To ask the Chancellor of the Exchequer when he next intends to meet his European Economic Community counterparts; and what he expects to discuss.

The next meeting of the Council of Economic and Finance Ministers will be held in Brussels on 18 December 1989. Its agenda has not yet been determined.

Is my right hon. Friend aware that everyone in the House will wish to congratulate him on this, his first appearance at the Dispatch Box at Question Time? All Conservative Members wish him 100 per cent. success in what he sets out to achieve.

I am grateful for my hon. Friend's opening remarks. Our rail investment programme is large, as he knows. The required rate of return is 8 per cent. in the United Kingdom, and it certainly varies in different parts of Europe, but the precise details of EEC countries' rates of requirement are unknown to me. I should need to check them and write to my hon. Friend.

The Chancellor will be aware that Members on all sides of the House, and the public, are concerned about war widows' pensions. When he meets his counterparts in Europe, will he take time to discuss with them their arrangements for war widows' pensions? Without committing himself today, will he listen to them with an open mind and bring before this House proposals for fair pensions for all war widows?

I admire the hon. Gentleman's ingenuity in raising that important matter on this question. I discuss a large number of matters with my Finance Minister colleagues in Europe, but the issue to which he referred is more a matter for discussion within the Government.

Is my right hon. Friend aware that the CBI favours early membership of the exchange rate mechanism of the European monetary system because it believes that that will lead to more stable exchange rates and lower interest rates? Does my right hon. Friend share my hope that the two conditions that the Government have laid down—lower inflation and the abolition of exchange controls within the Community—will have been met in a year's time?

Quite apart from the two conditions that my hon. Friend mentioned, other important matters need to be determined before we think it right for sterling to enter the exchange rate mechanism. I certainly hope to see lower inflation in this country and throughout Europe in a year's time.

When the Chancellor next meets his counterparts in Europe I suppose that he may discuss with them what his exchange rate policy is. Will he therefore tell the House what it is today?

First, I welcome the hon. Lady to her first Question Time in her new position.

To ask the Chancellor of the Exchequer what is the percentage rise in imports of (a) manufactured consumer goods excluding passenger cars and (b) manufactured capital goods.

In the six months to October, the volume of imports of consumer goods less cars was 3½ per cent. higher and the volume of imports of capital goods was 8 per cent. higher than in the previous six months.

I thank the Chief Secretary for that answer and I was interested in the reference period. Can he confirm that in the years 1988 and 1989 imports of consumer goods have risen in value to a greater extent than those of capital goods? Does that not blow the Government myth that the trade deficit is due to an investment-led boom allegedly taking place in this country?

I will certainly have to check the hon. Gentleman's figures. If he tables a written question, I shall be happy to answer it. Looking at the issue over a long period, for the first 10 months of 1989 capital goods imports were up 19 per cent. and consumer imports up 15 per cent. There has been a trend for some time for the growth of capital goods imports to be higher, which is a reflection of the strong investment in this country. It cannot be denied that we have had an investment boom; investment as a proportion of GDP is at its highest level ever. It is not surprising that this also shows up in the import figures.

Does my right hon. Friend agree that a balance of payments deficit of £15 billion or more matters to the long-term well-being of this country? Does he also agree that if tax concessions are available in the next Budget they should be to encourage manufacturing industry, not to lower the highest taxation rates, which would be inflationary?

I note my hon. Friend's early Budget representation and we shall take it into account. We have made it clear that it would be prudent for the current account deficit to be reduced, and the Government's policies are designed to do that. It is not right to say that a country cannot finance a current account deficit for some time. My hon. Friend will know that the United States has run a current account deficit for seven years, Australia has run one for 15 years and Sweden ran one for 10 years. It is prudent to get the deficit down, but in a world in which there has been extensive capital liberalisation, there are bound to be imbalances between different countries. In itself, that is not wrong.

Is not the truth of the matter that the Chief Secretary's reference to an investment boom conceals the fact that the Government are desperately looking for an intellectually respectable argument as to why the balance of payment deficit does not matter but have failed to find one? It is certainly implausible for the Chief Secretary to come to the Dispatch Box and to present as good news the fact that our country now imports capital goods such as machine tools which we could make for ourselves if the Government had put their weight behind British domestic manufacturing.

The current account deficit is a reflection of the excess growth of demand in this country, not a reflection of a lack of competitiveness. If it were, there would not have been the strong growth in British exports and we should not have seen British industry holding on to its share of world trade in the way that it has.

Does my right hon. Friend agree that the Labour party tends to exaggerate this problem, partly because it is coming right as a result of Government policies and partly because in the modern world there is a trend towards international specialisation and we are bound to see greater dependence on external factors?

My hon. Friend is right and it is clear that Government policies are beginning to have an effect; export volumes are rising faster than imports. In the three months to October, export volumes were 3 per cent. higher than in the previous three months and 10 per cent. higher than a year earlier. The same figures for imports, less oil and erratics, were 1½ per cent. and 8 per cent., so exports are obviously doing well.

To ask the Chancellor of the Exchequer what percentage of the average household expenditure is accounted for by value added tax; and what was the equivalent figure in 1978.

To ask the Chancellor of the Exchequer what percentage of the average household expenditure is accounted for by value added tax; and what was the equivalent figure in 1978.

A married man on average earnings with two children, who will have seen his real take-home pay increase by nearly 32 per cent. since 1978–79, would have paid approximately 2.7 per cent. of his earnings in VAT in 1978–79 and will pay about 5 per cent. in 1989–90.

The Economic Secretary is apparently admitting that a married man with two children and average earnings will pay double the VAT that he paid 10 years ago. Does that not show that the Government give tax cuts with one hand but with their other, invisible hand take more away through VAT and mortgage rate hikes?

The hon. Gentleman conveniently forgets that when we came to office in 1979 we faced a large budget deficit, bequeathed to us by the Labour Government. As a result, we raised some taxes during the first two years to get into surplus. We are now in surplus again. In recent years, the take has been diminishing. The crucial figure for the hon. Gentleman to recall is the 32 per cent. to which I referred in my main answer.

Value added tax is a regressive form of taxation as it takes more from the poor than from the wealthy. Will the Government ensure that they do not go further down that road by putting VAT on essentials, including medicines, newspapers, books and children's clothes? What will be the position if the Government go down that road given that the public will also face the extra burden of the poll tax?

The hon. Gentleman asked two supplementary questions. First, VAT is not regressive because VAT payments as a proportion of expenditure rise with income. Secondly, I do not wish to anticipate next year's Budget statement to be made by my right hon. Friend the Chancellor.

In the light of my hon. Friend's previous answer, does he agree that it is voodoo economics for the Liberal Democrats in Chelmsford to call for an increase in VAT to 18 per cent. to curb inflation when that would put 1½ per cent. on the rate of inflation, cost £75 billion to industry and commerce, and increase the expenditure of the average household through increased VAT payments?

It is never difficult to find a loony Liberal, but if there were to be any difficulty I know from my own experience that it is easy to find one in Chelmsford.

Are not the Government to be congratulated on resisting the European Commission's proposals to extend VAT to children's clothes and food? Will my hon. Friend confirm that as a result of the enormous changes in national insurance and taxation which have taken place in the past 10 years, the average household pays—on a tax basis alone—£10 less per week now than it would have paid in 1979, and that 2 million people have been taken out of tax altogether?

That is correct.

Will the Minister consider commenting on the effect of VAT on unemployed households, and will the Treasury consider issuing a leaflet explaining the VAT implications for households in which the parents are unemployed so that they can identify the things that they cannot buy?

If the hon. Gentleman cares to write to me, I will consider his suggestion. I remind him that the benefit system in this country already takes care of the sort of people to whom he has referred.

To ask the Chancellor of the Exchequer what is the corporation tax rate in the United Kingdom and other Organisation for Economic Co-operation and Development countries.

The United Kingdom corporation tax rate is one of the lowest in any major industrial country in the OECD. With permission, I will circulate the complete list of rates in the Official Report.

I congratulate the Government on having one of the lowest rates of corporation tax in the EEC. That could have been achieved only under a Conservative Government. I urge my hon. Friend to give further consideration to the impact of corporation tax on the many small and medium-sized companies which depend on ploughed-back profits for their investment and expansion.

I thank my hon. Friend for his remarks. He will know that we have a special low rate of tax for small companies. In his last Budget, my right hon. Friend the Member for Blaby (Mr. Lawson), the former Chancellor of the Exchequer, raised the threshold above which the higher rates come in. We have taken account of that already, but I shall consider further what my hon. Friend has said.

Is the Minister aware that the master cutlers told the Sheffield chamber of commerce at its annual dinner last week that despite the reduction in corporation tax, investment capital project decisions have become more difficult since 1983 because of the reduction in offset allowances, at a time when business men find themselves locked ever more severely into competition with European and other overseas competitors?

Since we introduced the reforms in corporation tax, the quantity of investment has reached record levels and the quality of investment has improved considerably. That is evidenced by the profitability of industry, which is at its highest level since the 1960s. Despite the fact that we have the lowest rate in the OECD, the revenues from corporation tax have doubled in cash terms.

Is it not true that our favourable corporation tax rates are a major factor in encouraging foreign investment in this country? Is my hon. Friend aware that yesterday we heard that the compulsory purchase order had been granted for the land in my constituency required by Toyota, which will shortly be investing more than £700 million in our country? Is not the fact that that business is coming to Britain a tribute to our good work force and our favourable business environment? No other sweeteners are needed.

My hon. Friend is correct. Foreign businesses, like British businesses, prefer a low-tax low-subsidy regime rather than the high-tax and, inevitably, high-subsidy regime that Labour offered. The success of my hon. Friend's constituents and others in Derbyshire in attracting Toyota is a tribute to them, as is the success of the tax regime that we have provided in attracting it to Britain.

To ask the Chancellor of the Exchequer how many letters he has received from small businesses about the level of interest rates.

A small number each month.

Is the Minister not aware that high interest rates are crippling small businesses? What assumption has he made for the level of interest rates in 1990, based on the very optimistic forecast in the Autumn Statement of 5·75 per cent. inflation?

If the hon. Gentleman looked a little more closely at the Autumn Statement, he would have his reply. Obviously he has not read it carefully enough.

Is my hon. Friend aware that small business men in Calder Valley are worried about interest rates, concerned about inflation and absolutely terrified of any prospect of a Labour Government?

My hon. Friend, as usual, is correct in most of his assumptions. I concede that high interest rates are causing a great deal of concern among small business men and mortgage payers. I am interested in my hon. Friend's question because a Gallup poll on Tuesday showed that the vast majority of people in this country.

Reading.

Order. Ministers have discretion in what they read from the Dispatch Box.

The poll showed that the vast majority of people in this country are content with the Government's economic policy and frightened of a Labour party coming to office with rising inflation, economic chaos, high taxation and undoing all that this Government have put right. That is what the people of this country said categorically in the poll published by The Daily Telegraph.

We appreciate the Economic Secretary's difficulties, but why is he so singularly unforthcoming-even coy—about the assumptions as to interest rates which underlie the Autumn Statement? Does he agree with his officials who, only this morning, are reported as saying that concern about the upward pressure on interest rates and concern about sterling was "so much political froth"? What comfort is that to the small business man suffering an investment nightmare or to the home owner suffering a mortgage hell? Is not the political froth that we should be concerned about the froth that has been washed up on the Treasure Bench? The Government should come clean or get out.

I welcome the hon. Gentleman to the Labour Front Bench, but his three years of rehearsal have done him no good at all. If the hon. Gentleman were to read the Autumn Statement and previous Autumn Statements, as I advised his hon. Friend to do, he would find that interest rate figures are never given and were not given by the Labour Government either.

Will the Minister show that he is aware how especially vulnerable small businesses are to high interest rates? What specific steps is he taking to help small businesses during what will obviously be a prolonged period of high interest rates?

I fully concede that many small business men and people paying mortgages are suffering from high rates, but a far worse enemy to small business men and to mortgage payers is high inflation. The hon. Gentleman asked what we were doing to help small business men and I will tell him. The loan guarantee scheme has helped more than 20,000 small businesses. Increased corporation tax bands have helped small businesses. The 150 deregulatory measures introduced by the Department of Trade and Industry and detailed in a White Paper are helping small businesses. Improved inheritance tax provisions have also helped small businesses, particularly small family businesses.

Is not my hon. Friend astounded at the sheer cheek of the Opposition when, instead of a record number of small firms starting up, as has happened under this Government, in the days when the hon. Member for Bradford, South (Mr. Cryer) was the Minister responsible for small firms a record number were closing every week?

Despite what the Labour party may wish in its heart of hearts, new small businesses are starting at the rate of 1,300 per week. In the last full year of the Labour Government in which the hon. Member for Bradford, South (Mr. Cryer) was a Minister, the number was diminishing at a rate of 100 per week.

rose—

Order. In fairness I should call the hon. Member for Bradford, South (Mr. Cryer).

I am grateful for your sense of fairness, Mr. Speaker.

The hon. Gentleman does not seem to be aware of the full facts. Each and every week 1,300 small businesses are starting up. They are being registered for VAT, and that is a net figure, not a gross figure. When the hon. Gentleman was responsible for these matters in the 1970s the net figure was a loss of 100 per week.

To ask the Chancellor of the Exchequer if he will give his latest estimate for the United Kingdom visible balance for 1989.

To ask the Chancellor of the Exchequer what is his latest forecast for the current account of the balance of payments for 1989.

I refer the hon. Members to the Autumn Statement forecast, table 2.3.

Do not those figures illustrate our deplorable trading condition, and is not that condition the worst of all the world's industrial nations, at least those within the Organisation for Economic Co-operation and Development? Does the Minister deny that that is an illustration of the most appalling economic mismanagement throughout the past, oil-rich decade?

It is not correct to say that our current account deficit is the largest as a proportion of GDP. There are countries with a larger deficit as a proportion of their GDP. I do not accept that the current account deficit is an accurate reflection of the competitiveness or health of a country's economy. The hon. Gentleman seems to be unaware that of the major industrial countries, only two are running a surplus. If he wishes to consider the health of Britain's balance sheet, let him look at our net overseas assets, which are the third largest of any country. That will be an enormous strength to us while we have a current account deficit.

Will the Chief Secretary give his view on whether the devaluation of the pound that has taken place since the Chancellor took office will help or harm our balance of payments? Given the Chancellor's wholly inadequate reply to the question asked by my hon. Friend the Member for Derby, South (Mrs. Beckett) will the Chief Secretary take this opportunity to make clear to the House precisely what is Government policy on exchange rates in relation to our balance of payments and inflation?

My right hon. Friend the Chancellor made the Government's position in respect of exchange rates crystal clear. It is absurd and a little irresponsible of the hon. Member to press my right hon. Friend further on that subject. My right hon. Friend has gone as far as possible on a very sensitive subject, and the hon. Gentleman should not press him.

In praising our balance of payments position, is it not important to note that last month imports fell, showing clearly that the measures by my right hon. Friend the Chancellor to curtail demand and to beat inflation are not only working at a domestic level but are improving our balance of payments? As to Britain's assets, perhaps my right hon. Friend the Chief Secretary will commend an article by Samuel Brittan, in the Financial Times on 23 November, which brought out this country's very strong asset position—which compares favourably not only with the United States and Germany but with Japan.

My right hon. Friend's remarks in respect of the current account are absolutely correct, for exports are rising faster than imports. As to the asset position of our overseas investments, we are far ahead of the United States. The two countries ahead of us are Germany and Japan. As a proportion of gross domestic product, our net overseas assets are the largest in the world.

Will my right hon. Friend accept my congratulations on the Government's decision not to raise interest rates recently to counter the 4 per cent. devaluation that has occurred in the past month? Will he revert to the policy pursued during the Government's most successful economic period between 1979 and 1983, when they followed not an exchange rate target but a money supply target?

I note my hon. Friend's comments. My right hon. Friend the Chancellor favours a firm exchange rate, and he continues to take account of the exchange rate alongside other monetary indicators when setting interest rates.

Does the Chief Secretary realise that these are the last Treasury questions of the decade? It has been an oil-rich decade during which the Government enjoyed the biggest oil revenues in history and took the credit for everything that has gone right. Now that Britain has the biggest balance of payments deficit in its history, can the Chief Secretary predict whether the Government will ever take the blame for anything that has gone wrong?

As to the past oil-rich decade, we have allowed this country to accrue overseas assets, whereas the Labour party want to see oil revenues invested in an industrial strategy—which would mean supporting a lot of lame ducks and unprofitable investments for the taxpayer. Our policy has resulted in a stream of income and a stream of dividends that will benefit this country for years to come.

To ask the Chancellor of the Exchequer what has been the growth in employment over the last five years.

Total employment has increased by 2¾ million since 1983.

I welcome that excellent news. Does not my hon. Friend find it amazing that whereas the Labour party complains about small numbers of job losses, when it comes to the creation of 2,500 jobs at Grangemouth or the announcement of new research and development jobs with Nissan, it fails to welcome that news—especially when the hon. Members for Dagenham (Mr. Gould), for Norwich, South (Mr. Garrett) and for Bradford, South (Mr. Cryer) have previously complained that most of the jobs available in Japanese car manufacturing plants are screwdriver jobs?

My hon. Friend is absolutely correct. One of the Opposition's most distasteful characteristics was the ghoulish pleasure that they used to derive from rising unemployment. Now that it is falling, they are totally silent. Of all the questions on the Order Paper put down by the Opposition, there is not one that deals with the excellent fall in unemployment in this country.

Can the Financial Secretary confirm that—despite the sudden rise in employment that has occurred in the past couple of years—Wales, the west midlands, the north-west, Yorkshire and Humberside, the north and Northern Ireland still have fewer people in employment than they did in 1979, and that almost 1 million men are unemployed?

Unemployment is falling in almost every region, and last year it fell fastest in the north. That is good news, and it should be welcomed by every hon. Member.

In view of the Government's great success in guiding the British people back towards conditions approaching full employment over the past two years, may I express the hope that my right hon. Friend the Chancellor will resist the continuing requests from teenage City scribblers for ever higher interest rates, which would provide the country with only a short-term currency advantage and would put the real economy and employment prospects at risk?

My right hon. Friend has made very clear which factors he will take into account in determining interest rates. I am happy to say that they do not include teenage scribblers—although I was once one myself.

To ask the Chancellor of the Exchequer what progress has been made as regards the conditions that must be met before the United Kingdom enters the exchange rate mechanism of the European monetary system; and if he will make a statement.

I refer the hon. Gentleman to my speech to the House on 2 November.

Does the Chancellor agree that British farmers have no opportunity to compete on equal terms with their European counterparts because we are not full members of the European monetary system? What plans has he to help small farmers to overcome the problem of the high interest rates that now prevail?

Small farmers face the same difficulties with interest rates as other business men. I entirely understand the hon. Gentleman's point, but I am bound to say that I think that the principal competitive problem that affects small farmers is caused by the unfair subsidies often received by their counterparts elsewhere in the Community.

May I support the plea by the hon. Member for Ceredigion and Pembroke North (Mr. Howells) for help for farmers, and draw my right hon. Friend's attention particularly to the extensification part of the common agricultural policy? The CAP is badly in need of modernisation, but surely extensification is the true new social way of helping farmers to retain their rural economy.

Whether or not that is correct—and I suspect that it is—it is probably only tangential to the exchange rate mechanism.

The Chancellor said on 2 November, and has said subsequently, that inflation must come down before Britain can join the exchange rate mechanism. He has also forecast that, at the end of next year, inflation will be running at 5¾ per cent. Will that figure be low enough, or is the inflation criterion simply another way of saying that he has no intention of taking Britain into the ERM in the foreseeable future?

As the hon. Gentleman's hon. Friend the Member for Dunfermline, East (Mr. Brown) pointed out in a recent debate, I indicated my support for the exchange rate mechanism as long ago as 1981. The Government have set out four conditions that must be met before we can join the ERM; they were made entirely clear at Madrid, and they remain the same today.

Does my right hon. Friend agree that we cannot make progress on an exchange rate mechanism while restrictions on capital movement between member countries remain? Those restrictions include not only exchange rate control, but restrictions on the activities of banks in various countries in raising foreign currency debt.

My hon. Friend is entirely right. He has touched on the other conditions that need to be met. We certainly need to see capital liberalisation, freedom of financial services and, of course, strengthened competition quality. Those matters are well understood by our European partners, who must deliver accordingly before we are in a position to join the ERM.

To ask the Chancellor of the Exchequer what account he takes of each of the monetary indicators in setting monetary policy.

My right hon. Friend sets a target for MO and also monitors broad money and other financial indicators, in particular the exchange rate.

Does my hon. Friend agree that over the past 18 months the increase in the rate of inflation was due principally to the increase in broad money? Can he assure the House that in future the Chancellor will take more notice of broad money than his predecessor did?

It would probably be more accurate to retrace the resurgence of inflation to the relaxation of monetary policy at the time of the collapse of world stock markets in October 1987. It is significant that we rarely relax monetary policy in response to non-inflationary matters to keep growth going. That is always the intention of the Opposition. They would have continuously rising inflation but we are determined to get inflation down.

If the Minister monitors exchange rates, will he tell us the exchange rate between the pound and the deutschmark on the day of the speech by the right hon. Member for Blaby (Mr. Lawson) at the Conservative party conference when he said that his was not a party for devaluation, and what the figure is now?

The current exchange rate is much where it was at the beginning of 1987, let alone then. The policy consistently advocated by the Opposition would destroy the value of the pound internally and externally.

To ask the Chancellor of the Exchequer what was the growth in output over the last five years for which figures are available in the United Kingdom and other EEC countries.

The United Kingdom, together with Spain, has grown faster than any other EC country except Luxembourg.

While thanking my right hon. Friend for that encouraging answer, does he remember the late 1970s when Britain was branded the poor man of Europe? Does his answer not underline the vigour of our economy and give the lie to so much that Opposition Members say about the economy?

My hon. Friend draws attention to the fact that during the 1960s and 1970s Britain was bottom of the growth league, but during the 1980s our growth rate has out-performed that of all other EC countries. That is certainly something of which we should be proud.

Is the right hon. Gentleman aware that the last Labour Government inherited the economy from the Conservative Government and that private industry was collapsing on a massive scale? The Tory Government had to take over Rolls-Royce and we had to take over British Leyland and British Steel because they had collapsed. In addition, we had to take over the shipbuilding industry because it had collapsed. There would have been no industry had it not been for the Labour Government—[Interruption.] Oh yes. We have now had a Tory Government for 10 years and industry is collapsing on a bigger scale than ever before.

The trouble with the hon. Gentleman's argument is that the failures of the Labour party in Government did not apply just to the last Labour Government but to the Labour Government before that, the one before that and to all Labour Governments.

To ask the Chancellor of the Exchequer whether he will estimate the annual cost to British industry of (a) a rise of 1 per cent. in interest rates and (b) a rise of 1 per cent. in payroll costs.

A 1 per cent. rise in payroll costs would cost companies £1¾ billion, roughly three times as much as a 1 per cent. rise in interest rates.

I thank my hon. Friend for that interesting answer. Since rising interest rates are a phenomenon of most industrialised countries, why does the CBI bleat about them? Higher wage rates are not a phenomenon of many industrialised countries, but the CBI leaves them entirely alone instead of concentrating on trying to keep wage costs under control.

My hon. Friend makes a very important point. Interest rates in Britain have gone up by the same amount as interest rates in Germany over the past 12 months. Obviously, it is in the power of industrialists to keep their total costs down if they keep firm control of their payroll costs.

To ask the Chancellor of the Exchequer what is his assessment of the effect on the United Kingdom's long-term economic performance of the proposed European social charter.

To ask the Chancellor of the Exchequer what is his assessment of the effect on the United Kingdom's long-term economic performance of the proposed European social charter.

Implementation of the proposed social charter in its present form would have a harmful effect on economic performance. It would raise costs and cost jobs.

Does my right hon. Friend agree that it is ludicrous for the EEC to try to introduce laws to govern a wide variety of our small business sector?

I entirely agree with my hon. Friend. I suggest to our colleagues in Europe that the principle of subsidiarity would serve us much better than the proposed social charter.

Further to that answer, what would be the effect on the United Kingdom's economy of a 35-hour working week?

I scarcely think that an immediate 35-hour week would be helpful for the economy.

To ask the Prime Minister if she will list her official engagements for Thursday 30 November.

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. This evening, I shall be attending a dinner given by the 4th Battalion of the Royal Green Jackets to mark the retirement of my right hon. Friend the noble Lord Holderness as its honorary colonel.

Does the Prime Minister agree that in the weeks coming up to Christmas the ambulance service will be under increasing pressure, and that the walkout in London yesterday only underlines the seriousness of the situation? Will she now instruct the Secretary of State for Health to refer the matter immediately to arbitration?

I understand that the accident and emergency service is being provided by National Health Service ambulance crews over most of the country. They are answering 999 calls, and dealing with urgent admissions, transfers of very sick patients and journeys for patients who need various treatments. In London, Bedfordshire, Hertfordshire, Derbyshire and Lincolnshire, the emergency service is being supplemented by vehicles and crews provided by the armed forces and the police. With regard to the last part of the right hon. Gentleman's question, he is aware that these negotisations are conducted in the Whitley councils, which make no provision for arbitration.

To ask the Prime Minister if she will list her official engagements for Thursday 30 November.

I refer my hon. Friend to the reply which I just gave.

Has my right hon. Friend noted that Toyota, Nissan and the German firm Reinshagen have announced substantial investment in the British car industry? Is this not proof positive that the overseas investor has complete confidence in the British economy? It is a far cry from the days when the British taxpayer had to pay £3,500 million of taxpayers' money to British Leyland.

I agree with my hon. Friend. We welcome this manifestation of confidence in British industry today. It will enable us to bring the car industry back to its former glories. When all that investment is on stream, we shall be producing some 2 million cars a year in this country, whereas we were producing only 1·1 million in 1979. It is also a tribute to the change in trade union law in this country, which eliminated some of the previous difficulties, restrictive practices and continuous strikes that nearly destroyed the car industry 10 years ago.

When the Prime Minister responded to my question on Tuesday, did she know that the sale of Rover had been assisted by £38 million worth of under-the-counter handouts, and that on the best estimates available Rover was looking forward to three years of significant profitability?

I answered the right hon. Gentleman as I shall answer him again today—the Government struck the best deal that they believed they could in all the circumstances of the sale. The circumstances of the sale were that the extra cash injection at the time of final privatisation brought the total funds injected by the taxpayer into British Leyland up to £3,457 million since 1975. I understand that the forward forecasts of profits were before interest had been paid on capital. That is hardly a profit.

I rather felt on Tuesday that we had not had the truth, the whole truth and nothing but the truth and I feel that now. Is it not clear from what we now know in detail, that the Government were less than honest with the European Community, deceived Parliament, and sold the British taxpayers short, and that the whole affair has been a rip-off? What will the Prime Minister do to get the British people's money back? Is not this the time for her to give the public apology for which I asked on Tuesday?

No, Mr. Speaker. If there was a rip-off, it was the almost £3 billion which the British taxpayer had paid since 1975 to keep British Leyland-Rover going. The amount was growing because of the Varley-Marshall assurances and already in March 1988 it had reached £1·6 billion. Perhaps the right hon. Gentleman remembers that when we attempted to sell British Leyland-Rover in 1986, our efforts were frustrated by the hysteria with which the sale was greeted by the Opposition. The right hon. and learned Member for Monklands, East (Mr. Smith) called our efforts "anti-British in effect" and did infinite damage to the prospect of a successful sale to other buyers who may have been interested. He went on:

"Can we now be assured … that there will be no question, during the lifetime of the Government, of Land Rover or any other part of the British Leyland Group passing out of British control?"—[Official Report, 25 March 1986; Vol. 94, c. 787–88.]

Truly me thinks that the Lady doth protest too much. Did she or did she not know on Tuesday that the sale had been sweetened with £38 million worth of handouts from taxpayers' money?

Answer.

My right hon. Friend the Secretary of State for Trade and Industry will make a full statement later this afternoon. The Leader of the Opposition should be perturbed that the car industry could not succeed without enormous cash injections from the British taxpayer—[HON. MEMBERS: "Answer the question."] That company constantly put its hands into the taxpayers' pocket—[Interruption.]

Order. The Prime Minister must be given the chance to reply.

We had the irony that among companies producing cars in Britain some, such as Ford, paid money into the British Treasury while others, such as British Leyland, took rather larger sums out of it. [Interruption.]

Come clean.

Order. Let us calm down.

Will my right hon. Friend reconsider her reply to the Leader of the Opposition? Does she agree that there has been a rip-off—the rip-off of the billions of pounds that were swallowed up by Leyland over many years?

The right hon. Gentleman should declare his interest.

I have no interest to declare. Does my right hon. Friend further agree that the Leader of the Opposition would benefit from some instruction about the cost of a contingent liability of £1·6 billion and the value to the taxpayer of getting rid of it?

I entirely agree with my right hon. Friend. Had British Leyland-Rover not been privatised, it would have continued putting its hands in the pockets of the British taxpayer indefinitely. Then we should soon have been in difficulties with the Commission because of heavy subsidies to British industry.

I am sure that the Prime Minister and the House will join me in condemning the horrific, sectarian murders last night in Northern Ireland. In view of the continuing loss of life, hope and quality of life in the north of Ireland, will the Prime Minister please take the Northern Ireland problem off the backburner and, along with the Northern Irish political parties and the Irish Government, as specified in the Anglo-Irish Agreement and again in the Queen's Speech, set about taking the problem by the scruff of the neck and solve it once and for all?

First, I gladly join the hon. Gentleman in expressing our horror at the murders and our sympathy for the victims' relatives. Although the hon. Gentleman cannot respond immediately, I ask him to bear in mind that it is easier to say what he said towards the end of his question than to put it into practice. I pay tribute to the work of the security forces, whether the police or armed forces. We shall never be able to solve the problem entirely until we have the full co-operation of all people in providing evidence to bring the criminals to justice from whatever side of the sectarian boundary they come.

To ask the Prime Minister if she will list her official engagements for Thursday 30 November.

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

Does my right hon. Friend agree that those who favour the European social charter must also favour her Government's abolition of the closed shop? Is there not a lesson in that for the Leader of the Opposition?

Yes, Mr. Speaker. One of the good aspects of the social charter—we disagree with many; most in fact—is that it would require the abolition of the closed shop—a measure which this Government will introduce in the trade union Bill which will be presented to the House later. If the Opposition are in favour of the social charter. I hope that they will support fully our trade union measures.

Is the Prime Minister aware that in answering my right hon. Friend the Member for Salford, East (Mr. Orme) everything she said showed how conscientious ambulance men and women were in answering emergency calls? Is she aware that at the end of her answer when she sought refuge by saying that the matter was for the Whitley councils, she showed that she was not prepared to treat the dispute as the emergency that it is? Is it not high time that she stepped in to ensure that the dispute goes to arbitration?

I described where the ambulance service was honouring its undertaking as an accident and emergency service and carrying out its duties in that respect. As the hon. Gentleman knows, nine tenths of the work of the ambulance service in the miles of calls it answers do not involve accidents or emergencies, but bringing in-patients and out-patients to hospitals. Naturally, we wish that service to be restored. The hon. Gentleman already knows that a fresh offer which will last for 18 months has been made to ambulance crews. We hope that they will accept it.

To ask the Prime Minister if she will list her official engagements for Thursday 30 November.

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

In view of the historic events taking place in eastern Europe, will my right hon. Friend confirm that Britain will maintain her military commitment to NATO and encourage other member states to do likewise?

Yes. I think that the members of the European Community, and I am sure the Heads of Government when they meet at NATO next Monday, will reaffirm that it is vital to continue NATO which has given us peace for the past 40 years. Both the concept and practice are good. It is vital to retain NATO and the Warsaw pact which provide the machinery through which we are negotiating conventional and chemical arms reductions. We are fortunate to enjoy peace. We must always have the means to keep the peace and NATO is that means.

How is it that the Prime Minister trusts the Vietnamese Government so little that she is prepared to risk aiding the Khmer Rouge in order to be able to kick that Government out of Cambodia, and yet trusts them so much that she is prepared to use force to repatriate the Vietnamese boat people into their hands? When will the Government get rid of one or other, but preferably both, of those shameful policies?

As the right hon. Gentleman is aware, we do not support the Khmer Rouge. We have supported the non-Communist resistance. If the right hon. Gentleman is referring to the representation in the United Nations, he will know that that is determined by the United Nations credentials committee which presently supports the Democratic Alliance of which Khmer Rouge is a part. Is he suggesting as some people are that one should support the Hun Sen Government? Hun Sen and some of his people were members of Khmer Rouge and as a puppet Government were previously kept in power by the Vietnamese.

Will my right hon. Friend take a little time today to reflect on two outstanding achievements? First, will she reflect on the 70th anniversary of Lady Astor the Member for Plymouth, Sutton, taking her seat in this place as the first woman Member of Parliament? Secondly, will she reflect on her own outstanding achievement as Britain's first woman Prime Minister?

I am grateful to my hon. Friend. We would all do well to remember that this is the 70th anniversary of the day on which Lady Astor took her seat in the House. It was a momentous day for women and a great tribute to all the suffragettes who had worked so hard to see that day. We must also be grateful to Lady Astor for the magnificent way in which she discharged her duties so that many of us could follow after. I thank my hon. Friend for mentioning my "first" and hope that it will continue.