asked the Secretary of State for Northern Ireland to what extent his Department has subsidised Harland and Wolff Shipbuilders over the last five years; and how much money is committed to further subsidy.

The amount of subsidy provided to Harland and Wolff over the last five years was £225·6 million. Provision of £40·5 million has been made in the Main Estimates for 1987–88.

Is not the Minister's problem this: Harland and Wolff now require a subsidy of well over 40 per cent. of its turnover, whereas the EEC sixth directive on shipbuilding means that subsidies at other shipyards are restricted to 28 per cent.? What steps will the Government take to bring their subsidy to Harland and Wolff into line with the subsidies that they are prepared to provide for mainland merchant shipbuilding yards, or will they continue to subsidise Harland and Wolff in excess of the levels that they are offering to mainland shipyards?

The hon. Gentleman is wrong to think that Northern Ireland is exempt from the EEC sixth directive on shipbuilding subsidies. If he believes that the subsidy given to Harland and Wolff is large, I remind him of the figure quoted by my right hon. and learned Friend the Chancellor of the Duchy of Lancaster on 7 July in the House, when he said that British Shipbuilders — with which Harland and Wolff is not connected — has been subsidised to the tune of £1,750 million since 1979.

Will the Minister confirm that the Belfast shipyard is essential to Northern Ireland and that it plays a vital part in the economy by directly employing 3,700 workers and indirectly employing many thousands? Will he also confirm that 740 companies in mainland Britain do business with the shipyard, and that during the last financial year companies in Britain have secured orders worth £50 million from Harland and Wolff for the supply of components and materials? Does that not contrast with the 600 companies in Northern Ireland which secured orders to the value of £7 million in the same period?

The hon. Gentleman makes sonic important points. We are aware of the importance of Harland and Wolff to industry in Northern Ireland, and we are doing all that we can to assist Harland and Wolff in winning further orders, upon which the future of the yard depends.

Will the Minister remind the Secretary of State for Defence of the exact terms of his statement in the House on 24 April, when he said that Swan Hunter should be given a preferential opportunity to bid for AOR2? He also stipulated that AOR2 should be of the same design as AOR1 and that the terms, conditions, cost and programme should be no less favourable to the Ministry of Defence than that which could be obtained from Harland and Wolff for a follow-on ship. Will the Minister continue to press that point and remind the Secretary of State of his statement in the House?

The commitments made at the time of placing the AOR1 order were quite clear. It was confirmed that the order was unsubsidised and comprehensively costed. As the hon. Gentleman will be aware, independent assessors are ensuring that there is no overrun on the cost of the construction.

Is my hon. Friend aware that, having spent my working life in shipbuilding, on a recent visit to Harland and Wolff I was immensely impressed by the efficiency of the yard, the quality of the output and the spirit of the work force? Has he received any approach from the EEC Commission which might put the future of that splendid yard at risk?

My hon. Friend's interest in this area is well-known and I welcome his recent visit to the yard. The Government are determined to do all that they can to assist in the winning of future orders for Harland and Wolff. We welcome the recent flexibility that has been shown by the work force at Harland and Wolff, which should ensure that the manner in which it tenders for further orders is assisted.

Does the Minister accept that there is agreement in all parts of the House that Harland and Wolff is vital to the economy of Northern Ireland? In the light of that, will the Minister state how many thousands of jobs have been lost to the yard since the Government came to power in 1979? Will he give projected figures for the number of employees in the yard over the next five years?

I welcome the hon. Gentleman to his Front Bench with his new responsibilities. We very much look forward to his future contributions.

asked the Secretary of State for Northern Ireland if he will make a statement about progress on cooperation on cross-border security with the Republic of Ireland.

Both Governments are committed to the development of the closest co-operation to defeat terrorism. Last week's meeting of the Intergovernmental Conference heard a detailed report on the programme of work which is being carried out by the Royal Ulster Constabulary and the Garda Siochana in the area of security co-operation, and we shall continue to give the highest priority to this.

Does my right hon. Friend agree that there can be no political solutions in the North or South of Ireland until terrorism is defeated? Will he acknowledge the sense of outrage felt in all parts of the United Kingdom at the shooting, from across the border, of a British soldier in Belleek? What representations has my right hon. Friend made to the Irish Government about this incident?

I certainly confirm the feeling of outrage that I know every hon. Member will share about that particular atrocity. My hon. Friend may be aware that, after that attack, I spoke immediately to Mr. Lenihan, the Deputy Prime Minister, and to the Foreign Minister of the Irish Republic, about that incident. He gave me the clearest assurance that every possible effort would be made in respect of their jurisdiction. I confirm that we shall be anxious to co-operate as closely as possible to bring to justice those responsible. It is quite clear that that attack was a deliberate provocation to try to stir up hatred and sectarian feeling.

Will the Secretary of State be assured by me that the people who live close to the frontier have no confidence whatsoever in what he says? The particular shooting to which the hon. Member for Battersea (Mr. Bowis) referred happened in my constituency. The site from which it took place is well known to me. There is no point in the right hon. Gentleman suggesting that security is better when that was the one single point overlooking Belleek police station and the main street from which an incident of this sort could have taken place. The terrorist was able to move in, carry out the murder and escape without any adequate steps being taken to apprehend him. There is absolutely no confidence in this so-called cooperation, when we know that members of the the Garda Siochana are not even allowed to work overtime.

Of all the Members in the House, the hon. Gentleman cannot pretend that he does not know something about the security situation. He knows perfectly well the problems of guarding 300 miles of border for 24 hours a day, seven days a week. He knows how difficult it is to prevent an incident where one evil man can on one occasion creep into position and commit an atrocity of that kind. He knows the challenge that that poses. I welcome the hon. Gentleman's contribution, but I put it to the House and to the hon. Gentleman that he make a constructive contribution and should recognise that there is no way in which we are likely to improve cross-border security without the co-operation of the Irish Government.

Our heartfelt sympathy goes out to the family of this young soldier who, I gather, had been in the Province for only 24 hours. Does my right hon. Friend agree that it is time that we reconsidered the whole concept of hot pursuit so that both sides have an opportunity to go over the border in pursuit of terrorists? Surely it is not asking too much to look at that again.

The problems of this sort of attack are not necessarily ones that are immediately met by a response of hot pursuit. It is important that there should be increasingly close co-operation between the security forces of both sides. I certainly look for clear evidence and the clearest determination in pursuit of the perpetrator of this crime. That also applies to the other crimes that have taken place because, tragically, there have been a number of other murders in recent weeks in Northern Ireland, the investigation of all of which must be prosecuted to a successful conclusion.

asked the Secretary of State for Northern Ireland if he will make a statement on the security situation in Northern Ireland.

asked the Secretary of State for Northern Ireland if he will make a statement on the security situation in Northern Ireland.

Since I last answered questions in the House on 14 May, 16 people have been killed in incidents arising from the security situation. They included five soldiers, two members of the RUC and nine civilians, of whom six are believed to have been the victims of sectarian murders. Of the remainder, two were former members of the security forces. The Provisional IRA has claimed responsibility for 12 of these brutal murders and the UFF and the UVF claimed responsibility for one each.

As the name of the man who carried out the dastardly attack on the wife of Jim Nicholson, a former Member of this House, is well-known to the security forces, will the Secretary of State tell the House just what assistance has been given by the Government of the Republic of Ireland to bring this man to justice, to extradite him and to bring him to trial in Northern Ireland?

Obviously I cannot comment on hearsay reports, but my understanding is that there are a number of people for whom both the Garda Siochana and the RUC are actively searching at the present time.

What are the prospects for real co-operation with the forces of the Irish Republic, given, as my hon. Friend the Member for Fermanagh and South Tyrone (Mr. Maginnis) said earlier, that the overtime of the Garda Siochana has been almost totally eliminated? Therefore, as the Irish army has to work in conjunction with the Garda there can be no effective co-operation. Is it realistic to expect the IRA to observe office times?

The right hon. Gentleman may care to reflect on that question and its totally negative nature. It contains the suggestion that it is not worth trying. It is no secret that the Irish Government face economic problems. The suggestion that somehow we would do better by having nothing to do with the Irish Government and by standing as far apart from them as we can is unrealistic. Surely the right hon. Gentleman should be encouraging closer cooperation with the Irish Government and co-operation between the security forces in Northern Ireland and the Republic and seeing how we can make this co-operation more effective.

Has not every Irish Government, since the troubles began, said that they were doing everything they could against terrorism? Does not that honourable undertaking, coupled with the worsening figures of deaths as a result of terrorism, indicate that the Anglo-Irish Agreement is at best irrelevant to the security situation?

I pick up one point straight away about my hon. Friend. When he looks at the statistics, will he be very careful, and when he talks quickly about the worsening figures of deaths, will he remember that within the global statistics are included, for example, those who were killed in the internal feud in INLA and terrorists who met their death at the incident at Loughall, and that it is important to look at what makes up the total statistics. I bow to my hon. Friend in his knowledge of Irish history and in what successive Irish Governments may have said. I can answer only from my own experiences and dealings with present Irish Ministers. I am satisfied that, whatever the history of the past, the whole experience of the previous and the present Government of the Republic of Ireland is an absolute recognition of what a total disaster to the whole of the island of Ireland is the present terrorist campaign, which is the godfather of unemployment in the Republic at present. I do not doubt the sincerity and real determination of the Government of the Republic of Ireland now to see what, together, we can do rout it out once and for all.

What has the Anglo-Irish Agreement achieved during the past 18 months in defeating the Provisional IRA south and north of the border? Does the right hon. Gentleman not find it strange that Dublin politicians, who shed tears whenever a British soldier, policeman or civilian is murdered by the IRA, sometimes from across the border, none the less protest vehemently whenever a soldier strays accidentally a few yards across what the right hon. Gentleman said is a complicated border? Will he protest as vehemently to the Eire Foreign Minister whenever one of our soldiers or citizens is murdered from across the border?

There is a question later on the Order Paper on the matter of cross-border incursions. What is certainly true, and I would have thought that the hon. Member would have recognised it when he heard the figures, is that there is now a much better understanding between the Governments about the problems of incursion. The hon. Gentleman may be interested to discover how many of them there have been and how little publicity has been given to them. I hope that he will be encouraged in that respect.

In reply to the second question today the Secretary of State seemed to complain about the activities of one evil man killing a soldier in Belfast while in the next few breaths he talked about 16 people who have died since he last answered questions in the House. When will the Government realise that they, and they alone, were elected by the people of this nation to protect its citizens, and get on with the job and stop depending on other folk? They should do their own job.

The hon. Gentleman knows a hit too much about the circumstances in Northern Ireland to pass the blame in that respect. Everybody has a contribution to make. One of the figures that I mentioned was the level of sectarian murders. Many of these sectarian murders will lie on the consciences of a lot of people who make strong speeches and inflame passions. They may not pull the trigger, but they have a share of responsibility for some of the murders that take place. May I just say that, yes, my goodness, standing here as I do as Secretary of State, I do not duck the clear responsibility that I have to do my best to try to improve security in the Province, but I look to a few other people to play their part as well.

Does my right hon. Friend agree that a helpful step forward might be to require councillors to take an oath of loyalty, coupled with a renunciation of violence?

My hon. Friend is trying to lead me on to country into which I am not quite ready to step. However, I note the point that he made.

I note the Secretary of State's careful reply to his hon. Friend's question. I, too, will not trespass there at present. The Opposition firmly support him and the policies of Her Majesty's Government in pursuing terrorists wherever they come from and from whatever side of the community in Northern Ireland. However, there can be no satisfactory solution to any of the problems of poverty, unemployment or discrimination while the place is plagued in that way. Can the right hon. Gentleman tell the House what progress is being made in seeking out the random killers in the Ardoyne who are only inflaming the situation and making passions high?

I welcome the hon. Gentleman to his first Question Time with his new responsibilities, and I look forward to debating matters with and responding to questions put by, him and the hon. Member for Leicester, South (Mr. Marshall).

Will the Secretary of State reiterate his assurance that he is receiving the full co-operation of the Government of the Republic of Ireland and the Garda Siochana with the RUC to apprehend and pursue terrorists within either jurisdiction? Will he confirm that the per capita expenditure by the Irish Republic on the pursuit and prevention of terrorism exceeds that of the United Kingdom? Most important, will he reaffirm that the basic answer to terrorism is a political solution to the problems of Northern Ireland, in that terrorism is the sympton, not the malady itself, which is political instability?

I am grateful to the hon. Gentleman, who has shown that I did not fully answer the question put by the hon. Member for Kingston upon Hull, North (Mr. McNamara). Talk of co-operation as if people will say, "Yes, we will co-operate where perhaps we were not cooperating before" and suddenly it all clicks into place is simply not the score. It will take much detailed work, some of which has been done, and some of which is in process. It will take training, compatibility of equipment and a whole range of different factors to make security cooperation more effective. It takes trust and confidence, and all those things are developing slowly, but in the right direction. It also takes time to establish them. Yes, we are determined, through that, to deny to the terrorists resources, whether they be weapons, explosives, money through the paramilitary rackets, or recruits, more of whom can be created by disaffection and grievance. We are seeking to pursue a totality of approach.

asked the Secretary of State for Northern Ireland when he intends to give parents greater choice in deciding which school their children should attend.

New arrangements for the transfer of pupils from primary to secondary schools were announced on 7 April. Under these new arrangements, from September 1988 parents will be free, within a selective system, to send their children to the secondary school of their choice, subject only to the physical capacity of the school and any special arrangements which may have to be made to protect a limited number of small schools serving relatively isolated communities.

I welcome my hon. Friend's reply as a clear sign that the Government are committed to increasing parental choice in all parts of the United Kingdom. Does his answer mean that he will no longer be deciding attendance quotas for indvidual schools?

That is exactly what it means — subject to the physical capacity of the school. I saw no justification for my deciding the individual allocation quota for a school when there were parents who wished to send their children to that school but who, because of my edict, were not able to do so.

Does the Minister accept that we are not giving proper choice if we subsidise bus fares for people who travel past good schools to go to other schools, and at the same time close secondary schools in working-class inner Belfast?

As the hon. Gentleman knows, there are 20,000 surplus school places in Northern Ireland. The Government have been encouraging the education and library boards to pursue a policy of rationalisation over some years, so that more money will be made available for educating the children. It does not make sense to spend money on half-empty schools when it could be better spent on books and education facilities for the children.

Is it the Government's policy to encourage integrated education? Why does it take so long for schools that are based on the integrated principle to achieve grant-aided status, particularly Hazelwood college in north Belfast? Having begun life last September with only 17 pupils, it now has 150 enrolled for the next academic year. Why has the Minister still not given the college grant-aided status?

It is the Government's policy to encourage integrated education, if that is what the parents wish, and they have taken several steps to encourage that principle. I do not accept that there is undue delay in the giving of grant-aided status to integrated schools, because I must be satisfied, first, that all those in the area who might be affected by the setting-up of a school have ample opportunity to express their views for my consideration. Secondly, I must be satisfied that when we commit public funds to a school it has a viable future, otherwise I would be subject to the criticism by hon. Members that I was wasting taxpayers' money.

asked the Secretary of State for Northern Ireland when he intends to introduce the equivalent of the technical and vocational education initiative in Northern Ireland.

A vocational education programme for secondary schools in Northern Ireland was announced in December 1986 and some £5·6 million has been made available in the 1987–88 financial year. That programme has the same broad objectives as the technical and vocational education initiative, but has been tailored to meet the particular needs of the education service in Northern Ireland.

I warmly welcome that news. Does my hon. Friend agree that the vocational education programme offers a real opportunity to break down barriers between education and training and to establish links between schools and employers? Will my hon. Friend give a little more detail about his plans? Can particular priority be given to introducing the programme in secondary and intermediate schools?

I am grateful to my hon. Friend, because I attach considerable importance to the new initiative. The £5·6 million to which I referred is for this financial year. I hope to be able to make broadly similar amounts available in the next two financial years. That money will go towards the provision of additional laboratories and workshops, additional equipment, sports facilities and in-service training for teachers because I am determined, as my hon. Friend says, to try to increase technology, science, information technology and economic awareness among the pupils in Northern Ireland to help them make the transition from school to industry and work.

asked the Secretary of State for Northern Ireland if he will make a further statement on his policy towards the future of electricity generation in Northern Ireland.

We aim to reduce the Province's over-dependence on oil-fired generating capacity and to promote efficiency in electricity generation and supply. Northern Ireland will require new generating capacity in the mid-1990s and substantial progress has been made in a complex examination of options which, as my hon. Friend knows, include a proposal presented by the private sector as well as by Northern Ireland Electricity.

I am encouraged by that reply, but can my hon. Friend assure the House that the final phrase in his answer to my question shows that the Government are anxious to consider the benefits that will flow to the whole economy — not only the Northern Ireland economy but the British economy — from private generation of electricity in Northern Ireland?

We recognise the benefit that could flow from a substantial investment of that sort in Northern Ireland, but the issues involved, particularly in the private sector option, are complex. We need to ensure that when the decision is made it will be to the long-term benefit of all consumers in Northern Ireland, both industrial and domestic.

Does the Minister accept that completion of phase 2 at Kilroot power station is the most economic option presently available for future generation in Northern Ireland? Does he further accept that if the decision were taken to complete Kilroot phase 2 we would create additional jobs for miners on the mainland, reduce dependence on oil by Northern Ireland Electricity and afford time, which is very necessary, to ensure that the right decision is reached on the future siting of the lignite power station and privatisation?

The hon. Gentleman puts the arguments well on one side. Kilroot 2 provides an attractive option, but we must consider the life of the prospective generating station over, say, 30 years, the price of coal and lignite during that period and the benefits that might flow from a substantial private sector investment in Northern Ireland. We are determined to consider all those factors carefully before reaching our decision.

Will the Minister give a categorical assurance that Northern Ireland will not be used as a dry test run for the privatisation of the electricity supply industry throughout Great Britain?

I can assure the hon. Gentleman that that thinking does not permeate our minds at all. We are determined to do the best that we can for the consumers in Northern Ireland. There are no current plans to privatise Northern Ireland Electricity, although of course, we watch the progress of my right hon. Friend the Secretary of State for Energy, who is responsihile for electricity generation in Great Britain, and we shall see whether there are lessons to be learnt for Northern Ireland.

asked the Secretary of State for Northern Ireland if he will make a statement on initiatives being taken to promote tourism in Northern Ireland.

We have encouraged the Northern Ireland Tourist Board in its promotional and marketing activities, and the grant-in-aid to the board has been increased for 1987–88 by 18 per cent. to over £3 million in order to assist it in these tasks. In addition, the Department of Economic Development is encouraging the extension and improvement of tourist accommodation by the private sector and the development of new tourist amenities by the public sector with grant-aid of almost £3 million.

I thank my hon. Friend for that answer. Did he hear the BBC Radio 4 programme "Breakaway" on Saturday, which paid attention to the idyllic attractions of Lough Erne, which seems to be an area of miles of still water and wooded islands where one can sail for days, tying up at different jetties, at each of which there is a different pub? Is it not time that we paid some regard to the beauties and attractions of Northern Ireland and the jobs that tourism can create for the people of Northern Ireland?

I regret that I missed that programme last week, but I have visited Lough Erne. The last occasion on which I did so was for the Sealink fishing festival—the fishing festival with the largest prize money in Europe—where I met a number of the 300 competitors from continental Europe and enjoyed with them the delightful tranquility of Lough Erne, which I encourage all hon. Members to see for themselves.

Does my hon. Friend agree that the most useful thing that the Government could do to promote tourism in Northern Ireland would be to win the war against terrorism and violence in the Province? In that regard, will he make representations to the Government of the Republic to the effect that our support for the Anglo-Irish Agreement is not unconditional and that we expect the apprehension and extradition to Northern Ireland of wanted terrorist suspects?

My hon. Friend is leading me along paths which are not my direct responsibility as Minister with responsibility for tourism. Those who come to Northern Ireland can enjoy golf, angling and the scenery, without really knowing that it has a problem of sectarian violence and I encourage people to take advantage of the tourist attractions immediately.

The Dublin Government use their embassies throughout the world to promote tourism in the Irish Republic. Will the Government urge their embassies to do a similar job to show the attractions of Northern Ireland to people in different parts of the world and to tell them the truth about Northern Ireland?

Our embassies overseas work hard to promote tourism in Northern Ireland, and I shall be delighted to give the hon. Gentleman more information about the efforts that have been made in that respect.

asked the Secretary of State for Northern Ireland if there are any plans to end the use of plastic bullets in the Province.

No, Sir.

As 383 people have been injured, some seriously, by the use of plastic bullets, and that 15 people, mainly innocent civilians, have been killed, will the Minister reconsider his decision? Will he state the position for compensation for victims who have been killed or maimed?

The hon. Gentleman will also be aware that over the years Northern Ireland has seen serious street disturbances. It is necessary to have an adequate deterrent to meet such disturbances. As to the figures that he gave on injuries, he should also bear in mind that in the two years ending in November last year about 1,000 RUC officers had been injured in street disturbances. It is important that we take that into account. Compensation is a matter for the normal processes of civil litigation. I do not believe that there is any extension of the statutory schemes.

Everybody obviously regrets any injury or fatality, but does my right hon. Friend agree that if he was a Minister standing at the Dispatch Box being asked to answer such questions in almost any other country he would probably have said, "Yes, Sir. They will be replaced by live rounds."? Is it not a compliment to the security services and to the tolerance that we show in this country towards such murderous activity that we still use plastic rounds?

I take my hon. Friend's point. He is entirely right. We have always followed a policy of absolute minimum effective deterrence in trying to deal with the serious problem of street disturbances. The series of marches in the Province during the past few days have been conducted in a much more peaceful and relaxed atmosphere. That is a significant development that reflects extremely well on the Royal Ulster Constabulary and on both communities in the Province.

Does the Minister agree that in many circumstances the use of plastic bullets is, in fact, the use of live ammunition, and that the circumstances surrounding their use often lead to confusion and to fatalities? Does he not also agree that, politically speaking, the use of plastic bullets is probably one of the most emotive and defeatist things that could be done when quelling a random disturbance in Northern Ireland?

The hon. Gentleman must bear in mind the nature of the problems that the RUC has had to face in the past in Northern Ireland. I certainly cannot agree with him when he says that plastic bullets are the equivalent to using live rounds. I draw his attention to the fact that although, regrettably, 15 people have been killed by the use of plastic bullets since 1970, about 100,000 plastic bullets have been fired during that period.

Does the Minister not understand that families in Northern Ireland are still grieving because innocent children have been killed by plastic bullets? People have been maimed. Indeed, a woman that I have met was standing in her kitchen doing the washing up when she was blinded by a plastic bullet. When the Minister stands at the Dispatch Box to defend the use of plastic bullets, does he not think that he should at least express some regret for those totally innocent people who have been hurt, maimed and killed by the use of plastic bullets?

I am very ready to express regret for the small minority of cases in which innocent bystanders have become casualties as a result of the firing of plastic bullets. I hope that, for her part, the hon. Lady will be ready to condemn those who have indulged in the throwing of petrol bombs and in all sorts of other extreme forms of violence in street disturbances in the Province.

asked the Secretary of State for Northern Ireland how many school leavers in Northern Ireland obtain one or more A-levels.

In 1983–84, the latest year for which figures are currently available, the number was 6,217—about 22·5 per cent. of all school leavers.

Will my hon. Friend accept the congratulations of the House on those excellent results? Will he explain to the House why those results are so excellent? Will he have a word with our right hon. Friend the Secretary of State for Education and Science to give him some guidance as to how we might achieve the same level of excellence on the mainland as we have managed in Northern Ireland?

I am grateful to my hon. Friend for his comments. There are several excellent schools in Northern Ireland and parents are committed to ensuring that their children are educated as well as possible. I am sure that both those factors, together with the fact that in several schools the teaching is directed closely towards examinations, help to give the good A-level results that are achieved.

asked the Secretary of State for Northern Ireland, pursuant to his answer of 2 July, Official Report, column 141, what is his estimate of the cost of listing the different representations received from bodies and individuals, including the Government of the Republic of Ireland, concerning current arrangements for trying scheduled offences in the courts in Northern Ireland.

Assuming that only representations made since 1979 were covered, the estimated cost of identifying and listing them all is estimated to be in excess of £300.

Does the Secretary of State recognise that that is a small sum to pay to allow the House to know what input has been made into a reform of the justice system of our nation? Or, are we being led astray by the statements of his previous co-chairman of the Anglo-Irish Intergovernmental Conference, who said that with the removal of Lord Hailsham we are getting ready to introduce three-judge courts in Northern Ireland?

If the hon. Gentleman had tabled a direct question I would have been happy to answer it, but on this matter, as I have made clear before, we have listened to the arguments and at present are not persuaded of the merits of the case. That is the position and nobody should read more into it than what I have said. We are not persuaded of the arguments and our position remains as it was when I made my statement on the matter.

asked the Prime Minister if she will list her official engagements for Thursday 23 July.

This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Will the Prime Minister encourage local authorities this summer to put their services out to competitive tender, thereby securing savings of up to 30 per cent. in place of municipal Socialism?

Yes. As my hon. Friend knows, we are introducing legislaton on this matter. It is a matter of regret that more local authorities have not taken this course of action, because had they done so they would have had substantial savings and a much more efficient service. We shall always encourage local authorities to produce services most efficiently. The local authority Audit Commission has made many proposals and has shown the scope for saving money.

Can the Prime Minister assure us that this morning's Cabinet meeting took an unequivocal decision not to reduce public expenditure in real terms next year?

We had an excellent Cabinet meeting this morning. We issued a statement as follows:

"The Cabinet had its usual July discussion of public expenditure today. It reaffirmed the policy"—

"It reaffirmed the policy that public expenditure should continue to take a declining share of national income, as set out in the last Public Expenditure White Paper,"

Does the Prime Minister not know that exactly two hours ago journalists were briefed that this morning the Cabinet decided to maintain the public expenditure planning totals, which amounts to a cut next year in real terms? Why does she not have the guts to tell that to the House of Commons?

I am telling the right hon. Gentleman precisely what happened. Why does he not have the guts to accept it?

Is my right hon. Friend aware of the growing anxiety about reports that Her Majesty's Government have failed to reach agreement on an interdepartmental basis on the budget for space expenditure and that the proposal of the British National Space Centre for increased space activities will therefore be rejected? Does that not call into question our future commitment to the European Space Agency and to the BNSC?

I do not believe that it does. It is quite correct that we have not been able to find the considerable amount of extra expenditure that was requested. As my hon. Friend is aware, we spend through the taxpayer some £4·5 billion on research and development. We are not able to find any more resources. Therefore, it would mean a switch of resources from one research or technology development to another. My colleagues felt that they could not make that switch and therefore we shall continue our subscription to the European Space Agency, but at present we are not able to find more money. I hope that the private sector, if it is interested in the results from such research, will come forward with considerable resources.

asked the Prime Minister if she will list her official engagements for Thursday 23 July.

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

Will the Prime Minister [HON. MEMBERS: "Reading."]

For greater accuracy.

Try to paraphrase, please.

Will the Prime Minister extend her pledge and give a categorical guarantee that she will veto any attempt to introduce VAT on bus and rail fares or on newspapers?

I answered that question in detail last week. I am not quite sure to which of the three aspects the hon. Gentleman is referring. He is probably referring to the proposal before the Commission that there should be some approximation of value added tax. That proposal could be passed only by the unanimous vote of all countries. — [Interruption.] It is not a question of vetoing—we should vote against it. [Interruption.] That is not a veto; it is a vote against. A veto is the phrase used for the Luxembourg compromise— [Interruption.] Mr. Speaker, the Opposition seem to know the answer.

Will my right hon. Friend assure the House that any agreement on intermediate nuclear weapons must not only be properly verifiable, but must ensure that NATO can deter aggression at whatever level it may occur?

Yes, I agree wholeheartedly with what my hon. Friend has said. Any agreement on intermediate nuclear weapons must be thoroughly verifiable, so that we can see that people are carrying out what they say they will do. Of course, it would have to be phased, and that, too, would have to be verifiable. We must also examine it in relation to the state of other defences, particularly chemical and conventional weapons.

During her summer holidays, will the Prime Minister try to work out how she will explain to people serving in Her Majesty's forces that if, in the next few years, they are stationed in England they will pay no poll tax, but if they are transferred to Scotland they will pay such a tax without any corresponding increase in income? During the summer, will she try to find anyone outside the ranks of the Government who supports this ludicrous measure and report such a discovery to the House?

I take it that the right hon. Gentleman is very much in favour of the community charge in Scotland. He knows full well why the Bill was brought forward in Scotland. Scotland has already suffered from the effect of a rating revalation, with disastrous consequences, such that we had to bring forward that legislation first. Legislation for England and Wales will follow.

Is my right hon. Friend aware that Mr. Gorbachev's acceptance of the double zero option with regard to intermediate and shorter-range nuclear missiles is most welcome? Will she accept that it is almost entirely due to her determination and steadfastness, and to that of our ally, President Reagan, that this satisfactory state of affairs is being brought about and that it owes nothing to the activities of the Opposition, let alone the so-called peace movement?

It is reported that the Soviet Union is about to accept the global zero option for intermediate nuclear weapons. Its proposals will be tabled, it is expected, in Geneva this afternoon. Until they are tabled, we do not know whether the option has been accepted with any conditions attached. If it is without conditions, we warmly welcome it.

"We would prefer the Soviet Union to agree to a global zero-zero on intermediate nuclear weapons. So far it has been unwilling to do that, but that is what we shall continue to ask for."—[Official Report, 30 April 1987; Vol. 115, c. 410.]

asked the Prime Minister if she will list her official engagements for Thursday 23 July.

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

Would the Prime Minister like to congratulate the hon. Member for Ealing, Acton (Sir G. Young) on his honesty, and good fortune, in disclosing to the Daily Telegraph that he stands to have the rates on his ancestral pile reduced from £2,000 to £300 under her new poll tax?

People who are paying heavy rates, unless they are within a very heavy spending local authority, will indeed gain. The people who will suffer from a community charge will be those who are under very high-spending authorities. That is one of the purposes, but only one, of having a community charge, so that local authorities will be accountable to all their constituents and so that their constituents can judge whether the services are delivered efficiently.

asked the Prime Minister if she will list her official engagements for Thursday 23 July.

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

Is my right hon. Friend aware that today in the north people are looking to her for a poll tax to promote initiative and enterprise? For years, Left-wing councils have been promising that their high-spending, high-rating policies will protect jobs and services. Is not the reverse patently the case?

Yes. I believe that a number of small firms are precluded from starting up in some of the areas where they are most needed because of the high rating policies of those local authorities. One of the purposes of introducing a community charge is to get a unified business rate, which will be a great advantage to those areas that need more private sector business. It is interesting that there have been record numbers of inquiries to our small firms centres about starting up small businesses. It may be that the expectation of a unified business charge is helping people to come forward.

Will the Prime Minister please consider whether any of the proposed cuts in the 20 million tonnes of steel from the European Steel Community production should take place in the British Steel Corporation, in view of the fact that we have had higher percentage deductions in staffing and production than any other European steel producer?

That depends on the year from which one starts, as it always does. Under this Government, the British Steel Corporation has gone from a deficit of about £600 million a year to a considerable profit, and it is now working well. We shall have to work with the European Community on steel quotas and we shall, of course, do battle for our steel workers.

asked the Prime Minister if she will invite the European Council to secure a report from the Commission on the operation and effectiveness of the strict budgetary controls agreed by the Council on 4 December 1984 before the Council gives further consideration to the Commission's proposals for extra funding linked to strict budgetary controls: and if she will make a statement.

The Commission reported on budget discipline in its two February papers on future financing of the Community. In the light of discussion at the June European Council it has undertaken to bring forward further proposals shortly. I made it clear that before the question of increasing Community resources can be addressed we must agree on effective and binding controls over Community spending, particularly agricul-tural spending.

As the last round of "effective, binding controls" produced, instead of restraint, a series of accounting devices, of which even Liverpool councillors would be ashamed, and an escalation in the cost of food dumping and food destruction to £240 million a week, with the Soviet Union and the Mafia being major beneficiaries, will my right in saying hon. Friend agree to stand firm in December and, instead of giving more money to the uncontrollable CAP, propose that we should return agricultural responsibility to member states?

I confess that I have some degree of sympathy with some of my hon. Friend's points—as one usually has. He is quite right in saying that we did not get a binding arrangement for financial discipline on the last occasion, and we must have it on this occasion. I do not think that we can abolish the common agricultural policy. There may have to be a degree of national financing, but it would have to be within a Community framework. My hon. Friend will know — he knows the common agricultural policy very well—that if one looks back to the treaty there is absolutely nothing wrong with the common agricultural policy. It is the way in which it has been operated in practice that we wish to cure.

rose—

I warn the House that this is not an open question.

Is not the common agricultural policy a disaster? The Prime Minister makes a great pretence of being concerned about the complete lack of budgetary control, but will not the farm agreement cost this country £600 million this year and many more millions of pounds next year? As we have such a huge balance of trade deficit in manufactured goods, will the Prime Minister explain to the House clearly and succinctly what benefits we get from the Common Market, because it costs about £500 million to £1 billion to be a member of this absurd organisation?

No. I think that the original reason why we went in, and it was agreed by most hon. Members on both sides of the House that it was wise to go in, was a political one—that we should be part of the European Community. The Community's original purpose was to ensure not only that there was an Economic Community but that nations which had hitherto fought one another should in future work together in peace and for greater prosperity for them all.