To ask the Chancellor of the Exchequer what representations he has received about the levying of VAT on domestic heating announced in the Budget.

I have received a number of representations.

Does the Chancellor agree that his time before the Budget would have been better spent had he not remained in purdah but talked to a number of the people who will be hardest hit by these proposals? Does he further agree that, as well as the people on benefit who are worried about how they are going to pay those higher bills, people just above benefit level are frightened that this measure will push them further into the poverty trap? Will he think again about this measure before it is too late?

On the first point, the hon. Lady suggested that I should have been out listening rather than reflecting in quiet, but, by doing so I was able to read the manifesto of the Leader of the Opposition in which he said:

"We should consider increased use of the fiscal system to promote environmental protection."

"We will be looking of ways of increasing taxes on environmentally damaging products."

Will the Chancellor give an assurance that in calculating the extra amount to compensate pensioners and those on low incomes for the effect of the tax—which will be paid in advance of the tax coming into operation—he will not take account of any change in the underlying level of fuel prices which may have occurred in the interim? If that is so, will he announce the amount now rather than wait until autumn?

I note my right hon. Friend's point. He knows that we have announced that we will bring forward the extra help so that it will be available from April 1994, at the precise moment that the bills will arrive. We have done that because we wish to help. We have made it very clear that while we regard this measure as necessary on both fiscal and environmental grounds, it is not our intention that poorer people should suffer. I have made that abundantly clear.

Since the Chancellor has now broken through the zero-rated barrier, does he realise that no one will believe him when he says that he will maintain the zero rate principle on many other items? Does not he see the danger that this very unpopular tax will, for the Tories, eventually prove to be the equivalent of the poll tax in the previous Parliament?

What the British public expect from the Government is that we should pursue sound finance. That is the overwhelming and first commitment of the Government.

When Lord Barber introduced VAT on April fool's day 20 years ago, he boasted that the British rates of VAT were the simplest to implement within Europe. Would it be reasonable to say that from 1995–96 and beyond that to 1996–97, if the Government get their budget deficit back under control, there could still be a hope of getting VAT on domestic fuel down again?

We have only just put our proposals forward and intend to legislate for them. It would be quite wrong for me to speculate about future years. I make this observation to my hon. Friend: Britain's average rate of VAT, measured across all products, is one of the lowest in the Community.

Should not the Chancellor have been reading his own election commitments, when he said that there were no circumstances in which value added tax on fuel, gas or electricity would be raised? Is not that the reason why the country will never trust the Chancellor again? Will he confirm that, as a result of the changes in VAT, the typical British family will soon be paying £15 a week in VAT, compared with £1·86 when the Labour party left office, and that the biggest element in that is the VAT on gas and electricity, which will cost £2 a week. Is not it a disgrace that the Government, who believe that unemployment is a "price well worth paying" for their economic failure, also appear to believe now that poverty among pensioners is a price well worth paying for their economic failure? Will he now answer—[Interruption.] Conservative Members do not like it because we are telling the truth about what is happening. Will the Chancellor answer one simple question? Is he now proposing that, on top of VAT on the use of fuel, he will also impose VAT on standing charges for gas and electricity—yes or no?

I assure the hon. Gentleman that, far from not liking what he says, we always love everything that he says in the House.

To ask the Chancellor of the Exchequer what is the differential between the level of corporation tax in the United Kingdom and equivalent taxes in other EC countries.

To ask the Chancellor of the Exchequer what is the difference between the level of corporation tax in the United Kingdom and equivalent taxes in other EC countries.

The proposed main rate of UK corporation tax for the financial year 1993 is 33 per cent. The main rates on distributed profits in other European Community states vary sbetween 33⅓ and 40 per cent.

Does my hon. Friend agree that it is much better for British industry and commerce to have a simple system of company taxation at the lowest possible rate, rather than the complex system of capital allowances much favoured by the Opposition parties, as they distort investment decisions and are open to abuse?

I agree entirely with my hon. Friend. The consequence of the corporation tax changes introduced in the 1980s is that we have cut the marginal rate of corporation tax on profits from 52 per cent. when we came to power to 33 per cent. now—the lowest rate in the European Community. That is one of the factors which make this country an attractive place for business to invest. That must have been one of the factors that Mr. Delors took into account when he correctly described this country as a paradise for Japanese investment.

My hon. Friend mentioned inward investment. How much encouragement does he believe that the low rate of taxation has given foreign companies in the past? Does he believe that the low rate of corporate taxation will continue to encourage inward investment into this country?

I believe that a low rate of corporation tax is an important part of the Government's total commitment to attracting a high rate of inward investment—a policy which has been startlingly successful. Some 40 per cent. of Japanese investment in Europe is based in the United Kingdom and one third of all inward investment into the European Community in 1991 came to the United Kingdom. That is because we have set out to make this country an attractive place in which business can invest in order to employ people and create wealth.

Is not it a misleading over-simplification to talk about the corporation tax rate of other countries without going into the complicated ways in which they give allowances for capital investment, particularly on plant and machinery? In this respect, while I understand that the Treasury will not increase the level of capital allowances in the way that I, for one, would wish to see, will the hon. Gentleman give an undertaking that the increase from 25 to 40 per cent., due to expire on 31 October this year, will be extended?

No, but I can give the right hon. Gentleman the undertaking that we will carry out the policy that we announced in the autumn statement: to have time-limited investment allowances of the sort that were written into the Labour party's manifesto at the last election. It is rather odd that the right hon. Gentleman should seek to move away from it. What is not an over-simplification is that plant and machinery investment in Britain today is running over 50 per cent. higher in real terms than it was when the Labour party left office in 1979. There is an investment boom in this country by firms that recognise that Britain is an attractive place in which to do business.

Will the Financial Secretary confirm that to state the rate is not to state the tax burden and that, in the United Kingdom, company taxes account for 4 per cent. of GDP while the European Community average is 3·1 per cent. of GDP? Will he further confirm that in the OECD only Australia, Japan, Luxembourg and Norway have higher corporate tax takes than we do?

To state the rate is to state the incentive, which is the important thing when considering whether an investment is to go ahead. The hon. Gentleman quotes a series of selective figures, which discount the fact that the figures for other countries for business investment should take account of the much higher rates of tax that they impose, for example, through their national insurance systems. Furthermore, the hon. Gentleman discounts the fact that British business has been successful at generating profits—more successful than it was when the Labour party was in power.

Is my hon. Friend aware that, only this morning, I took two Japanese business men to the Board of Trade because they have looked at the whole of Europe and decided that this is the best place to come, with quite large sums of money? They feel that the atmosphere, taxation and everything is right for setting up business.

I congratulate my hon. Friend on his actions and on the fact that he is drawing the attention of his Japanese business friends to the attractive nature of the regime for investment here. It is not only Japanese or overseas investors who find this an attractive place in which to do business. It would occasionally be nice to hear congratulations from Labour Members on the fact that 10 of the top 20 European companies are British companies which are successfully doing business in this country and proving themselves in the marketplace to be more successful than their competitors.

The Japanese are probably doing exceptionally well because they know the difference between threes and fives. The Minister referred to 33 per cent. corporation tax. Did he get that figure from the Chancellor of the Exchequer? If he did, how do we know that it is correct? It could be 55 per cent. I throw out a challenge to the Chancellor. I will play him at fives and threes at dominos and I will win every time and give the money to the pensioners to pay the extra VAT.

The hon. Gentleman might like to reflect on the fact that the £35 billion worth of public expenditure commitments that the Labour party made in its manifesto at the general election might have been £53 billion.

To ask the Chancellor of the Exchequer if he will estimate the number of taxpayers in 1993–94 who will be paying income tax solely at a rate of 20 per cent. and the number of taxpayers whose incomes are at a level where more than half the income tax they pay is calculated at the rate of 20 per cent.

The figures are 4·9 million and more than 8 million respectively.

Does my right hon. Friend accept that many of my constituents are among those millions who are benefiting from the 20 per cent. band of income tax? Is not that 20 per cent. rate of income tax, as it is being implemented, a firm example of the way in which we meet our manifesto commitments? Can he explain why the Labour party refuses to support the 20 per cent. band?

My hon. Friend makes a good point. I should have thought that it was eminently desirable that our starting rate of tax should come down to a level comparable with that of many other countries. The Labour party used to support that policy, but when the Conservative party implements it, it suddenly becomes wrong and the Labour party no longer supports it.

Will the Chancellor confirm that, as a result of freezing personal allowances, 300,000 more people will pay tax at 20 per cent. rather than at zero? Before the right hon. Gentleman brings the order to the House to implement that outrageous policy, will he invite his hon. Friends to sound out the 500 people in each of their constituencies who will have a tax increase from zero to 20p in the pound in order to discuss with them the fairness of such a policy before his hon. Friends vote on it?

What the hon. Gentleman ignores is the fact that, as a result of the Government's policies, almost 1·5 million more people are non-taxpayers than would be the case had we carried on with the tax regime that we inherited from the Labour Government when we came to power. Furthermore, when one takes into account the Opposition's promises and their public expenditure consequences, they cannot give us any lectures about taxation. We shall listen to the Opposition on income tax only when they join us in promising to work to reduce the basic rate of income tax to 20p in the pound.

Does my right hon. Friend agree that low marginal rates of direct income taxation are not only an incentive to hard work and enterprise, but are a significant factor when overseas companies are deciding where to put their manufacturing plant and, even more importantly, their European head offices? They will not invest in countries where their highly qualified executives are excessively taxed. Is not that why the previous Labour Government, with a marginal rate of 83 per cent., had a much worse record than this Government in attracting inward investment?

My hon. Friend is right. Britain has one of the most attractive and competitive direct tax systems in the world and we have made it clear that we intend to maintain it that way. The Opposition favour high rates of tax and, in the past, such high, confiscatory rates of tax have been counter-productive because they raise less revenue.

To ask the Chancellor of the Exchequer what discussions he has had with employees' and employers' organisations about his plan to increase national insurance contributions.

National insurance contributions were mentioned in a number of representations received before the Budget.

Did not those organisations tell the Chancellor and the Minister that an increase in national insurance contributions would be a tax on employment, with the result that about 18 million employees and 2 million self-employed people will be worse off and 500,000 people who have earned too little to pay income tax will have to pay the increase in national insurance contributions? Leaving aside the Prime Minister's statement last January that he had no plans to increase national insurance contributions, which now looks like an election con, does not the Government's insurance policy seem to be to up the premiums while cutting the benefit payouts?

The hon. Gentleman ignores the fact that we are paying about £37 billion a year in contributory benefits. Is that to be paid mostly by people in work or by taxpayers in general? If the hon. Gentleman's solution is that it should be paid by taxpayers in general, he is asking pensioners, people who have retired and people who are not in work to contribute to the ongoing benefits of other people. I do not believe that the hon. Gentleman wishes to support such a policy. We have a national insurance fund and it is a sound principle that, taking one year with another, as much as possible of it should be balanced.

Does my right hon. Friend agree that as long as we have a national insurance fund it must be adequately financed and that it is right to increase contributions when demand rises and reduce them when it falls?

The Government have shown some flexibility on that point in that, during the recession, when less money has come into the fund, we have been willing to see a Treasury supplement paid into it. But my hon. Friend must be right. We are paying out a huge amount in benefits. The average working person is now paying £10 each working day for social security benefits. It is right that people should be aware of that and, in principle, over a period of time, our national insurance fund should be balanced.

Will the Minister confirm that the proposed increases in national insurance contributions are not only a complete abdication of the promises given by the Conservative party at the election, but another increase in the overall level of taxation that the country is suffering? Will he further confirm that the overall level of taxation is now higher than it was when the Government took office in 1979?

If the hon. Gentleman holds views so strongly, why did he sign up to a manifesto that intended to increase national insurance contributions by 9 per cent., on top of income tax increases of 10 per cent? He wanted to increase the burden on the country's wealth-creating sector by 19 per cent., yet he has the cheek to criticise the Government.

To ask the Chancellor of the Exchequer if he will make a further statement about the measures announced in the Budget involving deregulation.

The Budget proposals will make an important contribution to the Government's deregulation initiative. The changes announced have been warmly welcomed in the business community—particularly the proposals on the statutory audit. In the longer term, the burden on the self-employed will be substantially eased by my proposals for simplified self-assessment.

I congratulate my right hon. Friend on his answer. Does he understand the importance to small business men in particular of the introduction of self-assessment as a system of deregulation and in relieving the burden?

The self-assessment proposals were warmly welcomed by the Federation of Small Businesses and the Forum of Private Business. There are strong arguments for self-assessment. It is a simpler, better system for the ordinary citizen and it is a good thing that the people of this country should know the tax consequences of Government spending.

Will not the self-employed who disappeared owing £114 million in tax in 1991–92 be delighted with self-assessment, because it is wide open to corruption? The Chancellor claims to reduce the burdens of business, but is not every extension of value added tax an imposition on small businesses, which have to act as tax-gatherers without receiving any money for doing so? Last year, the Government produced more statutory instruments— which are in the main burdensome regulations, affecting the community at large, including small businesses—than ever before in the history of Parliament. Does not that demonstrate that the Government are all words and no action?

I am slightly surprised about the hon. Gentleman's remarks about VAT, bearing in mind his first comments. The more that taxation is shifted towards indirect tax, the easier it is to deal with the black economy and to collect tax in that direction. The hon. Gentleman's comments are difficult to understand. I am sure that everybody, including small business organisations, recognises the hon. Gentleman's first point, when he seemed to characterise small business men as a lot of tax cheats. That is not our view.

To ask the Chancellor of the Exchequer what reaction he has received from environmental organisations about the measures announced in the Budget statement.

The Budget measures designed to encourage more efficient use of energy have been welcomed by a number of environmental organisations.

Is my hon. Friend aware that Friends of the Earth, no less, commenting on my right hon. Friend's fiscal measures to help the environment, said that the Budget was bad for energy wasters, gas guzzlers and perk company cars? Is not it hypocritical of the Opposition to portray themselves as green, but they squeal like mad when it hurts them in the pocket?

My hon. Friend is absolutely right. Friends of the Earth welcomed the Budget measures and if the Opposition are so incensed about the tax, one is bound to ask why they do not promise to reverse it.

In reacting to the Budget, have environmental organisations reminded the Treasury that substantial investment is being made in renewable energy sources, such as wind farms? If so, will the Minister take steps to ensure favourable fiscal treatment of electricity suppliers that are able to draw part of their supply from renewable energy sources?

The hon. and learned Gentleman speaks on behalf of wind farms and does so with vigour and passion. I hear what he says and I am sure that there is something in it. The main objective must be to comply with the Rio targets and conventions and the hon. and learned Gentleman's proposals would go hardly any way towards reaching that ambitious target.

Before the Minister drowns in self-congratulation, will he acknowledge that Greenpeace, no less, said of the Budget that the overall proposal was a setback for the environment? If the Minister is really interested in helping the environment, will he put into practice Labour's national energy efficiency programme, which would save four times the CO₂that the Government claim through the imposition of VAT? Will he bring forward environmental improvement measures that can generate jobs as well as save energy? Should not the Minister be insulating pensioners' homes rather than inflating their fuel bills?

As I said earlier, Friends of the Earth welcome our proposals. It is impossible always to please every environmental group. If the hon. Gentleman objects to the cost of imposing the taxation, it strikes me as strange that he should now propose that we go even further.

To ask the Chancellor of the Exchequer if he will make a further statement about measures to assist exports announced in the Budget.

The reduction in export credit premiums and the £1·3 billion extension of cover that I announced in the Budget will enhance the ability of British exporters to compete in some of the most important, fastest growing markets in the world.

I thank my right hon. Friend for his answer. Is he aware that the measures that he has announced to help exports will be particularly welcome in the north-east, which already exports a larger proportion of its manufacturing production than almost any other region? Does he recognise that export success has as much to do with individual endeavour and enterprise as with Government support and assistance? Will he join me in welcoming the establishment of a self-help programme—the manufacturing challenge for north-east industry—which has been launched with the twin aims of doubling the region's manufacturing base and tripling exports in the next 10 years?

I certainly agree with my hon. Friend, and I am grateful to him for mentioning the north-east manufacturing challenge. He can be assured that we will do all that we can to encourage agencies and business men in the north-east to support that initiative. Given their energy and commitment, I am sure that the outstanding export performance of the north-east will be enhanced further.

To ask the Chancellor of the Exchequer what percentage of an average household's income is forecast to be spent on VAT (a) in 1993–94 and (b) in 1994–95.

Around 5½ per cent. of income in 1993–94 for a family on average earnings.

Does the Minister accept that while the top 10 per cent. of earners spend less than 3·5 per cent. of their income on fuel, the bottom 10 per cent. spend more than 13 per cent of their much smaller income on fuel? Does he accept that a couple on income support, with two children, will have to pay an extra £2 a week for fuel as a result of the Chancellor's Budget proposals? Will he now end people's agony, suspense and misery by giving an assurance that they will be compensated in full?

The Budget as a whole ensures that the better off will pay more. It is undoubtedly true that, as my right hon. Friend the Chancellor has said, substantial help will be made available to assist people with the VAT costs that they will have to pay next year. As for the burden of tax generally, real take-home pay has risen considerably since the Government came to office. All in all, we should be judged according to our deeds rather than our words. We have protected those most in need, and everyone else is better off.

Will my hon. Friend confirm that the Government's policy has been to shift the burden of taxation away from incomes and on to expenditure? Over the past 14 years, the top rate of income tax has fallen from 83p to 40p, and the bottom rate has fallen from 33p—the rate under the last Labour Government—to 20p.

My hon. Friend is absolutely right—there has been a progressive move away from direct taxation and towards indirect taxation. This party, and this Government, believe that people should be left with as much as possible of the product of their own earnings and savings to spend as they think best.

Will the Minister clarify the position? The Chancellor was deliberately confusing on this point? Is it now admitted that VAT will be imposed on standing charges for gas and electricity as well as on the fuel actually used? If so, will the Minister explain how it can be an environmental matter to impose VAT on standing charges which do not vary according to the amount of gas or electricity used?

My right hon. Friend has made the position perfectly clear on this matter. I have nothing more to add.

To ask the Chancellor of the Exchequer what consideration he is giving to relieving registered charities of the present VAT costs.

There are a number of measures in the Budget to assist charitable giving, as well as a special transitional scheme to help charities which receive income from dividends.

I welcome those measures in the Budget and my hon. Friend's reminder, but could he not see his way to removing some of the VAT disincentives to contributors to charities as well as the burden on charities, which are now doing more and more and better and better, as needs must?

My hon. Friend is right to praise those involved with charities for the increasing contribution that they make. We welcome that, and we have given extensive support to it. We believe that the best way to help the charity movement to carry out its task is to provide incentives to those who give money to charity. That is why we have increased substantially the range of tax reliefs available—the majority of them on the giving of money to charities rather than the expenditure of money by charities. In total, those tax reliefs now have a value of £1 billion, of which £150 million amounts to direct VAT reliefs.

In view of the additional burden on charities created by the extension of VAT to fuel, will the Minister clarify once and for all whether the VAT extension will apply to standing charges on fuel bills, and will he tell us clearly what exactly is the environmental justification for that?

There is absolutely no secret about this. It has been said from the Dispatch Box repeatedly since Budget day that the answer is yes, it does apply to standing charges. [HON. MEMBERS: "Why?"] As my right hon. Friend the Chancellor of the Exchequer made clear to those who were listening to his answer a few moments ago, to try to levy VAT on energy without levying it on standing charges would be to establish an easy and obvious avoidance loophole.

To ask the Chancellor of the Exchequer what is the growth in unit wage costs in (a) the United Kingdom and (b) other EC countries over the past year.

While over the latest year manufacturing unit wage costs in Germany rose by more than 9 per cent. in Britain they fell by 1 per cent. That is excellent news for British jobs.

I thank my right hon. Friend for that reply, which confirms that manufacturing productivity in Britain is better than it is in Germany—and also, I believe, in Japan. Does my right hon. Friend agree that there has never been a better opportunity for manufacturing firms in Norwich and throughout the country to exploit opportunities in world markets and in the single market, and that it is bad news that there are those in this country at this time who are willing to encourage strike action in any part of the economy?

My hon. Friend is right. We expect competitiveness to be about 20 per cent. better during the year ahead than in the year gone by. Strikes are the worst possible advertisement to those thinking of investing in this country. Those who are thinking of investing in this country will want to hear clearly from the Labour party that it condemns the strikes and sees that strikes are pointless and self-defeating. They will also want the hon. Member for Dunfermline, East (Mr. Brown) to get up now and condemn the strikes.

Will the Minister confirm that we have some of the lowest unit wage costs in Europe, which accounts for some of our attraction to overseas industry, but that a major part of the budget of pensioners and others on low incomes will be the standing charges on their fuel bills? Those standing charges will amount sometimes to 50 per cent. and sometimes to three quarters of their fuel bills. That has nothing to do with fuel consumption. Do the Government believe that it is sensible to tackle global warming by increasing the number of deaths from hypothermia?

The Labour party is not very good at listening. It has heard the answer to that point time after time. The hon. Gentleman is saying that he does not believe in flexibility, that he does not believe in competition, that he does not believe in attracting jobs to this country. I am pleased to say that Bosch, which recently decided to move a plant from Stuttgart to Cardiff, knows the scene. The Federation of German Industry has said that at the Cardiff plant there is "strong motivation" and a "flexibility unknown in Germany". Why does the hon. Gentleman not welcome that?

Will my right hon. Friend cast his mind back to the late 1970s, when companies such as Ford and Vauxhall were falling over themselves to move production from Britain, and compare that with the current situation, in which, for the first time in 20 years, Vauxhall and Ford are exporting substantial numbers of cars? Those companies are moving the production of engines and components back to Britain and, as my right hon. Friend has pointed out, companies such as Bosch are coming to this country, not because of low wages but because of high productivity, quality manufacturing and an environment that is good for business. Do not Opposition Members have an absolute cheek to complain about the Government's record, bearing in mind that when their party was in power manufacturing output fell and productivity was appaling, whereas under the present Government manufacturing output has risen and productivity is at record levels?

Manufacturing productivity is at record levels, as are manufacturing exports. We are a net exporter of television sets, and we are improving our position in relation to motor cars. Close to my hon. Friend's constituency in Derbyshire, Toyota is investing £750 million at Burnaston and thereby creating 3,000 new jobs. The Labour party, by shouting, demonstrates that it has no interest in new jobs, that it is interested only in running Britain down. Luckily, it will not be in power in the foreseeable future. Luckily, too, its position will not put people off who are thinking of investing in Britain.

To ask the Chancellor of the Exchequer if he will estimate the cost in a full year to the average householder's energy bills of the introduction of value added tax at (a) 8 per cent. and (b) 17½ per cent.

It is not possible to make an accurate assessment. It depends on future pricing decisions by the fuel companies as well as on the effect of those pricing decisions on consumption levels.

How will the Minister ensure that the operation of benefits takes into account the 17·5 per cent. increase in VAT? He cannot simply rely on the retail prices index rate, which will be 8 per cent. Is not this a clear indication that the Government have no intention of meeting in full the needs of pensioners and people on low pay, who will have to pay the extra 17·5 per cent. on their bills?

We have said absolutely clearly that we intend to provide extra help in advance of the implementation of the price increases, and that this will be targeted at the 8 million households in receipt of income-related benefits. Assistance will go to those who need it, while the rest of us make a contribution to controlling the deficit—a matter which is of no interest at all to the Labour party.

If the extent of uprating is to be announced in November, will my hon. Friend please take into account the fact that it should reflect the increase for a full year, including the critical winter months? I am conscious of the fact that the period between the Budget in March and the announcement in November is only eight months.

My hon. Friend may rest assured that in calculating the increases to be made as part of the planning of next year's uprating we shall take account of all the costs that recipients have to face in the year during which those benefits are received. Furthermore, we have made it clear that the cold weather payments system will be adjusted to take account of the VAT changes that my right hon. Friend the Chancellor announced.

Given the hon. Gentleman's admission with regard to standing charges, will he now tell us how much more, in pounds and pence, a typical pensioner will have to pay because of the imposition of VAT on standing charges for gas and electricity? Will he also explain the environmental justification for that imposition?

The hon. Gentleman might explain to the House why Labour thought that it was entirely consistent to impose VAT on telephone standing charges. [HON. MEMBERS: "Answer."] The simplest layman—apart, apparently, from the hon. Gentleman—can see that the standing charge for the supply of energy to a household is part of the integrated cost that has to be charged by the supplier. The hon. Gentleman is pressing upon us the creation of a blatant tax loophole—something which he does not normally like to do. I can assure him that we shall resist his pressure.

Will my hon. Friend confirm that the majority of member states of the European Community levy VAT on energy costs for domestic consumers? Does he agree that in terms of energy costs the most important thing for people on low incomes is the need to keep energy prices down? Is not the statement made on Monday by my right hon. Friend the President of the Board of Trade indicative of the fact that the Government are prepared to allow the market to bring down energy costs? Will my hon. Friend also confirm that the extra money given to the coal industry will not be reflected in energy charges?

My hon. Friend is almost right about the European Community. He said that the majority of EC member states charge VAT on domestic fuel and power. The truth is that they all charge VAT on domestic fuel and power. He is right to stress that the key issue is the price that the consumer has to pay. We are certainly accepting no lectures from the Opposition about electricity prices. Electricity prices went up by 20 per cent. every year Labour was in power and by more than a quarter in real terms.

To ask the Prime Minister if he will list his official engagements for Thursday 1 April.

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.

Will the Prime Minister join me in congratulating the Home Affairs Select Committee on its decision to inquire into party political funding? Will he also join the Opposition in urging full co-operation and disclosure—that disclosure to cover items such as the £17 million secretly paid to the Conservatives to cover the cost of the previous election?

Of course the Conservative party will submit a memorandum as requested and will of course be available to submit oral evidence. We have always said that we are consistently opposed to state aid for political parties. If the hon. Gentleman is being so sanctimonious, I hope that he might consider whether his party is truly in favour of state aid or not.

To ask the Prime Minister if he will list his official engagements for Thursday 1 April.

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

Will the Prime Minister take this opportunity to express his condemnation of the proposed rail strike tomorrow—

rose—[Interruption.]

and does he agree that the state monopoly should be broken up as soon as possible? Has he noticed, by the way, how many Labour Members have scurried off to their constituencies before their union paymasters go on strike tomorrow?

There is no doubt that it was worth waiting for the rest of my hon. Friend's question. I entirely agree that the strike is deplorable. What is equally deplorable is the deafening silence from the Opposition who know very well that, when it comes to strikes, they are on strike in terms of condemning them. They are still the strikers' friends.

The Prime Minister will, I hope, be aware of the deep disquiet in the country about the events in Srebrenica. Does he agree that it is vital that the United Nations is enabled to resume its humanitarian relief convoys as a matter of urgency? Will the Government make it crystal clear to the Serbs that their barbaric disregard for humanity is simply not tolerable?

I entirely agree with the right hon. and learned Gentleman on both points. We are appalled by the plight of Srebrenica. It is terrible, and we believe that the Serbs must co-operate with the United Nations humanitarian effort. As the right hon. and learned Gentleman will know, British aid workers and British troops have been instrumental in providing more aid in Bosnia than any other country. That is a proud record, and we wish to see it continue. I align myself entirely with the right hon. and learned Gentleman's comments about Srebrenica.

May I associate the Opposition with the tribute that the Prime Minister paid to British aid workers and British troops, who are performing an invaluable role in assisting the humanitarian effort? But does the Prime Minister accept that if there is to be a lessening of the sickening events involving innocent women and children which, sadly, we have been witnessing on our television screens, sanctions must be applied more comprehensively and effectively against Serbia, and that the international community simply must insist that humanitarian convoys be accompanied by military escorts?

I certainly support the idea that there should be much stricter enforcement of sanctions; we would be perfectly prepared to contemplate the widening of sanctions as well as the stricter enforcement of existing sanctions. That matter is under discussion between our allies and ourselves at the moment.

As we enter the era of the council tax, will my right hon. Friend join me in congratulating Conservative-controlled Wellingborough borough council, which is to levy an average tax of £177—by far the lowest in the country? Is that not a wonderful achievement, considering that services have not been cut, and is it not the clearest possible signal to the electorate of this country to vote Conservative in this year's local government elections?

I believe that there is widespread understanding around the country that the council tax is the fairest method that we have yet had of dealing with local government finance. Not only that, but those people who are fortunate enough to have a Conservative council will find that, band for band, they will pay less council tax than those whose council is Labour controlled.

Does the Prime Minister not realise that being appalled by Srebrenica is not good enough? Being appalled by Srebrenica will not save a single life. The question is what the Prime Minister and the British Government intend to do about Srebrenica. I remind the right hon. Gentleman that that town and its 60,000 Muslim inhabitants are designated by the Vance-Owen plan as part of the Muslim territory. Will he therefore recommend to other western powers that we protect Srebrenica from being annihilated by the Serbs—or is this to be yet another example of our standing by the side, wringing our hands and saying that nothing can be done until it is too late for anything to be done?

I hope that the right hon. Gentleman will weigh carefully what he says on that matter, because I think that what he has said will be deeply offensive to the 2,300 troops that we have in Bosnia, to their families and to the many other people who are concerned about their safety there. They are doing a magnificent job; in many ways we have led the assistance being given to all parts of Bosnia over recent months. We strongly welcome the Security Council resolution enforcing the no-fly zone. My hon. Friend the Minister of State for Defence Procurement will have more to say about that after Question Time.

May I make my right hon. Friend aware that the trustees of the Maxwell pension fund will meet later this month to discuss the common investment fund, which now stands at about £180 million? I urge him to contact those trustees and beg them to have a distribution or a partial distribution of that fund so that, in conjunction with the Cuckney fund, the pensioners can be paid while the missing millions are traced and a long-term solution is put in place.

I certainly join my hon. Friend in urging the trustees and the liquidator of the common investment fund to restore advance payments as soon as possible. I understand the difficulties, and I hope that the trustees will be able to respond.

To ask the Prime Minister when he last met the leaders of other member states of the Security Council of the United Nations to discuss the implementation of UN resolution 808; and if he will make a statement.

The United Nations Secretary-General is due to produce a report by the end of April on the most effective and rapid means of establishing an ad hoc tribunal. United Nations member states have been invited to contribute views on an informal basis. Several states, including the United Kingdom, have so contributed.

This is the first time since Nuremberg and Tokyo that an international war crimes tribunal has been set up. Unlike Nuremberg and Tokyo, however, is it not likely that the implementation of United Nations resolution 808 will turn out to be an exercise in futility? Has not the United States State Department already labelled those murderous leaders, Milosevic and Karadzic, as potential war criminals? Are they to be granted immunity from war crimes proceedings? Who will apprehend the criminals? Will British soldiers be involved? Will British police officers and lawyers be involved? It is surely a charade.

I do not believe that it will be an exercise in futility. There are complex matters of international law to be determined, which are still under discussion within the United Nations, but it is intended, where possible, to ensure that people who commit war crimes face a tribunal and are punished satisfactorily and suitably.

To ask the Prime Minister if he will list his official engagements for Thursday 1 April.

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

My right hon. Friend will be aware of the opposition of the police, my constituents and myself to the proposed all-night rave scheduled to take place in my constituency at the end of May. Does he agree that such events have less to do with entertainment than with organised crime and pushing illegal and dangerous drugs? Does he agree that the High Peak, as one of the most popular national parks in the world, is a wholly unsuitable venue for such an event? May I assure him that he has the support of the Conservative side of the House for the Government's proposal to give the police more power to tackle these people? Will he ensure that the measures are brought forward as soon as possible?

My hon. Friend touches on a point which will concern many parents. The statement of my right hon. and learned Friend the Home Secretary yesterday shows beyond doubt that the Government are determined to crack down on those who ignore the rights and property of law-abiding citizens. It is wholly unacceptable behaviour. That is why we are giving the police tougher powers to deal with it.

Is the Prime Minister aware of the report recently highlighted in the Nottingham Evening Post, which illustrated that claims for severe hardship payments had increased in the east midlands by over 750 per cent. in the last three years, leaving large numbers of young people with no jobs, no cash and no hope? Will he explain how he has failed to deliver jobs to those young people and when will he restore entitlement to benefit payments to them?

I should mention to the hon. Gentleman that payments from the social fund could not have been made until we introduced the legislation to do so. No such comparable payments existed. As for jobs, it is interesting to note that for the first time in several weeks—in fact, since the unemployment figures fell last time—an Opposition Member has mentioned unemployment. We continue to take measures which will seek to increase jobs for all sectors of the community.

To ask the Prime Minister if he will list his official engagements for Thursday 1 April.

I refer my hon. Friend to the answer I gave some mdoments ago.

I welcome the support given to small businesses in the recent Budget. Is my right hon. Friend aware that my area of Scotland has benefited significantly from the oil and gas industry, and in particular from oil exploration in the North sea? Is he further aware that the changes in petroleum revenue tax have provoked enormous support from my constituents? Will he ensure that the transition to what many oil companies regard as a better low tax regime is smooth and does not cause undue disturbance and disruption in the industry in the meantime?

As my hon. Friend will know, many people have welcomed the changes in taxes, not least because of the big encouragement to development that is clearly evident in the new structure. That development will create future jobs, a matter which every hon. Member is concerned about. I take the figures from memory, but I seem to recall that in the year 1991–92 the previous petroleum revenue tax system actually cost the taxpayer £200 million net.

Has the Prime Minister noticed that the Prime Minister of the Irish Republic said that the idea that the Republic was a haven for terrorists is a fallacy? Does he understand that my constituents were surprised about that until they realised that today is the first day of April?

I know that the hon. Gentleman feels very strongly about the matter, but I must say to him that he should not confuse the actions of a minority with the views and instincts of the majority of people. I do not believe that the majority of people in the Republic of Ireland support the activities of the IRA, and I believe that their response to recent events is a clear illustration that that is the case. I hope and believe that the vast majority of people in the Republic of Ireland will join the hon. Gentleman and every other hon. Member in the House in condemning the IRA and all its murderous activities.

To ask the Prime Minister if he will list his official engagements for Thursday 1 April.

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

As we approach the first anniversary of the re-election of my right hon. Friend's Government, does the Prime Minister recall that only four weeks after that event a Conservative council was elected in Basildon? What conclusions does my right hon. Friend draw from the fact that, under the council tax, Conservative Basildon will, for the first time, not be capped while nearby socialist-controlled Harlow district council will be?

My hon. Friend has made a profession of making Basildon world famous and is doing it remarkably well. As it is also the anniversary of my hon. Friend's re-election, I offer him my congratulations on that. When he won, we knew that we had won, and it was an especially sweet victory.