To ask the Minister of Agriculture, Fisheries and Food which traditional British foods are affected by EC directives.

I have always argued very firmly in Brussels against burdening the food industry with unnecessary bureaucratic rules.

Will my hon. Friend resist any further regulations from the Community that might interfere with the traditional names of favourite English foods? May we have an assurance that well-known English foods, using their generic names, such as Cheddar cheese, York ham or Devon or Cornish cream will not be brought within the regulations and that he will resist any attempt to change those names? Will he also defend the British kipper from any suggestion that the wisest cure constitutes a health risk?

The answer to the first part of my hon. Friend's supplementary question is that at the meeting of the Agriculture Council in Luxembourg last month, when I represented the United Kingdom, I gave a considerable peroration on precisely that subject. It is wholly unnecessary and perfectly silly that generic names should be included in any bureaucratic regulations. There are a very limited number of cases in which that sort of special protection could be afforded any sort of justice. We shall certainly resist that.

Does the Minister agree that it is daft that we should be spending so much time in Europe discussing, for example whether an Eccles cake has to come from Eccles? Does he further agree that it would be damaging if the directive were approved in its present form because it would restrict innovation and prevent the trade in, and export of, good British food? We should be making sure that consumers get what they want and at a good quality and that we are able to export good quality British food.

Precisely.

Was my hon. Friend's peroration successful? If not, will he repeat it until it is?

The line-up comprises six states that prefer the original proposals and six states that support the alternatives that the United Kingdom has put forward. At present, it is a case of an irresistible force meeting an immovable object—we are part of the immovable object and we intend not to be moved on the subject.

To ask the Minister of Agriculture, Fisheries and Food what action he is taking to improve standards of animal welfare in the EC.

To ask the Minister of Agriculture, Fisheries and Food what action he is taking to improve standards of animal welfare in the EC.

We are pressing for the adoption of comprehensive Community rules setting high welfare standards for animals on farms, during transport, and at slaughter. In particular, we are seeking to have the United Kingdom's high welfare standards adopted on a Communitywide basis.

I thank the Minister for that reply. Will he assure me that animals with a militant tendency or left-wing views or which do not pay their community charge—[Interruption.]—will not receive any protection? Will he also give an assurance that the Government and our European partners will give adequate protection to the Leader of the Opposition—[Interruption.]—so that he does not end up before the election, as he will after it, in the knacker's yard?

Order. That is well wide of animal welfare.

I suspect that many animals would not behave like some Opposition Members.

Does the Minister accept that his words and those of his right hon. Friend offering substantial support for the cause of animal welfare in Europe enjoy substantial public support? However, does he also accept that there is now significant doubt about whether the principle expressed in those words will be matched by action in the Community, especially in view of the fate of a motion to protect the smaller cetaceans, on which the Ministry does not appear to have acted accordingly to the Secretary of State's words.

I entirely reject the last part of the hon. Gentleman's question. My right hon. Friend the Secretary of State was able to secure substantial protection for whales. He also managed to keep the motion to protect small cetaceans on the agenda of the international whaling conference. The British Government will stand by everything that we have said about the protection of animals. We are arguing strenuously in Europe for that and it would help very much if the Opposition would support us rather than carping in the House and trying to undermine our position at every opportunity.

I am sure that your failure to call me earlier was not personal, Mr. Speaker, although it has happened twice in the past few months.

It was not personal.

Thank you, Mr. Speaker.

My hon. Friend makes a good point and highlights the difficulty of Britain taking unilateral action, as we rightly did last year, to ban veal crates because we believe that they are cruel. The net result has been that most veal eaten in this country is now imported—and produced under the very system that we outlawed in Britain. That is why we are arguing strenuously to have our high welfare standards on veal incorporated throughout the European Community. I strongly support the campaign of the Royal Society for the Prevention of Cruelty to Animals to draw to British consumers' attention the fact that very little veal in this country is produced under humane systems and that if they want humanely produced veal they must seek it out in the shops, where they will find that humanely produced veal is nearly all British.

I entirely endorse what the Minister says and I am glad that he is prepared to endorse the RSPCA's campaign, but how can consumers know that they are buying humanely produced veal unless the supermarkets and butcher shops tell them? I think that people should avoid veal altogether, because they cannot know whether the veal cattle have been exported from this country and kept in the crates that the Government have banned here—a ban supported by the Labour party.

The hon. Gentleman raises an intriguing point. We can have a proper solution to this, and consumers will have the right to know exactly what they are eating, only when we have a Europewide solution and proper marking. We must also not forget that shops and supermarkets are the only places where consumers would know where the veal was produced, because some supermarkets are marking their veal as humanely produced in Britain or are selling small quantities of imported humanely produced veal. The problem lies in restaurants and cafeterias, some of which are not far from this Chamber, where veal may be on the menu, but we have not a clue where it has come from nor how it has been produced.

Will my hon. Friend tell the House exactly what measures he will be able to take concerning the export of live horses other than for breeding, as the practice of exporting horses purely for slaughter is obnoxious and unnecessary?

We shall continue with the action that we have been taking since that issue first came on the agenda. We believe that the minimum values rules operated in this country are an excellent means of protecting horses. We do not want to have to resume the export of live horses and ponies. We shall continue to resist that strenuously and argue to that effect in Europe. Our policy will not change.

Has the Minister seen the report by scientists commissioned by Greenpeace into French drift nets being used in the same fishery as our Cornish fishermen went to earlier this week? Is he aware that the scientists monitored three common dolphins and two striped dolphins that had been caught in the unacceptably long drift nets? The Minister knows that the suffering of dolphins and porpoises is completely unacceptable to the British people, so what does he intend to do about it?

Of course we are concerned about allegations from Greenpeace or anyone else of dolphins being caught in drift nets. I understand that as of this afternoon, in the first three days of fishing no dolphins have been caught. We shall monitor the position carefully, and we must find a Europeanwide solution to the problem. If the hon. Gentleman has any evidence, he should bring it before us.

To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on his Department's policy towards traditional meadow and pasture land.

The environmentally sensitive areas scheme provides protection and enhancement of meadow and pasture land. We are consulting on how to strengthen that programme.

Has the Minister read the recent report of the Royal Society for Nature Conservation which gives details about the alarming loss of traditional meadows and pasture land, with their wealth of wild flowers? Will he discuss the report's recommendations with its authors? Will he give a guarantee that those meadows and traditional pastures outside the areas of protected status will be retained for the future?

I have read the report and note that it is supportive of the environmentally sensitive area principle. The hon. Lady will know that, as part of the environmentally sensitive area consultations, we are talking about the creation of new meadow land. She will also know that, in the countryside premium under the set-aside scheme, there is specific provision for the creation of grass land and meadow land, and in the new countryside stewardship scheme there are at least two or three categories that are eligible for aid and which affect grassland—for example, limestone in river bottoms. We are extremely concerned to maintain those traditional grass lands. The thrust of our policy is to enhance the environment. We shall certainly be in contact with the authors of the report to see whether they have any suggestions, as, clearly, we are pushing in the same direction and have exactly the same preoccupations.

Is my hon. Friend aware that the Warwickshire nature conservation trust has taken 50 acres of excellent pasture land and meadows into its care to look after it for the community and is also seeking further tracts of land? Does he agree that that example should be copied by other counties up and down the country?

It is an example which should be copied by all organisations in a position to take action. There is widespread concern to ensure that the traditional countryside is preserved. That does not have to be to the detriment of effective and efficient agriculture—the two are perfectly compatible and there is no reason why we cannot pursue them in harness.

To ask the Minister of Agriculture, Fisheries and Food what he next expects to discuss in the EC Agricultural Council proposals for reform of the common agricultural policy.

To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the latest developments in negotiations over the common agricultural policy.

To ask the Minister of Agriculture, Fisheries and Food what representations he has received concerning the latest proposals for the reform of the common agricultural policy from the European Commission.

I expect the next discussion in the Agriculture Council to take place on 23 and 24 September. I will then place on record again our opposition to those parts of the MacSharry plan that discriminate against British agriculture, northern agriculture, specialist agriculture, efficient agriculture, the interests of the consumer, European agricultural ability to compete with the rest of the world, and use the reform not to reform agriculture itself, but to put forward Mr. MacSharry's personal views.

When my right hon. Friend next meets Mr. MacSharry, will he extend an invitation to him to meet my fen arable farmers in north-east Cambridgeshire—preferably under tight security—to explain to them the Irish logic of his proposals? His suggestions mean that they will be expected to take a cut of 35 per cent. for their cereal prices without any compensation, whereas small farmers in Ireland, Greece, Germany and France will be adequately compensated. Does my right hon. Friend agree that those are the economics of the madhouse and that the livelihoods of my constituents would be decimated to protect the incomes of less efficient farmers in Europe?

Clearly, those proposals are not acceptable, because they discriminate against successful farmers in the United Kingdom and in other countries. The proposals were best summed up in the editorial in The Sun, which stated that the scheme, which was designed to control costs in the future, involved spending an extra £4 billion now. The Sun comments:

"More savings like that and we are all ruined."

My right hon. Friend deserves congratulations and encouragement on maintaining his resistence to proposals which, by imposing an upper limit of 90 head for the beef and suckler cow premium and 750 head in the less-favoured areas for the ewe premium, will greatly damage farmers in my constituency, in Somerset and in the rest of the south-west. When will the European Community start trying to raise the standards in France, Germany and the Mediterranean countries to the standards of efficiency and structure which prevail in Britain, rather than penalising British farmers?

My hon. Friend is quite right to point out that the plans before us would uniquely discriminate against those producing sheepmeat in the United Kingdom. They would be particularly damaging to farmers in Wales, Scotland and the Lake district. No group of farmers deserve discrimination, but that group of farmers is particularly vulnerable. We have sought to help it through special measures, but it is now suggested that that group should be uniquely discriminated against. That must not happen.

Does my right hon. Friend agree that those ridiculous proposals would mean an increase of nearly 20 per cent. to the taxpayer and would do very little to affect the price of bread to our constituents? My hon. Friend the Member for Cambridgeshire, North-East (Mr. Moss) has spoken about the 35 per cent. cut in the cereal price. If that became operational, would it be followed by a 35 per cent. reduction in the price of bread to my constituents in Erith and Crayford?

The standard loaf, at a price of 65p, uses wheat worth 8·5p—that is the payment to the farmer. If the cost of the standard loaf were cut by 10 per cent.—one newspaper has suggested that that would be the result of the proposals—the payment to the farmer would have to be reduced to 2p, which is clearly impossible. It has been suggested that the MacSharry package would be helpful to the consumer, but that is not so. All the evidence is that the discrimination would result in higher rather than lower prices.

Is the Minister aware that in his initial response he said no so often, so firmly and with such good reason that I thought that he had joined the Unionist party? Does the right hon. Gentleman agree that the term "extensive" farming is simply another name for low-level, inefficient production, which would fly in the face of all that we have done in this country for many years? Does he also agree that one does not make the less efficient viable by crucifying the efficient? In the GATT negotiations, will he bear it in mind that we cannot open our doors to all the surpluses of the world, which would destroy all that we have laboured for in this country for so many years? Those who have food surpluses should have a duty to world agriculture.

The hon. Gentleman will not lead me down the dangerous path of discussing internal Unionist politics. I am one of those who wish that the Unionist party would sometimes say something other than no.

Does the Minister accept that his answer to the hon. Member for Cambridgeshire, North-East (Mr. Moss) ought to be widely welcomed by all the farming unions in Wales? Will he confirm that he regards Welsh sheep farmers, whom he helpfully mentioned a few moments ago, as a specialist sector particularly worthy of support? Does he agree that one aspect that ought to receive attention is the establishment of European Community standard abattoirs available to specialist sheep farmers in Wales to enable them to sell their dead produce abroad?

I am sure that the hon. and learned Gentleman will agree with me that it will be much easier to achieve movement on abattoirs and European standards now that, at long last, we have got the standards. We have been very much held up by the length of the negotiations. We hope now to move as soon as possible on that front.

May I assure the Minister that the Labour party shares the view that the MacSharry proposals, including the proposal to increase the cost of the common agricultural policy, will be unacceptable to the British people? Does he appreciate that although it is all very well for him to get excited and tell us what he is against, the House has a right to ask what he is in favour of? Does he not think that he would be taken more seriously by the farmers and taxpayers of Britain if he tabled his own counter-proposals and built on the environmental proposals in the MacSharry plan? If he did that, he would begin to determine the scope of the debate instead of allowing other people to dominate it.

I know that it is difficult for the hon. Gentleman, who is a long-time supporter of the Common Market safeguards committee and who hates the European Community, to come to the House and admit publicly that he does not understand how the European Community works. There is no way in which counter-proposals may be tabled.

Will my right hon. Friend confirm that a 35 per cent. reduction in support for cereal farmers is ludicrous and would be absolutely disastrous for them? Are not the negotiations on agriculture becoming a war of attrition and resulting in lower profits for our farmers? May I urge my right hon. Friend to come up with radical new proposals for reforming the common agricultural policy so that our farmers can see that they have a future in agriculture, instead of having to engage in a continuing battle against what seems to be a continuing decline?

My hon. Friend must surely agree that it would be acceptable, particularly within the context of GATT, to reduce direct price support, so long as we are able to help farmers by means of more direct and money-saving ways at the same time. What is objectionable about the MacSharry proposal is that about 90 per cent. of farmers would not have the reduction. The reduction would therefore be borne, not only as to their own percentage but to cover that which ought to be carried by others, by the 10 per cent. who remain. What is wrong with the proposal is that the compensation goes to some but not to others and that the cut is borne largely by efficient farmers, many of whom are in the United Kingdom.

To ask the Minister of Agriculture, Fisheries and Food what is his policy towards the milk marketing board; and if he will make a statement.

I welcome the milk marketing board's decision to submit plans for transforming itself to co-operative status.

Does the Minister recognise that many of us dispute the view that the abandonment of the current milk marketing scheme would be in the overall interest of milk producers? Does he deny that for farms that are relatively remote from major population centres, any curtailment of the guarantees currently provided by the milk marketing board could be catastrophic?

The milk marketing board proposes that it should make some changes, because it recognises the major problem—the hon. Gentleman must come to terms with it—that more than 35 per cent. of the liquid milk now bought is legally outside the scheme and that supermarkets, which are major selling agencies, can buy their milk from countries that are, naturally, outside the scheme. The milk marketing board is trying to produce a package that will better protect the producer and meet the needs of the consumer. If the hon. Member for Edinburgh, East (Mr. Strang) is opposed to the change and does not agree that the milk marketing board should seek what it believes to be the best answer, he is proposing a scheme in which he feels that he knows better than the board. I am not prepared to say that.

My right hon. Friend will know that the majority of Shropshire dairy farmers support the need for change and the view of the milk marketing board. Has my right hon. Friend read the letter in Farming News from the hon. Member for South Shields (Dr. Clark)? Is not it surprising that he is taking a more stick-in-the-mud attitude which will not help dairy farmers improve their incomes or businesses?

My hon. Friend may have seen that the shadow Minister of Agriculture, Fisheries and Food wrote in The House Magazine that he did not think that there should be changes in the milk marketing scheme. He, too, thinks that he knows better than the milk marketing board. I warn him directly that if the British people find that the milk marketing scheme falls about the ears of the producers because changes were not made in time, they will know who to blame for the disaster that would befall our milk producers. The hon. Member for South Shields (Dr. Clark) may laugh, but it is he who said that changes in the market should not be met by changes in the milk marketing scheme.

Does the Minister agree that there is little that the milk marketing board can do for the two dairy farmers in Bolsover who have had to cease production because of the dioxin levels in the milk in that area? Will he guarantee that while he is arguing for the polluter to pay—we all accept that—somebody should compensate those farmers in the meantime if Coalite or any other polluter takes the matter to court? I suggest that some compensation should be paid and account should be taken of the 25 other farms that may be affected in the future.

The hon. Gentleman rightly brings to the attention of the House the plight of two dairy farmers, both of whom I have met on their farms. I know very well how seriously they are affected. I asked the hon. Member for Bolsover (Mr. Skinner) whether I could visit those farmers since they are in his constituency and he kindly allowed me to do so.

To ask the Minister of Agriculture, Fisheries and Food if he has any plans to make an official visit to York to discuss current confectionery industry issues.

I am always ready to discuss confectionery issues in York and elsewhere.

Is my hon. Friend aware of the great concern in the city of York among the 6,500 employees in the confectionery industry about the problem of counterfeiting? While British products such as KitKat have become kit kit and kit kier, those jobs are at risk. Will he talk to the Secretary of State for Trade and Industry to ensure that there are adequate safeguards for good British products and that appropriate action is taken, especially in the middle east and the far east?

I appreciate my hon. Friend's concern about shady snacks in the souks, if I may put it like that. He will know that the protection of intellectual property which covers precisely that issue is an important element of the GATT talks. I shall certainly undertake to point out to my right hon. Friend the Secretary of State for Trade and Industry the importance of the problem for the industry, which I know is important in my hon. Friend's constituency. I shall certainly do all that I can to prevent such a theft of jobs from the United Kingdom and from Yorkshire, to which I am particularly attached.

To ask the Minister of Agriculture, Fisheries and Food what recent representations he has received from representatives of the fishing industry on the question of a decommissioning scheme.

I have made it clear that any decommissioning scheme must be part of an effective package of measures to conserve fish stocks and control fishery effort.

Does the Minister accept in principle the need for a decommissioning scheme? If so, is he prepared to sit down with representatives of the Scottish fishing industry and, instead of passing the buck directly to them, discuss in detail the relative contributions that will be made by the Government, the European Community and the industry to a conservation package which would have the confidence of the industry, rather than the present arrangement of the eight-day tie-up, which puts lives and livelihoods at risk?

We are always ready to sit down with the representatives of all United Kingdom industries, as we have demonstrated frequently in the past. We shall continue to do so.

Although I recognise the difficulties and pitfalls of a decommissioning scheme, will my hon. Friend nevertheless accept that the overwhelming desire of all hon. Members who represent fishing constituencies is that the Government should consider seriously the possibility of just such a scheme? Will my hon. Friend consider with great care the proposals put to the Government by the National Federation of Fishermen's Organisations, because many of us believe that at least the outline of such a package is contained in that scheme?

Decommissioning as the sole response to the problem of overcapacity is something which we cannot accept. However, we can accept that decommissioning as part of a sensible package of effective control may have a role. Therefore, we shall discuss it with all aspects of the industry. I frequently meet representatives of the NFFO—as it happens, I met them this morning to discuss a different matter. We met the Scottish Fishermen's Federation in Brussels early last week in the margins of the Council. I shall continue to have the closest contact with those organisations and also with those representing other parts of the United Kingdom.

Does the Minister recollect that only a few moments ago the Secretary of State was ranting and railing at the House, telling us that we must accept all European solutions? As there is a European solution with decommissioning, as there is access to European Community money and given the fact that he has been much more conciliatory today, will he now push strongly in his discussions with the various bodies for a proper decommissioning scheme as part of the conservation measures? We would all welcome that.

The problem with the European scheme is that it regards decommissioning as being isolated from other conservation measures. I have made it clear that that is not a sensible approach, but we shall certainly consider it in the context of a more thorough approach to conservation. Certainly, we hope to advance that conservation matter at the next Fisheries Council in October. I repeat my promise to remain in contact with all the organisations involved.

The Minister will be aware that the Wash shell fishery in my constituency has its own peculiar problems, and the fishermen there are extremely grateful that he took time off last Friday to visit them. Does he believe that the decommissioning scheme that is being talked of could have any relevance for that fishery?

Whatever scheme we introduced would be extendable to all British fisheries. We could not possibly produce a scheme that would apply only to a small sector of the industry. I realise that my hon. Friend's fishery is a special case, as it is basically a shellfish fishery, but we would not consider excluding it.

We welcome the Government's partial U-turn: we are glad that they are moving towards a decommissioning scheme. Is the Minister aware, however, that this week 900 jobs were lost in a fish processing factory in Grimsby? One of the main reasons for that—apart from the economic recession that the Government have caused—is that the lack of a coherent policy for the fishing industry has caused problems with the price and supply of fish.

We all regret the closure of the Findus factory and the consequent job losses. The problem is that there are not enough fish. To what extent would the hon. Gentleman be willing to liberalise imports to ensure increased supplies for the processing sector? That is an important question.

To ask the Minister of Agriculture, Fisheries and Food what is the balance of trade in beer and lager products.

Net imports of beer and lager were valued at just under £89 million in 1990.

As the Minister knows, many of my constituents work in Burton-on-Trent breweries run by companies such as Bass. Is not it a disgrace that we should have a trade deficit in beer and lager products? Given that many lager drinkers cannot tell the difference anyway, should we not be able to make Australian-type, Canadian-type, Danish-type and German-type lagers in Britain? If we can manufacture Japanese cars in this country and sell them successfully to Japan, why on earth do we have a trade deficit in beer and lager products, instead of a great big surplus?

I was born in Burton-on-Trent and no one could feel a greater desire than mine for its products to be exported much more widely.

Is not it a sad reflection on a country with such a fine tradition of brewing that we now import twice as much beer and lager as we export? Is not that typical of the state of our trade balance in the food and drinks sector generally which currently has a deficit of over £5 billion? If the French, German and Dutch Governments can support their export initiatives, why on earth do our Government refuse to back British export initiatives and British interests?

First, the British Government provide such support; secondly, the breweries are, on the whole, extremely large companies and quite capable of being in the export business themselves: thirdly, the exporting habit is, unfortunately, not as widespread in the United Kingdom as it should be.

To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the total incidence and regional concentrations of bovine spongiform encephalopathy in England and Wales.

The incidence of confirmed cases of BSE in 1990 was about 0·33 per cent. of the average adult cattle population of England and Wales. Nearly half those cases have occurred in the south-west of England.

Will the Minister confirm that BSE rates are as high as ever in this country and that there are now 31,000 confirmed cases? The Government estimated that there would be 20,000. Why is there such a difference between the Government's hope and the reality?

The disease is following the pattern predicted by the epidemiologists. In the past few months the increase has been very slight, although the overall number of cases continues, slowly, to rise. We would expect that. The source of the disease was cut off a few years ago, when the Government took action on animal feeding. The animals now appearing with the disease were infected earlier and we must now wait until the numbers decline and die out of the system.

May I congratulate my hon. Friend on the steps that the Government have taken to eradicate BSE? If the Ministry has any influence on planning applications for the construction of BSE incinerators, will he treat them with great care and ensure that no animal incinerators are put anywhere near residential areas or even in industrial estates? The devices should be situated in isolated areas that are well away from everything else.

My Ministry will give all the help that it can to local authorities and others, including technical advice on the design of incinerators for carcase disposal.

Does the Minister accept that there are 20 million tonnes of cereals in stock within the EC intervention fund? Does he accept also that despite the complaints of some that we are having a wet summer, the signs are that we shall have another record cereal crop? Arising from those two simple facts, is the Minister sure that the set-aside scheme is working?

The set-aside scheme was never designed to deal with cereal surpluses. Instead, it was designed to give some assistance to those who found it difficult to face the downward movement of prices. We still regard the scheme as part of the formula, but we regard producer closeness to the marketplace as the essential centrepiece of any reform of the sector.

To ask the Prime Minister if he will list his official engagements for Thursday 18 July.

I have been asked to reply.

In view of the embarrassing revelations that the Secretary of State for Employment knew in June 1990 of possible embezzlement and fraud at BCCI and that the Department of Trade and Industry stated that it has not received the letters which the right hon. and learned Gentleman says he sent to it on the matter, will the Leader of the House, as a matter of urgency, set up a full and independent inquiry into the whole sorry affair?

My right hon. and learned Friend the Secretary of State for Employment received a letter from the BCCI staff which primarily expressed concern about redundancy arrangements at the bank. He received also a copy of a covering letter which the association sent to the right hon. Member for Chesterfield (Mr. Benn). My right hon. and learned Friend wrote to the right hon. Member for Chesterfield on these matters and, as far as I know, the right hon. Gentleman did not come back to him on them.

To ask the Prime Minister if he will list his official engagements for Thursday 18 July.

I have been asked to reply.

Does my right hon. Friend agree that if a member of the Cabinet was accused publicly by his colleagues of being unwise, unprincipled and responsible for confusion, he should do the decent thing and resign? If he agrees with that principle, and if he has noticed an item on the front page of The Guardian, should not the shadow Foreign Secretary resign?

I say to my hon. Friend—[Interruption.]

Order. I think that the supplementary question was in order.

I cannot imagine any of my colleagues saying such a thing about any member of the Cabinet. If my hon. Friend is referring to the comments in the press this morning of the hon. Member for Kingston upon Hull, East (Mr. Prescott) about the right hon. Member for Manchester, Gorton (Mr. Kaufman), I was interested that he said,

"Everybody knows"—

"it's a policy change, but no one is admitting it."

Order. The Lord President should relate his reply to Government policy.

Government policy is very clear on the nuclear question, but the Opposition cannot, even now, give a simple answer to a simple question about their defence policy.

I look forward to receiving a simple answer to a simple question. Does the Leader of the House share the view expressed by the director general of the Confederation of British Industry on the "Today" programme this morning that Britain is no longer suffering from a depression but from a slump?

I share the view—[Laughter.]

Order. This takes up a lot of time.

I will give the right hon. Gentleman a simple answer to his question. The CBI's director general said on the "Today" programme this morning:

"The manufacturing side of our economy is in much better international shape than it's been for many years."

It may have been a simple answer to someone's question, but not mine. Can the Leader of the House attempt to justify his evasive answer having seen, as I suspect he has, the European Community's judgment on the British economy? It is that British investment will fall next year, while German investment will increase by 6 per cent.; and that unemployment in Great Britain will rise to more than 3 million next year, accounting for more than half the total increase throughout the whole Community. If that is not a slump, how would the right hon. Gentleman define one?

We made it clear in the Budget forecast that recovery would begin in the second half and that view is shared by the CBI and the Organisation for Economic Co-operation and Development. As to the European Commission's predictions on unemployment, I point out that it does not have a good record of making accurate forecasts. It indicated that unemployment in Germany would rise and it has not; and that employment in France would grow and it did not; and it asserted that training skill levels for school leavers were lower in West Germany than in Greece—and I do not think that anyone else believes that. I suspect that the Commission's unemployment forecast will turn out to be as accurate as that of the right hon. Gentleman in the 1983 general election, when he forecast that unemployment in this country would rise to 4 million—and it never did.

The Leader of the House does not seem to have a good record when it comes to remembering the Prime Minister's forecasts. In the House last week, the Prime Minister revised his forecast for recovery from the second half of this year to round about Christmas. Is not the truth that now that the glitz and glamour of the G7 summit is over, we are back in the real world of Britain's economic situation—and that real world is a catastrophe, caused by the Conservatives' policy of the past 10 years?

The most important things for long-term prosperity and for jobs are to get inflation down, as we are doing and which Labour singularly failed to do, and to keep public expenditure under control and at reasonable levels, which Labour also singularly failed to do. The right hon. Gentleman may remember that at the last general election, he committed Labour to increasing public expenditure by some £34 billion. Labour is at it again and that would be a real recipe for disaster for growth in the early part of the 1990s.

To ask the Prime Minister if he will list his official engagements for Thursday 18 July.

I have been asked to reply.

While we welcome the impending nuclear disarmament that will emanate from the G7 summit, does my right hon. Friend agree that Britain's independent nuclear deterrent would be put at risk, and could lose all credibility, if we cancelled the fourth Trident submarine —as Labour proposes to do?

I share my hon. Friend's strong welcome for the agreement on the START negotiations that was reached yesterday and I am sure that the House shares that welcome. However, my hon. Friend was right to draw attention to the sham of Labour's defence policy. Not only is it totally confusing, but although they will keep nuclear weapons for negotiations, on the other hand they totally undermine the credibility of our deterrent. Four Trident submarines are essential to ensure that one is on station all the time.

Why are the Government trying to gloss over the background to the closure of the Bank of Credit and Commerce International? Why are they refusing to hold an inquiry into the Bank of England's role? What advice did the Treasury give to local authorities around the country? Most of all, what did the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) do with the correspondence alleging corruption and negligence inside the bank which he apparently received from the present Secretary of State for Employment?

There is absolutely no glossing over. Obviously, we are all concerned about what has happened to a number of small depositors and borrowers at BCCI. The important thing now is for the Bank and the liquidator to get on with the practical arrangements and to move as fast as possible. My right hon. Friend the Chancellor of the Exchequer has already said that he will be reviewing what happened and will see what lessons can be learnt from it. The hon. Member for Bradford, West (Mr. Madden) will be aware that the Treasury and Civil Service Select Committee is meeting next week and that the Governor of the Bank of England will give evidence to it. Obviously many questions can be asked about what has happened over that period. I can assure the hon. Gentleman that there is no question of trying to cover up and no question of a sham.

To ask the Prime Minister if he will list his engagements for Thursday 18 July 1991.

I have been asked to reply.

Does my right hon. Friend agree that if the European regional funds, from which businesses in my constituency are unlikely to benefit significantly, were massively increased, the result would be a heavy cost to the British taxpayer? Does he also agree that it would be the height of irresponsibility to recommend such a policy without working out or stating honestly its cost? Is not that what we have come to expect from the shadow Foreign Secretary and the Labour party?

My hon. Friend is referring to some of the practical issues that arise out of moving very quickly to convergence and why it is right to take the view that the Government take in relation to economic and monetary union and moving to a single currency. If one moved to convergence very quickly and that required a very big increase in regional funds very early, it would mean taking more money from taxpayers in Scotland to give to Sicily.

To ask the Prime Minister if he will list his engagements for Thursday 18 July 1991.

I have been asked to reply.

What information, if any, was supplied by the Bank of England to Treasury Ministers, including the present Prime Minister, on the contents of the October 1990 Price Waterhouse report indicating serious fraud in BCCI? Does the Leader of the House accept that if it can be established that Ministers or the regulatory authorities had knowledge well before June this year of serious fraud in that bank, the Government cannot continue to wash their hands of the financial disaster facing depositors and local authorities?

The hon. Gentleman is probably referring to the Price Waterhouse report of March 1990. He said October, but I understand that it was in March. We are probably talking about the same report. The Bank had given the Treasury explicit assurances that although previous audit reports showed evidence of poor banking standards and losses—this applies to all these reports—they provided no evidence on which it could act in respect of the widespread fraud that was subsequently uncovered in the section 41 report. The evidence of bad banking standards and losses was being tackled by injections of capital from shareholders and by substantial management changes. It was the change in management that ultimately led to the discovery of extensive fraud, which led to the section 41 investigation. That was the first time that the Bank had evidence of serious and widespread fraud on which to take action.

Does my right hon. Friend recall the question from my hon. Friend the Member for Romford (Sir M. Neubert) on Tuesday and the slur and slander by the general secretary of the Labour party on the President of the United States and particularly on the President's manner of election? Has my right hon. Friend received any indication from the Leader of the Opposition that he wishes to dissociate himself—[Interruption.]

Order. This matter is not the Government's responsibility. [Interruption.] This is taking time. Let us move on.

To ask the Prime Minister if he will list his official engagements for Thursday 18 July.

I have been asked to reply.

While not being too thirled to statistics, although they are important, will the right hon. Gentleman acknowledge that the rate of unemployment in the United Kingdom and Scotland is dramatically high and is producing great suffering? Will the Government and the right hon. Gentleman in particular stop behaving like a cross between a pit bull terrier and a Scot—a Scots terrier —[Interruption.]—the type of dog which would ravage us first and then scurry away to get the ambulance. When the ambulance man comes along, he pours on the iodine and says, "If it isn't hurting, it isn't working." It is hurting, but it ain't working because it is producing great suffering on the part of the people of Scotland and many unfulfilled opportunities.

Obviously we regret any increase in unemployment, because it affects families very substantially, but it is important to keep the matter in context. If one looks at the other side of the coin, one will see that there are 1 million more jobs than there were in 1979. We have more jobs in this country than most other countries as a proportion of the working population.