asked the Chancellor of the Exchequer how many people have been taken out of taxation since May 1979; and if he will make a statement.

Some 1·4 million people would still be paying tax today had we simply increased the 1978–79 tax allowances in line with inflation; they now pay no income tax at all.

I congratulate the Government on this excellent fact. Will my hon. Friend confirm that the Government aim to take more people out of taxation? Should this not be contrasted with the numbers who would be taken into taxation if public expenditure were increased by £28 billion, forcing the standard rate of income tax up to 53p in the pound, which is what the Labour party proposes if ever it wins power again?

It would he wrong for me to anticipate my right hon. Friend the Chancellor, but it would be in the spirit of what he has achieved so far if more people were taken out of income tax. As to the increase in public expenditure of £28 billion, it has been said by the Labour party that it would only tax the top 5 per cent. It has also been said, out of Sheffield, that to say that Labour would tax only the top 5 per cent. would be dishonest.

Is it not the case that since the Government came into office in 1979 the total tax burden hs increased from 38 per cent. of GNP to 44 per cent. now, and that a recent report of the OECD showed that our tax burden is now heavier than that of most industrial countries in the West?

The hon. Gentleman is correct to say that taxation as a percentage of GNP has increased, but that is why the Government intend to reduce it.

In this debate, should we not also consider the impact of personal allowances? Am I not right in saying that while our personal allowances are similar to those of our major competitors, our basic rate of tax is higher?

My hon. Friend is correct. My right hon. Friend the Chancellor has shown a balance between real increases in allowances with cuts in the basic rate of income tax.

Does the Minister accept that in evidence it is necessary to tell not only the truth but the whole truth, and while we may take some satisfaction in the numbers that are being taken out of income tax, that cannot be dealt with in isolation? Which Government put a standard rate of 15 per cent. VAT on the vast majority of goods and services?

It is true that, in line with the policy of moving the burden of taxation from direct to indirect, the previous Conservative Administration discharged that task.

asked the Chancellor of the Exchequer if he will indicate the increase in take-home pay since 1979 of a married man with two children on the average industrial wage; and how it compares with the national increase in productivity over the same period.

The real take-home pay of a married man who has two children and is on average earnings is expected to increase by 17 per cent. between 1978–79 and 1986–87. Since this Government took office productivity has increased by 13·4 per cent.

Does my hon. Friend agree that those figures show that, during the Conservative Government's period in office, there has been a substantial increase in the standard of living of people in this country? Does he also agree that unless we modify our pay demands, or increase our productivity, our international competitiveness is at risk?

I agree with the first part my hon. Friend's question. As to the second part, what is already an outstandingly healthy economy would he healthier still if the rise in real earnings were matched by a rise in productivity, impressive though the latter is.

Is the hon. Gentleman aware that in parts of Liverpool 80 per cent. of children attending school receive free school meals, which is indicative of low pay in that area? On average, 50 per cent. of school children in my constituency of Broadgreen receive free school meals. Is it not a ludicrous and idiotic suggestion by the Chancellor of the Exchequer that people in places such as Liverpool should take more modest settlements in their income? Is that not an absolute recipe for disaster for an already impoverished region? When will the Government do something positive about providing real jobs and a decent standard of living for people in Liverpool?

Under present circumstances, if we could achieve a 1 per cent. reduction in the rate of growth of real pay, that would, over time, create 110,000 to 220,000 new jobs. Those figures can be increased pari passu. That would make a powerful contribution to our unemployment problems.

asked the Chancellor of the Exchequer if he will estimate the total tax yield from those earning more than £25,000 per annum in (a) 1978–79 and (b) 1985–86.

Taxpayers with incomes of more than £25,000 paid £8·7 billion in income tax in 1985–86, which was 22·8 per cent. of the total. These taxpayers represent just under 4 per cent. of all income tax payers. The same top percentage of taxpayers in 1978–79 paid £7·8 billion in income tax at 1985–86 prices, which was 20·6 per cent. of the total.

I thank my right hon. Friend for his reply. Does he agree that that destroys the credibility of Labour's plans for raising extra revenue? Does he accept that the result of a Labour Government would be a renewed flight of talent from this country and high tax on the low earner?

My hon. Friend is quite right. The figures I gave show that the yields have increased, with lower taxes on the higher paid. They show what we have always said, that getting taxes down from the penal rate levels under the last Government motivates the wealth creators, to the benefit of the whole country, and increases yields. Labour's policy of a return to the rates of tax that existed in 1979 would, as my hon. Frind said, drive many of our most able, energetic and ambitious people out of the country.

Are not the statistics in this planted question so obviously fiddled? Surely, if an extra 3 million people are taken out of taxation by being put on the dole, it affects the bottom of the pyramid and makes it look better at the top.

I was talking about a percentage of the total tax. I should like to make it clear to the hon. Gentleman that the figures are not fiddled. They are accurate figures and they demonstrate that a higher proportion of the taxes currently obtained—it is not a question of people at the bottom end coming out —comes from those with higher earnings, because of the motivations we have introduced.

As increasing tax rates on the rich actually produces less revenue and not more, does that not mean that if Labour were to impose such tax bands the £24 billion that it has to raise for its social spending would have to be raised entirely from those paying the standard rate income tax?

It is true that under a Labour Government —if ever there was one again—tax would rise on all income groups. My hon. Friend does not need to go as far as that. Labour's plan to raise £3·6 billion from the top 5 per cent. would mean tax rates of 70 per cent. for all those—including married couples with both partners earning—with earnings above £24,000. That is clearly a crippling increase in the tax burden on those groups. I believe that it would reduce yields, but it would have much more serious effects on the economy as a whole.

Does my hon. Friend agree that priority should now be given to reducing further the standard rate of tax, which is the marginal rate for most taxpayers? As cuts in the top rates of tax have increased revenue, is it not possible that there would be a similar effect if the standard rate were cut?

I am sure that my hon. Friend noted that in his Budget this year my right hon. Friend the Chancellor of the Exchequer deliberately skewed the tax reductions—this was with emphasis on the basic rate—in favour of those with average to lower incomes. It is precisely that group, which we believe is still taxed too highly, which will gain most from the Chancellor's longterm pledge on income tax.

Is my hon. Friend the Member for Bassetlaw (Mr. Ashton) not right when he says that the figures produced by the Chief Secretary are suspect because the percentages that he quotes are those of a much narrower tax base, a base which has been made narrower by the unemployment which the Government's economic policies have produced?

The absolute amount of tax increased from this group for the two years at 1985–86 prices, and not proportionately. That is why lower taxes, which motivate people, have in this instance produced a higher yield.

If the Government believe in lower taxes, why in the long period of seven years that they have been in office have they increased taxes for the average taxpayer by 3p in the pound?

If income tax had remained at the same rates and allowances as in 1978–79, an additional £8 billion would have come through from income tax in this period. That is a sign of how we have been following our policy of reducing direct taxes.

asked the Chancellor of the Exchequer if he will make a statement on Government policy towards the fiscal encouragement of wider share ownership.

Over the past seven years the Government have significantly improved and extended the tax reliefs available for participation in company share schemes. The number of all-employee share schemes has increased considerably, from 30 in 1979 to over 1,150 today.

Is my hon. Friend aware that these figures are very welcome, but that the time has come when the Government need to go further in this direction? Does he accept the powerful case that is being advanced by people in all parties, I believe, that employee share schemes that are available to all employees should have some measure of time-limited tax relief? Will he draw this important point to the attention of our right hon. Friend the Chancellor of the Exchequer when he is considering his next Budget?

I welcome my hon. Friend's remarks. Further relief will be kept under review in the manner in which it steadily has been over the past seven years. A great deal has already been achieved, but I shall draw my hon. Friend's words to the attention of our right hon. Friend the Chancellor of the Exchequer.

Will my hon. Friend accept from those of us who do not have any family silver how pleased we are with the performance of our Jaguar, Telecom, TSB, Cable and Wireless, British Aerospace and other shares?

I am grateful to my hon. Friend for his comment. He may be interested to know that of the companies which have been privatised, 350,000 employees, or 80 per cent. of the employees therein, have become shareholders.

asked the Chancellor of the Exchequer how many representations he has received on the Government's proposals to abolish the married man's allowance.

We have received a considerable number of representations on the Green Paper. The great majority of those expressing a preference support the proposal to introduce transferable allowances; which is what the Government are recommending and is not the same thing as abolishing the married man's allowance.

If the estimated cost of the proposals in the Green Paper will not be a cost to the Exchequer, are they not likely to impose a further tax burden on over 6 million tax payers, bearing in mind that if the cost were to fall on the Exchequer it would be as high as £5·4 billion? Why does the Minister not open to discussion the cost of this proposed scheme, when at the end of the day it will not do justice to the married woman's allowance anyway?

It is intended that the scheme will be introduced over a period, and much depends on what happens to thresholds and allowances during that period. I believe, as is clear from the responses to the proposals in the Green Paper, that there are so many benefits in moving to transferable allowances that it is a tax reform that the vast majority of taxpayers would support.

Why does my right hon. Friend not take action to take the money from the married man's allowance and use it to encourage mothers to stay at home and look after their children? Will he, with one move, open up jobs in the labour market for men who cannot find work and at the same time encourage a lot of mothers to do that which they do best — stay at home and look after their children?

The proposal will give choice to married couples. It will give benefits to wives who are having their first children, who perhaps have worked before and who stay at home to look after their children. They will be able to transfer the allowance to their husbands. The proposal we recommend helps couples at the stage in their lives at which suddenly one partner becomes financially dependent on the other. The crucial factor is that it gives them a choice.

asked the Chancellor of the Exchequer what recent discussions he has had with the President of the Bundesbank concerning sterling's relationship with the exchange rate mechanism of the European monetary system.

I have discussed the European monetary system with the president of the Bundesbank on a number of occasions.

Does the Chancellor of the Exchequer accept that if his import-inducing consumer boom continues to rip sterling may again come under pressure? In that eventuality, would it not be better for the Chancellor to cover himself within the exchange rate mechanism than to rely on the uncertain bounty of the Bundesbank?

There is much to be said for fully joining the European monetary system. One of the reasons for joining the system is not the soft option which the hon. Gentleman implied. It would not be a soft option.

If France and Germany are in the EMS as larger and stronger economies, why cannot we join it?

France and Germany do many things which we do not necessarily do, as much as I respect the Republic of France and the Federal Republic of Germany. My hon. Friend's support for our membership of the European exchange rate mechanism is well-known and consistent. We keep this matter regularly under review. The balance of argument has shifted considerably, but the Government have not yet decided that the time is tight.

As everybody knows of the differences of opinion between the Chancellor of the Exchequer and the Prime Minister about joining the monetary exchange rate mechanism, will the Chancellor accept that in this instance, perhaps uniquely, the Prime Minister may be right, and that if we were to join, despite the obvious advantages of a fixed currency, we would be closely tied to the German deutschmark, with the problems that that would entail?

The right hon. Gentleman is extremely percipient in noting that if we were to join the EMS fully sterling would be linked to the deutschmark.

When my right hon. Friend the Chancellor next discusses the EMS with the president of the Bundesbank, will he discuss whether there might be some connection between the fact that bank lending in Germany is growing at only about 5 per cent. a year and their interest rates are under 5 per cent., whereas here bank lending is growing at about 16 per cent. and our interest rates are 11 per cent.?

There are many reasons why German interest rates are lower than those in this country. One is that inflation is even lower in Germany — indeed, at present it is negative — than in this country. Another reason, and it is one to which I have alluded on a number of occasions because it is important, is that the markets can see that unit labour costs in this country are rising a good deal faster than in Germany and most of our major competitors.

Will the Chancellor confirm that the figures published on Tuesday show that the fall of $668 million of gold and currency reserves was spent to hold off the rise in interest rates and thus save the Chancellor's face during the Tory party conference? If so, that is a shocking waste of the country's reserves.

It is difficult to satisfy the Opposition. They complain when interest rates are high. However, when reserves are used tactically at a particular time to ensure that a rise in interest rates can be held to 1 per cent. and not 2 per cent., they complain about that.

asked the Chancellor of the Exchequer when he last met the Building Societies Association; and what topics were discussed.

My right hon. Friend has not met the Building Societies Association this year. I have myself met the BSA three times, mainly to discuss aspects of the recent building societies legislation.

Will my hon. Friend tell the building societies, and more particularly their customers, that the Government have no intention of restricting mortgage tax relief either to first-time buyers, as has been suggested in some quarters, or to those who are paying the standard rate of tax alone? Would that not create a log jam at both the top and the bottom of the housing market, which would do no one any good?

I am grateful to my hon. Friend for drawing attention to this point. He will have noted the answer that my right hon. Friend the Prime Minister gave last week. The building societies and all those with mortgages — 8 million of our fellow citizens — should beware that the Labour party, through the Leader of the Opposition, has now made it clear that under a Labour Government only those who are young, who have many children or who fall on hard times would get the full benefit of mortgage interest relief.

Would it not be appropriate to switch the burden of mortgage tax relief to repair and renewal funds instead of incurring the considerable expenditure indulged in by way of relief on the capital purchase? More specifically, will the Minister discuss as quickly as possible with the Building Societies Association putting an end to the idiotic and unfathomable rule which the Treasury imposes and which as a general proposition prevents the investment of millions of pounds in the provision of rented housing, of which we are in dire need, because it will not allow the marriage between grants and private investment in rented property?

It is extraordinary that an Opposition Member should speak about the problems of rented accommodation when it is the Labour party's policies that have prevented the revival of the rented sector. Mortgage interest tax relief contributes satisfactorily to the growth of owner-occupation. I am glad to be able to say that that figure has now reached 62 per cent., compared with 55 per cent. when the Conservative party came to power.

Has my hon. Friend received any representations on mortgage tax relief from the alliance parties? Before he conveys those views to the Building Societies Association, will he say whether he has decided which alliance spokesman to believe? Is it the leader of the SDP, who appears to believe that tax relief should be abolished altogether, or the experienced and distinguished Treasury spokesman for the Liberal party, who believes that it should be restricted to basic rate taxpayers? Is the alliance as disorganised, as disunited and shambolic on this issue as on any other?

The policies of all the Opposition parties on these matters are in a state of confusion, but the one common theme to each is that they want to cut back on mortgage interest tax relief, to the damage of home ownership.

Will the Minister care to note, as he seems to have failed to understand the words of either my right hon. Friend the Leader of the Opposition or other Front-Bench spokesmen, that the party's policy is to retain mortgage tax relief at the standard rate, not to allow mortgage tax relief at the higher rate, and to give further help to first-time buyers, such as my constituents, who face not only exceptionally high interest rates, which are this Government's responsibility, but high prices for such houses as they might wish to buy? Those three points have been made clear repeatedly both by the leader of the Labour party and by other Labour Front-Bench spokesmen.

I am always interested to note what the hon. Lady says. I note it with particular attention when what she says is so different from what the leader of her party has said.

"young people, people with maximum family responsibilities to children or dependent relatives, and people who experience inadvertant falls in income, derive maximum benefit".

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

The retail prices index increased by 3 per cent. in the 12 months to September.

Does my right hon. Friend agree that the impressively low level of inflation enjoyed in this country today could be put in jeopardy if we continue to have high wage increases which bear no relation to productivity?

We do have a problem with wage increases running far in excess of productivity. That is perfectly true. I believe that this is basically a threat to jobs and that is why I am concerned about it. It is not a threat to inflation which can be kept under control by our monetary policy.

Does the Chancellor agree that the current level of inflation cannot sustain the personal credit explosion which is currently taking place at a level of 140 per cent. over the past 12 months? Does that mean that the Chancellor is to allow inflation to increase? Will he take measures to control credit? Or is he just hoping that it will all hang together for another 12 months?

I am perfectly happy to rest on this Government's record on inflation. We have brought inflation down from the peak of 27 per cent. that occurred when the Labour Government were in power, supported by the Liberal party, to the present level of 3 per cent., which is one of the lowest levels it has been for the past 20 years. The policies that brought inflation down will continue to remain in place and ensure that it remains low.

Is my right hon. Friend aware that, because of the firm grip that the Government have kept on inflation, the risk-takers, entrepreneurs and job creators who went abroad are returning to Britain? Those people were driven abroad by the high taxation and high inflation of a Socialist Government. I hope that the voters of Knowsley, North remember that.

As usual, my hon. Friend is absolutely right. I would add that a further important change has arisen as a result of the new tax climate and the sharp reduction in inflation. We now have more new business formation than ever before. Every week 500 new businesses net are set up. That is one of the most important seeds for the future which can give us encouragement and which we have sought for a long time.

Is the Chancellor aware that his known assessment of the underlying rate of inflation is based on an underestimate of sterling depreciation which, under the law of one price, affects not only imports but works through to all goods and pay, and eventually even to the non-trade sector?

The answer that I gave concerned the retail prices index for September as calculated by rules which have been accepted by parties on both sides of the House. Despite its defects—and it may have some—it is the best and generally acknowledged measure of inflation that we have. If the hon. Gentleman is thinking of future inflation, I shall have something to say about that later today.

Does my right hon. Friend agree that the speech that was recently delivered in Loughborough by the Governor of the Bank of England on the role of monetary policy and the control of inflation strengthens the argument for Britain joining the exchange rate mechanism of the European monetary system? As we downgrade the importance of monetary aggregates in the control of inflation, are we not by implication increasing the importance of stabilising the external value of the pound?

I am sure that my hon. Friend was especially pleased that the Governor of the Bank of England gave his important lecture on monetary policy in his constituency. It is a lecture that will repay reading by the whole House. As for my hon. Friend's question about the exchange rate, of course it is important, and it would be highly undesirable to see a continuing depreciation of the exchange rate, which would inevitably cause faster inflation. That I am determined to avoid.

The people of Knowsley, North now have to pay more for their bus fares as a result of the deregulation of the buses. Is that an increase in inflation, or not?

The rate of inflation of 3 per cent. is less than half the lowest figure that it ever reached in any month under the Government whom the hon. Member supported.

Will my right hon. Friend repeat what he said in his Budget statement—that there is a good case for petrol prices to come down again? They seem to go up a lot quicker than they come down.

My hon. Friend, who is an acute observer of petrol price movements, may well be right. I am glad to say that petrol prices have indeed come down since the Budget, just as I predicted that they should and would. I recall that the Opposition said that nothing of the sort would happen. I was right and the Opposition, as usual, were wrong. Petrol prices are lower than at the time of the Budget.

As the Chancellor presumably authorised the Governor of the Bank of England to announce the abandonment of sterling M3 as a monetary target, are we to assume that the whole disastrous monetarist experiment of the past seven years has been nothing more than a mistake? Has the Chancellor yet made up his mind—if so, perhaps he could let us into the secret—about what new mistake he intends to use to replace the old one?

May I take this first opportunity to congratulate the hon. Gentleman, not merely on his election to the Labour party shadow Cabinet, but on his membership of the Opposition Treasury team? I read in one of the newspapers that his promotion to that job would add much-needed talent to a lack lustre Opposition team. I should like, on behalf of the Government, to associate myself with those remarks.

asked the Chancellor of the Exchequer if he will introduce legislation to provide tax relief at the basic rate on season tickets.

No, Sir.

Although I am fully aware of the enormous pressure that the Treasury is under to give such assistance, does my hon. Friend appreciate the attractiveness of such a proposal for the hard-pressed commuter who faces increasing transport costs? Does my hon. Friend agree that if he undertook such a proposal it might lead to a reduction in the amount of traffic on our roads?

As 2½ per cent. of the entire country's work force commutes to my constituency daily, I am familiar with the problem, but the expense of home-to-work travel has never been allowable for tax relief. Where people live has been regarded as a personal decision, so travel has been regarded as a personal expense.

Does the Minister agree that the proposal is eminently reasonable, socially desirable and would bring some much-needed equalisation into the Exchequer's treatment of various forms of motor transport — three reasons for probable disqualification in the eyes of the Chancellor?

I answered the question asked by my hon. Friend the Member for Basildon (Mr. Amess) with the words, "No, Sir." and I give the hon. Gentleman the same answer.

asked the Chancellor of the Exchequer what representations he has received about his Budget proposals to encourage charitable gifts.

The Budget proposals to encourage charitable giving were warmly welcomed by hon. Members on both sides of the House and by charities themselves. They represent the most substantial package of tax concessions for charities and charitable giving ever introduced in a single Budget.

Can my hon. Friend confirm that charitable giving has more than doubled since the Government came to power? What expectations has he for further realising our people's sense of responsibility and generosity?

The contributions to charity through covenants, bequests and other means have risen dramatically since the Government took office. However, I still suggest that the payroll giving scheme and the measures introduced by my right hon. Friend the Chancellor in his Budget earlier this year will be regarded as some of the most important encouragements to charitable giving that have ever been introduced and I hope that they will be fully exploited. I also hope that hon. Members on both sides of the House will encourage charities and employers in their own constituencies to take part in the new scheme.

In respect of the Government's welcome initiative on payroll schemes for charitable giving, does my hon. Friend agree that the timetable between the end of the consultation period and the inception of the scheme next April will be very tight? Therefore, will he announce his definitive regulations as early as possible? Is he also able to say that the Government's own employees will be able to participate in such schemes?

I note my hon. Friend's point about the need to have the regulations in place. The scheme is necessarily somewhat complicated. However, we published draft regulations last week. We hope that representations on those will be forthcoming as soon as possible, certainly during this month. We would then naturally want to publish the regulations in definitive form as early as we can. We want to give charities, employers and employees the longest possible notice to implement the scheme. Those who will want to take part will need to have the formal regulations available before they make their decisions.

asked the Chancellor of the Exchequer if he will make it his policy to include a forecast of the levels of unemployment in his next Budget; and if he will make a statement.

No. It has not been the practice of this or previous Governments to publish forecasts of unemployment.

Is not the real reason for that answer the fact that, despite the 18 statistical fiddles that the Government have used to count the number of unemployed in the past seven years, the only hope that the Government see for bringing the unemployment figures below 3 million by the time of the general election is through further statistical fiddles? The Government's own figure shows that there are 7,154 unemployed in Coventry, South-East, costing £46 million a year in benefits and costing those in work £35 a week. Is not the only hope for the unemployed in Coventry, South-East, not more statistical fiddles, but a change of Government?

Not at all. I must make it clear that we are simply following previous practice. There is no question of any change in the publication of forecasts of unemployment. The hon. Gentleman never understands that it is customers for goods and services at home and overseas who create jobs. They are hugely put off by the sort of activities which the hon. Gentleman and his colleagues previously undertook and encouraged in British industry, which did so much to destroy jobs. It is the reverse of that which is the greatest hope.

Although the levels of unemployment remain unacceptably high, is it not noteworthy that this country has a higher proportion of its population of working age in employment than any other major country in western Europe? Will my right hon. Friend take steps to make that fact more widely known?

My hon. Friend is right and I am extremely grateful to him for giving me another opportunity to make that fact known. There is only one other country which has a higher proportion. What is more, in this country our level of youth unemployment is below the EEC average, and falling. It is also true that we have had an employment increase. It is important to emphasise, as my hon. Friend did, employment rather than simply unemployment. It is true that we have had an employment increase in the past 13 quarters, which is the longest period of continuous employment growth for almost 30 years. Those are the facts and my hon. Friend is entirely right in emphasis.

Will the Chief Secretary admit that the reason why the Government will not publish the forecast is not that the forecast does not exist but that if they did publish it it would confirm what everybody knows, which is that the Government have no hope to give the people who have no jobs?

That is simply not true. We are following the practice of previous Governments, none of whom have produced long-term forecasts on unemployment.

asked the Chancellor of the Exchequer what is the latest estimate of the proceeds from asset sales for 1986–87.

Privatisation proceeds in 1986–87 are expected to be about £4¾ billion, as indicated in the 1986 public expenditure White Paper.

As the gas industry in this country already has the widest possible ownership, that is, every citizen of the land, what is the point of continuing with a £20 million advertising campaign — all at the cost of consumers of gas? That is enough money to provide every retirement pensioner in this country with a week's free gas to see them over the winter.

What the Government have been embarking on in their privatisation programme is not only of great benefit to industry and the economy, but provides true public ownership by the wider extension of shares.

asked the Prime Minister if she will list her official engagements for Thursday 6 November 1986.

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.

Has the Prime Minister had time today to reflect on the seven and a half years of her premiership, and especially on the statement made during the 1979 election that her Government's first task would be to create jobs for our economy? In 1983 the Government said that their greatest task was to create a prosperous economy providing jobs for our people. Can she therefore explain how, in this capital city, unemployment has increased from 2·9 per cent. to 9·4 per cent., with 400,000 people now out of work in London alone? Is there not one answer to that—cruel failure?

Since 1983, 1 million net new jobs have been created, which has brought hope to 1 million more people. The hon. Gentleman asked why that has not had a greater effect on the unemployment register. There are three reasons for that: first, unit wage costs are still rising faster than elsewhere; secondly, the continued increase in the population of working age due to the baby boom of the 1960s; and, thirdly, continued reduction in overmanning in manufacturing industry.

At this time, when we remember the sacrifices made by our service people in two world wars, will my right hon. Friend look into the actions of those local authorities which, amazingly, have specifically banned those in receipt of service and police pensions from seeking employment with them? Is she aware that the Labour-controlled Bradford council has specifically excluded service pensioners from seeking a job with it? Is that not a slap in the face for all those who have served their country with distinction?

I saw that report and I hope that all local education authorities will use the very good teachers who are available and who have served in the forces, especially for subjects such as mathematics and physics. I urge all local authorities to exploit any potential source of good quality teachers. They will find those teachers among people who have served in the armed forces.

Does the Prime Minister recall telling me on Tuesday that it was for the governors of the BBC to reply to the attacks made by her right hon. Friend the Chancellor of the Duchy of Lancaster? Now that those governors have convincingly rebutted 39 out of the 40 charges made by her right hon. Friend, does she agree with the governors or with her right hon. Friend?

It is for the governors to answer the complaints. Perhaps the right hon. Gentleman will recognise that freedom of speech involves the freedom to make complaints — a freedom which he uses every Tuesday and Thursday.

The BBC has made no attempt to make an incursion into the freedom of speech of any member of the Government. The reverse is certainly not the case. That effort at coercion is so blatant and obvious. Is the Prime Minister accepting the claims of her right hon. Friend, or is she rejecting them? Is she on his side or on the side of the independence of the BBC?

The BBC exists because of a charter, a licence and an agreement. That is not embodied in statute at all. Therefore, the governors have a special duty to see that that charter, that licence and that agreement are upheld. People are free to make complaints, and they do. It is up to the governors to answer them. In this instance, the governors have made a reply. It is not for me to judge between them.

The country will conclude that the governors of the BBC have discharged their duty to freedom, which is more than can be said for the Prime Minister.

Bearing in mind that it was the right hon. Gentleman's Labour authorities that tried to restrict the circulation of free newspapers, he is hardly in a position, when he supports that censorship, to make complaints himself.

Will my right hon. Friend find time in between her official engagements today to congratulate Mrs. Jo Hawkes, who was the alliance parliamentary candidate in Ashford at the last election, who today joined the Conservative party?

I gladly do so. She is welcome, and I wish her well in her future career.

In view of the Prime Minister's difficulties in answering questions from my right hon. Friend the Leader of the Opposition, may I ask how much longer she intends to allow the Chancellor of the Duchy of Lancaster to go on making a fool of the Government?

The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) joins his right hon. Friend the Leader of the Opposition in making effective use of freedom of speech, which is freedom also to make complaints. I hope that he is not himself trying to stem that freedom by making any suggestion that the BBC has anything other than a duty to uphold the terms of the charter, the licence and the agreement.

Does my right hon. Friend agree that the best way for the BBC to allay suspicions of bias and distortion is not for it to sit as judge and jury in such matters, but for it to be answerable, as other television companies might be made answerable, to an independent broadcasting council, to which aggrieved parties could make representations?

The difference between the BBC and other television companies, and some of the independent broadcasting companies, is that the other companies are bound by statute passed by the House. The BBC is not bound in any way, which is why complaints have to be made to the governors. I understand that it would be very difficult to take that charter or licence or agreement to court, which imposes on the governors special duties and responsibilities.

asked the Prime Minister if she will list her official engagements for Thursday 6 November.

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

Will the Prime Minister now accept that the questionnaire from the Department of Employment to the unemployed is unnecessary and, indeed, is seen by many in the informed sections of the benefit system as a vicious attack on the unemployed? Will the right hon. Lady now advise the Secretary of State to withdraw this obnoxious document, so that those who have a right to benefit can claim it?

No, Sir. As I said to the House when the same question came up last week, the test of availability for work was confirmed by the Labour Government in the Social Security Act 1975. The hon. Gentleman now therefore wishes to disregard that Act, which was brought in by his own Labour Government.

asked the Prime Minister if she will list her official engagements for Thursday 6 November.

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

In the course of her busy day, will my right hon. Friend find time to consider an inquiry into the use by education authorities of section 11 money, which is provided for the teaching of English to members of ethnic communities, in view of the apparent use of that money by authorities such as Brent, and possibly Avon, for the promotion of black racism?

I am aware that two cases have been reported, and the Home Secretary has asked Brent for further information about the use to which it is now proposing to put section 11 grants. He has made it clear that no grant will be paid unless he is satisfied by the reply. The Avon multicultural education centre is also the subject of inquiry by the Home Office, with particular reference to the eligibility for section 11 grant of certain posts there.

In the wake of the controversy between the Chancellor of the Duchy of Lancaster and the BBC, will the Prime Minister undertake to clarify to all her colleagues the distinction between public interest and party interest? Is she aware, for example, that another of her hon. Friends has been writing to business men in his constituency offering direct access to Government Ministers at a fee of £35 payable to his Conservative association, and, further, claiming it, outrageously, to be a legitimate business expense? Will the Prime Minister recognise that there is a need to draw a clear distinction between the interests of good government and the interests of her party?

If the right hon. Gentleman has any complaints to make, I am sure that he will make them to the proper authorities. With regard to Government and party, as the right hon. Gentleman is aware, I am responsible for answering from the Dispatch Box for Government. He equally knows that I am not responsible for answering for party. Although I have done so on the BBC matter, it is not strictly within my course of duty from the Dispatch Box.

Bearing in mind my right hon. Friend's responsibility as First Lord of the Treasury for financing the armed forces, may I ask whether she has had time to read this week's survey showing that the majority of young people in Britain would welcome an opportunity to participate in a form of national service? In view of the highly successful expansion of the Territorial Army, will my right hon. Friend introduce a Royal Commission to examine how the young people of Great Britain can serve their country?

I saw that report, but our armed forces are based on the existence of voluntary professional armed forces and we do not have any plans at the moment to change that. There are a number of youth training places which can be served in the armed forces and those, I think, are earnestly sought after. I said that at the moment we have no plans to change that. It would, of course, be extremely expensive to alter the whole nature of our armed forces, which I do not wish to do.

asked the Prime Minister if she will list her official engagements for Thursday 6 November.

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

Can the Prime Minister explain what circumstances have changed since June to justify our ambassador at the United Nations attacking the Nicaraguans for using the judgment of the world court, which the Foreign Office welcomed when it was promulgated in June? Is this the too-high price that we have to pay for American support over Syria?

The hon. Gentleman is talking nonsense in the latter part of his question. Although we had no legal objection to the resolution, we were not prepared to support the attempt by Nicaragua to exploit a legal judgment for its own—[Interruption.] —political ends. The Government in Nicaragua are increasingly repressive in their methods and in recent months have taken action—[Interruption.]

Order. The Prime Minister is entitled to a hearing.

In recent months the Government of Nicaragua have taken action to close the Church radio station and newspaper. They also continue to intervene to promote subversion outside their borders, thus threatening the stability of the region.

Reverting to the BBC, does my right hon. Friend recall, before the current episode blew up with the BBC, the Ian Curteis play? Is she aware that it was specifically banned from being broadcast, on the direct instructions of the director-general, because it showed the Government and my right hon. Friend in a good light?

I am sure that if my hon. Friend has that complaint he can make it to the appropriate authorities.

asked the Prime Minister if she will list her official engagements for Thursday 6 November.

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

Will the Prime Minister speak to her right hon. Friend the Member for Chingford (Mr. Tebbit) today and ask him to moderate his intemperate attacks on the BBC? Is she aware that her hon. Friend the Member for Derbyshire, South (Mrs. Currie) makes almost nightly appearances on the media? Will the Prime Minister ask her hon. Friend to do two things; first, ensure that a red warning triangle is exhibited, and secondly, curb her appearances before I start believing that the BBC is biased against the Conservative party?

I am delighted that the hon. Gentleman and so many other Opposition Members have so few complaints about the economy that they can concentrate on the sort of trivia that has been raised during this Question Time.