To ask the Chancellor of the Exchequer what representations he has received on his proposals to remedy the practice of late payment to suppliers.

My right hon. and learned Friend the Chancellor of the Exchequer has received a number of letters supporting the Budget announcement of consultation on measures to promote prompt payment. Responses to the consultation paper, which should be addressed to the Department of Trade and Industry, should reach that Department by 31 March 1994.

We cannot hear.

Order. I have already given instructions that the microphones should be switched on. Perhaps we can proceed as it is being taken care of.

Hon. Members on both sides of the House tell of small businesses in their constituencies whose survival has been put at risk by late payments from large companies. Will my hon. Friend investigate allegations that such practices are condoned or even encouraged by managements of certain companies? Does he agree that that is another example of the unacceptable face of capitalism which threatens the survival of small businesses, the growth of which the Government have done so much to encourage?

My hon. Friend's complaint is clearly echoed in many of the representations that hon. Members on both sides of the House have received. The Government deplore big companies taking advantage of small companies by the wilful late payment of bills. Many of those small companies have to pay in cash or in advance when big companies can delay payment. That is exactly why my right hon. and learned Friend has produced the consultation paper and I hope that it will be well received.

Surely the best way to bring the big companies to their senses is to make them pay interest on the bills that they owe? Would not it help companies of all sizes if interest rates generally were reduced?

That is indeed one of the proposals that are being mooted in the Government's consultative paper. Clearly, there are problems with legislation, in that it interrupts the contractual arrangements between companies. My right hon. and learned Friend in putting forward the proposals, clearly believes that there is an endemic problem, which is not just a reflection of the period of high interest rates, but has become a matter of culture in business payments. It needs to be dealt with and we look forward to the response to the paper.

To ask the Chancellor of the Exchequer if he will make a statement on the effect of taxation on the consumption of carbon dioxide-producing fuels.

Taxes on energy products are one factor affecting their consumption and hence total carbon dioxide emissions.

I thank the Minister for his reply. Does he agree that we put political considerations aside when we put VAT on fuel and that we were more concerned with saving the planet? We put a generous compensation package in place—the most generous ever—which made the figure proposed by the hon. Member for Glasgow, Garscadden (Mr. Dewar) a weak, wet 50p. We beat that 50p. Does the Minister further agree that if we wired up that lot opposite, they would not produce enough energy to turn on the lights of Madam Speaker's Christmas tree?

As usual, my hon. Friend tells the truth with a flourish. The Labour party supports Rio and the reduction in borrowing, but it is not willing to accept the consequences.

In the context of road fuels, has the Minister had representations from those involved in bus companies? The way in which the rebate works will considerably increase the cost of bus transport, probably to a greater extent that the Treasury has anticipated. Is he studying the matter? Can he tell the companies that the Treasury will find a way round the problem?

We always study carefully all representations that we receive. However, the cap on the bus fuel rebate will also encourage energy efficiency which, as the hon. Gentleman knows, is part of the point of the measure.

Is not it a fact that the hon. Member for Glasgow, Garscadden (Mr. Dewar) complained about the way in which his proposal was treated only after the Budget was announced, when he realised that the Government were meeting the amount for which he had asked? Should not he make it plain that he did not complain before the Budget?

It came out clearly in the debates last week, following the Budget, that the hon. Member for Garscadden did not raise the matter until after the Budget statement.

Will the Minister admit that 70p a week compensation for a pensioner couple will not cover the VAT on their fuel bill? Does he recognise how bitter and angry those pensioners will feel when they recognise that, in addition to the VAT, they will have to pay 70p a week on their insurance premiums, which will wipe out the effect of the VAT compensation? Is not that typical of this Conservative Government? Even when they are forced grudgingly to give a little with one hand, they take it all back—and more—with the other.

The decision on compensation will add £1·30 a week to the single pension and £1·85 a week to the married couple's pension by April 1996, when the measure is introduced in full.

Does my right hon. Friend agree that if we are to meet the objectives of the convention on climate change, to which we signed up in Rio, we need to encourage more energy efficiency in the domestic sector, which my right hon. and learned Friend has done in his Budget by doubling the home energy efficiency scheme? We also need to burn hydrocarbons more efficiently in the transport sector. My right hon. and learned Friend has encouraged that by his pledge to increase the price of hydrocarbons by 5 per cent., which is a very tough target in real terms over the next few years.

All this goes towards fulfilling our Rio commitments which, as I said just now, the Labour party supports, although it will not accept the means outlined by my hon. Friend.

To ask the Chancellor of the Exchequer what estimate he has made of the effect of his public spending plans for growth in the economy.

Taking full account of effects of the Budget, my forecast is for GDP growth of 2·5 per cent. in 1994.

Yesterday, under questioning in the Treasury Select Committee, the Chancellor admitted that the total effect of his tax changes would be to put up income tax by the equivalent of 7p in the pound and to put up the average family's tax bill by £9 a week. You can debate—(Interruption.]

Order. The hon. Lady must put a question to the Chancellor.

Does the Chancellor agree that whatever one says about the effect of his public spending proposals on growth, the country will never trust the Conservatives on tax again?

In the long session yesterday in the Select Committee, I certainly accepted that I had raised taxation to a certain extent and that I had reduced public spending as well to get down the level of public borrowing, which would otherwise be a constraint on recovery. The effect on the individual man and woman will depend not only on one feature of that, but on what happens to economic recovery.

Does my right hon. and learned Friend accept that cuts in public spending have less effect on consumer confidence than do increases in taxation and, therefore, less impact on growth? Does he accept that the overwhelming majority of Conservative Members welcome the cuts in public spending under the Budget and the contribution made to bringing the Budget deficit under control? Does he further accept that there is still an enormous amount of waste, overmanning and inefficiency in the public sector, especially in local government? Will the Government launch a national campaign to cut that waste and to make further public savings?

Obviously, it depends on how one makes the spending cuts. I agree with my hon. Friend that there is plenty of scope to cut out waste in the public service. Many dedicated public servants do just that. We have never embarked on an exercise of reducing public spending quite so sharply as we have on this occasion. It will not damage the economy, because a great deal of the savings will come from administrative improvements and from holding down the pay bill of those who work in the public sector to a level —for the same reasons as the pay bill will be held down in the private sector—to create the conditions in which we can have economic growth and today's welcome fall in unemployment can be repeated month after month. That is why we take the tough and necessary decisions on tax and spending. I will be grateful to my hon. Friend for his support when we do so.

As well as increasing taxes "to a certain extent", the Chancellor has also committed himself to a very tight new control total for the non-cyclical elements of public expenditure, allowing for growth of only 3·8 per cent. between 1992–93 and 1998-99. Is not it the case that, at the same stage of the economic cycle under Baroness Thatcher's Government, comparable spending rose by 12·5 per cent? Is not it therefore incumbent on the Chief Secretary to say just what hardship and pain are to be caused to achieve these undesirable and hitherto unachievable spending targets?

As a Government, we are in a position where we are very conscious of the need to constrain public spending. We have improved the opportunities for the private sector to be released and achieve growth, investment and new job creation. We have set a very challenging target for ourselves, but it is not impossibly challenging at a time when we have got inflation down. The headline figure is 1·5 per cent.—the lowest for 25 years. It is the first time since 1960 that inflation has been below 2 per cent. for almost every month in the year. That makes the spending targets realistic. When we made our spending decisions—as the hon. Gentleman will recall—we protected all our priorities. Spending on health and higher education was up, we had the new apprenticeship scheme and we protected our spending on law and order. It is a well-judged spending package.

To ask the Chancellor of the Exchequer what representations he has received in response to his Budget.

The Budget has been widely welcomed throughout the country.

At this festive time, will my right hon. and learned Friend agree with the owners of small and medium-sized businesses who have made representations to me that his Budget is a major step forward in creating the stable economic environment in which they can trade? Further, does he agree with them that the specific measures taken to help small businesses in the Budget, together with the low interest rates and unprecedented low rates of inflation, make it possible for them to look forward to a very happy and prosperous new year?

I believe so, and I am glad that my hon. Friend has had the same reaction from the small business people she has met as I have had from the people I have met, who have been generous in their comments on my Budget. Mr. Stan Mendham, who is by no means always uncritical of the Government, has been very praising of the Budget. A commentator described me as having something of a bee in my bonnet about small business. That is the case. I believe that in order to improve the prospects for investment in small businesses, it is legitimate to deregulate and take the burdens off them and encourage more risk capital and self employment in this country. I believe that it is in the small and medium-sized business that we will get the growth of employment that we require throughout the 1990s. I am gald that my hon. Friend approves of the fact that we laid such heavy emphasis on the needs of small business in the Budget.

Facing the consequences of the severe recession, is it not clear that the balance of payments deficit is more important than the Budget deficit? With the pound increasing in value steadily during the past six or nine months to a considerable extent, is it not also clear that this is the time to reduce interest rates, cut imports and encourage exports?

I am glad that the right hon. Gentleman, who is very experienced in these matters, acknowledges that we are now firmly on top of the deficit in the public finances, and so is turning his attention to the balance of trade. He will know that, at the moment, it is difficult to get accurate figures on our trading position as we introduce the new system because of the introduction of the single market. Because our economy is so much stronger and demand is rising here compared to the continuing recession in Germany and France, there is a tendency for people to wish to sell into our economy, which is affecting our position. Otherwise, our trade figures are extremely good and our currency has been remarkably stable for the past few month—it has not been strengthening noticeably. Most importantly, British industry is retaining its competitiveness. We are still holding the advantage from devaluation. Our unit wage costs have fallen this year, and we are in a competitive position. I shall keep an eye on all the matters on which I usually keep an eye when deciding monetary policy, but I am reasonably optimistic about the British trading position as we come out of the recession.

I welcome the measures in the Budget which deal with small businesses. Does my right hon. and learned Friend agree that the measure suggested by the right hon. Member for Yeovil (Mr. Ashdown)—slapping an extra 1 per cent. on national insurance contributions for the self-employed—would be a disaster for small businesses and would affect the competitiveness of British industry?

I entirely agree with my hon. Friend.

What about what the Government are doing later today?

My hon. Friend was speaking about an increase in the national insurance contribution for the self-employed. The hon. Gentleman is wrong. We are raising it for employees this evening.

The Chancellor presumably recognises that the rate of contribution by the self-employed is below that paid by employed people and employers. As the Budget strategy depends very much on low interest rates and low inflation, will the Chancellor look carefully and favourably at the proposal made by the Treasury Select Committee today, which carries the support of all but one member of the Committee, for a central bank that has autonomous responsibility for monetary policy? Is not that the way to lock in low interest rates and low inflation? Will he give that suggestion the most careful consideration?

I can agree to give the proposal careful consideration, but it requires much further debate and discussion. I am grateful to the Select Committee for its report. We shall have an opportunity, through the Bill being presented today by my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), to debate those matters in the House. I have an open mind on the subject, although people try to guess my opinion. I have a feeling that the Select Committee's proposal is becoming rather a fashionable cause. We should consider it with care, also taking into account such matters as parliamentary accountability for an increasingly more autonomous Bank of England.

Has my right hon. and learned Friend received representations from the Scotch whisky industry, which has been telling me that the sensible treatment of excise duties in the Budget will have a substantial impact on its sales at home? Is he aware that that will increase the revenue to the Treasury and help the position abroad, because it sends the right messages for an industry that exports almost £2,000 million worth of products?

I agree with my hon. Friend and I am glad that I was able to follow the precedent set by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont) in acknowledging the problems of the Scotch whisky industry and not increasing excise on its products. I hope that the industry will be able to take advantage of that and will recover its strength. I also hope that the industry derives the enormous benefits that could potentially accrue to it from the successful conclusion of the GATT round, which is the best piece of economic news that this and most other trading countries have received in 1993.

After the Chancellor's admission yesterday that the typical family will pay the equivalent of 7p in the pound more in income tax, will he also confirm that the typical family will, from April, be paying £10 a week more in seven separate tax rises and three new taxes? Will he also confirm that, while the wealthiest 1 per cent. received 33 per cent. of the income tax cuts made in the 1988 Budget, middle and lower-income Britain is now paying 95 per cent. of the tax rises from this year's Budget? Are not the Tories now exposed not only as the party of higher taxation, but, as it always has been, as the party of unfair taxation?

The hon. Gentleman uses what he describes as a "typical family". It is not an average family, but a family that he takes out of the middle ranks of those earning. I have acknowledged that we are increasing taxation. I made an hour and a quarter's speech describing my taxation increases. The hon. Gentleman's mistake is to say that that is the only effect that the Budget will have on the average family. If the hon. Gentleman had his way, he would follow policies that would increase inflation, again increase interest rates—now at their lowest level for 16 years—increase public sector borrowing, slow the recession recovery, reverse the fall in unemployment and probably cause it to increase again, and once more make this country extremely uncompetitive in world markets. That would do far more damage to the ordinary person than my Budget, which sorts out the problem with public finances so that we are clear to have a stronger recovery in the 1990s.

To ask the Chancellor of the Exchequer when he next expects to meet his French counterpart to discuss economic competitiveness in Europe; and if he will make a statement.

I met Mr. Alphandery, the French Finance Minister, along with Finance Ministers from the other member states, to discuss European competitiveness at the recent European Council and ECOFIN meetings. I expect that we will discuss this issue further at future meetings.

When my right hon. and learned Friend next meets his French counterpart, will he employ his customary energetic diplomacy to remind the French Finance Minister that an economic plan for Europe which involves higher borrowing, more help for state-funded white elephants and cuts in working hours would not encourage investment, but would cause any potential investor simply to shake his head sadly and take both money and jobs somewhere else?

I think that my hon. Friend is assuming that the French Finance Minister is a bigger supporter of some proposals that come from the Commission in Brussels than he actually is. My colleague Mr. Alphandery is as big a sceptic as I am of some proposals, such as those my hon. Friend listed, that have been emanating from people with less well-judged ideas. The French Government have been imposing some strict austerity measures recently. They are making changes to their social security system to make it affordable and to reduce the costs on their employers. They have reduced their minimum wage for young people because they have found, as we would if we were to introduce one here, that the minimum wage created unemployment among young people. I assure my hon. Friend that my colleague Mr. Alphandery is somewhat nearer to his views and mine than he fears.

The French Government have obviously decided that the best way of promoting their economic competitiveness is in the negotiations with the German Government on the terms of the creation of a single currency. How does the Chancellor intend to influence those negotiations? Or is he content that Britain should remain on the European sidelines?

We are not on the European sidelines. It is true that at the Finance Ministers' meetings that I attend I am more often in total agreement with the German and Dutch Finance Ministers and usually with the Spanish Finance Minister than with Mr. Alphandery. Nevertheless, Mr. Alphandery and I are agreed on about four fifths of the issues. Last week's debate was based on the Opposition party's crazy premise that all the Finance Ministers of western Europe were sold on the idea of borrowing enormous sums and spending enormous sums to create extra jobs.

Does my right hon. and learned Friend accept that Europe is increasingly uncompetitive and over-regulated? Does he further accept that the growth in the world will take place outside Europe, in north America, south America and the Pacific rim? When will he create policies for Britain's manufacturing and construction sectors to enable us to take advantage of the real growth outside Europe?

I agree with my hon. Friend. We must make ourselves competitive with the countries in the Pacific rim and north America that are our rivals in world trade, but that point is increasingly appreciated in western Europe. As my hon. Friend talked about burdens on employers, he will be glad to know that at the recent summit in Brussels it was agreed that we should have an inventory of social regulations that bear down on employers and add to the costs of employment.

At my request and that of the manufacturing alliance.

I am glad that my hon. Friend went ahead of us to ask for that. We regard that as a considerable success in our negotiations.

Does the Chancellor accept that taxation and transport links affect Britain's competitiveness? As the Chancellor does not know when, or even whether, the channel link will open and as he put up taxes when the Conservatives said at the previous election that they would not, why should we believe a single word that he or any of his colleagues say at the next election?

We are borrowing more money from the European investment bank than any other member state and investing it in Britain's infrastructure—for example, the Heathrow express, the Jubilee line extension—[Interruption.] They are under construction. Until recently, expenditure on Britain's road programme was about 40 per cent. higher in real terms and railway investment in Britain was 40 or 50 per cent. higher than five years ago. We are investing heavily in our infrastructure and we are ahead of our partners in Europe in developing it using European instruments—[Interruption.] The debate that we had last week was based on the dire proposition of the hon. Member for Dunfermline, East (Mr. Brown), who had not read the document that he was talking about, that Mr. Delors was offering us some money to build the channel tunnel high-speed rail link. That rail link has not yet been built because it has not been designed.

With regard to economic competitiveness in Europe in the auction of works of art, will my right hon. and learned Friend join me in congratulating my right hon. Friend the Paymaster General on the successful outcome of the long and difficult VAT negotiations, preventing that valuable market from being driven out of Britain and the Common Market to Geneva and New York?

I happily join my hon. Friend in those congratulations. I happened to be there when the final decision was taken in the Council last week, and he is right to say that all the negotiations have been carried out with considerable skill by my right hon. Friend the Paymaster General.

To ask the Chancellor of the Exchequer what percentage of total expenditure was devoted to education in 1980–81, 1984–85, 1988–89 and 1992–93.

For the years in question, the percentages of total expenditure devoted to education were 11·8 per cent., 10·7 per cent., 11·8 per cent. and 11·9 per cent.

I thank the Minister for that reply. Does he agree that our spending on education as a percentage of total expenditure is not as high as that of most of our competitors and that, in particular, we have a dismal record on nursery education on which we need to spend far more in order to give our children the best possible start in life?

The hon. Gentleman heard the figures that I gave, which I do not think he expected, and I spared his blushes by not mentioning that the number of schoolchildren had fallen by 1 million during that period, so that expenditure per child had risen by 50 per cent. in real terms. The hon. Gentleman is interested in international comparisons. He might think that education was of a high standard in Germany and Japan, but the percentage of gross domestic product spent in Germany and Japan was 3·2 per cent. and here it is 4·8 per cent.

Is it not abundantly clear from my right hon. Friend's exchange with the hon. Member for Bridgend (Mr. Griffiths) that my right hon. Friend shot the hon. Gentlman's fox? Is it not equally clear that the Government believe in investing in human capital and have had consistent policies to that end over the past 15 years? Are they not right to insist that those who benefit directly from higher education should bear a greater proportion of the burden?

My hon. Friend is well placed to comment on those matters. He knows that we have increased the proportion of our young people in higher education to about one in three, which is a rise from one in eight in 1979. He also knows that the number of young people participating in further education will increase by about 250,000 in the next three years.

How on earth does the Chief Secretary square what he has just said with the reports of his views that the target of one in three need not be met and that the country does not need that many graduates by the year 2000? He believes in putting the right-wing dogma of cutting expenditure over the needs of education. He said that he wanted to impose the cost of education on students. Does not that show that he puts the dogma of right-wing Tory ideology over the need for investment in education and opportunities?

I shall tell the hon. Gentleman what I think is important. So far, all the discussion has been about how much money we are putting into education. There should also be a discussion about the quality that we get out of education, the number of people whom we educate and the qualifications with which we put them into the outside world. The hon. Gentleman cited certain of my views. If he has the documents in which I stated them, he should lay them on the table. If not, he should stop indulging in gossip.

To ask the Chancellor of the Exchequer if he will make a statement on the prospects for the balance of payments.

Unit labour cost performance is excellent and competitiveness has been much improved. In spite of weak activity abroad, the trend in the visible deficit is downard, with exports at record levels.

Does my right hon. Friend agree that that performance is a considerable tribute to British exporters? Will their performance not be further enhanced by the successful outcome of the negotiations on the general agreement on tariffs and trade, into which the Government have put so much effort in recent months?

I thank my hon. Friend for those remarks. My right hon. Friend the Prime Minister, in particular, has been a major force in pressing for the most liberal outcome to the GATT negotiations. The GATT outcome is estimated to be worth $270 billion to the world economy. My right hon. Friends the Prime Minister and the President of the Board of Trade have put great emphasis on that benefit to the world economy. That benefit far outweighs the individual difficulties of countries. Although we well understand those difficulties, they are definitely less important than that benefit.

Is the Minister aware of the deep concern in South Yorkshire about the state of the engineering and steel industry? Yesterday, United Engineering Steels, which is one of the United Kingdom's prime exporters and at the core of United Kingdom industry, had to shed 400 jobs. That company is convinced—

Order. The hon. Lady must ask a direct question now.

My direct question is: what will the Government do that they did not do in the Budget to support this country's core manufacturing industry, so that the jobs of highly skilled workers and engineers in our constituencies are not lost?

The House heard my right hon. and learned Friend the Chancellor say earlier that unemployment fell last month. It fell across the country and, incidentally, it fell in Sheffield.

Does my right hon. Friend agree that the prospects for our balance of trade have significantly improved since we withdrew from the exchange rate mechanism a little more than 12 months ago? Does he further agree that if we were to enter a single currency in the EC, which would involve huge costs to sustain both it and the disparities in the EC, Britain would be made less competitive and it would be bad for our balance of trade?

The prospects for our balance of payments have been altered in recent months. I do not know whether my hon. Friend is aware that the deficit for 1992 has been revised downwards, from £12 billion to £8·5 billion, and that our forecast for the two years ahead has also been revised down, from £17·5 billion to £9·5 billion in 1993 and from £18·5 billion to £9·5 billion in 1994.

To ask the Chancellor of the Exchequer what account he took of the level of national health service inflation in determining his allocation of resources to the Department of Health.

The Government reached a view on the appropriate level of national health service spending, taking into account the GDP deflator and the scope for efficiency improvements.

Is the Minister aware that the British Medical Association says that the real inflation figure in the national health service is 3·9 per cent? Does he agree that the announcement in the Budget will therefore lead to a decrease in NHS spending power?

I calculate that in the year ahead the NHS will be able to treat 4 per cent. more patients than this year. Once again, I urge the hon. Lady and other hon. Members to concentrate on outputs, not inputs. Surely what matters is how many people get treated, not how much money gets put in.

Does my right hon. Friend agree that the way to solve a problem is not necessarily to throw money at it but to get better value for money? Is he aware that the NHS trusts in Gloucestershire are doing just that? Gloucester Royal hospital will treat nearly 250,000 people this year—it is a trust. The Gloucestershire ambulance service, also a trust, is continually improving its service to patients, too.

The reforms that my right hon. Friend the Secretary of State for Health and her predecessors have introduced have transformed the ability of the health service to provide efficient health care and to ensure that ever more patients are treated well and efficiently. The hon. Member for Rochdale (Ms Lynne) was wrong to talk about a rate of inflation in the health service. Inflation in the health service is largely a matter of pay in the health service. That pay is under the control of management in the health service, and so it should be.

To ask the Chancellor of the Exchequer what estimate he has made of the impact of the average family's tax bill of all the increases in taxation announced in his Budget last month.

On average, the main tax-related changes proposed in my right hon. and learned Friend's Budget will cost households around 90p a week from April 1994 and an additional £1·80 a week from April 1995.

Is the Minister aware that, during the election campaign, my constituency was covered with posters announcing the so-called "Labour tax bombshell"? Since then, there has been a Tory tax explosion. Will the Minister explain why his party lied during the election about its tax proposals?

We saw earlier this afternoon the exact nature of that Labour tax bombshell. The hon. Member for Newcastle upon Tyne, East (Mr. Brown) stood at the Dispatch Box and called for increased public expenditure without giving the House any indication of how he intended that expenditure to be paid for. We will listen to the Labour party on the subject of lower tax when it tells us how it would finance its spending programmes.

To ask the Prime Minister if he will list official engagements for Thursday 16 December.

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.

Is the Prime Minister aware that, exactly one year ago, a man who was suffering from mental illness climbed into a paddock of a zoo and was savagely mauled by lion? Despite the public dismay and concern over that incident, there are still thousands of mentally ill people who are tramping the streets of our major cities. They often live in cardboard boxes and are unable to look after themselves. Does the right hon. Gentleman agree that that is a national disgrace? Will he tell the House what action he will take to get those people off the streets and into places of care and protection?

As the hon. Gentleman knows, a great deal of action has been taken—most noticeably in London—to get many people, both those suffering from the ailment to which the hon. Gentleman refers and others, off the streets. That has been remarkably successful, and we will continue with that policy.

Does my right hon. Friend recall his admirable speech at the Conservative party conference in which he said that the Union between Ulster and Britain was of immense importance to the Conservative party? Did not that echo his comment during the election that he stood with passion and commitment for the unity of this country? Is my right hon. Friend aware that that stands a little oddly beside his statement that this country has no strategic interest in Northern Ireland? Will my right hon. Friend therefore declare today that he believes in the Union, that he wants it to persist and that he believes it has been in the interests of the people of this country?

I do not believe that it stands remotely oddly with the joint declaration which I set before the House yesterday. The joint declaration reaffirms in unmistakeable terms the commitment that we have consistently given to the people of Northern Ireland, and I reaffirm that again now.

Does the Prime Minister agree with the Chancellor of the Exchequer who told the Treasury Select Committee yesterday that the tax increases in this year's Budget were the equivalent of an increase of 7p on income tax?

What my right hon. and learned Friend said yesterday was that the aggregate sum of money raised after three years would amount to a crude equivalent of 7p. As the right hon. and learned Gentleman knows, that takes no account of growth in the economy and many other matters. When the right hon. and learned Gentleman talks about taxes, perhaps he might contemplate some of his proposals for new taxes. He is committed to eight more taxes, without any indication of how he would fund his spending promises or meet the debts that occurred as we helped vulnerable people through the recession.

Does not the Prime Minister realise that the Chancellor told the Select Committee yesterday that the increases would amount to between £15 billion and £17 billion? Is there anything more crude than promising not to increase taxes before an election and putting them up by £15 billion afterwards?

The right hon. and learned Gentleman clearly does not realise that he is referring to the cost of Budget measures over the next three years. He is obviously deficient in understanding and has produced an entirely spurious one-off tax increase. I can understand why. I quote what the acting general secretary of the Fabian Society wrote about the right hon. and learned Gentleman in the "Labour Review". [Interruption.] I hope that the Opposition will laugh in a moment because this is what was written about the right hon. and learned Gentleman and his party:

"If the characteristics being exhibited by the Parliamentary Labour Party were translated into the conduct of a single individual, she or he would certainly be in therapy."

May I put a straight question to the right hon. Gentleman. [Interruption.] I know that his party does not want to hear it. Does he deny that before the last election, the Conservative party promised not to increase taxes?

Does the right hon. and learned Gentleman deny—[HON. MEMBERS: "Answer the question."] Does he deny what his hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) said about unemployment? He has had nothing to say today about unemployment, nothing about inflation and nothing about the eight taxes to which he is committed. [Interruption.]

Order. The House must settle down. I want to hear the Prime Minister. [Interruption.]

The Opposition do not, because they will not like it. Let us hear from the right hon. and learned Gentleman about his proposed taxes on tourism and development, his payroll tax, his education tax and the fact that he wants to have the same level of corporation tax as our competitors in Europe. What about his pollution tax and his windfall tax? The man does nothing but propose new taxes day after day.

Is my right hon. Friend aware that small businesses in my constituency are absolutely delighted with the Chancellor's Budget and that, together with low inflation, low interest rates and increasing confidence, they are looking forward to a period of steady growth in the foreseeable future?

I have no doubt that that is the case. It is largely the growth and success of small businesses that are bringing down unemployment, and have been doing so month after month throughout this year. When unemployment figures go up, that is the only issue that concerns Labour Members. When those figures start coming down, apparently it is matter of no importance whatsoever.

May I draw the Prime Minister's attention to the fact that 1·25 million people are close to starvation in beleaguered central Bosnia, many of whose lives will be further put at risk in the bitter cold yet to come if the local power station at Kakanj is allowed to cease operations? Is he aware that, without vital supplies, that will happen in 20 days' time? Is he further aware the vital supplies provided by Britain are now being blockaded by the Serbs and Croats? Will the Prime Minister see what urgent action could be taken to make the provision of those vital supplies a test case for the Geneva convention on free passage of convoys so that those lives could be saved?

As the right hon. Gentleman knows, we are committed to the aid effort through the winter. We have made it clear, to pick up a point that will concern many hon. Members, that we still need to see the opening of Tuzla airport. We have so far provided more than £150 million-worth of assistance, and more than 2,300 troops are delivering that assistance, day after day, under the most difficult conditions. We are examining what we can do to deal with the present difficulties in Bosnia. The co-operation of parties on the ground will be needed to enable us to deliver the humanitarian assistance that we are prepared to deliver and fund. Throughout the conflict, our record has been second to none, and we will continue to do all that we can to ensure that people receive supplies throughout the winter.

My right hon. Friend knows that the economy is beginning to emerge. We are reducing unemployment every day and there will be more money in the coffers by the time of the next Budget. Does he agree that more money must be allocated by the Treasury to the Home Office to enable the pledges given by my right hon. and learned Friend the Home Secretary to be carried out, not only on the neighbourhood watch security patrols but on the numbers of police required? In Hampshire, for instance, we asked for 120 extra police and were given only five this year. Does my right hon. Friend agree that all those measures are part of the Conservative philosophy and that, in the not-too-distant future, money will be available to fund them?

My right hon. and learned Friend the Home Secretary announced measures not very long ago which, if carried out, will enable approximately 5,300 police officers to move from dealing with administrative work out to the front line to deal with the matters that my hon. Friend mentioned. That action has been taken within the expenditure levels agreed by my right hon. Friend the Chief Secretary.

To ask the Prime Minister if he will list his official engagements for Thursday 16 December.

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

Does the Prime Minister agree with the Chancellor on the subject of stopping tax abuse? The right hon. and learned Gentleman said in his Budget speech that claims that more money might be found in that way were much exaggerated. Does the Prime Minister agree with the Public Accounts Committee, which found another £1 billion tax loophole for the aristocracy? Would not the Chancellor be better employed closing such tax loopholes than stinging every family in the country for an extra £10 a week as a result of his tax-raising Budget?

The hon. Lady should know that my right hon. and learned Friend closed a number of genuine loopholes in the Budget. That will yield about £2 billion over the next three years. The loopholes so beloved of the Opposition Front Bench are not loopholes generally but measures such as ending relief on capital gains inheritance—which would leave less for parents to hand down to children—and reforming the rules applying to non-domiciled status foreigners, which is the Opposition's latest idea. All the main parties agreed, when that measure was reviewed in 1989, that the existing rules should remain because they made Britain an attractive business location.

Does my right hon. Friend agree that the general agreement on tariffs and trade provides important trade opportunities, not just for countries such as Britain but for developing countries? Removal of the trade barriers will give them the chance of export-led growth to benefit their economies and bring about prosperity.

Yes, I entirely agree with that. My hon. Friend will know that, at the Commonwealth conference, we agreed that a number of Commonwealth countries—including less-developed and developing countries—would send a mission to the main Governments around the world in the GATT negotiations, to ensure that there was a satisfactory settlement. I noticed yesterday that Malaysia, on behalf of the less-developed countries, had hailed the round as a victory for common sense.

To ask the Prime Minister if he will list his official engagements for Thursday 16 December.

I refer the hon. Member to the answer I gave some moments ago.

Why have the Government put 7p on income tax, or its equivalent?

The hon. Gentleman is clearly not very good at listening, or he would have heard the answer a good deal earlier, but I will tell him what the Government have done.