asked the Chancellor of the Exchequer how many representations he has received in pursuit of the restoration of the tax exempt limits for friendly societies.

About 60 letters have been received, nearly all of which have come from one friendly society.

Does my hon. Friend agree that the reduction two years ago in the tax exempt limits has had a most damaging effect upon the traditional social role of the friendly society movement, because the management costs of such modest family protection policies have made them very difficult to sell? Will he urge his right hon. Friend to use his forthcoming Budget to restore the tax exempt limit to the level at which he fixed it in 1980, namely, £2,000?

I have no reason to think that the changes made in the Finance Act 1984 have had any such adverse consequences. However, during the passage of last year's Finance Bill I said that I should be very glad to meet the friendly societies liaison committee to discuss these matters. That statement was followed up by a letter to the committee in July 1985. Only this week have I received its response. It has accepted my invitation to discuss the future, including tax treatment. No doubt the committee will be putting points to me on that occasion.

asked the Chancellor of the Exchequer when Ministers of the Group of Five are due to meet next.

The Finance Ministers of the Group of Five nations meet from time to time.

Will the Chancellor of the Exchequer call for an urgent meeting of the Group of Five and urge that it should follow the lead given by France and Japan in reducing interest rates, which would give a boost to British industry? Will he also discuss with it international debt, which is having a disastrous effect upon the world economy, particularly upon the economies of the developing nations? It is absolutely urgent that such a meeting should be held.

There was a meeting in London, under my chairmanship, only last month at which the likely trend in interest rates and international debt was discussed. There will be further discussions about international debt at the spring meeting in April of the interim committee of the International Monetary Fund. The general view is that as inflation comes down worldwide it will help to reduce interest rates.

Does the Chancellor agree that the important thing is not to discuss problems, but to try to solve them? Will he agree that the main priorities in international co-operation are lower interest rates, high growth and a solution to the problems of international debt. Will he also firmly undertake now not to allow any domestic dogma to stand in the way of international progress?

It is true that the difference between the two sides of the House is that the Opposition discuss problems, but we solve them.

asked the Chancellor of the Exchequer what factors he estimates are currently most likely to determine the exchange rate; and if he will make a statement.

asked the Chancellor of the Exchequer what representations he has received from British industry as to the sterling exchange rate; and if he will make a statement.

In recent weeks the markets have been influenced by the substantial and rapid fall which has taken place in the price of oil.

Is it not interesting that those pundits who have said that we have an oil-based economy have been confounded, in that the fall in oil prices has not been followed by a rise in interest rates, panic on the exchanges or a rundown on reserves? Is that not a matter of congratulation for the Government? As the pundits are now suggesting that my right hon. Friend the Chancellor is still considering reducing direct income tax, will he agree to confound them again by concentrating his mind entirely on raising thresholds instead?

My right hon. Friend the Chancellor listens carefully to all Budget representations which are made to him. I think it is indeed most welcome that there was much less disturbance recently in the markets than many had expected. That is a tribute to the strength of the economy and the sound financial policies of my right hon. Friend.

Is not the reality somewhat different? Is not the fact that we have kept the exchange rate as it has been over the past few months simply a result of historically high levels of interest rates? Have not those interest rates damaged British industry, putting many firms out of business and losing many jobs? Is it not about time that the Government accepted that that is the reality of economic policy?

The reality is that British industry has been doing very well. In fact, exports of manufacturing industry rose by over 8 per cent. last year.

I join those congratulating the Chancellor on the subtle way in which he has sought to influence the complex relationship between oil prices, interest rates and the exchange rate, particularly since the beginning of the year, which would otherwise have been a difficult period. Does my right hon. Friend agree that the relationship between the dollar and sterling is not unsatisfactory, and that for exports the relationship in relation to the deutschmark is better that it was before?

My right hon. Friend's remarks about the handling of financial and monetary matters recently are indeed welcome. On the matter of the relative position of the exchange rate, I think that there were serious imbalances, which have, to a substantial extent, been improved. I particularly welcome the strengthening of the deutschmark and the yen since the Plaza agreement.

The Minister told the House that manufacturing industry had not suffered by over-high exchange rates. Manufacturing industry, particularly in areas traditionally dependent on manufacturing, has suffered crippling effects because of an inability to export, which is shown up in a record manufacturing deficit on the balance of payments. Can he give a guarantee for the future that the pound will now reflect the needs of those parts of the country which depend on the export of manufactured goods?

The current level of the exchange rate undoubtedly gives manufacturing industry important opportunities. I only hope that it will not dissipate those opportunities by failing to control its unit costs, in particular wage costs.

Does my hon. Friend agree that if we were to take a great deal of notice of the Opposition's horrendous expenditure programme, as they foresee in terms of the Budget, that could have an effect on international confidence in our country?

I am sure that international observers are confident that the British people would never be so foolish as to elect a Government with a spendthrift programme of the kind which would involve VAT of 41 per cent. and all the consequent implications for inflation.

Do the Minister's remarks imply that the present relationship of the pound to the dollar and to the deutschmark constitute the Government's present exchange rate target?

I have to remind the hon. Lady, as one frequently has to remind Labour Members, that the Government have no target for the exchange rate.

asked the Chancellor of the Exchequer whether he will make a statement on the effect that falling oil prices have had on the British economy.

The overall effects of falling oil prices on output and inflation are expected to be broadly neutral—if anything, slightly beneficial.

Has the Chancellor recovered sufficiently from the threat to his tax-cutting plans presented by the situation to recognise that it is an opportunity for British manufacturing industry to export, so long as it is not penalised by high interest rates?

I have explained on a number of occasions that there are swings and roundabouts when the oil price falls. One of the things that suffers is the scope for reductions in taxation, and one of the beneficiaries, as the hon. Member has rightly pointed out, as I have done in the past, is industry, particularly manufacturing industry, whose fuel costs are diminished.

Is my right hon. Friend aware that many Conservative Members are becoming increasingly impatient for large tax cuts, and that we hope that the fall in oil prices will not be used as an excuse for not considerably raising tax thresholds? Does he accept that the only real way in which we shall be able to find the elbow room for substantial tax cuts is by reducing over-manning in the public sector, particularly in local government and the Health Service?

I pay tribute to my hon. Friend for the consistent campaign that he has waged over the years for the reduction of overmanning and waste in the public sector. He is right to say that we must always be vigilant. We have achieved a great deal, but there is scope for achieving more, particularly in local government and the Health Service. As for the reduction in the tax burden, he and I are again at one in thinking that it would be highly desirable and beneficial for the British economy and for employment if we could reduce the burden of taxation generally and of income tax in particular. Substantial losses of North sea oil revenue as the result of a sharp fall in the oil price are not an excuse but a fact.

Does not the fall in oil prices only confirm the point that the Labour party has been making over the past five years, that far too much reliance has been placed on the development of oil in the North sea and far too little reliance on the development of manufacturing industry within the United Kingdom? Why cannot the Chancellor learn that lesson, and even at this late stage begin to reinvest in British industry?

The position is quite to the contrary. It is the hon. Gentleman's Front Bench that is in favour of joining forces with the OPEC cartel, so as to keep up the price of oil artificially, which would be contrary to the interests of manufacturing industry. That was clearly stated in a letter to me from the hon. Member for Thurrock (Dr. McDonald).

I congratulate my right hon. Friend on the Government's effective, well-judged and, above all, sustained attempt not to join OPEC in any sense. Does he agree that nothing does more damage to the capacity of the free market to adjust to changed conditions of supply and demand than an attempt to maintain either fixed supply levels or fixed price levels?

My hon. Friend is right, and in all fairness I have to add to my previous remarks that it is not merely the policy of the Labour Opposition that Britain should join forces with OPEC, but also the official policy of the SDP and, as far as I am aware, that of the Liberal party as well. The right hon. Member for Plymouth, Devonport (Dr. Owen) has made this clear. We have no intention of joining OPEC.

Does the Chancellor of the Exchequer recall hearing the hon. Member for Norfolk, North (Mr. Howell) refer to sacking people in the National Health Service and local government? What is the economic sense in stopping the payment of wages to people working in the National Health Service and local government, who are paid for by the ratepayer and the taxpayer, only for them to go to the unemployment benefit office to receive money from the taxpayer in another form? It is costing £24 billion to finance—

Order. The question is about oil prices.

Yes, it is. The hon. Member for Norfolk. North, raised this matter and he was not stopped, Mr. Speaker. The Government are paying £24 billion to finance that pile of human misery known as the dole queue. What is the sense in adding to it?

I am not sure whether that question is in order, Mr. Speaker, but I shall be brief. Overmanning in many local authorities, especially Socialist local authorities, is a main cause of unnecessarily high rates, which are causing great damage to small businesses in those areas.

Will my right hon. Friend remind the House that it is irrelevant however many of our Opposition political parties decide to join OPEC, because the fundamental national qualification to join is that 80 per cent. of the gross national income should be from oil. We have not yet reached that point.

Nor shall we. If my hon. Friend had been his normal attentive self, he would have heard that I talked about joining forces with OPEC. The Opposition wish to agree with OPEC in cutting our production, which is effectively joining the cartel, although, technically, as my hon. Friend has pointed out, we would not be eligible for membership.

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

Short-term interest rates are held at whatever level is necessary to maintain sound financial conditions, but no higher.

Does my right hon. Friend agree that it is vital to the future of the economy to achieve lower and more stable interest rates? Towards that objective, at a time when the oil crisis is considerably less and the pound is competitive with the deutschmark, would it not be helpful to consider urgently the possibility of joining the exchange rate mechanism of the European monetary system?

That is a matter that we keep regularly under review. The factors to which my hon. Friend has referred obviously must be taken into account.

If the Chancellor will not give an assurance on that, will he give an assurance that he will respond positively to the initiative taken by President Reagan in calling for internatinal monetary reform? Will he respond to the appeal for a conference? Will he cooperate with the American Administration in seeking to reduce interest rates to achieve more stable exchange rates?

I noted the passage in President Reagan's "State of the Union" address in which he asked the American Treasury Secretary to examine whether it would be a good idea to hold an international monetary conference. I believe that there are great dangers 3n holding an international monetary conference when we Oo not know what proposals to put to the conference. However, if there is a way to build on the Plaza agreement and inject some stability into the foreign exchange market, I would welcome it.

Is my right hon. Friend aware of the country's widespread desire for lower interest rates? Is he aware of the complete lack of public understanding about why interest rates must remain so high?

Everyone would like lower interest rates, except perhaps those who are savers and depositors in building societies and banks. No doubt they are content with their return. It is much better to get the return that those people receive today than to be cheated of their savings as they were under the Labour Government, when there was a negative real rate of return.

Are there any lines of communication between the ivory towers of the Treasury and the embattled Departments of Employment and of Trade and Industry, which are faced with increasing unemployment, including a large increase last month that especially affects the north-west, which is dependent on manufacturing industry? Does the Chancellor of the Exchequer realise that in the complacent world in which he lives, people are unemployed because of the Treasury's policies?

To answer the first part of the hon. Gentleman's question, the Government are one harmonious whole—

They have fallen into a hole.

Order.

Unemployment is a matter not for complacency but for concern, and that is why the Government have taken many measures to address the problem directly. The hon. Gentleman will recall that in my Budget last year I restructured national insurance contributions for employers and the lowest-paid employees, which came into force only four months ago. Therefore, we have not seen its full effect. I also announced the two-year youth training scheme, which will not come into force until April this year, but which I believe will have a beneficial impact.

Does my right hon. Friend agree that an absolute condition for lower interest rates is a low and sustained low rate of inflation, and that if inflation falls to 3 per cent. this year there will be a good prospect of reducing interest rates? Does that not contrast badly with the prospect if the policies espoused by the Labour party and the alliance were followed?

My hon. Friend is right. The policies of the Opposition, who propose an extra £24 billion of public expenditure, would not merely cause a substantial increase in taxation and a VAT rate of 41 per cent., as my right hon. Friend the Chief Secretary said yesterday, but would be highly inflationary, which would certainly mean higher interest rates.

Why are British interest rates so much higher than those of our OECD competitors?

I gave the answer to that a moment ago.

asked the Chancellor of the Exchequer what is his policy regarding competitive tendering for Government services; and if he will make a statement.

Our policy is to contract work out of the public service wherever this is commensurate with sound management and provides good value for money for the taxpayer. As the House knows, Government Departments are now required to test the market in specified areas.

Does the Minister accept that the scope for competitive tendering for Government services is almost infinite? Does he further accept that many Conservative Members are rather impatient with the progress being made?

In some key areas of central Government Departments the proportion is already high: in cleaning, it is 84 per cent.; in laundry, 73 per cent.; and in maintenance, 81 per cent. We are pursuing the policy, but I agree with my hon. Friend that there is considerable further scope. That is why I recently initiated a multi-departmental review to extend the application of competition and improve ways in which the policy is delivered.

What guarantee does the Minister require against bankruptcy in the tendering firms? Does he accept that if they go bankrupt it is almost impossible for the public sector to take back the services?

It is not impossible. I know of one case where a company was removed from its contract because of inefficient performance. The service specified in the contract and the company's performance are thoroughly monitored, and the contracts contain penalty or break clauses to cover the eventuality that performance does not match specification, or the sort of event to which the hon. Gentleman referred.

asked the Chancellor of the Exchequer if he will make a statement on the proportion of the population in the United Kingdom who own shares; and how this compares with other Organisation for Economic Co-operation and Development nations.

The number owning shares directly is at least 3 million, which is about 7 per cent. of the adult population, and recent market research suggests that the figure may be much higher. I regret that comparable figures are not available for most other OECD nations.

While thanking my right hon. Friend for his reply, may I ask for confirmation that although individual share ownership may have more than doubled since 1979, there is still a long way to go in the pursuit of wider share ownership? Does he agree that many individuals, especially employees, who bought shares as a result of the Government's privatisation policies are in great danger from a Government formed by the Labour party, especially if its bite is anything like as bad as its bark?

My hon. Friend is on to an important point, to which we need a clearer answer than the one we have received so far. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has said that if by any mischance the Labour party were to get into office and renationalise any companies, the shares would be bought out at the original selling price. That is expropriating the money of millions upon millions of pensioners and holders of life assurance policies. Those pensioners have a right to know which companies the right hon. Gentleman wishes to renationalise and why he intends to rob them in that way.

Is the Chancellor aware that the only reason why more people in Britain own shares is that he is selling national assets to pay tax bribes? All that waffle from him and the hon. Member for Surrey, South-West (Mrs. Bottomley) is false propaganda. The British people want more jobs, not wider share ownership.

We should like to see more jobs, but that does not conflict with wider share ownership. They are in harmony, as those employees who are members of over 1,000 existing employee share schemes would fully bear out.

asked the Chancellor of the Exchequer if he has any plans to seek to provide tax relief on expenditure on training.

Tax relief is already available for most expenditure on training.

In acknowledging the need for a significant improvement in training for industry, may I ask my hon. Friend to consider extending tax relief for training and allowing all capital expenditure related to training as a relief against tax in the year of expenditure?

I fear that I cannot give my hon. Friend any encouragement in that direction. The subject is essentially one for my right hon. Friend's Budget.

asked the Chancellor of the Exchequer what representations he has received about the fiscal measures to be proposed in his forthcoming Budget.

A large number on a variety of subjects, though I cannot anticipate my right hon. Friend's Budget statement.

Since coming to power the Government have seen fit to hand out over £20 billion in tax concessions to the richest 5 per cent. of the population. Is it not about time that taxation for those people was increased to bring about more public investment in real jobs for some of the record number of people who have been thrown out of work by the Government's economic policies?

I am not going to get into an argument with the hon. Gentleman about the figures that he quotes, but I shall treat his representation as yet another that we have received.

Does my hon. Friend agree that if, in the next Budget, there is an increase in public expenditure of £24 billion which is not funded by a 41 per cent. VAT rate, the only other way that it can be funded is by a 20 per cent. increase in the standard rate of taxation? Does my hon. Friend agree that that would mean a married man earning over £66 per week would pay to the Exchequer 59p for every extra pound?

That sounds about right.

Can the Minister estimate how much the Chancellor of the Exchequer ever listens to his Cabinet colleagues? When he comes to look at direct tax cuts, will he ensure that some of those Cabinet colleagues are listened to and that the money is spent on raising tax thresholds rather than on reducing the basic rate?

I have known my right hon. Friend for a long time. I have always found him extremely attentive and sensitive to the points put to him.

While my hon. Friend considers representations about changes in fiscal rates, will he not neglect the problems facing the National Health Service when he discusses matters with his right hon. Friend the Chancellor of the Exchequer? Is my hon. Friend aware that, notwithstanding considerable increases in real resources to the National Health Service since 1979, we still cannot provide full, proper and good health care and the payment of increased wages and salaries in that important service? Will my hon. Friend remember, too, as he talks to his right hon. Friend the Chancellor of the Exchequer, that any decline in the provision of resources to the NHS will mean inevitable decline?

I can assure my hon. Friend that my right hon. Friend the Chancellor of the Exchequer heard every word that he uttered.

asked the Chancellor of the Exchequer what studies his Department has done into he effects of joining the European monetary system.

The Treasury submitted a memorandum to the Select Committee on the Treasury and Civil Service in June 1985.

Is the Minister aware that this week the CBI has come out formally in favour of joining the EMS? The Government continue to say that they are in principle in favour of joining the system when the time is right. As the exchange rate has moved through almost every conceivable position on the scale during the past year, will the Minister set out the criteria that the Government use to judge when the time will be right?

I am aware that Sir Terence Beckett said that he thought it would be a suitable time to join the EMS in relation to the current levels of the exchange rate. However, there are many other factors that have to be taken into account concerning the conduct of financial policy generally. We have always said that there are arguments both in favour and against joining the system and that we would not want to join unless we were convinced that the balance was clearly in favour of so doing.

In view of the widespread and genuine misunderstanding about the Government's present monetary policy, will the Government give an undertaking that there will be a definitive statement on monetary policy in the Budget?

I think that my hon. Friend will have to wait and see. My right hon. Friend the Chancellor of the Exchequer, who is sitting beside me, will no doubt have heard what he said.

asked the Chancellor of the Exchequer if he will make a statement on the growth of the economy as it relates to manufacturing output.

Manufacturing output has grown by 11 per cent. since June 1983. We are now experiencing the longest period of uninterrupted growth of manufacturing output since 1971.

The Chief Secretary has been highly selective in his choice of years. Will he say when he expects manufacturing output to reach the level that prevailed in May 1979?

The years were not at all selective. I thought it entirely reasonable to pick the figures since the last general election, when the country returned the Government to power. My choice of years shows the progress that we have made since then. As I said last night, there was obviously a major worldwide recession between 1979 and 1981. Since then we have been making good progress on manufacturing output.

Does my right hon. Friend agree that the best way to improve and maintain manufacturing output and productivity is to minimise wage awards, and that the best thing that the Treasury might do towards that would be to raise tax thresholds as far as possible?

I shall not comment on any tax issue that my hon. Friend raises. There are two main conditions. The first condition is the maintenance of a low inflation policy, which enables our manufacturing sector to remain competitive. The second consideration, as my hon. Friend has rightly said, is to ensure that we keep unit labour costs in manufacturering as low as possible. It is worrying that at present they are higher than those of some of our competitors.

Why has unemployment increased since last year's so-called Budget for jobs?

As my right hon. Friend the Chancellor of the Exchequer has made clear, the three major ingredients of last year's Budget have not had time to take effect— [Interruption.] There is nothing funny about that. The national insurance contributions changes of the 1985 Budget came through only four months ago. A second major ingredient, the two-year youth training scheme, comes into operation in April because it requires time to plan.

With the manufacturing base in Germany being three times as large as that in Britain, will my right hon. Friend tell us what the interest rate to industrial and commercial borrowers in Germany now is and when we shall be able to reduce our rate to that level as a result of my right hon. Friend the Chancellor of the Exchequer's brilliantly adroit management of the economy?

Obviously there are many factors that operate on interest rates. One of the key ingredients is to maintain the pressure on inflation. To ensure the right monetary conditions, interest rates are as they are to keep the pressure on inflation.

The Chief Secretary has told us when the measures in the last Budget will come into effect. Will he now tell us when we shall see the jobs?

We debated this last night. There are many factors causing the present levels of unemployment, including the demographic factors. We have made significant progress in the economy and there has been continuous economic growth in the last four years. Without that, we would be in a more serious situation. It is important that we maintain these policies.

Does the Chief Secretary agree that if the Chancellor of the Exchequer has available a fiscal adjustment of some £3·5 billion, as against the £1 billion forecast, he will be in a much more powerful position to help manufacturing industry? Will the Chief Secretary therefore tell us whether we should give any credence to the reports that a Secretary of State has calculated, on the basis of his Department's forecasts, that there will be a £3·5 billion fiscal adjustment?

The hon. Gentleman will clearly have to await the Budget statement, which is not very far away. With regard to jobs, about which I was asked, I make the point that in the last 18 months more new jobs have been created in this country than in the whole of western Europe put together.

asked the Chancellor of the Exchequer what is the average monthly rate of inflation from June 1983 to date; and how it compares with that from May 1979 to June 1983 and October 1974 to May 1979, respectively.

Between June 1983 and December 1985 the annualised increase in the retail prices index was 5·1 per cent. This compares with 11·3 per cent. between May 1979 and June 1983, and 15·1 per cent. between October 1974 and May 1979.

I congratulate my hon. Friend on the progress that he has just enunciated. Since the inflation rates in West Germany, the United States and Japan remain lower than ours, is it not the case that we need to keep up the pressure on bringing down inflation to be able to earn our jobs and our profits from trade abroad?

I will pass on my hon. Friend's congratulations to my right hon. Friend. It is very much my right hon. Friend's policy that we should maintain continued downward pressure on inflation.

Is it not a fact that the greater the number of people who are sacked the more inflation is held steady? The real barometer should be the number of people in the country who are unemployed. The number of people who are on YTS and similar schemes in order to keep young people off the unemployed list proves that there are at least 4 million people unemployed in the country. It does not give much comfort to those people to tell them that the inflation rate is being kept steady.

The hon. Member's economic theory is a little complex, but the Government share his concern to seek to bring down the level of unemployment.

Does my hon. Friend agree that the marked disparity in the inflation figures between the period of this Government and the period when the Opposition were last in power demonstrates conclusively that any return to the sort of policies advocated by the Opposition will almost certainly lead to a trebling of inflation rates?

The lowest inflation rate achieved by the Labour Government between 1974 and 1979 was above the highest rate since the last election. The Opposition pay lip-service to the idea of suppressing inflation, but the policies they espouse in opposition and the actions they take when they are periodically in government lead ineluctably to the debauching of the currency.

Will the Minister name those of our major industrial competitors that currently have a higher level of inflation than us?

I acknowledge that there are competitor countries that have a lower rate of inflation. That is why we are maintaining our pressure on inflation.

asked the Chancellor of the Exchequer what is his latest estimate for the public sector borrowing requirement for 1985–86.

I shall be giving my latest estimate in my Budget statement.

Bearing in mind that the PSBR may act as a constraint on the amount of any tax reliefs which my right hon. Friend is able to grant this year, will he assure the House that, if there are any reliefs, they will be concentrated in the form of higher tax thresholds and lower employee national insurance contributions, as these are by far the most effective way of stimulating employment?

Cases can be made for many things. My hon. Friend will recall that in my Budget last year I did both of the things to which he referred—I increased tax thresholds and lowered employees' and employers' national insurance contributions for the low-paid. Looking forward to this year's Budget, it is quite clear that scope for manoeuvre has been affected by the sharp fall in our North sea oil revenue.

Bearing in mind what the Chancellor expects the public sector borrowing requirement to be, will the right hon. Gentleman allow councils to spend more of their receipts from the sale of assets to meet the problems that they face and to get people back to work?

One thing is essential, and is clearly understood and agreed by all of the major industrial nations. There is a need to keep firm control of public expenditure. Within that control, we allow local authorities to spend their housing receipts, but over a period of time. Of course, if there were a Labour Government there would be no housing receipts because no council houses would ever be sold.

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

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. This evening I hope to have an audience of Her Majesty the Queen.

Has my right hon. Friend had a chance to see today's reports, which say that the urban aid programme has been underspent by more than £100 million during the past three years? Is it any wonder that the prudent low-spending authorities feel aggrieved by the recent rate support grant settlement, which shifts money from them to the inner cities?

I have seen the report to which my hon. Friend refers. It is not true, because the Department of the Environment redirected the resources to other programmes, thus benefiting the inner cities. Some was directed to additional urban programme schemes, and some was directed to derelict land grant, which meant that most of the surplus was used up. However, I understand the feeling of the shire counties that they have to endure higher rates because money was deliberately shifted towards inner cities on the rate support grant.

What is the right hon Lady's explanation of the Gallup survey, which shows that only 6 per cent. of the population think of her as a caring Prime Minister?

The right hon. Gentleman is aware that I do not look at opinion polls. I do not explain them either. The polls that I am interested in are those done on election day, and we have not done too badly at them.

As the right hon. Lady is too reticent to offer an explanation of her own, might I suggest that the reason why the country thinks she does not care—[HON. MEMBERS: "Question."] Will she consider the possibility of the country thinking that she does not care because she has presided over unemployment which has trebled, poverty which has doubled, increases in homelessness, cuts in overseas aid and £2·50 being stolen each week from the pensioner?

We have presided over a Health Service which is far better than anything that the right hon. Gentleman had, we have kept our pledges to pensioners, output is at an all-time record, our manufacturing industry is doing well and growth has been going on for six successive years. That is the outlook of a caring Government.

The Prime Minister heard five examples of her uncaring policies and uncaring style. Is she prepared to deny one of the facts that I offered her?

I will deal with the facts that the right hon. Gentleman offers, or at any rate with his interpretation of them. The right hon. Gentleman has absolutely no idea how to go about wealth creation or the creation of more jobs, whereas we have the highest and best record of job creation in the whole of Europe during the past two years.

Bearing in mind the students' lobby of yesterday and the intense desire of institutes of higher education to expand and improve, will my right hon. Friend nevertheless remember that there are today 70,000 more students in higher education than there were in 1980—the highest number and the highest proportion of the relevant age group ever?

I am grateful to my hon. Friend. Students have the best deal through student grants and the opportunities available to them exceed those available previously, as the figures show.

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

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

In the interesting speeches made by her colleagues and would-be successors at Blackpool last weekend, did the Prime Minister notice the passage in the speech of her right hon. Friend the Secretary of State for Energy in which he asserted that unemployment can be brought down provided appropriate policies are pursued? Is there such an alternative after all, and why does the Prime Minister not take it?

Unemployment can be brought down by the creation of more jobs. In the last two years 700,000 more jobs have been created. That is the way to tackle the problem. It is being tackled. The proportion of the population of working age in work in this country greatly exceeds that in France, Germany, and Italy.

Has my right hon. Friend had time to read today's excellent leader in The Times setting out her achievements and pointing out what still remains to be done under her leadership? Does it not show that, in spite of what other newspapers and political commentators have said during the past two weeks, The Times still has a fair sense of political priorities?

I am delighted to confirm my hon. Friend's conclusion and I am grateful to The Times for an extremely sensible leader.

The Secretary of State for Trade and Industry told the House yesterday that General Motors had not yet made formal proposals to purchase Leyland Trucks. In view of that, will the Prime Minister join me in recognising the tremendous and successful efforts made by the employees and the management to turn the Land Rover division into a profitable concern? Will she therefore send a message of support to the "Keep Land Rover British" campaign? Will she bat for Britain and back a profitable and successful British product?

Both the Government and the taxpayer have batted for the whole of British Leyland by putting in over £2 billion of taxpayers' money and on top of that guaranteeing the amount it takes out in loans under the Varley-Marshall assurances, which amount to some £1·6 billion. That is the faith that the British taxpayer has shown. We are anxious to have a prosperous car and truck industry and we shall take the steps that seem to us most appropriate to achieve it.

Does my right hon. Friend agree that the recent fall in oil prices is an opportunity for this country, rather than a misfortune? Will it not lead to greater economic activity in growing markets? Is it not a challenge which our manufacturing industry welcomes?

Yes, it is an opportunity. It has other adverse effects on this country which it does not have on our competitors such as the United States, Japan and Germany. They will gain more from a fall in oil prices than we will. Undoubtedly it will be helpful to our manufacturing industry and will reduce its costs. In addition, it will keep down unit labour costs, without which the Germans and the Japanese will get a bigger proportion of overseas trade.

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

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

Does the Prime Minister agree with one of her many former Cabinet colleagues, the right hon. Member for Cambridgeshire, South-East (Mr. Pym), that in terms of curing unemployment her policy has not worked?

Had policies been put forward from the Opposition, and had they been carried into effect, unemployment would be infinitely worse than it is and there would be precious little prospect for growth or increased prosperity in the future.

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

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

Is my right hon. Friend aware of the growing public anger and frustration at the escalation of violence and mindless crime? Is she further aware that at this time yesterday evening my home was attacked by three villians while my wife and young son were inside? Is it not time that we considered tougher measures to deal with the problem, and reintroduced the birch?

I am sure that the House will wish to express great sympathy with my hon. Friend over the personal crime which his family suffered. He will be aware that the Home Secretary has just made an order available for the police, and that the Court of Appeal has made it clear that firm sentences should be imposed for crimes of violence. I do not believe that my hon. Friend's proposal would ever pass through the House.

Does the Prime Minister recall that I have written many letters to her about a constituent, Mr. Ian Lynch of Benedict road, Hull, who was one of the Army bandsmen severely injured in the Hyde park bombing incident? Is she aware that neither Mr. Lynch nor many of the other Army personnel have yet received full compensation for those terrible injuries received in 1982? Will she instigate an investigation by the Criminal Injuries Compensation Board to see whether those matters can be dealt with more expeditiously?

As the hon. Gentleman is aware, we answered fully, and the doctors and authorities have looked carefully into that case. Unfortunately, they were not able to go further than they have already gone. We shall certainly look into speeding up matters.

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

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

Does my right hon. Friend agree that, if the Chancellor of the Exchequer has room for manoeuvre in the Budget, it would be better for people on average earnings, especially the heads of households, to reduce the rates of tax rather than to increase tax thresholds?

I am sure that we would like to have the choice. My hon. Friend will be aware that in view of the falls in oil prices we must. above all, have a prudent, cautious Budget. I am sure that my right hon. Friend the Chancellor of the Exchequer will take into account the choice of my hon. Friend when he draws up his Budget.

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

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

Will the Prime Minister, having taken such egregious pleasure in seeing off two Labour Administrations and three Labour leaders, now consider seeing off her 18th Cabinet member, the Secretary of State for Education and Science, and replacing him with someone to whom the teachers can talk, who understands the problems of the children, and who will consider them with faith and understanding?

My right hon. Friend the Secretary of State for Education and Science has done more than any other previous Minister to raise the standards of education. I deeply resent the hon. Gentleman's implications made against him.

Has my right hon. Friend had a chance to consider the Manpower Services Commission report yesterday, which shows that last year between 20,000 and 30,000 young people chose a place on the dole rather than a place on a youth training scheme? Does she agree that, while they are entitled to make that choice, they should not have been entitled to do so at the taxpayers' expense?

I can see my hon. Friend's point vividly. I hope that those young people will think again and accept a place on the YTS, especially since it has been extended to two years. It will give them a much better training than any that they would be likely to get in any other way, and a much better prospect of a job in future.

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

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

Has the Prime Minister had time to read the Valentine card which was delivered to 10 Downing street this morning by the nurses? [Interruption.] The hooligans on the Back Benches do not want to listen to what the nurses are saying about the Health Service. That Valentine card asks the Prime Minister to put some heart back into the Health Service, and accuses her of turning hospitals into supermarkets. As 93 per cent. of the population believe that the Prime Minister will listen to reason, may I ask her to listen to the reason of the nurses, who know better than anybody else that the Health Service is not safe in her hands?

I did not think that it was Valentine's day today, but I think that the hon. Gentleman will agree that we have put a lot of resources into the Health Service— 20 per cent. more in real terms than any other previous Government. This means more doctors, more nurses, more patients treated—in-patient and out-patient—and no previous Government can hold a candle to that record.

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

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

During her very busy day, will my right hon. Friend have time to relax, perhaps make a cup of tea, and reflect, with a degree of satisfaction, on the fact that the TUC has at long last conceded that the democratic right of union workers is to have a postal ballot, and that it has also decided to accept financial assistance towards that ballot?

That is very good news. It was our intention to give the ordinary members of the trade union much more control over their bosses. I am delighted that that has now been recognised.