asked the Chancellor of the Exchequer what consideration he is giving to including measures in his Budget to reduce unemployment.

I cannot anticipate my right hon. Friend's Budget statement.

Is the Chief Secretary aware that last year the Chancellor concluded his Budget statement by describing the measures that he was taking as tackling the problem of unemployment where it was most acute and that it was a Budget for jobs? Since that time, unemployment has increased by over 114,000 in this country, over 9,000 in the northern region, over 1,300 in my constituency and by 259 in Fulham. When the Chancellor sits down on Tuesday—I know he will not tell us what measures he will take—but, in language that the unemployed will understand—[Interruption.]

Order. Briefly please.

Will the right hon. Gentleman tell us whether unemployment is likely to go up or down, where and when?

After that rather long speech, I should say that the main element affecting the point to which the hon. Gentleman referred in the Chancellor's Budget statement last year was a significant increase in expenditure on employment and training measures in 1986 and 1987, involving extra expenditure of £600 million, particularly concentrated on the youth training scheme. I believe that throughout 1986–87 that will have a significant effect.

Order. May I ask for brief questions, because they lead to brief answers.

Will my right hon. Friend explain to the people of Sunderland and to their elected representatives that the one thing certain to destroy jobs in Sunderland is a public spending spree of £24 billion?

My hon. Friend is absolutely right. Such spending would mean either big increases in taxation or much higher borrowing, which would clobber industry. I know the point to which my hon. Friend is referring. I have just sent a letter to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) telling him that I still believe that the extra public expenditure involved in the Labour party's programme would be about £24 billion.

As the right hon. Gentleman was educated in my constituency, knows Scotland well, and knows about the unemployment figures in Scotland, which are the highest in its history, is he aware that the British Steel Corporation has announced a further 414 redundancies in my constituency at the Clydesdale works? Unless there is a change in policy, there will be an upward trend in unemployment. I do not want the right hon. Gentleman to tell us that inflation worsens the position. When will the Government change their policy and show that in their Budget?

Because I come from the hon. Gentleman's constituency, I know of the need there, perhaps more than in most parts of the United Kingdom, to restructure from the old traditional industries, including the steel and coal mining industries, to modern industries. I have seen many examples in Scotland of vast new employment being created by modern industries. That is a considerable success story.

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

Base rates have remained unchanged since 8 January.

As all the economic jigsaw pieces seem to be in place for an immediate and significant cut in interest rates, what is preventing such a cut? A cut in interest rates would be of great value to British business and to my right hon. Friend's counter-inflation policy.

I am sure that there would be a benefit from lower interest rates, although one should not exaggerate the difficulties of the present level of interest rates. As my right hon. Friend the Chief Secretary said, the latest CBI monthly trends inquiry has shown the best combined response to output and prices since these figures were first collected. Of course, there is a difference between the United Kingdom and other countries, which have recently been able to reduce their interest rates. Those countries have benefited unambiguously from the fall in oil prices, whereas for Britain the effects have been inevitably more mixed. I think that the world trend can be nothing but helpful to this country.

Is the right hon. Gentleman aware that the House knows of his partiality for announcing interest rate cuts at the time of his Budget statement? Is he further aware that hon. Members will be extremely disappointed if the interest rate cut is not considerably more than 1 per cent?

The right hon. Gentleman has an extraordinary insight into my partiality, given that in none of my previous Budget statements did I announce a reduction in interest rates.

Does my right hon. Friend agree that a 1 per cent. cut in the base rate would not only be welcome, but would give industry a boost? Does he also agree that a 1 per cent. reduction in the amount of wage claims would reduce unit labour costs much more than would a 1 per cent. reduction in interest rates?

My hon. Friend is right. It would reduce industry's costs by many times more. There is a further connection. As I told the National Economic Development Council in December, excessive wage increases put upward pressures on costs. It is essential to stop that cost pressure from leading to an upsurge in inflation. That inevitably means higher interest rates than would otherwise be required. There is a double benefit to industry from keeping firmer control on its pay costs.

Is the right hon. Gentleman aware that the sky-high interest rates which this country has had to tolerate under this Government have resulted in City bankers being able to make massive profits, whereas the manufacturing side of industry and local government have suffered as a result? The people in Fulham will vote out the Tory candidate, not merely because of unemployment, but because of the double standards operated by the Government to look after their friends in the City and to hell with everyone else.

I must tell the hon. Gentleman, whose knowledge of Fulham I suspect is not very extensive, that if there were ever to be a Labour Government—which there will not—and they put into effect their £24 billion increase in public expenditure, the effect on borrowing would be to raise interest rates far higher than they are at present.

Will my right hon. Friend confirm that the Labour party's policy of directed reflation—which is the latest entertaining euphemism to come from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) in an attempt to buy votes with a public expenditure addition of no less than £24 billion—would entail not only stratospheric interest rates but taxation rates even higher than under the Labour Government, a collapsing pound, souring inflation and truly catastrophic unemployment?

My hon. Friend is very knowledgeable in these affairs, and his assessment corresponds precisely with my own.

On the subject of interest rates, will the Chancellor break the habit of a lifetime, be frank with the House, and admit the squalid fact that the inevitable reduction in interest rates is being held back in order to give a little shine to a Budget which would otherwise be very lack lustre?

I am glad to note that the right hon. Gentleman is expecting a reduction in interest rates. Not so long ago he told the House that there was bound to be an increase, but that did not happen.

There was one.

The right hon. Gentleman is wrong again. As I have said, interest rates have remained unchanged since 8 January, but since 8 January the right hon. Gentleman has confidently predicted that there would be an increase. He was wrong then, and he is always wrong.

asked the Chancellor of the Exchequer what representations he has recently received concerning cuts in income tax.

We have received a wide range of representations on this subject.

I thank the Minister for his reply. Does he accept that, in the light of the information today that only 3 per cent. of the work force have benefited from budgetary changes, most of the working people of this country cannot afford many more Tory tax cuts?

My right hon. Friend the Chancellor of the Exchequer and I have tried to remind the House on many occasions that working people are benefiting at all levels, right down to half average earnings, from the enormous increase in the dynamics of the economy and the reduction in inflation. I wonder whether I might draw the attention of the constituents of the hon. Member for Cambridgeshire, North-East to the fact that clearly the budgetary submission of their Member of Parliament should be that, if the Chancellor has the opportunity to reduce taxes in next week's Budget, those reductions should not go to his constituents.

Will my right hon. Friend observe that many people are deeply appreciative of the lower rates of tax under this Government at the higher levels, but that, if there is any more taxpayers' money to be put around, it is better that the decaying inner cities should receive the benefit?

I know that my right hon. Friend the Chancellor will be listening carefully to my hon. Friend's budgetary lobbying.

Why does the Minister not have the honesty to admit, be it in Fulham or anywhere else, that most people are now paying more tax, direct and indirect, than in 1979 when the Government took office? Have the Government any estimates of the amount of money which has been lost to the Treasury as a result of mass unemployment? If those millions of people had been allowed to earn their living, if there had been a different policy, how much more revenue would there have been from the people who are now unemployed being able to pay proper taxation?

It might be wise if I stay with the first of the hon. Gentleman's points, which was totally inaccurate. The people of this country are paying lower levels of income tax at all levels than they were when the Government came to power. Beyond the facts in connection with income tax, all people in work, whether on half, three quarters or average earnings, are better off than they were at any time under the previous Labour Government.

asked the Chancellor of the Exchequer what is the cost to the Treasury of direct financial support to those aged over 16 and under 18 years.

Information on total social security expenditure for this age group is not available.

I am sure that my right hon. Friend, like myself, is seeking common ground as much as possible on this issue. As any young person between the ages of 16 and 18 has the opportunity of education, the youth training scheme or a job, is it not time that the money that is spent in this area, through supplementary benefit or unemployment pay, was spent in other directions? Do not the sensitive souls on the Opposition Benches also agree that that money could be better spent on the elderly and other people?

Young people who refuse an appropriate training place—I am thinking of the youth training scheme on which a considerable amount of the expenditure on those aged between 16 and 18 goes—already face a substantial financial penalty. If they refuse a place, it will result in the loss of unemployment benefit for a period, for those who are entitled to it, and payment of a substantially reduced rate of supplementary benefit. Therefore, it makes sense to concentrate expenditure on YTS. I hope that, in view of the penalties for those who do not take up places, there will be a substantial take-up.

asked the Chancellor of the Exchequer what he estimates would be the additional revenue in the year 1986–87 if the marginal rate of tax on personal incomes in excess of £30,000 was increased to 100 per cent.

Individual taxable incomes in excess of £30,000 total some £3½ billion, of which almost £2 billion is already paid in income tax. The theoretical additional yield of a 100 per cent. tax on this slice of income would thus be around £1½ billion, but the actual yield would be closer to zero as relatively few people are prepared to work for nothing.

I thank my right hon. Friend for his full reply. Does he agree that it is a grave deception for any politician to suggest that a public expenditure programme of an additional £24 billion could be financed merely by taxing the better off, because it would mean that even those on well below average earnings would have to pay substantially higher income tax?

That is right. My hon. Friend is on the ball, if I may use an expression of a sporting nature. There is an alternative. As the Labour party has said that it would not raise the basic rate of income tax, it is possible that it might have recourse to VAT, in which case, arithmetically, it would require a 41 per cent. rate of VAT.

Will the Chancellor of the Exchequer confirm that the burden of taxation on individuals has increased under the Government, and that, as a reply from one of his colleagues showed, the Government would have to reduce the basic rate by 5·7p to compensate for increases in taxation which people are paying in other spheres? Until he reduces the basic rate of tax by a further 5·7p, will he refrain from claiming that there have been decreases in taxation?

First, my right hon. Friend the Chief Secretary was right in saying that the levels of income tax now are considerably lower than they were under the Labour Government, which the hon. Gentleman supported. Secondly, total revenue from taxation has increased, because incomes and prosperity have increased considerably. I welcome the fact that in future the hon. Gentleman would like to see a cut in tax. So would I.

Has my right hon. Friend noticed that the sum which would result from increasing taxes to 100 per cent. on incomes above £30,000 would not only be insufficient to pay for a programme of £24 billion extra expenditure, but would be wholly inadequate to pay for the more modest programmes espoused by alliance Members?

My hon. Friend is right. We have not yet been able to cost the proposals put forward by the Liberal party and the SDP. One difficulty is that the proposals frequently conflict, but we shall get down to that in due course. Meanwhile, we have been able to cost properly, correctly and objectively the Labour party's proposals, and it is interesting that Labour Members have not been able to deny the accuracy of that costing.

asked the Chancellor of the Exchequer what representations he has recently received concerning increasing the public sector borrowing requirement.

My right hon. Friend the Chancellor of the Exchequer has received a number of representations concerning the public sector borrowing requirement and related matters.

Will the Minister acknowledge that last year the Chancellor of the Exchequer described his Budget as a Budget for jobs, but that unemployment has increased? Will he now acknowledge that a modest increase in the public sector borrowing requirement will be necessary to secure the finance to tackle the problem of unemployment? Will he now undertake to change his strategy, which would be destroyed by a modest increase in the PSBR?

I have already said that a number of measures which were announced last year have come into effect this year, although we have not yet seen their impact on jobs. I must make it clear that, as a result of the strategy that my right hon. Friend has been pursuing, the manufacturing industry and the economy are growing at a faster rate than before and inflation is at a lower level than for a long time. We are becoming more competitive, and that is the best guarantee for jobs in the future.

Can my right hon. Friend estimate what would be the effect on inflation and interest rates of a £24 billion increase in public expenditure implicit in the Labour party's programme and not to be funded through taxation?

Clearly it would be very severe. I stick to the figure in the region of £24 billion. Yesterday I wrote to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and admitted that one of the figures that I gave earlier should be down, but said that another should be up. I note that the right hon. Gentleman has not given an alternative figure. If the sum of £24 billion is to be lower—I certainly hope it would be—I should be interested to know which of his colleagues' spending commitments he would intend to knock out. The right hon. Gentleman would have to do that, because my hon. Friend is absolutely right.

In view of the Government's track record from the so-called Budget for jobs last year back to the so-called Budget for enterprise in 1979 and the fact that the numbers of people working in Britain—the employed and the self-employed—have gone down by more than a million, what assurance can the Minister give the British people that this year's Budget will be any more successful than his right hon. Friend's previous Budgets?

The work force has grown considerably in recent years. Since 1983 there has been an increase in the numbers of people employed. One of the key factors is that we have had a consistently higher rate of manufacturing growth over a number of years.

One million fewer jobs.

The hon. Gentleman knows that the same is happening in other countries with technology, tax, and so on. Nevertheless, it is absolutely clear that we are on a better course with regard to inflation and growth than for a long time.

asked the Chancellor of the Exchequer when he expects to publish the Green Paper on personal taxation.

On Budget day.

Will the Chancellor take the opportunity of the publication of the Green Paper to make it clear that he will extend the consultation period to include the possibility of integration of taxation and the benefit system? Will he also give an assurance that he will take note of the findings of the House of Lords Select Committee on European Legislation and of the European Community, to the effect that the arguments against transferable allowances are substantially stronger than those in favour of it because they discriminate against women's prospects for employment?

The hon. Gentleman will not expect me to anticipate the Green Paper which is to be published on Budget day. I hope he will find it of interest when it is published. The matters to which he has referred will be fully aired in the Green Paper, and there will be every opportunity for consultation.

Does my right hon. Friend accept that the proposals will enable men and women to be treated equally in taxation matters? Does he agree that they are likely to be immensely popular and will represent an enormous step forward?

My hon. Friend is correct. An increasing number of married women are fed up with the way in which the present tax system discriminates against and treats them almost as second-class citizens. I think that they are right to have this sense of grievance. The proposals that are to be aired in the Green Paper would remove all of those grievances.

Is the Chancellor aware that the programmes of a Labour Government will be funded not only through higher levels of taxation for the higher paid, but through the adoption of a completely different industrial strategy based on growth, as against the one of recession adopted by the Government? Another area that we could tap for higher taxes is the many billions of pounds that are given away by the Government in the form of concessions on capital transfer and capital gains tax. The accumulation of the sources of finance would be quite sufficient to fund the major programme of a Labour Government.

There is no way in which the hon. Gentleman and his colleagues can find £24 billion from capital taxes. Even the Labour Government, who introduced new and more punitive capital taxes, were unable to raise anything like that sum. Ten years ago, when they followed the hon. Gentleman's advice, they had to go cap in hand to the IMF.

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

Over the 12 months to January 1986, the RPI rose by 5½ per cent.

How massively would inflation rise if the Labour party were given the opportunity to go on its £24 billion expenditure spree?

It is difficult to make an exact estimate, but we all remember what happened when the Labour party was last in office—the rate of inflation rose to nearly 30 per cent.

Will the Chancellor say which section of the Treasury established the figure of £24 billion, and whether that is wholly the work of the Treasury? Secondly, will he answer the question on the Order Paper and give details of the assessments that have already been provided to him by Treasury officials?

I shall readily explain to the hon. Gentleman as briefly as I can that Treasury Ministers collected a list of various published pledges to which the Labour party is committed and then asked Treasury officials to give an objective costing of these proposals. They did that, and the figure that was arrived at was £24 billion.

Does my right hon. Friend agree that, for the first time since 1979, this year British exports have increased as a percentage of world trade? Does this not reflect by his ability to take care of the problems of inflation?

My hon. Friend is right, and it is a remarkable fact that in recent years British manufacturing industry and British industry generally have been more successful in holding their share of world trade than they have been for a long time.

Will the Chancellor also confirm the more remarkable fact that the only roughly equivalent industrial nation that has a higher level of inflation than us is Italy? Was that the Chancellor's aim two years ago when he took office?

I notice that the official spokesman for the alliance, the hon. Member for Stockton, South (Mr. Wrigglesworth) said that the party's programme would produce inflation of 7½ per cent. I shall be dealing with the prospects for inflation in my Budget statement, but I do not regard the present level of inflation as satisfactory, even though it is far lower than that achieved by the Labour party when in government.

Is not the conquest of inflation and the return to honest money the foundation of the Government's economic policy and the essential prerequisite for industrial, and consequently commercial, success?

It is indeed the foundation of the Government's economic policy, and I assure my hon. Friend, who has been one of the Government's most stalwart supporters through their seven years of office, that it will remain the foundation of our economic policy.

Why is it that our inflation rate is now running faster and higher than the inflation rate in the countries of our major OECD competitors?

The plain fact is that I do not regard the present rate of inflation as satisfactory, even though it is far lower than was ever achieved during the period of that Government of which he was a Minister, but I am confident that it will come down.

asked the Chancellor of the Exchequer what representations he has received from the tobacco industry concerning his forthcoming Budget.

Representations have been received from the Tobacco Advisory Council, individual companies, employees in the industry and trade union representatives.

When the Chancellor considers his Budget proposals, will he bear in mind that most tobacco factories are situated in areas of high unemployment and that more than 60,000 jobs have been lost in the tobacco industry since 1979? Will he tell the health lobby that in the last financial year more than £5 billion was raised through duty and VAT on tobacco products? Is he further aware that 200 Members have sent petitions to the right hon. Gentleman asking that there be no increase on cigarettes higher than the rise in inflation and no increase at all on pipe tobacco?

I cannot anticipate my right hon. Friend's Budget, but industrial implications will obviously be one of the considerations that he will bear in mind.

Has my hon. Friend asked his right hon. Friend not to increase tobacco duty in the coming Budget by more than the rate of inflation in case he succeeds in killing off the tobacco goose that lays many golden eggs for him?

Again I cannot anticipate my right hon. Friend's Budget, but I am sure that he will take all considerations into account.

In all those considerations, naturally the Chancellor will be taking into account the health factors. Has he made the calculation that 6p on a packet of cigarettes would produce half the amount of the National Health Service bill for chronic emphysema, carcinoma and chronic bronchitis treated in NHS hospitals?

The representations to which I referred in my answer have also included health interests, and I have been delighted to receive all of them, as has my right hon. Friend.

asked the Chancellor of the Exchequer if he will give the latest figures available for the annual rate of investment under the business expansion Scheme.

The figures are £105 million in 1983–84, something in excess of £126 million in 1984–85 and we expect the amount to be higher still in 1985–86.

I congratulate the Government on the success of the business expansion scheme, which shows that the spirit of free enterprise flourishes in the country. Can my hon. Friend tell the House when he expects to publish the Peat, Marwick and Mitchell report?

I thank my right hon. Friend for his congratulations. He is correct to say that the scheme has helped hundreds of companies and thousands of jobs. I can confirm that the Peat, Marwick and Mitchell report will be published in full on Budget day.

How far would lower interest rates reduce the demands on the business expansion scheme? Why on earth, for instance, should manufacturers consider manufacture when they can get more money by lending money?

The hon. Gentleman completely misunderstands the nature of the business expansion scheme. He misunderstands the nature of the way in which high risk relates to high rewards and the way in which it has inspired a complete change in the entrepreneurial nature of society. I am unhappy that he obviously is not supporting from the Opposition Benches the nature of the business expansion scheme.

asked the Chancellor of the Exchequer how many taxpayers he estimates are assessed at the standard rate of income tax during the current financial year.

Approximately 24 million, of whom 23 million pay tax exclusively at the basic rate.

Will my hon. Friend confirm that it remains the Government's policy to reduce the standard rate of taxation, and does he agree that, if the black economy was not as buoyant as it appears to be, we would all be paying less in tax?

My hon. Friend will know that the Government have reduced considerably the burden of income tax. The thresholds have been increased in real terms by 20 per cent., and the basic rate has been reduced from 33 to 30 per cent. I think it peculiarly inappropriate for me at this juncture to do more than draw the attention of my right hon. Friend the Chancellor to the remarks of my hon. Friend.

Does the Financial Secretary agree that those who do not pay tax exclusively at the standard rate certainly number among them some of those earning very high salaries in the City? In those circumstances, how does he justify allowing them not to have assessed for income tax the vast sums of money that they are paid when they join their new firms?

I remind the hon. Gentleman of the figures that the Chancellor gave earlier. Those paying above the basic rate pay a substantial amount of tax, well in excess of £2 billion. I should have thought that that was a clear indication of their commitment, through their very high rates of tax, to the success of the economy.

asked the Chancellor of the Exchequer if he will take steps to relax the level of penalties on late payment of value added tax by small firms when special circumstances exist.

I can assure my hon. Friend that the surcharge, which comes into force in October, will not apply where the taxpayer can show a reasonable excuse to Customs and Excise or, on appeal, to an independent VAT tribunal.

I thank my hon. Friend for his reply. Is he aware that there have been a number of cases of hardship, particularly in relation to small companies? When the new regulations are brought into effect in the autumn, will he try to iron out some of the present inflexibility?

Customs and Excise is prepared to be as helpful as possible to traders who are experiencing temporary difficulties. However, in fairness to the bulk of traders who pay tax on time, it cannot allow others to regard regularly delayed payments of VAT as a convenient no-cost source of working capital.

I accept my hon. Friend's answer. Nevertheless, does he agree that since the Customs and Excise proposals became law there have been sufficient worries among small firms to indicate to his right hon. Friend the Chancellor that there might be an argument for delay in introducing the similar proposals of the Keith committee relating to income tax?

I shall pass on my hon. Friend's comments to my right hon. Friend.

asked the Chancellor of the Exchequer if he will make a statement on the level of total demand in the economy.

The 3½ per cent. growth of gross domestic product in 1985 is likely to be the highest in the European Community and probably higher than in the United States.

Does my right hon. Friend agree with the statement in the 1944 White Paper on employment that the country will avoid mass unemployment if the total demand for its goods and services is maintained at a high level?

I did not quite catch what my hon. Friend said, but I think that what is absolutely clear—[Interruption.] I am afraid that I missed a crucial word in my hon. Friend's question. However, it is absolutely clear that we have seen a higher growth in real demand and therefore in the level of proper demand in the economy, which I am sure he will agree is not money demand, as money demand has been brought down. It is the fall in inflation and the success of other policies that have enabled us to achieve that higher growth in demand.

But is the Chief Secretary aware that the level of total demand is lower than it might otherwise be because the oil companies have failed to pass on to domestic and industrial consumers the 50 per cent. drop in crude oil prices? That failure means high and rising unemployment. What does the Chief Secretary intend to do to ensure that the oil companies pass on these benefits to the economy?

I recall that the hon. Lady wanted to have discussions with OPEC to ensure that oil prices did not come down. On balance, the drop in oil prices has been of benefit to the economy and has produced much greater prospects for industry, including exports, because of lower costs. I certainly hope that more of the lower prices will be passed on to assist industry to do even more.

asked the Chancellor of the Exchequer how much extra revenue would be yielded by each additional percentage point in the rate of value added tax.

One percentage point on the standard rate of VAT would bring in about £945 million extra in a full year, at 1986–87 prices.

I thank my hon. Friend for his answer. May I ask him to clarify something that I believe I heard his right hon. Friend the Chancellor of the Exchequer say a moment ago about the yield from VAT? I wondered whether he was quite serious about it. Did he say that if this country suffered the twin misfortunes of a future Labour Government and the incredible spending programme that the Labour party has presented to this nation, VAT would not be 15 per cent., as it is now, or 20 per cent., or 25 per cent., or even 30 per cent., but would be 41 per cent.?

When my right hon. Friend the Chief Secretary to the Treasury unveiled the Opposition's spending plans he said that it would require a VAT rate of 41 per cent. to achieve that £24 billion of expenditure. My right hon. Friend was characteristically generous in his estimate. Since larger increases would yield progressively less revenue, the figure would therefore be considerably in excess of 41 per cent.

Is it sensible for the Minister to use the resources of his Department to construct an entirely fictitious figure, which he says is the cost of the Labour party's programme, and then to encourage all of his hon. Friends to try to make the figure stick by constantly repeating it, as though a lie constantly repeated becomes the truth?

I was asked about the extra yield of an additional 1 per cent. Even a Treasury Minister can divide £18·5 billion by 15.

asked the Chancellor of the Exchequer what recent representations he has received about the level of public expenditure.

Public expenditure has been mentioned in some Budget representations. It is customary for the Government to receive representations on these matters throughout the year.

Does my hon. Friend agree that the refusal of the Labour party to cost its extraordinarily irresponsible spending programme is a fraud on the British public?

What is interesting about our public expenditure plans is that they will remain constant in real terms over the next three years and fall as a proportion of gross domestic product. What is interesting about today's Question Time is that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) clearly does not wish to deny the figure of £24 billion.

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

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.

Does the Prime Minister acknowledge that today's reports of unlimited extra money for teachers' pay in Scotland simply encourage militant teachers in England, who want to use the current ACAS negotiations as a pause before further disruption in our schools? Therefore, will she ensure that Ministers give the same positive support and financial commitment to the ACAS negotiations as they are giving to the independent inquiry in Scotland, so that teachers, parents and, most important, pupils can look forward to lasting peace in the schools?

I am grateful to the hon. Gentleman for raising the question, because I think that the reports have not been wholly accurate. As he knows, there is a formula for distributing extra money. The formula is on a well-known basis, so that when changes are made in public expenditure programmes for England and Wales, changes are made in the comparable Scottish programmes on the basis of the fixed formula. That formula will still obtain for taxpayers' money.

Notwithstanding the statement in the House yesterday by my right hon. Friend the Secretary of State for Transport, will my right hon. Friend the Prime Minister see whether something can be done so that British Airways can be privatised in the immediate future? That would meet the needs and desires of many people.

Yes, we are anxious to get British Airways privatised. As my hon. Friend will be aware, there are certain legal and negotiating requirements under the Bermuda agreement with the United States and we must safeguard our vital interests before British Airways can be privatised.

Has the Prime Minister seen the reports that the Budget commissioner, Mr. Christopherssen, has said that the United Kingdom rebate is now in doubt? Will she confess that the rebate was not automatic, as she promised, and will she tell the House what she intends to do about it?

The rebate is made upon a formula. I am not certain what the hon. Gentleman is referring to. There are times when there has to be a small supplementary budget to enable us to receive our rebate. Our refunds have risen from £440 million for 1983 to £570 million for 1984, and to at least £830 million for 1985. So the amount we are getting back has almost doubled in two years.

Does my right hon. Friend agree that there appears to be a growing and strong link between violent crime, including rape, and the widespread misuse of heroin and cocaine? Will she confirm that the Government are giving, and will continue to give, the highest priority and all the resources that may be necessary to meet the terrible dangers of drug abuse?

Yes, Sir. I agree with my hon. and learned Friend that the use of drugs makes all crime, and particularly crimes of violence, worse than they would otherwise have been. We shall give every priority to tackling this terrible canker in our lives. As my hon. and learned Friend knows, largely at his instigation we are changing the law to make it easier to get at the proceeds of this dastardly crime.

In view of the continuing and alarming rise in crime—a massive increase of 41 per cent. since 1978—will the Prime Minister ensure that new money is allocated to local authorities to assist them in their efforts to make streets and homes safer in their areas for ordinary citizens, especially the elderly?

The right hon. Gentleman is aware that local authorities were given extra money through the police grant. Some money is expended under the community programme to further crime prevention programmes.

Is not that answer somewhat misleading? At the crime prevention seminar which the right hon. Lady held back in January the only new money that was ever referred to was the £50 million to be taken from the housing improvement programme. Does she not think that that would be an inadequate sum from absolutely the wrong source? Will she acknowledge that the sums involved in improving door locks, the standards and safety of doors, lighting, telephone entry systems and many other additions to security should be paid for, and that they can appropriately be assisted by the Government?

Most people will and should be able to make their own provision for crime prevention.

Someone can if he lives in Dulwich.

As with almost every question, the right hon. Gentleman shows that he wants to put his hands deeper into the taxpayers' pocket. It is important to say—

The right hon. Lady does not care.

Opposition Members do not care how much they take away from the taxpayer. It is far better for most people, who are able to do so, to take crime prevention measures themselves. As for the elderly, who cannot afford to take such measures, it is very proper use of money and labour from, for example, the community programme, to assist with a crime prevention scheme. I will stand comparison with any Opposition Member on personal care and provision—[Interruption.]

Order. It is very difficult, even for me, to hear against this background noise.

Much of what the right hon. Lady says might be true in Dulwich, but it is not necessarily true on housing estates throughout the country. If we do not find resources to help old people and poor people to protect their homes and their streets, we shall have to find the money in any case to help the police detect the crime, too late—after the damage has been done.

The right hon. Gentleman's record on the police should be compared with ours. We have provided extra police and extra equipment, and he goes and shakes hands with Bernie Grant and Scargill.

Is my right hon. Friend encouraged to pursue her economic policies by the annual report of the British Overseas Trade Board, which says that British manufacturing industry is improving its performance and that last year it expanded its volume exports by 8 per cent., thus proving that the rubbish spoken by Opposition Members about the British manufacturing base contracting is utterly false, as it is expanding?

My hon. and learned Friend is right. British manufacturing industry increased its exports last year by a further 8·5 per cent. That contributes greatly to our balance of payments and to the provision of jobs. Management and work force should be warmly congratulated.

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

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

In connection with the crime figures, is the Prime Minister giving urgent attention to the large increase in reported crimes of rape and sexual assault on women? Does she believe that, among other things, what appears in the media plays some part in creating the climate of opinion in which so much of this violence takes place? Will she dissociate herself from the offensive way in which the hon. Member for Birmingham, Ladywood (Ms. Short) was ridiculed when she tried to bring this matter before the House yesterday, and will she perhaps use her influence to bring together some of the newspaper proprietors and editors to talk about how they might improve the climate and not add to the grief of the victims of rape?

Rape is a uniquely barbaric offence and I am sure that the hon. Gentleman is very pleased with the recent judgment of the Lord Chief Justice, which set out guideline sentences of a much more severe kind than seem to have been applied in previous cases. The whole of the media bear a great responsibility for the way in which they report crimes of violence. As far as this particular crime is concerned, the hon. Gentleman will be aware that the name of the victim must not be given, by law, after a charge has been made, and that there are certain customs and conventions which obtain between the commission of this terrible offence and the court which one would hope would be observed by the press.

Does my right hon. Friend remember that in July last year we held a very informative meeting on the deregulation of the six freeports in the United Kingdom? She kindly gave me a letter after the meeting, but unfortunately I have to say today that the six freeports are ailing and dying because Customs and Excise is still applying all the regulations within its power. VAT, import duties and all the other taxes are still being charged within the freeports by Customs and Excise. The six freeports are very worried about this.

Perhaps my hon. Friend will let us have details. I think he is saying that fees are being charged which should not be charged because they are freeports. I doubt very much whether the Inland Revenue or Customs and Excise is charging what should not be charged, but if they are, perhaps my hon. Friend will let us know.

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

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

If the Prime Minister is not concerned about the old-age pensioners, I wonder whether she could show some concern for shop workers. Is she aware that 99 of her right hon. and hon. Friends have signed early-day motion No. 90 requesting a free vote on the Sunday trading legislation? Is she also aware that early-day motion No. 538 asking for the preservation of the traditional Sunday is supported by 70 right hon. and hon. Members? Is she further aware that Home Office Ministers have expressed great concern at the fact that they have received 400 letters in support of the Shops Bill and 40,000 against it? Is it not time that she reconsidered the situation and either withdrew the Bill or took it to the country?

First, with regard to pensions, I would point out that when the pension went up in November it went up to the highest ever level in real terms, and this is the first time that we have had an interim increase in the pension.

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

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

Has my right hon. Friend read press reports today which show that, despite the negative attitude of the Socialist parties towards Britain's manufacturing prospects and performance, it is predicted that exports of manufactured goods will increase to offset any loss of oil revenues?

Exports of manufactured goods are doing very well and have increased by 8·5 per cent. in volume terms—[Interruption.] Opposition Members are not interested in good news. This is good news for manufacturing industry and will provide jobs. Opposition Members would much prefer not to listen to success stories. Moreover, there is wider investment in manufacturing. In 1985, overall investment reached an all-time record of about £60 billion.

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

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

Given the Prime Minister's well known interest in law and order, may I ask her to consider what happened at Wapping last night, when one of Rupert Murdoch's lorries ran into a crowd of people who were peacefully listening to speeches from Privy Councillors and members of the shadow Cabinet? Will she institute a full inquiry into the rogue lorry that attacked those people last night?

I regret that in this incident two demonstrators at Wapping suffered injuries, and I am glad to report that neither was seriously hurt. Two police officers also suffered minor injuries. I hope that the hon. Gentleman will express sympathy—[Interruption.]

Order. Only one question has been asked.

I hope that the hon. Gentleman will express sympathy for the 79 policemen who have been injured at the picket line at Wapping.

On a point of order, Mr. Speaker. I should like to raise a short but not bogus point of order arising from questions. When the Chief Secretary to the Treasury answered question 13, he distinctly said that he had not heard the queston. Before the question could be repeated, he answered it, without having heard the original question.

I also noticed that, but I am not responsible for Minister's answers.