To ask the Chancellor of the Exchequer what representations he has received on the subject of taxation of child care; and if he will make a statement.

We have received a number of representations on that subject.

Does the Minister recall that we on these Benches have advocated provision for tax vouchers for child care in the past three Finance Bills? Does he recognise that provision is required for local authorities, voluntary groups and the private sector to provide places in creches and nursery schools? Will he take steps to ensure that that is possible following the Budget?

I am aware that the hon. Gentleman and his colleagues have promoted all sorts of proposals in recent years, and many of them have been contradictory. At this stage in the period preceding the Budget, he will not expect me or any of my right hon. Friends to say anything about specific tax matters.

Is my hon. Friend aware that private nursery provision has increased by 50 per cent. in recent years and that efficient councils such as Wandsworth have been able to provide nursery education fully to all the children in their areas?

My hon. Friend makes an important point.

To ask the Chancellor of the Exchequer if he will list those measures which he has taken since November 1990 to improve employment prospects.

Since November 1990. the Government have reduced interest rates by 3·per cent and price inflation has fallen by more than half. Underlying earnings growth has fallen to its lowest level for almost 25 years and economy-wide productivity has increased, helping push non-oil exports to record levels. The foundations have been laid for sustainable growth in both output and employment.

Has the Minister any understanding of the individual human tragedy of unemployment? Is he aware that today's increase is the 22nd consecutive monthly increase in unemployment? Does he know that since the Chancellor and the Prime Minister came to office, some 30,000 jobs, on average, have been lost every working day? Is not the Government's complacency on the matter scandalous and disgraceful?

No, there is no complacency. Unemployment is a tragedy for the unemployed in Britain, just as it is for the greater number of unemployed in France and the United States. We have created a climate for recovery. The key question is not the one that the hon. Gentleman asked, but, rather, whose policies will be best able to put people back to work? The Labour party will have to deal with that issue.

Does my right hon. and learned Friend agree that far more people are in employment today than in 1979? Does he also agree that a minimum wage and higher taxation would lead to even greater unemployment?

That is undoubtedly so. There are nearly 600,000 more jobs in the United Kingdom today than there were in 1979. My right hon. Friend will be aware that the Organisation for Economic Co-operation and Development said that between 1984 and 1990 the United Kingdom had by far the best job creation record of the larger European Community countries.

Why does not the Chief Secretary recognise that a period of high unemployment and recession is the best time to spend additional resources on investment in the fabric of our schools, homes and transport? That would put people back to work and give long-term benefits to the economy.

The hon. Gentleman knows only too well that in his autumn statement my right hon. Friend the Chancellor was able to announce a £1·4 billion boost to the railways and London Transport and an increase of more than 10 per cent. in real terms for capital works on schools. In addition, for good measure, a substantial increase in the Government's commitment to hospital building was announced. Therefore, I am not sure that the hon. Gentleman has as good a point as he thought.

Does my right hon. and learned Friend agree that the best way to provide improved employment prospects is to get inflation and interest rates down, as the Government have done so commendably in the past 18 months? The worst thing to do would be to impose swingeing increases in personal taxation of the sort advocated by the Labour party, because that would undermine the incentive and enterprise on which jobs depend.

My right hon. Friend is quite right. As the Bank of England's recent quarterly bulletin made clear, the right environment for recovery is one of stable prices. For the Labour party, inflation is the word that dare not speak its name.

Are not the truly appalling unemployment figures announced today—an increase of more than 53,000, taking the unemployment total to more than 2,600,000, even leaving out the thousands of job losses announced during the present month—ample proof that the Government's incompetent economic policies are certainly not working, but are causing severe hurt? Do the Chancellor and the Chief Secretary consider that the mounting job losses, with all the human tragedy that they bring, are a "price well worth paying"?

It is quite clear that we have a climate for recovery in this country, with falling unit labour costs, inflation below the European Community average and interest rates fully competitive with those of our competitors. Once we get beyond the cheap debating point, has the right hon. and learned Gentleman thought about what the minimum wage will do to unemployment? Does he appreciate the nonsense of the proposal to increase taxation at this time of economic difficulty? The key question is: what impact would Labour policies have on unemployment and the economic well-being of the country? That is the question which the right hon. and learned Gentleman fails to address.

To ask the Chancellor of the Exchequer if he will give the rates of VAT since the beginning of 1979; and the dates of each change.

Until 18 June 1979, 8 per cent. and 12½ per cent; from 18 June 1979 to 1 April 1991, 15 per cent; and since 1 April 1991, 17½ per cent.

I am grateful to the Economic Secretary for his diligent research in producing those figures. Will the hon. Gentleman tell the constituent of mine who is over 21 and earns £50 for a 40-hour week why he has taken a greater percentage of the young man's earnings than he has from his right hon. and hon. Friends who go to the City and, for part-time work, earn hundreds of thousands of pounds? Is not it a fact that the Government are robbing the poor to pay the rich?

The only way to reverse what the hon. Gentleman alleges would be to go back to the sort of tax rates that we had under the last Labour Government—83 and 98 per cent. I am sure that it will be interesting to the right hon. and learned Member for Monklands, East (Mr. Smith) to know that Labour Members advocate such tax increases.

Will my hon. Friend confirm that it was the last Labour Government who introduced a value added tax of 25 per cent. on certain luxury items?

My hon. Friend does well to remind the House of what happens under a Labour Government. They had a value added tax rate of 25 per cent. My hon. Friend may have noticed that the Opposition have been floating a similar idea among themselves and discussing again in an internal memorandum the possibility of a luxuries rate of VAT. We have no problem in this regard; we do not need to raise taxes—[HoN. MEMBERS: "You have."] We have set out our tax and spending plans for the next three years. The Labour party has set out only its spending plans, including plans to spend £35 billion. Apparently, it does not need to finance that from raising more tax.

Is the Minister aware that he has just admitted that under this Government there has been a trade-off between income tax cuts and increases in VAT? If we take the Prime Minister's words at face value—that the Conserservative party will not raise the rate of VAT —does the hon. Gentleman recall an interview given recently by the Chief Secretary, when he was asked about extending coverage of VAT to transport fares? He said:

"nobody knows what is waiting round the corner."

This is quite extraordinary. No one could have fought harder than this Government to maintain the zero rates that we have. We have secured the right to do that. My right hon. Friend the Prime Minister has made it clear that we have no intention of raising the rate of VAT either before or after the election. As I told my hon. Friend the Member for Batley and Spen (Mrs. Peacock), we do not need to raise taxes; the Labour party does. How do the Opposition think they are going to finance £35 billion of extra spending without raising taxes on ordinary people? They cannot do it.

My hon. Friend reminds the House of the 25 per cent. rate under the last Labour Government and mentions that it was a tax on luxuries. Will he confirm that those luxuries included televisions; and does he agree that if there is not to be an income tax rate of 35p to support those massive spending plans, they can be supported only by a large increase in VAT?

My hon. Friend is, of course, right. There has to be a substantial increase either in income tax or in VAT to pay for the Labour party's spending plans. My hon. Friend does well to remind us that when the Labour party was last in office its idea of luxuries included petrol as well as televisions and caravans.

To ask the Chancellor of the Exchequer what representations he has received in favour of taxation policies to benefit the environment; and if he will make a statement.

We have received a number of representations on this subject also.

Given that investment in cavity wall insulation, in energy-efficient boilers and in heating controls has dropped by 50 per cent. since 1987, given that even double-glazing salesmen appear to have gone quiet in this recession and given that energy-efficiency investment not only helps the environment but protects the vulnerable and the old and creates hundreds of thousands of jobs, will the Government consider extending the exemption from stamp duty for all energy-efficient homes beyond August and perhaps indefinitely?

I shall certainly listen carefully to what is said on that matter and give it full consideration. The hon. Gentleman seems to leave out of account the fact that investment in energy efficiency is desirable for its own sake. Saving energy saves on cost, so there is already a built-in incentive for people to make prudent investments in energy-efficiency measures.

Will my hon. Friend confirm that one of the representations that he must have received was that from the Liberal Democrats advocating their policy of imposing an extra 50p a gallon on petrol? Does my hon. Friend agree that those who live in rural areas ought to know that that is what the Liberal Democrats have in mind? Does he agree that that policy would have a devastating impact on people who live in the country areas of Teignbridge?

My hon. Friend does a sterling service in drawing attention to that Liberal Democrat policy. I wonder, with him, whether the Liberal Democrats will be quite as keen on promoting that policy in rural areas in the coming general election.

To ask the Chancellor of the Exchequer if he will state the amounts of Exchequer revenue raised from value added tax in each of the years 1978–79, 1986–87 and 1990–91; and indicate what percentage of total Exchequer revenue raised in each of these years these figures constituted.

In 1978–79, £5·2 billion and 9 per cent.; in 1986–87, £22·2 billion and 15·1 per cent.; and in 1990–91, £32·5 billion and 15·8 per cent.

I thank the Minister for that answer and the confirmation that during the Government's tenure the burden has been placed firmly on the shoulders of those who are least able to bear it. Will the hon. Gentleman give a categorical assurance that if, unfortunately, the Conservatives are returned to power in a general election, value added tax will not be extended to any of the goods or services upon which it is not already levied? May I have a simple answer, yes or no, and no shenanigans?

It simply is not true that the burden of taxation has been increased on the poorer members of society. [HON. MEMBERS: "Answer."] That was the subject of the first part of the hon. Gentleman's question. Living standards at all income levels improved over that period. [HON. MEMBERS: "Answer."] The hon. Gentleman asked about three questions and I shall choose which one to answer. I think that most people are interested in the fact that living standards under this Government have risen dramatically.

Has my hon. Friend heard the call from the many people who run village halls about the burden that VAT imposes on their activities?

I hear my hon. Friend's Budget representation and will take it into account.

How can the Government give an assurance that there will be no change in VAT rates when, under the Single European Act, the Government have already committed themselves to a policy of convergence of VAT rates throughout the European Community?

Any change in fiscal measures has to be agreed by unanimous vote in the Council of Ministers.

Will my hon. Friend make it clear that. according to the Treasury and Civil Service Select Committee, VAT is progressive in its impact, given that the more people spend. the more tax they pay? May we therefore put the Government's tax policy into context: although we do not wish to raise VAT above its present level, what we have done reflects further taxation on those who can afford to spend more?

Of course, my hon. Friend is quite right. The more one spends, the more one pays in VAT. It must amaze my hon. Friend, as it amazes me, that we have to explain that to the Opposition.

Does the Minister agree that his initial answer, taken with the huge increases that his Administration have brought about in national insurance contributions, the poll tax and the burden of rates that business men and business women have to pay. makes it clear that his party is the tax, tax and tax again party? Will he confirm that the proportion of national income taken in tax rose from 34·75 per cent. in 1978–79 to 37 per cent. in 1991–92? Has the Minister any plans to lower the total burden of taxation on the people of this country, which reached its highest levels in the 1980s after the very much lower levels that we experienced under Labour in the 1970s?

It is extraordinary that the hon. Gentleman wants to discuss this part of his party's history. The tax burden under this Government rose during our first two and a hall years because we inherited at the top of the business cycle a borrowing requirement of 5·5 per cent. of gross domestic product. For every year since 1981, the tax burden has fallen. It will continue to fall this year and next year and I think that it is well known to everybody that this Government's policy is to lower taxes, in contrast with the plans of the hon. Gentleman's party. We know that it plans to spend £35 billion. We should like to know how Labour plans to raise that.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's answer to the question on the extension of VAT, I intend to raise the matter on the Adjournment.

To ask the Chancellor of the Exchequer what assessment he has made of the impact on total tax revenues of the changes in the higher rate of income tax since 1979.

To ask the Chancellor of the Exchequer what assessment he has made of the impact on total tax revenues of changes in the higher rate of income tax.

The top 5 per cent. of taxpayers pay 32 per cent. of the total yield of income tax, compared with 24 per cent. in 1978–79.

Does my right hon. Friend agree that those figures strikingly demonstrate that lower, rather than higher, tax rates are at once a fairer and more effective way to maximise revenue to sustain improvement in important public services?

My hon. Friend is absolutely right. We inherited a situation in which there were penal rates of taxation, which we reduced. The effect was to increase revenue. The Opposition seem anxious to repeat the mistakes that they made before. They want to increase tax rates again. The whole country would like to know at what level of income they intend to increase the higher rate of tax. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) says that it will be at £36,000, but the right hon. and learned Friend the Member for Monklands, East (Mr. Smith) will not tell us and says that he does not think that it is necessary to say so.

Does my right hon. Friend agree that any proposal to raise the higher rate of income tax, as advocated by the Opposition, would he damaging for morale and prosperity, because such a move would not only destroy the will to work but drive some of our best brains out of the country? We Conservatives do not want that. Will my right hon. Friend confirm that we shall always be the party of lower taxes and the Opposition that of' higher taxes?

My hon. Friend makes a good point. In addition to her arguments, I believe that the low rate of top rate tax is also an incentive to bring inward investment into the country. It is very much appreciated and gives us a competitive advantage.

Does the Chancellor of the Exchequer realise that ability to pay must be the underlying and fundamental principle of any fair taxation policy?

I do indeed, and we have a progressive system. What the hon. Gentleman does not seem to understand is that one can have a progressive system with two rates.

Does the Chancellor of the Exchequer recognise that 2.700,000 people out there would welcome the opportunity to pay any income tax?

What the hon. Gentleman does not answer is this question: by putting up—

Answer the question.

The point that the hon. Gentleman will not face up to is this—

Answer the question.

The point implicit in the hon. Gentleman's question is: what is the point of putting up the top rate of tax if one raises less revenue? What good does that do the poor of this country?

To ask the Chancellor of the Exchequer how much income tax was paid by an average family with two children in 1979 and 1991, at constant prices.

Income tax has been reduced from 14·5 per cent. of such a family's gross income in 1978–79 to 13 per cent. in 1991–92.

Does my right hon. Friend agree—[Interruption.]

Order. This is no longer funny.

Does my right hon. Friend agree that the reductions in personal taxation have played a major role in the revival of enterprise and the increase in risk taking, productivity and output that we have achieved in the past decade? Does he agree that reductions in personal taxation are a highly efficacious means of stimulating simultaneously the demand and the supply sides of the economy?

I entirely agree with my hon. Friend. The benefits of income tax cuts have been widely appreciated. The last thing that the country needs at this moment are the sort of enormous tax increases being advocated covertly by the Oppositionb—the tax increases implied by their sky-scraping public spending plans.

Has not national taxation increased with higher levels of VAT and the introduction of poll tax? Is not it disgraceful that the Government are destroying living standards, yet they claim to believe in human values? Is not it also true that the Prime Minister claimed that he was concerned about third-world debt? As this country is also a third-world country, suffering a Tory Government, what is he going to do about that?

I have long thought that the hon. Gentleman imagined that we were living in Ethiopia, having listened to some of his speeches about the economy. Equally fanciful is his assertion that we are destroying living standards. How he can use that phrase when living standards for a married man on average earnings with two children have risen by about 35 per cent. after increases in VAT and increases in the cost of living, I do not know. The answer lies in the real increase in take-home pay.

To ask the Chancellor of the Exchequer how many taxes have been abolished since 1979; and if he will list them.

We have abolished six taxes—investment income surcharge, national insurance surcharge, development land tax, the tax on lifetime gifts, capital duty and composite rate tax. We plan to abolish a seventh—stamp duty on shares.

Has not my right hon. and learned Friend conclusively convinced the House that only a Conservative Government have the courage to reduce taxation on the one hand and to get rid of taxes on the other, in contradistinction to nearly all other Governments before them, and especially the one between 1974 and 1979 who found endless ways of leaching money out of other people's pockets? How many new taxes would the Opposition introduce if they were in government?

We know that the right hon. and learned Member for Monklands, East (Mr. Smith) proposes a number of additions to existing taxation and a number of new taxes, including the reappearance of investment income surcharge. I return to the question that we shall level continually at the Labour party: what is the basis for thinking that there is any answer to the country's problems through increasing the burden of taxation?

How many welfare benefits have been cut and how many freezes have been imposed to pay for taxation cuts?

On the contrary, the level of benefits paid has never been higher. It has risen sharply in real terms, as the hon. Gentleman knows only too well.

I congratulate my right hon. and learned Friend on the abolition of composite rate tax. Is he aware that the 0800 free number is of enormous benefit, especially to pensioners who have had tax deducted from their gross income from their investments in banks and building societies? Has he any plans to extend the free 0800 number to other taxes which could be reclaimed by pensioners and others?

I have no announcement to make on that matter at this stage, but I shall bear in mind the representation that my hon. Friend has made.

If all those taxes have been abolished since 1979, why is it that the average family, starting out in 1979 with a debt of 45 per cent. of income after tax and insurance, reached the end of 1991 with a debt of 102 per cent? The abolition of those taxes has not done the average family any good, has it, or those at Lloyd's?

During the lifetime of this Government the average family the hon. Gentleman talks about has had increases in disposable income of unprecedented levels, in excess of £50 per week, while the hon. Gentleman well knows that from 1974 to 1979 their standard of living bumped along without showing any significant increase.

To ask the Chancellor of the Exchequer what was the average family income in (a) 1979 and (b) 1991 in real terms.

The real net income of a married couple on average male earnings with two children has increased from £194 in 1978–79 to £262 in 1991–92—a rise of 35 per cent.

Does my right hon. Friend agree that that huge increase in real income clearly demonstrates the overall success of Conservative policies and would not have come about without the tax cuts that all families have experienced? Would it not be a disaster if families in my constituency in Leicestershire and throughout the country faced the huge tax increases proposed by Labour and the Liberals?

It remains the situation that if we had not altered the income tax regime that we inherited when we came to office, and if we had merely indexed the rates and allowances, the average family would be paying £1,200 more in income tax. That is what it would be paying under the previous regime of the last Labour Government.

What about value added tax?

I may inform the right hon. and learned Gentleman that a single man on average earnings in 1978–79 was paying 42½ per cent. of his income away in income tax, national insurance contributions, and VAT. Today the proportion is 40½ per cent.

Will the Chancellor comment on the recently published "Social Trends", which shows that the income of the richest one fifth increased by more than 50 per cent. as an overall proportion, whereas the bottom 60 per cent. saw their proportion of income fall relative to that top one fifth? As most average families are in the bottom 60 per cent., does not that show that the Government have given money to the rich at the expense of ordinary families?

A person on half average male earnings—a married man with two children—has seen his after-tax, post-inflation income rise some 28 per cent. That is the increase in real take-home pay for someone on half average earnings. The hon. Gentleman does a valuable service by reminding us that Labour is committed to a policy of heavy redistributive taxation.

My right hon. Friend informed us that the previous tax rates would have cost each family an extra £1,200. Perhaps I may turn briefly to the higher rates, which may he in the minds of some, and ask whether it would be possible to picket Park lane, to ask those attending this evening's £500 per head dinner whether they are paying more tax this year at the lower rate, or whether they paid more tax in 1979 at Labour's higher rates?

My hon. Friend makes an excellent point. It is utterly baffling why Labour wants to pursue a policy that is likely to raise less revenue and do less good for everybody.

To ask the Chancellor of the Exchequer what the cumulative total of all taxes from North sea oil has been since 1979 in 1991–92 prices.

Around £109 billion.

Is the Minister aware that the Government have just announced that they have achieved a financial bonanza that no previous Government in history have enjoyed? Bearing in mind the millions of pounds that the Government raised from privatisations—the selling of the family silver—and all the money that has been raked into the Treasury, should not the Economic Secretary stand at the Dispatch Box and apologise for the economic mess in which the Government have landed this country?

The revenues from North sea oil and privatisations helped this Government to restore public finances to the kind of good shape that those of few other countries are in. Ours is one of the few countries in the European Community that would meet those aspects of the stage 3 European monetary union standards. Under the last Government, debt rose to unprecedented levels, which was essentially postponed taxation on future generations. We reduced those debt levels. They have gone in reducing overseas debt inherited from the—

Where has the money gone?

I am telling you—listen.

Order. The Minister ought to rephrase that remark.

Through you, Mr. Speaker, I am telling the hon. Member for Workington (Mr. Campbell-Savours) where the money has gone. It has gone in repaying the overseas debt that we inherited from the last Labour Government. It has gone on reducing the fantastic levels of public sector borrowing requirement that were reached under the last Government. It has gone on reducing income tax from the levels of 83 and 98 per cent. that were reached under the last Government. We think that that was a good investment.

Welcome though North sea oil taxation revenues are, does my hon. Friend agree that they are not a large proportion of the taxes paid in the United Kingdom? Also, can he confirm that a separatist, socialist, nationalist Scotland could not expect to enjoy all those oil revenues?

My hon. Friend is right about the revenues from North sea oil taxation. This financial year, they are expected to be just over £1 billion—about one half of 1 per cent. of total tax revenues.

To ask the Chancellor of the Exchequer what is the most recent monthly figure for output in the manufacturing industry; and what is the comparable figure for the same month 18 years ago.

The idex of manufacturing output was 111.2 in November 1991, the same level as 18 years earlier.

Does my right hon. and learned Friend think that this situation represents satisfactory progress over the last 18 years?

The real test of what has happened has been the overall growth in gross domestic product, which has been very substantial. In so far as one concentrates on manufacturing output, the fall was in the earlier part of this period. Between the first half of 1974 and the first half of 1979, there was a fall in manufacturing output of 2½ per cent.; whereas from the end of the first half of 1979 to the third quarter of 1991, there has been an increase of nearly 6 per cent.

The complacency that the Chief Secretary has just demonstrated is way beyond anything that my constituents will understand. They have seen manufacturing industry absolutely devastated during the period of this Government. What do the Government intend to do not just to offer help to individuals but to give areas such as mine the opportunity to be again a fully participating part of this nation?

With the greatest respect to the hon. Lady, perhaps she should read the Confederation of British Industry's recent publication, "Modern Manufacturing Strength". It is a fair assumption that the CBI knows at least as much about manufacturing as the hon. Lady does, and she will see a commendation of the Government's policy in the 1980s and a firm recommendation that it should continue.

Is not the constituency of the hon. Member for Durham, North-West (Ms. Armstrong) in the middle of the area of the United Kingdom which gets the largest level of outside investment into this country and, indeed, into the European Community? Is not that new manufacturing capacity brought here by the Government's successes in promoting Britain and the north of England as a location for manufacturing?

My hon. Friend has made an invaluable point. The fact that this country has recently received 50 per cent. of total inward investment by the United States and Japan in the European Community has made possible a diversified economic base, particularly in manufacturing in the north. This has enabled the north to weather this recession far better than any previous recessions and in a way that bears the best comparison with the south.

As the Chief Secretary has no doubt noticed, the Government's figures today indicate yet a further fall in investment in the manufacturing sector. Given the horrendous job losses that have been announced this month in the manufacturing sector, are these signs of the success of the Government's economic policy?

What those figures certainly reveal is that the real gains in investment in British business since 1979 have been sustained, so that even at the depth of this present recession investment is 40 per cent. higher in real terms than it was in 1979. That was the position last year and it is a sign of the real improvements in investment that have followed the policies of this Government.

To ask the Chancellor of the Exchequer if he will make a statement on how the charter mark will operate.

Charter marks will be awarded each year to those organisations that have delivered service to the public to the highest standard at present available. They must be able to show measurable improvements in the quality of their services over the past two years, and customer satisfaction, and they must have in hand or plan to introduce at least one innovative enhancement to their services which entails no additional cost to the taxpayer or consumer.

Since the charter mark is designed to improve public services, does my hon. Friend agree that the attack launched today on the citizens charter by the National and Local Government Officers Association in a lavish newspaper advertising campaign is typical of that union's contempt for the consumer and lack of interest in improving public services?

What is depressing about that campaign is its spineless acceptance that nothing can be done to improve public services without throwing huge amounts of money at them. It would be interesting to hear whether the Labour party agrees with the view of that huge public sector trade union. Or does it accept that the only way to make things better is to lavish ever-greater sums of public money on the public services?

To ask the Chancellor of the Exchequer when he expects to have available (a) information on the United Kingdom gross domestic product per head in 1991 and (b) comparable information for the other member states of the European Community.

October, when 1991 population figures for the United Kingdom and other EC countries will be available.

May I draw the Economic Secretary's attention to a study that I have just received from the House of Commons Library's statistical section? According, to the author's best estimates, the average gross domestic product per head in this country in 1991 was five percentage points behind that of Italy. Can the hon. Gentleman confirm that that means that the average family in this country would be approximately £2,000 better off if it lived in Italy? Is this yet another case of "Excuse the mess, we have got the Conservatives in"?

I told the hon. Gentleman that I could not give him the information for which he asked until October, when the 1991 population figures would become available. I can tell him, however, that over the 1980s GDP per head in this country rose at an average rate of nearly 2½per cent. a year—faster than in Germany, France or Italy.

To ask the Chancellor of the Exchequer if he will make a statement of his policy on the level of savings.

The Government aim to secure an appropriate climate in which people can plan sensibly for the future, making their own decisions about what to save and what to spend.

Would not a policy of clobbering savers with an investment surcharge reduce savings and so reduce the pool of available investment capital for manufacturing industry? Do not such policies illustrate the fact that no amount of tacky red plastic roses, sharp suits or slick public relations can disguise how little Labour has really changed?

My hon. Friend is absolutely right. Labour Members talk all the time about the need for investment. Investment is financed out of saving and the last way in which the level of savings can possibly be increased is by the imposition of extra taxes on it.

To ask the Prime Minister if he will list his official engagements for Thursday 13 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.

What advice has the Prime Minister for one of my constituents, Mrs. Logan, who lives in Camlinton new town and is in great pain with an arthritic hip? She has to climb the stairs with the aid of her husband and has to lie in bed in agony most nights. She has been told by the local hospital that she cannot have an appointment until June 1993. Is that the Prime Minister's way of keeping waiting lists low?

If the hon. Gentleman will give me details of the particular case that he has mentioned, I will certainly have it examined. What he should acknowledge, however, is that spending is up by more than 50 per cent. in real terms, 25 per cent. more patients are treated, there are far more doctors and nurses, and they are far better paid, and treatments that were rare in 1979 are now commonplace. I wish that the hon. Gentleman and his colleagues would stop running down the improvements that have been made in the national health service.

On a constitutional point, does my right hon. Friend agree that if an assembly were set up in Scotland with responsibility for health, trade and industry, and taxation north of the border—[HON. MEMBERS: "Reading."] In such circumstances, would not it be impossible thereafter for Members of Parliament with Scottish constituencies to sit in Departments as Ministers, administering those Departments—[Interruption.]

Order. Get it out, please.

I know that this is painful. Would not it be impossible for Ministers to be in charge of Government Departments administering those matters for England and Wales? Does my right hon. Friend agree that it would be right to set up a retraining scheme for soon-to-beredundant members of the shadow Cabinet?

I think that that is enough.

I should be happy to add that training scheme to the many other excellent training schemes we have at present. The point that my hon. Friend has made was graphically illustrated by the hon. Member for Livingston (Mr. Cook), who is reported as having said that if Labour were to introduce its devolution plans he could not act as Secretary of State for Health for England and Wales. Presumably the same principle would apply to the right hon. and learned Member for Monklands, East (Mr. Smith) and the hon. Member for Dunfermline, East (Mr. Brown). I look forward to their confirming that. If the Labour party were then to show some affection for devolution in Wales, perhaps the same principle would apply to an even more eminent right hon. Gentleman.

rose—[Interruption.]

Order. The Leader of the Opposition must have a chance to answer.

Not until we have a Question Time for the Leader of the Opposition, but within a couple of months I shall be answering from the Government side of the House.

I accept that the unemployment figures this month are disappointing—no one can deny that—but what we are seeking to do is to put people back into permanent jobs, and not temporary jobs. That can be done only by putting in place the right conditions to create long-term, permanent jobs, long-term growth and secure jobs. That is why we have been working to reduce inflation—with success; to bring down interest rates—with success; and to cut direct tax rates—with success. Of those people who have lost their jobs, more than 250,000 are this year in well worth while and excellent training schemes. That is the right way to help people, it is the right way to achieve long-term prosperity for this country and it is the way in which we have been developing our policies.

For 2½6 million of our fellow citizens the unemployment figures are not disappointing—they are absolutely devastating. Why does the Prime Minister ignore the evidence of employers, who tell us that unless policies change 50,000 more jobs will go from construction, 40,000 from motor vehicles and textiles, with a further 70,000 manufacturing jobs going? Why does the Prime Minister ignore all that evidence? Why does he just sit there and do absolutely nothing to combat the recession that his policies have caused? After 22 months, does he not yet understand that sitting there crossing his fingers and closing his eyes will not bring recovery?

The right hon. Gentleman talks of ignoring evidence. There is evidence, too, which he is ignoring. He has not acknowledged that more people are now moving out of unemployment than a year ago. Every month 300,000 people are leaving unemployment. The right hon. Gentleman quotes job losses, but he fails to mention Tesco's plans for 5,000 new jobs over the next year, Safeway's plans for 2,000 jobs, Nissan's plans for 600 new jobs in the north-east, and the fact that Toyota is providing another 3,000 jobs in Derbyshire. He also chooses to ignore the fact that this country has a higher proportion of its population in work than any other Community country except Denmark.

Under the Prime Minister's leadership, in the last 12 months alone more than 800,000 jobs have gone and during that period the number of people in employment in Britain has gone down by 800,000. The number of vacancies has fallen. Even the Chancellor confesses that the Government caused the recession. And they have continued it, and have let it get out of control. The Government are guilty on all counts.

My right hon. Friend said no such thing, as the right hon. Gentleman knows. If the right hon. Gentleman wants to talk about taking action, perhaps he will consider the action that he proposes to take in his policies: a minimum wage that will cost jobs, a payroll tax that will cost jobs, and a strikers charter that will create jobs—not here but in France, in Germany, in Belgium, in Italy, in the United States and elsewhere. Can the right hon. Gentleman explain how the costs of extending national insurance or raising taxation will help employment? None of that will help employment. The right hon. Gentleman's plans would spell disaster for this economy, disaster for companies and permanent unemployment for millions of people.

Does the Prime Minister accept that one of the great achievements of the Olympic movement is to bring nations together in sporting endeavour and excellence and that similarly, despite the forthcoming general election, all political parties are brought together to support this country's bid to host the Olympic games in the year 2000? Will my right hon. Friend agree to support fully the Manchester Olympic bid which will benefit not only the north-west of England, where most of the events will be staged, but our capital city and the rest of the countryi—n fact, the whole nation?

I met the Manchester Olympic bid committee some weeks ago when we discussed the proposed bid that Manchester wishes to make. I asked on that occasion for considerably more information. That is being provided and I look forward to meeting the bid committee again towards the end of this month.

The Prime Minister is right—the Government are not wholly to blame for this recession, but they are chiefly to blame. Does he realise that what the country now needs from him is hope, but all that it gets is complacency; that what the country needs from him is leadership, but all that it gets from him is excuses; that what the country now needs is a Government who will act, but what it has is a Government paralysed by the election who dodge the issues, duck the realities and do nothing?

I am grateful to the right hon. Gentleman for reprising his party political broadcast of last evening. It is a good sound bite, but it is not any better for hearing it the second time. What the right hon. Gentleman should bear in mind, if he cares about real prosperity for this country. is making sure that we get the economic basics of inflation and the exchange rate correct so that we can get sustainable investment for the long term, not the short-term gimmicks that the right hon. Gentleman embraces.

Will my right hon. Friend tell Mr. Delors that the proposed increase in the United Kingdom contribution to the European budget is wholly unacceptable? Will he also tell him that the first priority must be to reform the common agricultural policy, to remove the losses from fraud which occur within that policy and, especially, to bring about a successful conclusion to the GATT negotiations?

I agree with my hon. Friend on each of the points that he makes. There is no justification whatever for an increase in the budget on anything like the scale that the Commissioner proposed. There is already scope for significantly increased expenditure within the existing own resources ceiling.

To ask the Prime Minister if he will list his official engagements for Thursday 13 February.

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

The Prime Minister will be aware that there is great anger and despair in the country at the announcement today that unemployment has moved up again. That is reflected in my constituency, where there are an extra 400 people unemployed in the Carlisle area, bringing the total to a staggering 4,000 unemployed. Bearing that in mind, will the Prime Minister take the opportunity today to condemn one of his Ministers who said yesterday that people who were losing their jobs were being "liberated"? Will he dissociate himself from that comment and will he take action today to see that the hon. Gentleman concerned is "liberated" from his ministerial duties? In other words, will he sack him?

The hon. Gentleman neglected to mention that unemployment in his constituency has fallen by nearly 20 per cent. since the last general election. My hon. Friend has made clear his regret at the job losses at British Aerospace. The hon. Gentleman simply trivialises the issue with his remarks.

Does my right hon. Friend agree that of the known policies of the Labour party—[Interrption.]

Order.

Does my right hon. Friend agree that if there were a minimum wage and also higher taxation both on individuals and on companies, that would kill inward investment and cause even more unemployment?

I entirely agree with my right hon. Friend about that. It is also the case that most independent commentators Goldman Sachs, Credit Lyonnais, BZW, Phillips and Drew, Nomura, the CBI—agree that Labour would cause a rise in inflation, with all the impact that that would have on living standards, jobs and future prosperity.

To ask the Prime Minister if he will list his official engagements for Thursday 13 February.

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

In a radio programme, the Prime Minister told Sue Lawley, in response to a question on housing, that repossessions had stopped before Christmas. Will the Prime Minister now tell us whether he accepts that, in addition to the massive number of homes repossessed last year, a further 80,000 families are to lose their homes in the current year?

What I confirmed in answer to the question to which the hon. Gentleman has referred was that we had put in place measures to deal with the problems arising from repossession. Lenders have confirmed that they do not seek possession where the borrower has suffered a severe reduction in income support but is still making a regular and routine payment, nor will they repossess— which is the point that I was making—where income support is paid direct to them. I reiterate that point today.

To ask the Prime Minister if he will list his official engagements for Thursday 13 February.

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

Further to the European Community budget proposals, which were proposed unanimously by all the Commissioners, including the two British Commissioners, will my right hon. Friend also agree that extra resources long term will be needed for redundant farmers—[Interruption.]—in east European countries, and for the cohesion fund, that there is no need for us to have the United Kingdom budget contribution under- mined in any way by these proposals and that they are less in percentage terms annually than the last 10 years' increase in the EC budget?

My hon. Friend points to the fact that there is scope for significantly increased expenditure, perhaps for eastern Europe and the cohesion fund, as he says, but without the existing own resources ceiling, which is still underspent. There is at this stage no justification for the proposed increase suggested earlier this week.