an opportunity to see the early-day motion on the import of dangerous toys? Will she consider the possibility of placing the onus on importers rather than retailers, so that there can be happiness rather than misery at Christmas?

Yes. Some time ago, warnings used to be issued about certain toys. They have not been issued recently because there was some criticism of them. As my hon. Friend knows, there are certain prohibition orders, but it is for both the importer and the person selling the toy to have regard for its safety.

asked the Prime Minister if she will list her official engagements for Thursday 28 November.

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

Why is it that many months after these affairs took place the case concerning Johnson Matthey Bankers is only now being referred to the DPP? Nothing has been done about insider trading with regard to BT, and nothing has been done about the scandal of the Lloyd's insurance markets. Why does the Prime Minister not realise that, to be effective, the rule of law that applies to the inner cities must apply with equal vigour to the City?

The hon. Gentleman is well aware that matters of fraud are for the police and that matters of prosecution are for the Director of Public Prosecutions. The day that politicians interfere with prosecutions, the rule of law will cease to be upheld.

asked the Prime Minister if she will list her official engagements for Thursday 28 November.

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

Has my right hon. Friend read the speech made by our hon. Friend the Parliamentary Under-Secretary of State for Education and Science on Monday, in which he suggested that there was still a lack of consumer choice in state education? Does she agree that the solution that he proposed—that the market has a role to play in assisting consumers of education to make their choice—was pointed to in "No Turning Back"? Does my right hon. Friend also agree that that pamphlet contains some solutions, to which many Conservative Members look?

Earlier this week I was asked about the pamphlet, and I have read it. My hon. Friend is aware that the House is to consider an Education Bill, which will strengthen the voice of parents in running schools. I share his anxiety about parents not having a sufficient choice of schools. That is a matter to which we must pay earnest attention.