As the remaining 12 Bills have blocking motions, with the leave of the House, I shall put them together.

To ask the Chancellor of the Exchequer if he will make a statement on the proceedings of the most recent meeting of ECOFIN.

My right hon. Friend the Chancellor and I represented the United Kingdom at the Council of Economic and Finance Ministers on 12 March. The main topics discussed included the implications of German economic and monetary union, the European Bank for Reconstruction and Development, the revision of the financial perspective, the problem of fraud against the Community budget and the report of the European Court of Auditors for 1988.

I am grateful to the Minister. Can he tell us how he intends to persuade our European partners to locate the new European Bank for Reconstruction and Development in London particularly with such a grudging attitude about Europe on the part of the United Kingdom—for example, our reluctance over the social charter and the exchange rate mechanism? Can he tell us what powers of persuasion he has?

Our case is irresistible. It is so irresistible that we have produced the excellent brochure that I have with me. I shall be more than happy to send the hon. Gentleman a copy. Over lunch last Monday my right hon. Friend the Chancellor was able to raise the matter as part of the lunchtime agenda. The case for bringing the European Bank for Reconstruction and Development to London is clear. More than 520 foreign banks are already located in London. It is Europe's financial centre, and the centre of the Eurobond market, and we do more banking work with eastern Europe than any other banking capital in Europe. I hope that I have the hon. Gentleman's support and the support of the entire House in trying to get the EBRD to London.

In my hon. Friend's distinguished contribution at the ECOFIN meeting, did he have the opportunity to tell his colleagues on that body of the substantial support in industry in this country for full British membership of the European monetary system?

The conditions for Britain's entry to the exchange rate mechanism were clearly spelt out at the Madrid summit last summer. As many people have already said, the question is not whether we should enter the ERM, but when.

If the case is so overwhelming, will the Minister explain what will be said about the deficit on invisible earnings? For the first time since those figures have been recorded, they are in deficit——

indicated dissent.

The Minister may shake his head—does he deny that the figures are in deficit? If he wants to deny it, he should get up and say so. Will he tell us what this incompetent and inept Government will do to remedy this sad state of affairs?

This question relates to ECOFIN. That matter was not discussed last Monday at the ECOFIN meeting.

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

I thank my right hon. Friend for his reply. Is he aware that unemployment in the east midlands has fallen by 20 per cent. in the past year? Is he further aware that employment in manufacturing has increased by 18,000 since 1983? What are the figures for manufacturing output? Have they increased under this Government? How do they compare with the figures under the previous Labour Government?

Manufacturing output has increased. Manufacturing productivity has been a remarkable success story. It has grown faster in this country than in any other G7 country, including Japan and the United States. It has grown at twice the rate of the 1970s and it is higher than it was in the 1960s. That helps to explain the remarkable success of industry in my hon. Friend's constituency and in neighbouring areas.

Will the Chief Secretary accept this, the last of my pre-Budget recommendations: that the 25 per cent. capital allowance for plant and machinery is hopelessly inadequate, given the level of inflation and the value of capital equipment, which deteriorates over the first year of its life? That level is not an investment incentive; it is an investment disincentive. Will the Chief Secretary seek to remedy it?

I always listen carefully to the right hon. Gentleman, and I note what he describes as a late Budget representation, although it seems to be a little wide of the original question.

Does my right hon. Friend agree that for productivity to increase there must be more investment in manufacturing and research and development? Is he aware that in east Yorkshire and Hull an enormous amount of development is taking place? In my constituency, BP has just finished a new acetic acid plant costing £250 million and has announced plans for a research laboratory, which will employ over 200 scientists and high-paid technicians.

I am pleased to hear the good news from my hon. Friend's constituency. He is right that productivity is related to investment. However, it is related not to investment alone but also to good management and good industrial relations, which have improved remarkably.

To ask the Chancellor of the Exchequer when he expects to have zero inflation.

I shall set out my forecast for inflation next week.

The fact is that the Government have no chance of getting inflation down to zero per cent., even though that was the stated aim of the previous Chancellor of the Exchequer. It will not fall significantly from the present rate of inflation. Many of my constituents are suffering great hardship because of the Chancellor's and the Government's policies. Many of them are facing hardship because of increases——

Too long.

Order. In fairness to the House, the hon. Gentleman should ask a single question.

Inflation has been fuelled by high interest rates, high rents, high gas and water prices and the dreaded poll tax.

Order. I think that that is about enough.

rose—[Interruption.]

Order. It is not at all fair to the hon. Gentleman's colleagues for him to ask several questions.

I thought for a moment that the hon. Gentleman was trying to talk out Question Time. The reality is that without utilising our present interest rate policy there will be no chance of bringing down the rate of inflation to a level that is tolerable for most people. To that end we shall continue to sustain monetary policy. It is important that we do so for economic and social reasons. The hon. Gentleman mentioned the community charge. It is perfectly true that the dramatic burst of spending by local government will raise the retail prices index, but much of that comes from local authorities of which the hon. Gentleman approves.

Will my right hon. Friend accept my congratulations on the way in which, to date, he has borne down on inflation? Does he agree that it will be far more difficult in future to resist the demands of those, from every section of the community, who recommend and enjoy inflation, and who will look to him for a major relaxation of credit before the next general election?

I share with my hon. Friend the belief that it is vital to take whatever action is necessary to bring inflation down.

Is the Chancellor aware that all three local authorities in the Mid-Staffordshire constituency—two of which are Conservative—have set poll tax levels —[Interruption.] I have selected a constituency in which the Conservative party has a 14,000 majority. Surely that is perfectly fair. The three authorities have set levels significantly higher than the previous rate bills and far higher than the Government's ludicrous guidelines. Do not those examples and others throughout the land show clearly that the Secretary of State for the Environment was perfectly correct when he said that the poll tax would have a devastating impact on the retail prices index? Does the Chancellor agree with his colleague?

The right hon. and learned Gentleman was uncharacteristically unreasonable in omitting from the beginning of his question the fact that the Labour county council covering that area has dramatically increased its expenditure. He also did not mention, for example, the quite astonishing and unreasonable community charge of more than £600 to be set by Labour-controlled Lambeth.

Will my right hon. Friend remind the House what the rate of inflation was before 1979? Does he agree that if the Labour policy about which we know was implemented, we should have hyperinflation and a run on sterling?

There is no doubt that Labour's policy would cause a run on sterling—and we have yet to find out precisely what Labour's policy will be in individual aspects. The Labour Government's inflation record speaks for itself. Their best month was still higher than our worst.

To ask the Chancellor of the Exchequer if he has recently received any representations about the relationship between incentives to work and the level of income tax.

My right hon. Friend has received a number of representations about income tax.

I thank my hon. Friend for his reply. Does not the incentive effect of lowering direct taxes more than offset any loss to the Treasury because it increases the general buoyancy of the economy? Will he apply that logic to women who may wish to go out to work and who would be encouraged to do so if they were allowed to offset some of the costs for help in the home or with children?

I am sure that my right hon. Friend the Chancellor heard that late pre-Budget representation. All that I can do is to refer my hon. Friend to my answer to a similar question in the previous Question Time.

Surely a better answer for the Financial Secretary to give to his hon. Friend the Member for Billericay (Mrs. Gorman) would have been to say that the Government's tax policies are specifically designed to advantage the well-off rather than the generality of the community. If he had wanted to give his hon. Friend an alternative answer, he could have said that the parliamentary Labour party was absolutely right and that next Tuesday, the Government would abolish the tax on workplace nurseries.

I can answer the hon. Gentleman's question a little more fully by referring to the past and not to the future. The previous Labour Government had tax rates of 83 per cent. on the rich, but only 30,000 people paid them. Now that we have reduced the rates to 40 per cent. at the same level of income, 190,000 people pay them. People in the top 5 per cent. of incomes are paying 30 per cent. of the total income tax burden against only 24 per cent. at the end of the Labour regime. If anything, we have soaked the rich to everyone's satisfaction.

Does my hon. Friend agree that one person's tax relief is another person's tax bill? Introducing a new tax relief erodes the tax base. Will my hon. Friend, therefore, concentrate on the Government's long-term objective of reducing the standard rate of tax and thereby helping all taxpayers?

I recognise my hon. Friend's point, which continues a fruitful discussion that we had at a recent Adjournment debate. [Interruption.]

Order. Will the House settle down please? It is very difficult to hear at this end of the Chamber.

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 comparable amount in 1989.

The total of interest payments depends both on interest rates and the amount of mortgages outstanding. Of the growth from £22·1 billion in 1988 to £32·4 billion in 1989 nearly half was due to the increase in the stock of mortgages.

Does the Chancellor of the Exchequer accept that the squeeze on home owners has put more than 400,000 of them into some form of arrears, and that the position of many of them and of the poorest will be worsened when the poll tax comes in? What does he intend to do to relieve that burden of debt?

As the hon. Lady will know, the vast majority of borrowers are still keeping up with their mortgage payments, and I expect that to continue to be the case. Borrowers in serious difficulties account for less than 1 per cent. of the total number of borrowers.

Bearing in mind the fact that for years and years the Opposition steadfastly opposed the sale of council houses, that even now Labour councils put obstacles in the way of people who want to buy their council houses and that under this Government there has been a record rise in home ownership, does not concern for the plight of the home owner sound rather odd coming from the lips of Opposition Members?

My hon. Friend is correct in his observations, in particular that owner-occupation has risen dramatically. The demand for it continues and it will continue to rise.

Does the Chancellor recognise that the only way to get interest rates down without pushing inflation up is to combine membership of the exchange rate mechanism with a tighter fiscal stance? Since the Labour party is not prepared to do that, why does not he give it a try on Tuesday?

I am grateful to the hon. Gentleman for his advice, but he will understand that I have no intention of responding to it now.

Does my right hon. Friend think that those who now have a mortgage, who may want a different house, or those who aspire to have a mortgage, would benefit if we were to embrace the policy to freeze new mortgages advocated by the Opposition's environment spokesman, the hon. Member for Dagenham (Mr. Gould)?

What is certainly true is that the Opposition's policies would create a mortgage queue, which would help no one who wishes to become a home owner.

Does the Chancellor realise that many home owners who are struggling not to fall into arrears will find his complacency deeply worrying? Has he taken no notice at all of the recent Policy Studies Institute report, which suggests that about 1 million people are in serious housing debt, especially as that report was published before the most recent mortgage and rent increases?

The hon. Lady misjudges me if she thinks that I am complacent or unconcerned about the issue, but the reality is that only a relatively small number of borrowers are in difficulty. When that occurs, I hope that they will take the advice of their lender, whether a bank or building society, and I hope that, wherever possible, that lender will enable them to meet their mortgage payments by extending the mortgage. That is frequently the position. It has been in the past and I expect that it will be so in the future. But there is no doubt whatever that a premature move to bring down interest rates would not be to the benefit of the economy, would not assist us in bringing down inflation and would not assist mortgage holders either.

Notwithstanding the necessity to maintain a tight monetary policy, I remind my right hon. Friend that many families in outer London face acute hardship because of great difficulty in keeping up with their mortgage payments and the rising cost of commuter fares. In his forthcoming Budget, will he ensure that he does not rely on monetary policy alone to restrain inflation? His predecessor's obsession with monetary policy was very damaging.

As my hon. Friend knows, he will receive the answer to that question within a few days.

Question No. 8 Mr. Cunliffe?

They are all in Staffordshire.

Order. It is always a help to the Chair if hon. Members who cannot be here to ask their questions inform the Chair.

To ask the Chancellor of the Exchequer what proportion of non-oil gross domestic product, non-oil taxes and national insurance contributions represented in (a) 1978–79 and (b) 1989–90.

Non-oil taxes and national insurance contributions amounted to 34·1 per cent. of non-oil GDP in 1978–79 and 37·1 per cent. in 1988–89, the latest available year.

Will the Minister admit that under the Tories, tax take has increased as a proportion of GDP? Will he further admit that the Tory claim to have reduced taxes is entirely bogus, given that the Government have reduced taxes only for the rich and increased them for the rest of us? Does the Minister think that the poll tax will help to reduce the overall burden of tax?

I am sure that I speak for all my hon. Friends when I say that if the Labour party were to choose to fight the next general election on which party would deliver tax cuts, we know who would win it. The hon. Gentleman is not on a good point, when the Labour party has voted against every tax cut that the Government have ever made. Is reducing the rate of income tax from 33p in the pound to 25p in the pound a tax cut or not? If we had simply carried on with the tax regime that we inherited, with the same rates, bands and allowances, and adjusted them for inflation, a married man on average earnings would be paying nearly £20 a week more. That is the tax burden that we had under the Labour party.

Does my right hon. Friend agree that the virtuous circle brought about by the Government's low tax policies has meant more growth, more incentive and therefore a higher tax take for the Treasury? Does he further agree that, should the Labour party have the opportunity, unlikely as it seems, to put its policy of higher taxes, a wealth tax and an investment tax into operation, that would damage the good of the economy and therefore that increased tax take?

My hon. Friend is right, and the truth of what he says is shown in the rise in average living standards, which have gone up by nearly one third for the man on average earnings in the past 10 years, in contrast to the stagnation in living standards under the Labour party. In addition to the tax burden, the Labour Government also had a debt burden, which could not be financed out of taxes because the tax rates were penally high, so they had to finance borrowing out of inflation, which lowered living standards.

The Chief Secretary is adept at talking about tax cuts, but he talks only about income tax, when the total tax take has increased under the 11 years of this Government. As a result, total tax as a percentage of GDP is higher than it was when the Labour party was in office. If the Tory party is not to be permanently saddled with the tag of being the tax, tax and tax again party—[HON. MEMBERS: "No."] Oh yes. The tax, tax and tax again party. Will the Chief Secretary give an estimate of when the tax level that existed under the Labour Government will come about as a result of the Tory Government's policies?

That is a little bit like being lectured on celibacy by Mae West.

Does my right hon. Friend accept that he has had it straight from those on the Opposition Front Bench that their policies, if they were elected, would be to put up the rate of tax, reduce the tax revenue to the Exchequer, and plunge the country back into the depths from which we rescued it in 1979?

That is absolutely right. If we had a borrowing requirement burden similar to that which we had under the previous Labour Government, that alone would be the equivalent of 14p on income tax.

To ask the Chancellor of the Exchequer what was the monthly payment on an average mortgage in July 1988; and what was the comparable figure in February 1990.

The figures are £128·63 and £190·31.

Does the Minister share my concern about the clear connection between the huge increases in mortgage repayment figures and in homelessness? Is he aware that in Yorkshire and Humberside, during the 10 years of the present Government, homelessness has increased by 860 per cent? What are the Government doing to get to grips with the appalling human consequences of a high interest rate policy?

We all recognise that high interest rates mean that families have to cut spending on other things for the time being. The level of repossessions in the past year was below that for the previous four years.

Does my hon. Friend agree that rising interest rates are an international phenomenon from which we cannot insulate ourselves? Does he further agree that a policy of increasing public expenditure as practised by Labour councils and advocated by the Labour Front Bench team would lead only to higher interest rates?

My hon. Friend is correct. No Labour Government to which Opposition Members could point—let alone a Conservative Government—have succeeded in reducing inflation without a period of high interest rates.

The Financial Secretary must be aware that millions of families are facing mortgage bills that are £100 more than they were two years ago. In Mid-Staffordshire, the average is £50 extra a month. It is no comfort to such families to be told that it is an international phenomenom. When will the Financial Secretary and the Government end the exclusive reliance on interest rates as a mechanism for taking demand out of the economy?

I recognise the difficulties of people with high interest burdens. We should remember, however, that under this Government living standards for the average family with two children and on average earnings have increased by 32 per cent. more than inflation. The index takes account of mortgage interest payments. Under the Labour Government, the increase was only 1 per cent.

To ask the Chancellor of the Exchequer how many staff are currently employed in Inland Revenue valuation offices.

There are 5,748 staff currently employed in the Inland Revenue valuation offices.

Given the many appeals against business revaluations in my constituency and throughout rural England, is my hon. Friend satisfied that the valuation offices can cope with the increase in revaluations and appeals effectively and to the advantage of the taxpayer?

We are confident that the burden of revaluations and appeals will be met by the valuation offices. I appreciate that my hon. Friend has a problem with the local valuation office that is due to close in Salisbury. I assure him, however, that his constituents will be served satisfactorily from Swindon and Southampton.

Is the Minister aware that the Inland Revenue is being swindled out of £1 million a day by employers who are taking insurance contributions and not passing them over to the relevant authorities? Is he further aware that if the Government used as many inspectors to follow those employers as they do to hound one-parent families out of their DSS benefit, they would retrieve much-needed money for the Exchequer?

I must tell the hon. Gentleman that that is not the responsibility of the valuation offices. I rather thought that he would ask whether the valuation offices would be able to cope with revaluing everybody's house every year according to its rising capital value if a roof tax were imposed. I have to tell him that they would not be able to cope, and nor would the British people.

My hon. Friend took my supplementary question out of my mouth with his latter comments. As the point bears repeating, will he estimate how many people it would require to value every property in every street to implement a roof tax?

My hon. Friend clearly has powers of telepathy. I am grateful to him for prompting me. I assure him that it would need armies of valuation officers to revalue everyone's house every year to impose an ever-rising roof tax on them. It would put taxation through the roof.

To ask the Chancellor of the Exchequer when he expects to next meet the director-general of the Confederation of British Industry; and whether the current level of interest rates will be on the agenda.

My right hon. Friend will be addressing the CBI's annual dinner on 17 May.

As now is the time—or so the House has been led to believe—when the economy will begin to turn the corner, inflation will be brought under control and interest rates will begin to edge downwards, what prospects will the Chancellor of the Exchequer offer to the CBI at the dinner in May? Will it still be a story of "Great Expectations" or will he own up, at long last, to "Bleak House"?

When my right hon. Friend the Chancellor has the pleasure of dining with the CBI in May, he will be able to remind it that in the 1980s we had low inflation compared with the 1970s. The highest rate of inflation under this Government is lower than the best achieved by Labour—[Interruption.] The underlying strength of the British economy is as great as that of most other countries in the western world. Investment has been increasing by 40 per cent. in the past three years. Profitability has hit record levels. Manufacturing productivity in Britain in the 1980s has been higher than for 20 or 30 years—[Interruption.] Moreover, the British growth rate in the 1980s is far higher than in the 1970s, when the hon. Gentleman's party was in office.

Order. There seems to be a carnival atmosphere. I ask the House to settle down.

Does my hon. Friend agree that the Confederation of British Industry has enjoyed a period of sustained growth—the longest since the second world war—and a longer period of sustained and increasing profits than at any time since the second world war? Does he further agree that wages are a much more important factor in arriving at costs than the cost of borrowing money will ever be?

My hon. Friend is right to say that the 1980s have been a period of great economic success, not least in Scotland. He is also right to warn against high unit labour costs. Those high costs prevent Britain from becoming even more prosperous and prevent employers from taking on more people at their places of work.

To ask the Chancellor of the Exchequer what assessment he has made of the effect of the Government's policy on interest rates.

Fifteen per cent. interest rates are tightening demand.

Will the Chancellor confirm that his team is at the top of the OECD inflation table entirely because the right hon. Gentleman keeps scoring own goals through his high interest rate policy?

To be fair to him, I do not think that the hon. Gentleman has been well briefed for this question. Britain is not top of the OECD inflation league by a long chalk. Many other countries in Europe have higher inflation rates than Britain, as do others in the OECD.

Does my hon. Friend agree that one factor in this complex consideration is that if we were to join the exchange rate mechanism, interest rates would become a much more important element in combating inflation than they are ever at the moment?

My hon. Friend is trying to entice me crown an incredibly attractive path, but I shall resist the temptation. As he knows, the question is not when—[Interruption.]—not whether, but when we shall join the ERM. He also knows that we shall pursue the conditions set out at the Madrid summit last summer. As soon as those conditions have been met, we shall enter the ERM.

The Minister will be aware that, as a result of high interest rates, many home owners are considering remortgaging packages, which may appear to them to be attractive. Is he aware of a difficulty here? At present home owners get tax relief on that part of the mortgage with which they acquired their property and on home improvements, provided that they were carried out before 1988. Is he aware that if they remortgage they lose out on tax relief on that part which involves the home improvements scheme? That is a very important consideration. Will the Minister make a statement or, if he wishes to reflect on it, will he write to me?

I shall certainly pass on the hon. Member's Budget recommendation to my right hon. Friend the Chancellor. The hon. Gentleman is right to this extent: high mortgage rates cause a great deal of anxiety to people with mortgages, particularly young married couples. As soon as we can get inflation on a sustained downward path, interest rates and mortgages will follow.

Does my hon. Friend agree that the short-term pain of high interest rates is preferable to the long-term pain of inflation—£1,000 in 1960 had a purchasing power of only £160 in 1980? Does he agree that we must never allow that to happen again?

We must never allow it to happen again, but it will if the Labour party ever gets a chance or a sniff of office. Their record in the 1960s and the 1970s showed that they do not care at all about high inflation and how it affects people with mortgages and savings. The rates of interest and of inflation in the 1970s were a particular problem to elderly people with savings. It is to them that the Labour party would mete out its policies if it ever won office again.

To ask the Chancellor of the Exchequer which OECD countries have, by latest estimates, trade deficits that are bigger as a percentage of gross domestic product than the United Kingdom.

Information on the current account deficit in the United Kingdom is contained in the Central Statistical Office's latest balance of payments press release of 13 March 1990, and on United Kingdom gross domestic product in the CSO's national accounts press release of 21 December 1989. Figures for each of the other OECD countries are published by OECD in the December 1989 issue of "Economic Outlook".

Cutting through all that verbiage, is not the reality that Britain's trade deficit is the largest in Europe and that this is a shameful record for the Government's economic policies over the past 11 years? Does the Minister remember that the former Chancellor, the unlamented right hon. Member for Blaby (Mr. Lawson), used to pooh-pooh the trade deficit by saying that it could be financed by invisible trade? What is the Government's excuse for the present shameful trade deficit?

The hon. Gentleman refers to Britain's trade deficit. Many other countries in the western world have a trade deficit, including the United States, Italy, Canada, Denmark, Finland, Greece, Iceland, Norway, Portugal, Spain, Sweden and Australia. The truth is that the British trade deficit is improving; the volume of manufacturing exports was up by 11 per cent. last year and the CBI believes that there will be further improvement in the months ahead. The hon. Gentleman is even gloomier than normal.

Will my hon. Friend speculate on the effect on Britain's trade performance if the Government were to support every inflationary wage demand in sight, increase income tax and increase corporation tax—all policies supported by the Labour party?

To be fair to the Labour party, I am not sure whether it supports those policies. The Labour party has refused to say what its policies are. We have opinions from the Labour party, but no policies.

We are used to the excuses of the Economic Secretary and this Government for our failures in relation to visible earnings. Will the hon. Gentleman give us what will no doubt become the usual excuse for our failure to secure a satisfactory position in relation to invisible earnings? Why do we, for the first time since the Napoleonic war, have a deficit in our invisible earnings? Is it because the right hon. Lady and her Government have succeeded in doing to our country's economy what Napoleon never did—destroy it?

If the hon. Gentleman reads the press releases, he will find that during the past year invisibles have been erratic, but we hope that their performance will improve this year. The hon. Gentleman should read the details of the press releases from the CSO rather more carefully than, I fancy, he has to date.

Does my hon. Friend agree that, day in and day out in this House, we are subjected to the Opposition rubbishing British industry? Is not the truth of the matter that the industrial base of this nation is as strong as ever, and that we are importing goods so that we may value-add to them and sell them at a profit? This nation is outstripping the rest of Europe in production and in the creation of jobs. Why do the Opposition keep rubbishing our industry?

The short answer is that my hon. Friend speaks for Britain, and the Labour party does not.

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

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 he having further meetings later today.

Will my right hon. Friend join me in welcoming the decision of Mr. Jacques Delors, president of the European Commission, in rejecting the proposals for new labour laws as part of the social charter of the European Community? Does not that show that she was right in being the first to speak up against these damaging proposals, despite the fact that they were being put forward so enthusiastically by the Labour party and its Socialist allies? Is not it a shame that—[Interruption.]

Briefly, please.

Is not it a shame that when this was first reported in the national newspapers the comment that my right hon. Friend was "isolated" made the front page, whereas now the item makes only page 11?

I join my hon. Friend in being grateful that greater realism and common sense are coming into Brussels. It would be quite absurd to create a common market and then to tie it up with bureaucracy and Socialism. With regard to our sometimes being isolated, as we were in respect of the social charter, I should say that we got the right result then, and many people who criticised us at the time are now taking our view. So we were right.

Following the tragic events in Iraq earlier today, may I make it clear that the Opposition will support the Government in taking the strongest possible action, consistent with international law, in response to the barbaric execution of Mr. Farzad Bazoft? We are, of course, aware of the importance of doing all that we can to protect Mrs. Daphne Parish and Mr. Ian Richter. The Government, by their actions as well as their words—[Interruption.] Some of us regard this as a grave matter. As I am sure the Prime Minister agrees, the Government, by their actions as well as their words, must express the sense of outrage that is felt throughout the country.

I agree with the right hon. Gentleman that this is a very grave and serious matter. The Iraqi Government's action is an act of barbarism which is deeply repugnant to all civilised people. We extend our sympathy to Mr. Bazoft's family and colleagues. I agree that we must consider Mrs. Parish, who is still in prison in Iraq, as well as Mr. Richter, on whose behalf we have made many representations. The right hon. Gentleman will know that my right hon. Friend the Foreign Secretary will be making a statement after questions, so I think that further details should be left until then.

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

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

Does my right hon. Friend share my disappointment at the decision of the Irish Supreme Court to release two IRA terrorists? Does she further agree that that could damage the Anglo-Irish Agreement and that the action is an unjustified attack and slur on the Northern Irish prison service?

I very much agree with my hon. Friend. The suggestion that anyone extradited to Northern Ireland would be maltreated is grossly offensive and totally unjustified. The Northern Irish prison service is run by dedicated and courageous people who do a very difficult job. I fear that such a judgment may encourage terrorists to the view that they will probably find a safe haven in the Republic of Ireland, and that is very serious.

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

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

Does the Prime Minister know that she recently scored 66 per cent. in a popularity poll in Lithuania—[Interruption.]

Order. May we have the rest of the question, please?

Will she reciprocate that affection by declaring her support for the right of the Lithuanian people to negotiate their independence and their return to full statehood?

I am very pleased to hear the news that the hon. Gentleman has given to the House. Those people, along with many others, are fighting Socialism. They know the poverty of Socialism and they are trying to get rid of it. The matter must now be taken up in discussion with President Gorbachev. I hope that the outcome will be satisfactory to everyone.

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

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

Is my right hon. Friend aware that the Government's determination to keep their spending under control is one factor that keeps public investment flooding into this country? Since the last thing that we want is to call in the International Monetary Fund to bail us out again, as happened under Labour, will she reaffirm that she intends to stick to her courageous line?

I agree with my hon. Friend that we get a great deal of inward investment from Germany, Japan and other investors because they know that the Government will continue to pursue sound economic polices, to have the right industrial law, to resist nationalisation, to privatise more industries and to have lower taxes than we have had at any time since before the war. All those things are vital to investors and to the prosperity of the country.

Will the Prime Minister reconsider her reply at Question Time on Tuesday that not paying the poll tax is anti-democratic and a bad example to set to all young people? Does not she realise that 42·5 per cent., or over 205,000, of the people in Glasgow, are not paying the poll tax, and that they and the millions who are about to join them in England and Wales are deeply insulted by her remarks, because it is for their children and their families that those who can't pay won't pay? I and others on this side of the Chamber are proud to stand alongside those people in Scotland.

Deliberately to disobey a law, properly passed through all its stages in Parliament, is thoroughly anti-democratic and contrary to the rule of law, and leads to all the acts of dictatorship against which the House stands firmly. I repeat what I said: it is anti-democratic and against the rule of law. It sets a bad example to children and young people and should never be propounded from the House.

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

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

Has my right hon. Friend noted that the Labour-controlled county council in Staffordshire, which runs the education of that county, has produced results showing that 11 per cent. of all who leave school do so without educational qualifications? Should not the people of Staffordshire closely examine the way that that county council runs its affairs, to ensure that it gets the retribution that it deserves in the forthcoming election?

I agree with my hon. Friend. Whether in central, county council or district council government, we all have a duty to obtain the best value for money, whether it is the community charge or taxpayers' money. High-spending councils often do not get the best value for money in education or other services. Our community charge plans will enable people to scrutinise their local councils more competently to ensure that their money is well spent and to take action if it is not, and if the community charge is too high. Our education reforms will give parents more say in the education of their children and enable them to see how well they are doing. That is thoroughly to be recommended.

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

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

Last week the Prime Minister told me that home repossessions were one third of I per cent. Has not the Council of Mortgage Lenders said that the number of people who are six to 12 months in arrears has risen by 29 per cent., and that 500,000 families are now two to six months in arrears? Are not the Government's high interest rate policies to blame, and will they do anything about it in next week's Budget? Should not new home buyers have been warned that they are home owners only on borrowed time?

As I told the hon. Gentleman last week, 99·2 per cent. of people are able to pay their mortgages in the normal way. Of course, some are in difficulty. If they are in difficulty with building societies, in most cases the building societies will extend the mortgage or make other arrangements to enable them to pay. That is frequently done. Frequently the value of the asset for which they are receiving the mortgage has increased considerably since they first took out the mortgage.

Is my right hon. Friend aware that industry in the north-west has undergone a resurgency since she took office? Unemployment has fallen substantially, not least in my constituency of Lancaster, where it fell by 0·4 per cent. in the past month alone.

I agree with my hon. Friend. Industry is far stronger now. Restrictive practices have gone, the rate of investment in industry is higher and exports are increasing. Today's news from the unemployment front is that there are now more jobs than ever before: nearly 27 million. We have one of the lowest unemployment rates in Europe. On the day that the unemployment figures were announced, Opposition Members used to be the first to get up to ask about them. But they never ask about them now, because we have one of the lowest unemployment rates in Europe. We have created more jobs than they have, and that tells its own story.

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

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

Will the Prime Minister join the Life Assurance and Unit Trust Regulatory Organisation and independent consultants in denouncing the wickedly dishonest advertising and overselling of personal pensions? Already, over 1 million people are likely to be worse off because they have been misled, taken the Government bribe and left SERPS. Will the Prime Minister guarantee that when the time is right for those cheated 1 million to return to SERPS, there will be a full-blooded Government advertising campaign to inform them of the truth?

I totally reject the hon. Gentleman's premise and the language in which he expressed it. People are perfectly free to take out personal pensions. They take a burden off SERPS, which is why they receive a certain amount from it when setting up pensions. Many people have exercised their choice. I recognise that choice is anathema to Socialism, which is why Socialism will be rejected in this part of Europe as it has been in eastern Europe.

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

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

Is the Prime Minister aware that the privatised British Telecom is charging people £80 in certain areas before it will install a telephone? Does she think that that is a good advertisement for the privatised system, remembering that people do not get the £80 back until they have paid four consecutive bills? That is a disgrace. Does she agree that things were better when BT was public?

If the hon. Lady looks at the record of British Telecom since it has been privatised she will find that it is giving a much better service. Because of the regulatory regime, it has not been able to increase its prices by anything like the rate of inflation, so in real terms prices have gone down since privatisation. That is good news for all telephone users.