To ask the Chancellor of the Exchequer if he will make a statement on the composition of growth in the United Kingdom as between consumer expenditure, exports and investment over the period 1981 to the latest available date.

I hope that my hon. Friend will forgive me if I begin by saying how glad we all are to see the right hon. and learned Member for Monklands, East (Mr. Smith) fit and well and back in his place.

I thank my right hon. Friend for that reply. Do not those excellent figures show that much of the extra demand is spent on investment which will balance the problem with the balance of payments deficit? Are we not really paying the price for the fact that throughout the time when the Labour party was in office, investment was seven times lower than the rate of increase in consumption?

My hon. Friend is right. We have had increasingly in recent years an excellent performance on investment. Investment growth last year was probably the highest ever and certainly private investment last year was the highest percentage of GDP since records began in 1955. As my hon. Friend indicated, over the whole of our period of office since 1979, investment grew at 27¾ per cent. compared with only 25¾ per cent. for consumption, whereas under the Labour Government, consumption was up by 10½ per cent. and investment only a puny 1½per cent.

Is the Chancellor aware that the rise in exchange rates is doing immeasurable damage to much of Britain's manufacturing industry? As imports are being sucked into the United Kingdom, many jobs are being lost at home in all sorts of industries, but in particular in the footwear industry and in Millers, a company in my constituency. What will he do about that? Will he leave exchange rates at the present high level and accept job losses at home with the consequent effect on the Exchequer?

I think that the hon. Gentleman is wholly unaware of what has happening in the British economy. Unemployment has been coming down month after month for over two years now in every region of the country. I would have thought that he might first become aware of that and when he has become aware of that, he might welcome it.

Will my right hon. Friend the Chancellor confirm that in 1988 investment grew by more than 12 per cent. and that that was twice as fast as the growth in consumption? Will he also confirm that the rate of unemployment in Stockton, South has fallen faster than in any other constituency in the north of England and that that is undoubtedly due to the hard work of local entrepreneurs and the increased level of self-employment in that region?

I agree with what my hon. Friend says and I am sure that the quality of the hon. Member representing Stockton, South must have played some part in this excellent performance. Indeed, investment growing at something like more than double the rate of consumption in 1988 was no flash in the pan. During the whole of the period that I have been Chancellor of the Exchequer, investment has grown very nearly twice as fast as consumption. Indeed, going back to 1981, investment in this country has grown faster than in any other country of the European Community and faster, indeed, than in any other major industrial nation.

On the question of growth, investment and the impact of the exchange rate, does the Chancellor recall his previous statements that we would join the European monetary system when the time was appropriate, and his new statement last night that previous difficulties had "clearly diminished over time"? Will the Chancellor give us his own assessment of the advantages of joining the European monetary system and say whether he has persuaded the Prime Minister of them?

I would advise the hon. Gentleman to read the speech that I gave at Chatham house last night. It well repays reading, and, as I said, we will join the EMS when the time is appropriate, as the Prime Minister has said on previous occasions.

To ask the Chancellor of the Exchequer what was the total level of investment in the United Kingdom in 1988 and 1987; and what was the change in the level of consumption over the same period.

Between 1987 and 1988 investment is expected to have grown by at least 12 per cent., twice as fast as consumption.

Does my right hon. Friend agree that business investment in the years 1986–88 rose by the almost unprecedented figure of 20 per cent. in real terms, and exceeded that of the United States, Germany and France? Does he agree that that massive investment programme confirms the economic well-being of the United Kingdom, even in terms that the economic illiterates of the Opposition can understand?

I am not sure about my hon. Friend's last point, but I can certainly confirm his first point. Since 1981, business investment in the United Kingdom has grown faster than in any other major industrialised country and any country in the European Community.

Will the Chief Secretary come down to earth? Is he aware that the National Savings bank has introduced regulations so that the minimum investment is now £5? That is causing great concern among pensioners and Age Concern Scotland as many pensioners invest £1, £2 or £3 regularly and will be unable to do so when the regulation comes into force. Will the Chief Secretary intervene and see whether some action can be taken to reverse that regrettable decision?

I hear and understand what the hon. Gentleman says. I have no direct response to his point except that he needs to bear in mind that throughout the economy as a whole investment is growing and that in our judgment, and in the judgment of the independent surveys, it will continue to grow. That is thoroughly disirable.

Does my right hon. Friend agree that the Opposition's criticism of the economic handling of our country is rather hypocritical when one bears in mind that under their regime we were at the bottom of every economic league not only in Europe but in the world and now we are at the top?

As usual, my hon. Friend is entirely right. These are painful waters for the Opposition and I hesitate to dwell on them any longer.

To ask the Chancellor of the Exchequer what representations he has received concerning tax concessions on lead-free petrol.

A number.

I thank the Minister for his helpful answer. Does he accept that for lead-free petrol to become the norm it will have to become available in all retail outlets throughout the country, including small retail outlets such as those in the Borders? The only way realistically to do that is to increase demand. The only way to increase demand for lead-free petrol is to increase its tax advantages against petrol containing lead. Will the Minister give careful consideration to the representations that he has had so that a positive change may be made in the forthcoming Budget?

I am sure that my right hon. Friend has noted the hon. Gentleman's remarks. Although I cannot be very helpful about his request for information about tax concessions in future, I can remind him of what occurred in the last Budget when my right hon. Friend the Chancellor increased the differential between lead-free and leaded petrol. Since then, there has been a considerable increase—indeed, a tripling—of the number of outlets at which it is available.

Does my hon. Friend agree that following the tax concession in April, sales of unleaded petrol have increased by 1,500 per cent? Does that not demonstrate that the tax concession is quite sufficient at the moment, and that any moneys that may be available from the Treasury to promote the use of unleaded petrol would be better used in persuading manufacturers and petrol companies to increase its availability?

My hon. Friend is quite correct to point to that statistically large increase although, admittedly, it was from a small base. By October, the market in lead-free petrol had reached about 1·6 per cent. By mid-January it had reached 3·5 per cent. so it is clearly growing rapidly. I agree with my hon. Friend about the need for campaigns to spread information by both petrol retailers and motor car manufacturers.

Will my hon. Friend note that there are many obstructions in the way of the admirable policy of our right hon. Friend the Chancellor to introduce a differential in the duty on lead-free petrol, one of which is the price spread of four-star leaded petrol, which can be anything between 12p and 14p in a district? Is it not worth reminding the Chancellor that if something is worth doing it is worth doing well?

My hon. Friend is correct to say that there is a spread of prices for four star, although the recent Which? report showed that, almost universally, garages were passing on the advantage of the tax increase at the last Budget. The differential between lead;free and four-star petrol was about 5½p at the pump.

Is the Minister aware that he has the Opposition's support to increase the use of unleaded petrol? He will also have the Opposition's strong support if he introduces a bigger differential between leaded and unleaded petrol in the next Budget. Will he try to persuade his right hon. and hon. Friends to provide more advertising on site, to ensure that advice is widely available and to tackle ignorance so that motorists are aware of the problem and take the advice that is widely available?

I am grateful for the hon. Gentleman's remarks and I agree about the importance of advice. It is important that people recognise that virtually all new cars can take unleaded petrol; from October 1990 all new cars will be able to do so. Most cars can be converted at small cost to run on lead-free petrol; only a dwindling minority are incapable of such conversion.

Notwithstanding what my hon. Friend has just said, will he bear in mind that millions of car owners depend on leaded fuel? If the differential between unleaded and leaded fuel is to be increased, will he ensure that it is not at the expense of increasing duty on leaded petrol?

I am sure that my right hon. Friend noted those remarks, as did I.

To ask the Chancellor of the Exchequer what assessment he has made of the consequences for the economy of two-year pay deals of, or over, 20 per cent.

None. Few such pay deals have been concluded.

Given that the Chancellor and other Treasury Ministers have expressed derogatory views about such pay deals in the press, and notwithstanding the reasons of other right hon. and hon. Members for so doing, will the Minister explain why he and every Treasury Minister, including the Chancellor, voted in favour of a pay rise of over 25 per cent. for hon. Members for 1988–89? What peculiar brand of logic leads Treasury Ministers to tell Jaguar workers, workers at Peugeot Talbot in Coventry or home owners groaning under a 13 per cent. mortgage that they cannot demand what Ministers vote for themselves?

In 1983, the Government opposed what became known as the du Cann amendment on hon. Members' pay linkage. The hon. Member for Coventry, South-East (Mr. Nellist) voted with the Government, but despite his help we were defeated by eight votes. In 1987, the Government respected the will of the House as expressed in 1983 and tabled a resolution to implement the amendment, because otherwise it would not have counted for pension purposes. Unlike a recent Labour Government on boundary commission proposals, this Government vote for their own resolutions.

Does my right hon. Friend agree that whatever the consequences of two-year pay deals of over 20 per cent. may be, they are much better than the consequences of one-year pay deals of over 20 per cent., which were such a feature of the last Labour Government's period of office?

The Government believe that pay is ultimately a matter for the parties directly concerned. I join my hon. Friend in urging pay restraint.

What has the Minister to say about the 286 per cent. increase that Lord Hanson awarded himself last year, the 237 per cent. increase that Lord King awarded himself last year and the 168 per cent. increase that John Clement of the Littlewoods Organisation awarded himself last week? Is the Minister's plea for restraint addressed to them?

As I said to my hon. Friend the Member for Suffolk, South (Mr. Yeo), pay is ultimately a matter for the parties directly concerned.

To ask the Chancellor of the Exchequer what is his latest forecast for the level of public sector surplus in 1988–89.

The Autumn Statement forecast for the PSBR in 1988–89 was for a net repayment of about £10 billion. I shall be publishing a new forecast in the Budget in the usual way.

When did this country last have a surplus which represented such a high percentage of GDP? Does

I am grateful to my hon. Friend. I cannot tell him when a British Government last enjoyed a budget surplus—a public sector debt repayment of this scale, but one would have to go back a very long time indeed. As for the claims on that surplus, I am sure my hon. Friend will agree with me that progress in tax reduction needs to be accompanied by progress in debt repayment, and the balance between these two in each particular year is a matter to which I shall give very careful consideration.

Is one reason for the surplus the fact that the Treasury has saved £4 billion a year from the decision to break the link between pensions and earnings and prices? Would it be an excellent use of the budget surplus to give that £4 billion a year back to those who badly need it?

We have, as the hon. Lady knows, increased public expenditure very substantially. The increase, for example, which I announced in the Autumn Statement in November for the National Health Service was far and away the biggest increase that the Health Service has ever received. We have, like any other Government, to decide what our priorities are within public expenditure. We have decided that it is absolutely right that pensioners should enjoy price protection. Beyond that, we have decided to give extra help to the poorest pensioners so that we can then give a great deal more to the Health Service and other public expenditure priorities.

Is it the case that, if my right hon. Friend were borrowing at the same rate as borrowing took place when the Labour party was in power, this year's public sector borrowing requirement would be £40 billion? Will my right hon. Friend persevere in doing good and continue with his excellent policy of repaying debt?

My hon. Friend is quite right. That is the scale, and indeed if we were to go back to that particular Labour Government tombstone of a £40 billion public sector borrowing requirement, I could abolish the whole of income tax and I would not get as big a borrowing requirement as that, but I have to tell the House that I shall not be doing that. [Interruption.] It is a very important source of strength that we have this surplus, and our sound fiscal position, and indeed the transformation, is something that has earned us the respect of the whole world.

I thank the Chancellor of the Exchequer for his generous personal remarks. He was good enough to write to me the day I took ill, and I thank him for that. However, I observe that not much changed while I was away.

I do not altogether agree with the right hon. and learned Gentleman that nothing has changed. I observe with some envy that he has lost a great deal of weight. But apart from that, nothing at all has changed. He is as entertaining as ever, and as totally devoid of policies.

The House will note with pleasure and satisfaction the healthy public expenditure surplus, but will my right hon. Friend acknowledge that millions of British taxpayers wish substantially more money to be spent on infrastructure and will he assure the House that he will view with favour such requests from the Department of Transport?

As my hon. Friend knows, we have a desirable convention that public expenditure decisions are taken and announced in the autumn and that the spring Budget is for judging the level of taxation and the level of borrowing, or, as it is called in the new era in which we live, the level of debt repayment. But I am sure that in that context my hon. Friend will have noted with great satisfaction the substantial increase in expenditure on transport infrastructure, particularly on roads, which I announced in the Autumn Statement in November.

To ask the Chancellor of the Exchequer if he will provide his latest forecast for growth in the United Kingdom's visible exports in 1989.

As set out in the Autumn Statement, exports of goods are expected to rise by 7 per cent. in 1989.

Does the Chancellor consider that that is exceedingly optimistic in the view of the Government's high interest rate policy, which seems to be undermining British industry, and the lack of investment in future research and development, which will certainly undermine future balances of payments? Would that the balance of payments was in surplus, as the Chancellor constantly boasts about the public sector borrowing requirement.

In the CBI's January quarterly survey, a larger balance of firms than in any quarterly survey since April 1987 is shown expecting export order books to rise over the next few months.

Does my right hon. Friend agree that the difference between today's visible exports and those under the previous Labour Government is that today's visible exports generate profits while in 1979 they were generated out of losses, particularly in major industries such as steel, coal and so on?

I am not sure that I could effect that precise correlation, but there was a great deal more subsidy to manufacturing industry in those days than in these.

The Government's optimism on visible trade reminds some Opposition Members of the words of a former Chancellor, Mr. Gladstone, who, shortly before he died, said, "I feel better now." It is clear that the Government are expecting a miracle on the visible trade side. When will they realise that the miracle has not been changing water into wine but transforming the wine of North sea oil into massive interest rate rises, and a chronic structural deficit?

The dying words of Lord Palmerston were

"Die, my dear Doctor, that's the last thing I shall do

Does my right hon. Friend agree that the growth in visible exports over the last two years, and, indeed, expected growth over the next year, has played an important part in the fall in unemployment in my constituency from 11 per cent. to below 6 per cent? Will he join me in congratulating two small companies in Whitstable, one selling printing materials to Japan and the other electrical parts to Taiwan?

My hon. Friend is entirely correct in identifying the linkage between exports and jobs and I congratulate the two firms in his constituency.

To ask the Chancellor of the Exchequer if he will provide the latest available data on net flows of (a) direct investment, (b) portfolio investment and (c) banking flows into the United Kingdom in 1988.

In the first three quarters of 1988, the latest official estimates identify net outflows of £6·3 billion on direct investment and £5·6 billion on portfolio investment, and net banking inflows of £10·5 billion. However, the balancing item indicates that there are net inflows of foreign exchange amounting to a further £12·3 billion which cannot be identified.

How does the Chancellor explain his high interest rates if not in terms of his record balance of payments deficit and the need to lure in to the economy highly speculative funds from abroad?

The hon. Gentleman clearly does not realise that, in all countries, it would now be true to say that all money is hot money because we live in a world of free exchange rates where people are free to move money about. Therefore, all Governments, whether they have a surplus or a deficit, are required to maintain the confidence of their people and of international financial markets. This Government have the confidence of international markets because their policies are sound and because the prospects of election of the Labour party are negligible.

Will my hon. Friend confirm that the balancing item is now so large that it exceeds the balance of payments deficit? Does not that mean either that the deficit is overstated or that the figures for capital inflows are understated? Which does the Treasury think it is, and, whichever it is, does it not show that all the figures should be treated with some caution?

My hon. Friend is absolutely right. The answer to his question is, "A bit of each" and he is right to say that we should treat with scepticism those figures, whose importance is grossly exaggerated.

Will the Minister confirm that the balance of payments deficit with which we have been saddled as a result of the Government's policy is one of the principal reasons for high interest rates? We have the highest interest rates among the industrialised countries because we have to pay the price of attracting into the system the hot money to which he has just referred.

No. The right hon. and learned Gentleman has got it wrong. High interest rates are necessary to bring down inflation and keep pressure bearing down on inflation, as we shall do. I hope that he will soon take the opportunity to explain how his recipe of cutting interest rates and reimposing credit controls could possibly work in the modern world.

To ask the Chancellor of the Exchequer what was the average (a) inflation and (b) interbank rate (i) since May 1979 and (ii) between March 1974 and May 1979; and if he will make a statement.

The average rate of inflation since May 1979 has been 7½ per cent. compared with 15½ per cent. between March 1974 and May 1979. The average three-month interbank rate since May 1979 has been 12 per cent. compared with 10½ per cent. between March 1974 and May 1979. In other words, with interest rates 1½per cent. higher than under Labour, we have enjoyed inflation 8¼per cent. lower.

Is it not clear from my right hon. Friend's reply that the Government's record on inflation is at least twice as good, perhaps nearly three times as good, as that of the last Labour Government? Is it not also clear that his policy of high interest rates is beginning to work, although the full effects will not be known for some time yet?

My hon. Friend is right. Inflation under this Government has been less than half the rate of inflation under Labour and, of course, at the present time, it is lower still than that and it will continue over a period of time to fall.

When will the Chancellor of the Exchequer stop complaining about mortgage interest payments increasing the retail prices index when, at the same time, he is obtaining great advantages from the fact that house prices are not part of the retail prices index? As they have shown an explosive inflation, is he not rather lucky?

Asset prices are not part of the retail prices index in any country in the world and, indeed, we are one of the only two countries in the European Community, out of 12 nations, that have mortgage interest payments in their consumer price index, the only other one being Ireland. It is an eccentric, unwise and economically unsound thing to have and we get the underlying trend very much more clearly. This is widely accepted by economists of all parties and none, if we look at the retail prices index, after extracting mortgage interest payments.

Does my right hon. Friend agree that the contrast between the performances of the Labour Government and this Government is demonstrated by the survey published in the press today which showed a very bullish attitude among 500 senior managers in industry? Most of them expect orders and investment to rise this year and at least one third expect to create new jobs.

My hon. Friend is right. Of course, the fundamental confidence of British industry is also shown by its investment intentions which continue to run very high, as was evidenced by the most recent CBI survey. The only thing that might cause a tremor among industrialists is were there to be at any future date a slight glimmer of a fear that the Labour party might be elected to office.

To ask the Chancellor of the Exchequer what estimate he has made of the impact of his interest rate policy on consumer credit.

By increasing the cost of credit, rises in interest rates exert downward pressure on the growth of consumer credit.

Are Treasury Ministers sufficiently confident of the success of their policies to tell us that they will not need to raise interest rates further? Have they looked at the indices that they now use to argue that they have got control of the situation? Last year, those indices were showing even more clearly that there would not be a credi.t boom. If Ministers believed them then, that may be the explanation for what went wrong with the Budget strategy. Will Treasury Ministers consider alternative measures that are available to broaden the attack on inflation without going to the credit control measures favoured by the right hon. and learned Member for Monklands, East (Mr. Smith), whose return we so much welcome?

No Minister can give the hon. Gentleman the firm assertion which he asked for at the beginning of his question. The problem at the moment is excess demand. The way to control the growth of credit is to increase its cost. That is what we have done. We are confident that it can and will work.

Will my right hon. Friend remind the House that last spring Opposition Members were calling for even faster reductions in interest rates which would have fuelled the consumer boom even more? Now they are claiming the benefit of hindsight and they say that we were moving too fast. Their economic policy does not add up.

I certainly recall that. I also recall that Opposition Members were asking for more public spending both last autumn and earlier this year. That would not have helped, either.

To ask the Chancellor of the Exchequer when he expects to reduce interest rates.

It is not my practice to comment on future movements in interest rates.

Does the Minister agree that that is a deplorable reply? Is he so unaware of the problems that his Government are causing to industry and to people seeking to buy their own homes? Can he tell the House what advice he would give to people who budgeted for expenditure that they thought they could undertake and are now suffering from the ongoing increases in interest rates, leading to higher mortgage repayments? What advice can he give them so that they may have confidence in the future under the Government's policies?

Far from suffering from the present circumstances, industry is undergoing an investment boom which I hope the hon. Member welcomes. We have been very successful in our policy of encouraging home ownership; 3 million more people own their homes. Mortgage rates show no correlation with difficulties over arrears or repossessions, the biggest factors in those problems being martial discord and unemployment. Happily, the latter is coming down.

Does my hon. Friend agree that the tight fiscal policy of the Government, shown by the size of the public sector surplus, has enabled them to use the interest rate weapon flexibly? Now that it is having its effect, will Opposition Members stop ranting and raving about other measures and give the Government credit for their success in curbing consumer spending?

My hon. Friend is right to point to the importance of having a background of sound fiscal policy. The fact that the Government are repaying £10 billion of debt means that that money is available for industry to borrow.

The Minister's statement just now will go down in the House as representing the uncaring face of the Government. As millions of home owners around this country are finding it extremely difficult to meet massive increases in mortgage repayments, when will the Government give them some hope and some relief in that task?

When the hon. Gentleman was last at the Dispatch Box he said that lots of people had budgeted prudently by borrowing up to the hilt. Happily, most hon. Members would not give that advice to their constituents. Both the lender and the borrower have an obligation to make sure that borrowing is not excessive. On occasions when the borrower has difficulties, almost invariably the building society will reach arrangements that will accommodate those difficulties.

To ask the Chancellor of the Exchequer what has been the total rate of inflation in the average price of a house in the United Kingdom since June 1983.

House prices have approximately doubled since June 1983.

As this Government are supposed to be the Government who keep down inflation, what have they been doing to help young couples to buy a house or even rent one from the council? Have not the Government priced young couples out of the market? Why did the Chancellor not urge the building societies to lend only two and a half times the annual income of an applicant, as they did many years ago? Why has the Chancellor sat back and done nothing, in the free market, when building societies are lending three and a half to four times annual incomes, and sending house prices rocketing through the roof? What advice would he give now to young couples who are desperately seeking somewhere to live?

In response to that long question, I shall just say that in the first half of 1988, half of all building society loans went to first-time buyers.

Does my right hon. Friend agree that the majority of people in this country recognise the great benefits of home ownership and the fact that mortgage rates go up from time to time as well as come down, but that the advantages of home ownership outstrip the short-term disadvantages?

My hon. Friend reflects the Government's policy correctly.

Does the Minister agree with the statement of his hon. Friend the Economic Secretary to the Treasury a few minutes ago that people have no more difficulty in paying their bills when mortgages go up than they did when they were low?

That is not what my hon. Friend said. According to the Building Societies Association the main causes of mortgage problems are matrimonial problems, unemployment and financial mismanagement.

To ask the Chancellor of the Exchequer what is his latest information on the investment intentions of manufacturing industry.

To ask the Chancellor of the Exchequer what is his latest information on the investment intentions of manufacturing industry.

The Department of Trade and Industry's investment intentions survey published in December showed that manufacturing investment is expected to grow by 11 per cent. in 1989.

Does not that reply indicate that manufacturing industry understands far better than the Opposition the opportunities generated in the economy by this Government? Can my right hon. Friend say by how much manufacturing investment has grown over the past five years or so?

My hon. Friend is entirely correct. Manufacturing investment in real terms reached an all-time peak in the second quarter of 1988, and is expected to increase substantially next year.

I welcome the buoyancy of manufacturing investment intentions, especially as last year there was the largest increase in manufacturing investment for 25 years. Is my right hon. Friend aware of a recent survey on industrial space take—up throughout the country which indicated that more than one third of the total industrial space taken up last year was in the west midlands? Does not that show clearly and unequivocally how geographically broadly based the economic expansion of this country has become?

Indeed it does, as does the fact that unemployment has fallen in all the regions in the past 29 months. The last CBI survey shows clearly that investment intentions remain strong for the future.

Is the Minister aware that, despite high investment in industry, the CBI survey pointed out that, for the first time for three years, more exporters are gloomy about prospects than before, and that in Wales more than one in three manufacturers who export are reporting reductions in their orders because of the high interest rate policy? Are we not suffering because of the Chancellor's desire to give money hand over fist to the wealthy?

Manufacturers in Wales and elsewhere recognise clearly that renewed inflation is far more damaging to them than is the medicine necessary to ensure no renewed inflation.

To ask the Prime Minister if she will list her official engagements for Thursday 26 January.

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.

In the light of widespread public concern about the expansion of private credit, so eloquently endorsed by the Labour party, does my right hon. Friend consider that the case for credit controls is severely undermined by the fact that that party intends to launch a membership drive backed by credit cards?

I agree that those who are concerned about too much credit should not add to it, but should fully support the Chancellor's policy of getting inflation down through interest rates.

Will the Prime Minister agree with me that hospices in Britain meet a vital health care and humanitarian need? If so, will she now respond to the appeal by the Royal College of Nursing and the charity Help the Hospices and provide full funding for the pay increases of nurses who work in hospices, thereby ensuring that any possible bed closures are prevented?

The practice is that the health authorities make a grant for the contractual obligations that they have with the hospices to supply nurses to them. A sum of money was given to the hospices for that purpose. The Government also made it clear that they would wish it to be sufficient for authorities to supply on a non-contractual basis, which some of them do. My right hon. and learned Friend the Secretary of State for Health discussed this matter with the hospices this morning.

Does the Prime Minister not recall the very specific promise made by the Secretary of State for Health at the Conservative party conference that

"£4·5 million more"

"to pay the increases of nurses who work in hospices".

I have indicated what the arrangements are. I have indicated that my right hon. and learned Friend the Secretary of State for Health today discussed this with representatives of the hospice managers' forum of the Royal College of Nursing. He emphasised the Government's commitment to the voluntary hospice movement. Information on local funding arrangements is being collected urgently and my right hon. and learned Friend will consider the need for further action once this has been received and analysed. All that was told to them this morning—not only what the right hon. Gentleman said.

What is not in doubt is that the Government promised £4·5 million, and what is not in doubt either is that the Government are now saying that the sum is limited to £1·3 million. Will the Prime Minister tell the voluntary movement how it can meet the need, exercise choice and be independent when it has no money with which to do it?

Once again, the right hon. Gentleman did not listen to what I said. He had worked out his supplementaries, irrespective of my answers. [Interruption.] It is quite a good idea to get the facts right first. That is why information on local funding arrangements is already being urgently collected. My right hon. and learned Friend the Secretary of State will consider the need for further action once the information has been received and analysed.

Will my right hon. Friend take time in her busy day to consider the document on Transpennine that I have sent to her? This is an initiative by a group of business men and bankers who have come together to promote the north of England, not only to the rest of the country but to Europe and the rest of the world. Will she join me in congratulating them on their intiative?

Yes, most certainly. I congratulate many of them on the enterprise they are showing and the way in which they are providing jobs, reducing unemployment and building up prosperity for the future.

When the Prime Minister appointed Lord Chalfont to the post of deputy chairman of the Independent Broadcasting Authority, was she aware that he is the director of a private intelligence company with extremely grubby connections in the past and whose—[Interruption.]

Order. The right hon. Gentleman must take responsibility for the questions that he asks.

Is the Prime Minister aware that its published aims are to provide intelligence services—

On a point of order, Mr. Speaker.

Order. I will take the point of order when the right hon. Member for Yeovil (Mr. Ashdown) completes his question.

Was the Prime Minister aware that Lord Chalfont is currently the director of a private intelligence organisation whose publicly stated aims are to provide private intelligence services for the Government? Has she no idea of the conflict of interests involved?

I am happy with the appointment I made. The right hon. Gentleman must be the first leader of his party to pursue a vendetta in that way.

On a point of order, Mr. Speaker.

It takes time but I shall take it.

On a point of order, Mr. Speaker—[Interruption.]

Order. It will take time out of Question Time.

On a point of order, Mr. Speaker. Is it in order for the right hon. Member to smear a right hon. Member of another place in this way?

Order. I was listening carefully to the right hon. Gentleman and nothing disorderly took place.

Has my right hon. Friend had an opportunity to see the three Green Papers issued by the Lord Chancellor's Department yesterday? Does she agree with me that, contrary to the impression given by some, including a former Lord Chancellor who ought to know better, the Bar has no need of restrictive practices in order to maintain its high standards? Does she also agree that members of the Bar welcome the opportunity to help recast the legal professsion to give the public an even better service in the future?

Yes, I agree with my hon. Friend that those three Green Papers tackle the problems in a bold and courageous way and provide solutions. I hope that they will be widely discussed and will maintain the high standards of legal service that we are entitled to expect.

To ask the Prime Minister if she will list her official engagements for Thursday 26 January.

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

Is the Prime Minister aware of the widespread feeling in this country and the House about torture in Turkey, and about the deep disappointment felt that she did not discuss that matter with either the President or the Prime Minister of Turkey last year? Did she discuss torture and human rights with the Turkish Defence Minister yesterday? If she did, what was the result?

The answer is yes. We did discuss the matter, and the Turkish Defence Minister assured me once again that the Government are taking all possible steps to see that there are no abuses in that country.

Will my right hon. Friend join me in welcoming the indication that a leading Japanese motor manufacturer, Toyota, is considering investing in Europe rather than exporting to Europe? Can she tell us what steps we are taking to ensure that the investment comes to this country rather than to other member states?

Yes, we believe that we are the lead country of Toyota's choice for them to invest in. They will be very welcome in this country. They are interested in a number of different areas. We shall work closely with them and shall of course consider any application for selective assistance under our legislation.

To ask the Prime Minister if she will list her official engagements for Thursday 26 January.

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

On another matter affecting Japan, does the Prime Minister recall that, of the 50,000 British prisoners-of-war of the Japanese who were tortured and starved, 12,433 died in captivity? Does she recall that thousands of other Commonwealth service men suffered in the same way, including over 2,800 Australians who died as a result of war crimes while working on the railways? In those circumstances, how could it happen that Her Majesty's Government would advise the Duke of Edinburgh to pay a royal visit to Japan in the circumstances he has in mind? Will she please reconsider this grotesque and offensive suggestion?

Nothing can obliterate what happened then or the memories and feelings of the people who suffered or of their relatives. There is no difference between us on that. Japan is now a democracy and is a very different country. Many people here have jobs provided by Japanese investment. We are both economic summit countries and there have been state visits. We have made the proper recommendations, which I believe are right, with an eye to the future.

On the occasion of Australia Day, will the Prime Minister take this opportunity to communicate to the Australian Prime Minister this country's commitment not only to the future of an unrestricted European market but to the ideal of free trade throughout the world?

Yes, I will gladly do so. We have to work hard to see that there is no element of protectionism in Europe after 1992. That is very much in keeping with everything we believe and that will be the message I shall try to give the Australian Prime Minister. It is the message which my right hon. and hon. Friends and I are constantly giving the European Community. We look forward to welcoming the Australian Prime Minister to this country later this year.

To ask the Prime Minister if she will list her official engagements for Thursday 26 January.

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

Bearing in mind the Prime Minister's support for the football ID scheme, and bearing in mind also the hooliganism that we saw at Henley regatta last year and on a whole variety of sporting occasions, has she any intention of trying to widen the scope of the scheme?

The hon. Gentleman is aware that it is a membership card scheme because football has developed a history of attracting hooliganism both on the pitch and outside the stadium over the years and there have been several reports upon it to both Conservative and Labour Governments.

To ask the Prime Minister if she will list her official engagements for Thursday 26 January.

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

Bearing in mind the enormous losses suffered in the second world war by Bomber Command, which was based substantially in my right hon. Friend's home county of Lincolnshire and which resulted, unbelievably in losses of air crew in greater numbers than all the officers killed on the western front in the first world war, surely it is never too late to recall our second lost generation, to reconsider our decision not to grant a medal for Bomber Command and at least to say "We shall remember them".

There will be no difficulty about remembering all of those in Bomber Command and in other commands who gave their lives or suffered during the war. I know that these matters are very carefully considered in the Ministry of Defence, and I am sure that they were carefully considered before a decision was reached. The chances of the matter being reopened are not very good, but of course I shall pass on to my right hon. Friend the Secretary of State for Defence what my hon. Friend has said.