To ask the Chancellor of the Exchequer when he last met representatives of the Child Poverty Action Group to discuss taxation.

I have not met them as a Treasury Minister.

When the Chancellor meets representatives of the group, I hope that he will have some good news for them on child benefit which, as he knows, is the best way to give support to families on low incomes. I hope that he will raise child benefit in line with inflation because, as he knows, it has been eroded since 1987 when his Government's manifesto commitment was to "pay it as now". Surely that should not mean to pay it as it was paid in monetary terms, but that it should be uprated in line with inflation. I hope that the Chancellor will take that point on board in his next Budget and put that right.

I am grateful to the hon. Gentleman for his views. As he knows, we have a statutory obligation to review child benefit every year before the public expenditure round, and that has occurred. On the point about the freeze on child benefit in the past two years, the hon. Gentleman knows that there has been a compensating increase in income support and family credit, precisely to meet the point about low pay to which he referred.

When considering the answer that he has just given, will my right hon. Friend bear it in mind that quite a number of his colleagues, let alone Opposition Members, feel strongly that child benefit is the only income of some women, who appreciate its being uprated whenever possible?

I am grateful to my hon. Friend for that reminder. As she knows, child benefit was introduced by the present Government and at present costs £4½ billion, all of which is paid to the wife.

Surely all that the Chancellor needs to say when he meets the Child Poverty Action Group is that, as the social security Minister who gave the pledge in the manifesto about child benefit, he feels morally bound to uprate it in line with inflation?

It is always a pleasure to have advice from the hon. Lady, although it may be that I do not get quite as much advice from her as her right hon. and learned Friend the Member for Monklands, East (Mr. Smith). Nevertheless, I am pleased with the advice that she has given and shall certainly bear it in mind if I meet Miss Fran Bennett and her colleagues.

To ask the Chancellor of the Exchequer if he will make a statement on the growth during the 1980s of manufacturing productivity in (a) the United Kingdom and (b) other major industrial countries.

The average growth of output per person employed in United Kingdom manufacturing industry between 1980 and 1988 was 5·3 per cent., contrasted with 3·4 per cent. for the other Group of Seven economies.

I thank my hon. Friend for that encouraging response. Is not it also true that productivity in British industry has risen substantially above that in Japan? Does my hon. Friend agree that extra investment in new manufacturing industry, such as is happening in Stevenage, where over £600 million is being spent by Glaxo, British Aerospace and other companies, is the answer, to ensure that we have good manufacturing prospects?

I agree entirely with my hon. Friend's latter point. On his first point, manufacturing productivity growth in Britain over the past decade has been higher than that of any other leading western nation, including the United States and Japan.

Why does not the Minister tell the whole story about productivity in manufacturing? Why does not he also say that during the past 10 years of this Tory Government, more than 900,000 manufacturing jobs have been lost in Great Britain, many of them in the north and the west midlands? Will he also say that in West Germany there is a balance of payments surplus, equivalent to £50 billion, while Britain is running a balance of payments deficit of £20 billion? There is the contrast.

The hon. Gentleman may not know that manufacturing employment has been falling in every leading western nation for the past decade and more. Furthermore, manufacturing unemployment did not start rising in 1979, when this Conservative Government came to office, or in 1970 when the previous Conservative Government came to office. Manufacturing employment began to fall in 1966, the year that a Labour Government were re-elected.

What is my hon. Friend's view on bringing about a major increase in the productivity of East German manufacturing industry, by British taxpayers providing vast amounts of money through the European Community budget to improve East German manufacturing industry?

Earlier this week, I attended a meeting of Ecofin in Brussels at which the West German Finance Minister told us about the latest developments in the sphere to which my hon. Friend referred. It is inconceivable that the West German Finance Minister is unaware of my hon. Friend's views.

To ask the Chancellor of the Exchequer what steps he is taking to cut down on tax evasion.

The Government are strongly opposed to tax evasion, which is why we have doubled the number of staff engaged in anti-evasion work. We have increased the penalties, which had not been increased since 1960, implemented the bulk of the Keith committee's recommendations, simplified the tax system and reduced punitive tax rates, which invited avoidance and evasion.

Is it not true that according to the latest National Audit Office report, almost £4 billion or 15·5 per cent. of assessed tax revenues were uncollected in 1988? If the tax collection system was as efficient now as it was 10 years ago, we should have an extra £1·5 billion of revenue.

I appreciate the hon. Gentleman's point. If he reads the Treasury's reply to the committee, he will see that the sum of money is notional and that it has been normal for large amounts to be under assessment while assessments are waiting to be fixed. The actual amount that remains uncollected is only about one fifth.

Does my hon. Friend believe that shifting the burden of taxation from a direct to an indirect basis is altogether helpful, to avoid this problem?

That is certainly one of the factors that enter into the equation. However, I should also lay emphasis on reducing top tax rates. The previous Labour Government, when they had rates of 83 and 98 per cent., collected tax from only 30,000 taxpayers. Now, at the rate of income in real terms at which they would have been paying 83 per cent., 190,000 taxpayers declare their income.

The Minister's general commitment is not matched by the detail that he has given the House. According to the performance indicators in the public expenditure documents that we discussed in the House on Tuesday, the Inland Revenue's cost per employee on income tax cases has fallen. If the resources have been saved—I doubt whether they have—will the Government merge the special office and the inquiry branch—a reform which they have been putting off since 1985—in order to clamp down on corporate fraud?

If the hon. Gentleman looks closely at the figures, he will find that there has been a sixfold increase in the amount successfully recovered by the tax evasion unit. That is good news.

Does my hon. Friend have it in mind to introduce any measures to prevent the Labour party from giving evasive answers about the proposed roof tax?

My hon. Friend makes an extremely good point. One of the worst types of tax evasion is for the Labour party to evade giving the British people details of the taxes that it proposes to impose on them. We should like to see an end to the evasion of many questions on the roof tax. Is the Inland Revenue to be invited to hand over details of individuals' taxation to local authorities? Will individuals see their tax burden rise with every increase in the capital value of their house?

To ask the Chancellor of the Exchequer what has been the level of manufacturing investment in each of the last two quarters.

Manufacturing investment was £3,163 million and £2,784 million at 1985 prices in the third and fourth quarters of 1989 respectively. Manufacturing investment reached a record level in 1989, after six years of growth averaging 8 per cent.

Notwithstanding the Minister's answer, does he accept that the Government have an appalling investment record? The share of manufacturing investment in GDP fell by one quarter between 1978 and 1988. Does not that prove the Government's utter contempt for the nation's manufacturing prospects and their preference to grab what they can from the sinking ship?

The hon. Gentleman says notwithstanding my answer, as if somehow he did not want to hear the facts in it. The facts are that between 1983 and 1989 investment grew by 8 per cent. on average, but under the previous Labour Government manufacturing investment grew by 1½ per cent. per annum. Manufacturing investment is now 7¼ per cent. above the level in 1979. It grew by 5½ per cent. last year and it is now at a record level. It may surprise Opposition Members to hear that manufacturing output in the 1980s grew faster in Britain than in Germany.

Has my right hon. Friend had the opportunity to calculate the effect of the strike at Ford on manufacturing investment? Does he agree that it behoves all parties in the House that want to see manufacturing investment to support companies such as Ford, which want to invest in Britain, not those who are striking and so putting at risk future investment in Britain?

Two factors are important for manufacturing investment. One is increased profitability and the other is improved industrial relations. Both have improved enormously under the Government and in the teeth of opposition from the Labour party.

What effect are interest rates that are much higher than those of any of our European competitors having on investment intentions? Is falling manufacturing investment consistent with an on-going economic miracle? When does the Chief Secretary expect interest rates to start falling?

It is expected that manufacturing will continue to grow faster than non-oil GDP. Obviously, investment will, to some extent, be affected by interest rates, but it is important that we should reduce demand of which investment is part. The fact remains that in recent years we have had extremely strong investment growth, including strong manufacturing investment growth.

To ask the Chancellor of the Exchequer what action he is taking to promote personal savings and investment.

There have been a range of measures to encourage savings and investment in recent years.

Has my right hon. Friend been able to assess the popularity of personal equity plans following the improvements made to that scheme by his distinguished predecessor? Notwithstanding present high mortgage commitments, are not more and more people investing in PEPs?

My hon. Friend has taken a great interest in the personal equity plan schemes. He will be delighted to know that the number of plans taken up and the amount invested are now running at higher levels than at any time.

As so often, the right hon. Gentleman talks about savings for those who are basically rich enough to afford advice on how to save. What does he intend to do for the ordinary saver, the person who is being crucified by the present high mortgage rates?

The hon. Gentleman may conceivably not have noticed it or remembered it, but independent taxation comes into force from 1 April this year, which will be of considerable help to the married woman saver.

To ask the Chancellor of the Exchequer what recent representations he has received about interest rates and their effect on the economy.

I have received a number of such representations.

Does my right hon. Friend accept that many people in the House and outside it admire the way in which he has tackled his job in the few short weeks that he has been Chancellor of the Exchequer? Does he further accept that many of us hope that the belief that the pound and interest rates ought to be tied to the deutschmark has been buried? Because of the Germans' headlong and precipitant flight to a new fatherland, their inflation is likely to be very high. If Germany's interest rates increase 1 per cent., may we have an assurance that our interest rates need not follow, because British industry could not sustain such a rise or compete with it?

I am grateful to my hon. Friend for the first part of his question. As to the second part, I shall continue to judge interest rate levels against what I think is right for the country's counter-inflation policy.

Does the Chancellor realise that yesterday's announcement by one building society of increased mortgage rates spells personal tragedy for many people as well as great pressure on wage negotiations in the coming year? Can the Chancellor give the other building societies any hope of a reduction in interest rates while he refuses to make a clear commitment to Britain's early entry into the exchange rate mechanism, or should all building societies increase their interest rates in anticipation that base rates will remain high?

It would be very attractive to be able to stand here and say that I foresee an early reduction in interest rates. However, I must tell the hon. Gentleman and the House that it would be unwise to make such a commitment until I am certain both that it would be right in terms of beating inflation and that once we bring interest rates down, we can safely keep them down.

I thank my right hon. Friend for that answer, and I am sure that he will have strong support from Conservative Members in making sure that the campaign against inflation is maintained for as long as it need be. Will my right hon. Friend emphasise that an increase in mortgage rates is not the same as an increase in the rate of inflation? In that respect in particular, the retail prices index is a very unsatisfactory measure of inflationary conditions. When the RPI falls below the real rate of inflation, as it will over the next two years with falling interest rates, will my right hon. Friend take the opportunity to introduce a more realistic official inflation indicator and be prepared to adjust the annual uprating of benefits accordingly?

My right hon. Friend is right to say that the retail prices index as presently constituted is an inaccurate measure of the underlying rate of inflation in the British economy. He will be aware that few countries in the world include mortgage repayments in their retail prices index, as we do. I take note of my right hon. Friend's other comments.

The Government have said frequently that if their economic policy is not hurting, it is not working. Is not the real problem that the Government's policy is hurting manufacturing industry, investment and home owners? When will the Government open their eyes to the possibility of an alternative approach, such as credit control—which, although not perfect, can be of some help?

The most damaging thing for industry and for the economy as a whole is inflation. Our monetary policy is there specifically to bear down on inflation. If we had not used monetary policy successfully in recent years, I doubt whether there would have been the dramatic reduction in unemployment which all right hon. and hon. Members welcome, and which today's announcement shows is continuing.

Does my right hon. Friend agree that although the battle against inflation must take priority, the burden of it is being borne excessively by small businesses and home owners? [HON. MEMBERS: "No."] Yes it is. While I accept that my right hon. Friend cannot anticipate his Budget, will he, with his usual sensitivity, take that into consideration? After all, the need for the battle was not the fault of small businesses and home owners, but that of the Government.

I understand the concern felt by my hon. Friend, who is a powerful and consistent proponent of lower interest rates. I entirely sympathise with the difficulties that many home owners in particular face at present. I have to bear in mind as an overriding objective the necessity to ensure that we have the right economic conditions for bringing down inflation and for ensuring that it is kept down. I must keep that in the forefront of my mind and policy, and I propose to do so.

To ask the Chancellor of the Exchequer what he estimates privatisation revenue will be in 1989–90.

The latest estimate of net privatisation proceeds in 1989–90 is £.4¼ billion.

Is not the Minister aware that, at the time of the previous Budget statement, the expected revenue was £5 billion? Can the shortfall be accounted for by the selling-off of water at far below its real value, and will that shortfall be a factor that will prevent the Chancellor from raising tax thresholds in accordance with the Rooker-Wise amendments?

The hon. Lady is not correct. Water was sold at a good price, and I was glad to see that 85 per cent. of employees in the water companies participated in the sale. On the hon. Lady's second point, a Labour Government who deprived themselves of a continuing flow of privatisation proceeds would have a black hole that they would be unable to fill without higher borrowing or higher taxation of the sort that she alludes to.

While the £4,500 million received in the present financial year is a welcome by-product of the privatisation programme, will my hon. Friend confirm that the political purpose of the programme is to release businesses from political control into the healthy private sector, where every privatised industry has performed wonders for the economy of the United Kingdom and for its staff?

My hon. Friend is absolutely correct. We have privatised some 29 major companies, and virtually every company has increased its turnover, profits and investment and improved its industrial relations as a result. That is good for the company and good for the taxpayer because companies end up paying higher taxes—as British Telecom does—than they used to provide in dividends to the Inland Revenue.

What shall we live on when there is nothing left to privatise?

Should a Labour Government be elected, the problem that the hon. Gentleman envisages would come sooner. What would a Labour Government do without the proceeds of privatisation from day one? I should be interested to hear the answer to that question.

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

It would raise costs, and cost jobs.

Does my hon. Friend accept that the best social charter that the country can have is plentiful and, ideally, full employment in the most modern and competitive industries?

I fully agree with my hon. Friend. As he knows. Britain has created more jobs during the past six years than any other country in the European Community.

Was not the Minister really saying in his first answer that Britain under the Tories can survive only by bad employment practices and cheap labour? Have not the other 11 countries of the European Community, with which, I remind the Minister, we have 70 per cent. of our trade deficit, realised that completely the opposite is the case, and that a good employment record is a recipe for economic success?

If the social charter went through as it stands, the first people to suffer and to lose jobs would be women and the unskilled. I imagine that the hon. Gentleman's slogan in Islington at the next election will be, "Back the social charter and create unemployment."

Does my hon. Friend agree that, in view of events in eastern Europe and the potential reunification of Germany in particular, the social charter has now become an outdated irrelevance?

My right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), the former Secretary of State for Employment, said when he held that post that hundreds of thousands of British jobs would be at risk if the social charter went through. We need no lessons on unemployment problems in this country, because our unemployment is two thirds of the European average.

To ask the Chancellor of the Exchequer what is his latest estimate of the public spending planning total for 1990–91.

The public expenditure planning total for 1990–91 has been set at £179 billion.

I am sure that the Minister will confirm that we have an historically low level of public spending. How then can he justify the present position? Owing to our current balance of payments deficit, one item on which spending will be cut in real terms is export promotion services.

In fact exports are doing extraordinarily well: the latest figures show that they are up 15 per cent. on the previous year. If exports are to increase, what matters most is the competitiveness of British industry, and we are determined to achieve that.

Has there ever been a period in British history when, at the same time, public expenditure has risen substantially in real terms, the proportion of gross domestic product gobbled up by the state has fallen and a considerable amount of public debt has been repaid?

My hon. Friend is right. There have been large real-terms increases in specific priority programmes within total general Government expenditure, which at the same time has fallen as a share of GDP. I believe that that is entirely related to the sharp increase in our growth rate—compared with that of our European competitors—during the same period.

To ask the Chancellor of the Exchequer what is his latest estimate of the number of home-owners with mortgage arrears.

Around 70,000 mortgages are more than six months in arrears, less than half of 1 per cent. of total home-owners.

I am sure that all hon. Members are meeting more and more constituents whose debts have reached crisis point. Many have become homeless, and the position has been worsened by the increase in mortgage rates. The plight of those people is desperate: they also face increases in transport and heating costs, and the poll tax, which is yet to be imposed in England and Wales. Are not we moving from crisis to catastrophe, and should not those who reside at No. 10 and No. 11 Downing street be evicted, rather than our constituents?

I share the hon. Gentleman's concern for those who are in difficulties. However, the level of arrears, although a little higher than it was a while ago, is still very low. A vast number of repossessions are predominantly the result of marriage break-up rather than high interest rates.

Will my right hon. Friend confirm that the figures that he just gave for mortgage arrears account for 0·73 of 1 per cent. of all mortgage holders, and that that proportion is lower than it was at the end of 1985? If that number is in arrears, by definition 99·27 per cent. of people are not.

I confirm those figures. Of course arrears are difficult and painful for every individual home owner, but it is equally true that they are not running at the critical level implied by the hon. Member for Derbyshire, North-East (Mr. Barnes) in his supplementary question.

Is the Chancellor aware that—quite apart from the tragedy of repossession—many people who had thought that they were home owners have discovered that they are home buyers? There is a big difference between the two. The Government have no interest in home buyers; they try to persuade home buyers that they are home owners, which they are now discovering that they are not.

The right hon. Gentleman is clearly unaware that the number of properties repossessed in 1989—which, I think, underlies his concern—was less than one fifth of 1 per cent. of the number of building society loans. The problem has been there for a long time, and it certainly existed when the right hon. Gentleman was a Minister.

Is my right hon. Friend aware that more than 2 million more families now own their homes than in 1979? Is not there a strong case for raising the mortgage tax relief threshold from £30,000 to at least £60,000—[Interruption.]

Order. The hon. Gentleman has ark absolute right to say what he wants to say.

to take account of the huge increase in the value of homes, especially in the south-east, and in north-west Kent in particular?

I note my hon. Friend's representations on that matter. He should bear it in mind that owner-occupation has risen from 55 to 65 per cent. in the past decade and that there is still a substantial demand for home ownership to continue, as I believe and expect it will.

Does the Chancellor recollect that in the Conservative party's 1979 manifesto the then level of interest rates and mortgage repayments were said to result from what was called "Government financial mismanagement"? After 11 years of Conservative Government, with people are suffering the highest mortgage repayments in our history, is that still true? Is it caused by Government financial mismanagement and, if not, what is the reason for all this misery?

What was said in 1979 was entirely correct—[Interruption]—because for a long time when the Labour party was in Government there were negative interest rates which robbed savers, pushed up inflation and wrecked the economy.

Does my right hon. Friend agree that the building societies, which have been lending young people three and four times their income to buy overvalued properties, must take some of the blame? Does he also accept that what is worrying people in my constituency is not just the mortgage rate but a combination of the mortgage rate and the potentially astronomical community charge? Will he take cognisance of that and invite my right hon. Friend the Secretary of State for the Environment to cap Derbyshire county council?

I shall certainly pass on my hon. Friend's latter remark to the Secretary of State. I agree that people should be prudent in the borrowing that they take on.

To ask the Chancellor of the Exchequer what further representations he has received on tax relief for workplace nurseries.

I regret that I cannot comment on tax matters in the run-up to my right hon. Friend's budget statement.

Will the Minister join me in congratulating those local authorities and private companies that have established workplace nurseries? Does he accept that the establishment of workplace nurseries has meant that parents, and especially women, have been able to participate to a much greater extent in those industries? Will he consult the Chancellor to see whether he can include in the Budget provisions that will exempt from taxation people who are deemed to be liable for taxation because of the subsidy that they receive for participation in those schemes?

On the first part of that supplementary question, I am happy to join the hon. Gentleman in welcoming the action of the bodies he mentioned. On the second, I am sure that the Chancellor has noted carefully what he said.

I congratulate my hon. Friend on supporting workplace nurseries in the public sector. I had the pleasure of opening one for a health authority last September. However, will he have a word with the Leader of the House about the need for workplace nurseries in the Palace of Westminster? I have a problem in that within a few days of each other, both my secretary in the House of Commons and my secretary in the constituency announced that they were pregnant.

I am sure that my hon. Friend will pass on to the ladies concerned our congratulations, as I shall to the public sector bodies that are providing the facilities that they may soon need. I shall also draw to the attention of the Leader of the House my hon. Friend's point and the impending increase in demand.

To ask the Chancellor of the Exchequer how much private medical insurance tax relief will cost in a full year.

About £40 million.

Is not the Government's conscience troubled when they give away that sort of money to people who are relatively well off and when district health authorities such as mine in Wolverhampton and elsewhere are closing beds and wards, when waiting lists are growing and when the fabric of the buildings is deteriorating? How can the Government justify giving away that sort of money when all those problems exist in our hospitals and in the National Health Service generally?

If the relief on private medical insurance for the elderly is as successful as the Opposition appear to fear, it will pay for itself, because the National Health Service will be relieved of 100 per cent. of the cost of providing treatment for those subsequently cared for by the private sector, whereas the fiscal loss will be either 25 or 40 per cent. of the cost of premiums.

Will not tax relief on private medical insurance for the elderly mean shorter NHS waiting lists to everybody's benefit as more pensioners opt for private treatment? Does my hon. Friend agree that it typical of the Opposition to begrudge a little tax relief to pensioners who mean to care for themselves if they possibly can?

My hon. Friend makes a good point and puts the case cogently for that relief, which I believe will be widely welcomed by pensioners.

To ask the Chancellor of the Exchequer what was the total amount of mortgage interest paid by owner occupiers for 1988; and what is the comparative amount for the first three quarters of 1989.

The figures are £22·1 billion and £23·5 billion.

Does the Minister agree that those are appalling and indefensible figures? Many of us believe that they are a direct result of the inept, suicidal and disastrous Government economic policies. Will he give some words of relief and wisdom to mortgage payers who are faced with the financial trauma of consistently increasing rates? Does he agree with the present Secretary of State for Employment, the former Minister responsible for housing, who recently made the corny and insulting comment that if one is feeling the pinch because of mortgage interest rates payments one should take in lodgers?

I appreciate that high mortgage rates cause distress to all mortgage payers, and particularly to young married couples. But we have to continue to bear down on inflation. Once inflation is on a sustained downward path, interest rates and mortgage interest rates will follow.

Does my hon. Friend agree that the direct effect of putting up mortgage interest tax relief allowance from £30,000 would be to add to the cost of housing? Would not that be a bad thing?

I have heard the representations made by my right hon. Friend and by my hon. Friend the Member for Dartford (Mr. Dunn) earlier today. I am sure that my right hon. Friend the Chancellor of the Exchequer will take those views into account when formulating his Budget by 20 March.

To ask the Chancellor of the Exchequer what representations he has received from the Confederation of British Industry over the state of the economy.

The CBI submitted a paper for the National Economic Development Council's discussion on the outlook for the economy on 10 January.

Is it true that privately the CBI is told that it is all the fault of the previous Chancellor? How much longer can the right hon. Member for Blaby (Mr. Lawson) be held responsible for the economic mess when the responsibility clearly falls upon the entire Government, not least the Prime Minister?

The CBI fully supports the Government's policy. The CBI strongly believes that the most important thing is to reduce inflation, and therefore it supports the Government's policy. The hon. Gentleman talks as though the CBI was somehow the friend of the Labour party. He may have noticed that the other day the Director-General of the CBI said that the last decade had been the best 10 years he had ever known for business in this country.

Will my right hon. Friend ask the CBI what the state of the economy would be if the Labour promises were put into effect?

I certainly do not need to ask the CBI because we all know what the effect would be. The only trouble is that during the debate on the public expenditure White Paper the hon. Member for Derby, South (Mrs. Beckett) still refused to answer questions on the cost of Labour's programme and on how much would it put up taxes.

To ask the Chancellor of the Exchequer what is the current policy of the Inland Revenue in relation to the tax treatment of United Kingdom banks which make provision against Third world debt.

The Inland Revenue operates the test laid down by law. This provides tax relief to the extent that the principal is estimated to be irrecoverable.

Would it not be appropriate for the Chancellor of the Exchequer to introduce incentives for the banks to cancel outstanding debts to the Third world and thereby assist in the development of those countries to bridge the gap between the developed and the underdeveloped world?

I thank the hon. Gentleman for his Budget representations, but judging from his remarks, I think that he does not quite understand the purpose of the matrix.

Does my hon. Friend agree that the new bank matrix provides guidelines only? Can he reassure banks that the matrix will not be used as a revenue-raising mechanism? Can he confirm that banks will be able to write off Third world debt strictly on a business basis?

This is a matter for the Inland Revenue, but I should point out to my hon. Friend that the increase in the matrix reflects the concern of the Bank of England over the past few years about the debt problem.

To ask the Prime Minister if she will list her official engagements for Thursday 15 February.

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.

During her busy day, will my right hon. Friend consider the plight of community charge payers in Lancashire, where the Socialist-controlled county council's provisional budget represents the equivalent of a 30 per cent. increase in the rates? Does my right hon. Friend agree that this contrasts sharply with the position in the Conservative-controlled borough of Westminster, whose council has recently announced a community charge below £200 and below the Government's estimate? Will she therefore, with the Secretary of State for the Environment, consider community charge capping Lancashire, which is both high spending and incompetent?

There is no justification for the kind of increases that my hon. Friend has just mentioned in the case of Lancashire. My right hon. Friend the Secretary of State for the Environment has made it perfectly clear that if authorities continue to budget excessively he will not hesitate to cap them. They should have more consideration for their residents. I am very glad that the Conservative Westminster council has given such an excellent lead with a community charge below £200. Other councils will follow.

On the subject of capping, can the Prime Minister tell the House what thought she has given to imposing a cap on mortgage rates?

About 3 million more people are now able to take out mortgages than in 1979, and there has been a much greater increase in the number of people who own their own homes compared with the position some 10 years ago. That is a very good record.

Why cannot the Prime Minister stop dodging the question and simply own up to the fact that the all-time record mortgage rates are due entirely to her economic policies?

Also due to our economic policy, as the right hon. Gentleman may know if he looks at "Social Trends", published today, is the fact that real household disposable income increased by 25 per cent. between 1981 and 1988, and that there are now 15 million owner-occupied homes, compared with 11·6 million under Labour. That is due to the excellence of Conservative economic policies.

Through the use of the word "also", I accept the Prime Minister's confession.

Our Chancellors have handled our economic policy excellently, and I note that well over 99 per cent. of an increased number of mortgage holders manage to pay their mortgages very well, and will find home ownership a great benefit—it is a very good investment.

To ask the Prime Minister if she will list her official engagements for Thursday 15 February.

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

In the light of the question put to her by the Leader of the Opposition, is it due to the economic policies of my right hon. Friend the Prime Minister that, for the second successive year, the level of manufacturing in this country has gone up? Is that also why our unemployment is almost the lowest in western Europe? Will that eventually make some contribution to reducing interest rates?

As my hon. Friend observed, the figures for manufacturing investment last year have just been published. Manufacturing investment in 1988 was an all-time record and last year's figures raised that record to a new high level. That is two years of excellent manufacturing investment.

Will the Prime Minister take time this afternoon to consider the plight of the hundreds of thousands of council tenants whom the Government encouraged to buy their council houses? Is it not time that the Government reconsidered their policy of cutting support for council housing and bringing pressure on council tenants to buy their council houses by forcing up council rents?

As the hon. Gentleman is well aware, we put through a policy of tenants purchasing their council houses, which was bitterly opposed by the Labour party but from which many people have profited, and they are grateful for that. We shall continue to pursue that policy. In Scotland, as he knows, it has been extended in Scottish Homes. That has been a good bargain for all who have partaken of the opportunity that they have had from the Government.

To ask the Prime Minister if she will list her official engagements for Thursday 15 February.

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

In a week when Inter-Parliamentary Union delegations have returned from Bulgaria, Czechoslovakia, East Germany and Romania, will my right hon. Friend take this opportunity of assessing the current state of our political, economic and social links with the countries of central and eastern Europe? In particular, will she speculate on how those developments will be regarded in the light of the latest discussions on German reunification?

As my hon. Friend is aware, the Government have been active in contacts with and grants to eastern Europe. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and my right hon. Friend the Minister of State, Foreign and Commonwealth Office have visited a number of east European countries. We recently had the Polish Prime Minister here, and previously the Hungarian Prime Minister. We hope to have President Havel of Czechoslovakia here soon. We have contributed to the Polish and Hungarian stabilisation funds through the know-how fund and substantially, through the European Community, with extra food and medical equipment for Poland. All that is going very well indeed.

Order. The Prime Minister.

When I am asked questions, I expect to answer them. We shall also—[Interruption.]

Order. These are very important matters.

We shall also need an appropriate framework in which to discuss the implications for the European Economic Community, particularly in regard to agriculture, trade and financial arrangements.

Is the Prime Minister aware that the BBC plans a "Panorama" programme with the avowed object of denigrating the Ulster Defence Regiment? Will the Prime Minister undertake to ensure that the Government refute this slander by publishing the true facts about that regiment?

I had heard that a programme on the UDR was being prepared. I most earnestly hope that it will not denigrate the UDR. It is a very fine body of men and women whose lives are at risk whether they are on or off duty. I hope that the right hon. Gentleman's fears will not come to pass, but I suggest that he contact the chairman and the director-general of the BBC if he is in any doubt.

To ask the Prime Minister if she will list her official engagements for Thursday 15 February.

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

Does my right hon. Friend agree that for various reasons, including the spreading and contracting of AIDS, any proposal to reduce the age of consent to homosexual activities is wholly unacceptable and utterly crackers?

I agree with my hon. Friend. I think that any such proposal would give totally the wrong signal at this time. It would give offence to many people and worry many more and would give us great problems in the future. I would be very much against reducing the age of consent.

To ask the Prime Minister if she will list her official engagements for Thursday 15 February.

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

I am sure that the Prime Minister is aware that 10,000 farmers and farm workers leave the land every year. Will she tell the consumers of this country who will produce their food requirements by the turn of the century and what she intends to do about this very serious problem?

As the hon. Gentleman is aware, we are not short of food in the European Community and we are not short of food from America and a number of other places. Indeed, one of our problems has been the surplus of food; hence the need for quotas for milk, and so on. If there is a prospect of East Germany coming into the Community or being reunited with West Germany, that also will he a great producing area which will add to, not diminish, supplies. Also, many of the eastern European countries are only too anxious to send their supplies to us, which could pose problems. I do not think that the problem that the hon. Gentleman outlines will arise by the turn of the century.

To ask the Prime Minister if she will list her official engagements for Thursday 15 February.

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

Does the Prime Minister agree with Norman Shrapnel that too much silence is much more ominous than too much noise in a parliamentary democracy? Why, then, does she fear an inquiry into the Colin Wallace affair?

I have already replied on that matter, as have my right hon. Friend the Secretary of State for Defence and my hon. Friend the Minister of State for the Armed Forces. I have nothing further to add to what we have said.

To ask the Prime Minister if she will list her official engagements for Thursday 15 February.

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

Uncertainty has hung over the future of the English National Opera and the English National Ballet, of which I am a governor. Will my right hon. Friend send her best wishes to both those national companies for continued artistic excellence, supported by generous Government grants, good management and a high level of private sponsorship?

I gladly join my hon. Friend in sending best wishes to those two most excellent organisations, the English National Opera and the English National Ballet. I am delighted that they are out of financial difficulty. In the arts in Britain we have excellent private sponsorship, owing to the prosperity arid generosity of industry, and a high level of Government support. In the coming years we shall put it up by some 22 per cent. to ensure that that high level is maintained and that London remains the most distinguished centre in the world.

To ask the Prime Minister if she will list her official engagements for Thursday 15 February.

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

Now that the Government have agreed to pay 100 per cent. compensation for the victims of mad cow disease, will the Prime Minister agree to introduce a similar scheme of compensation for the millions of victims of her poll tax?

If I may answer the serious part of the hon. Gentleman's question, my right hon. Friend the Minister of Agriculture, Fisheries and Food announced 100 per cent. compensation for mad cow disease. We are expecting an increasing amount of the disease because of the long incubation period. My right hon. Friend thought, under those circumstances, that it was better to go from 50 per cent. to 100 per cent. compensation.