To ask the Chancellor of the Exchequer if he will provide a series of financial incentives to marriages which last (a) 10 years, (b) 20 years and (c) 30 years. [15275]

While I strongly believe in the institution of marriage, I see difficulties in introducing the concept of a loyalty bonus into the married couple's allowance.

The Government offer a disloyalty bonus to broken marriages by providing all sorts of state benefits. Although virtue has its own reward, in a highly materialistic society surely we should give some reward to those people who follow Government policies. Just as there are financial incentives to preserve the environment by using unleaded petrol, for example, could we not have some financial incentive for those who preserve the family, such as an anniversary award for those who stay married?

A marriage that endures happily for 30 years is its own reward. I am not sure whether the Inland Revenue could significantly enhance that reward. We certainly use the tax system to influence economic behaviour, but I pause before accepting my hon. Friend's proposition that we should use the tax system to encourage people to like each other and continue to live with each other.

If the Minister cannot give financial rewards to people like me with 37 years' service, could he hand out a tin hat and a medal and arrange for a day such as VE day when we can celebrate the battles and wars that we have had and enjoy a proper anniversary?

I hope that the hon. Gentleman and his wife have the ingenuity and the resources to celebrate each year of their infinitely happy marriage. I am sure that in the current framework of the Labour party he would not want to advocate any expenditure of public money on celebrating his marriage.

To ask the Chancellor of the Exchequer what representations he has received which suggest that renewed house price inflation would divert resources from productive investment; and if he will make a statement. [15276]

It is generally recognised that rapid house price inflation would be detrimental to productive investment.

I thank my hon. Friend for that reply. Does he accept that for years people have been urging that the British economy should be run along strict German lines, but now that that is happening people are suggesting that we put up house prices to make people feel better? Does he accept that democracy has a straightforward choice: it can either vote for long-term economic well-being, or it can fall for the tricks of the Labour party and be bought by cheap promises? Will he undertake to go up and down the country extolling the virtues of what we are doing now?

My hon. Friend makes a very good point. Of course the Government want a sound and healthy housing market and a thriving construction industry, but at the end of the day the country cannot live on bricks and mortar. Productive investment requires assets to be devoted to that area. My hon. Friend makes the point very well and I hope that it will be heard.

While no one wants an uncontrolled rise in house prices, which causes problems, does the Minister accept there is a serious problem for the many people with negative equity who cannot sell their houses or move jobs and are in a cleft stick because of Government policy?

The Government are concerned about cases of negative equity, but it is fair to point out to the hon. Gentleman, first, that the number of people with negative equity has declined by half. Secondly, the value of that negative equity has reduced by nearly two thirds. Thirdly, last year I announced a couple of measures on the transfer of security and the ability to borrow unsecured so as to enable people with negative equity to move. So the Government have done something about that to advantage.

To ask the Chancellor of the Exchequer what estimate his Department has made of the change in real personal disposable income in 1995–96; and whether he will make a statement. [15277]

At Budget time, I forecast growth of 1½ per cent. in real personal disposable income during 1995 as a whole.

That is welcome news. Does my right hon. and learned Friend accept that it is largely due to his determination and that of the Governor of the Bank of England to keep a tight lid on inflation, and to the Government as a whole pursuing policies which have improved the supply side of the economy, that people have been enabled to earn more in a productive way?

I agree with my hon. Friend's analysis. Real disposable personal incomes, over and above the low inflation that we now enjoy, grew last year and they are forecast to grow this year. People can feel confident that this increase in prosperity is based on very sound and secure ground, precisely because we are pursuing the approach that my hon. Friend commends.

Does the Chancellor agree that millions of people are worse off under the Conservatives, first, because there have been 20 tax rises in the past two years, secondly, because of two mortgage rises in the past few months and, thirdly, because of the overcharging by water and electricity companies? Will he explain why no action has been taken on that overcharging until now? Does he agree that water companies—not just one, but all water companies—should be reducing their prices and that there should be a refund for past excesses?

If the hon. Gentleman is trying to imply that people are worse off under the Conservatives since we came to power, that is an absurd claim, as he well knows. Average incomes are up by about 40 per cent. in real terms since we came in, whereas they crawled up, barely increased at all, when the Labour party was in power.

My right hon. and learned Friend refers to the abysmal performance of the Labour party in failing to increase real personal disposable income in 1974–79. Can he think of a single policy advocated by the Labour party which would make it do any better next time?

It is rather difficult to think of a single policy advocated by the Labour party full stop. If I may, I shall judge the Labour party by its actions. It has voted against all our attempts to raise revenue and against all our attempts to cut public expenditure. It has given no clue that it has given any thought to the level of public borrowing, and it would plainly disregard inflation. This country would be in deep recession and people would face reduced living standards if we had taken the slightest notice of such hints of interest as have come from Members on the Opposition Front Bench.

Is the Chancellor aware that when the Tories came to power in 1979, out of disposable income the amount that the average family owed in debts of one kind or another was 45 per cent? After 15 years of a Tory Government, that has now risen to well over 100 per cent. That is why people realise that there is no feel-good factor because, like the country, most of them are up to their necks in debt. They are living on tick.

That is a quite ingenious but wholly selective use of figures. The real incomes of people, every section of society in this country, are substantially higher now than they were in 1979. When the Labour party was in power, we were an industrial laughing stock. The country was suffering from stagflation, and the real living standards of people rose by barely 1 per cent. per year. Since that time, they have taken off and real disposable incomes are about 40 per cent. higher than they were then.

While I very much appreciate the sound way in which my right hon. and learned Friend the Chancellor is seeking to manage our economy and to keep inflation under control, is he not aware that the construction and housing sectors of our economy—which are of immense importance to the economy of this country as they purchase from practically every manufacturing sector—are in deep decline? There is a crisis and we need a regeneration of confidence in that area, not to increase house prices as rapidly as happened in the late 1980s, but to get some confidence back into that sector of the economy. What can my right hon. and learned Friend do to achieve that?

I do not agree that there is a crisis or that those sectors are in decline. However, my hon. Friend makes a serious point: the housing and construction market is completely flat, which makes economic judgments very delicate. We must sustain the strong recovery, particularly in manufacturing, we must ensure that unemployment continues to fall, and for that we must have low inflation. The recovery is unbalanced, with manufacturing and exports doing well and housing and construction very flat. I believe that growing consumer confidence—people's growing feeling of security in the future of their jobs and the fact that mortgage rates are so much lower than they were in 1990—will create enough pent-up demand to make the housing market move. I should be wary of any artificial stimulation, which would have the effect that my hon. Friend the Member for Rutland and Melton (Mr. Duncan) warned us against and return housing prices to unrealistic levels.

Does the Chancellor accept that there is a massive disparity between personal incomes in different areas? In Gwynedd—my own county—Dyfed and Mid-Glamorgan, gross domestic product per capita is now lower than the average in the Irish Republic. What will the Chancellor do to try to ensure that areas which have fallen behind can catch up?

There have always been discrepancies in earnings and living standards in different parts of the country, but comparisons between living standards—which are what matter—must be made very carefully, especially when borders are involved, because exchange rates and so forth must be taken into account. In most parts of the United Kingdom, actual disposable incomes in terms of purchasing power compare very well with those in most of Europe, and we have a high level of consumption. The old regional disparities have changed greatly in many ways, as we see when we examine actual economic activity. Another healthy feature of the current recovery is the fact that there is no longer a performance gap between the north, Scotland, large parts of Wales and south-east England.

To ask the Chancellor of the Exchequer what is his latest estimate for the public sector borrowing rate for this financial year. [15278]

We anticipate that the PSBR for 1994–95 will be in line with the Budget forecast of £34.5 billion.

I am not surprised that the Chief Secretary did not want to elaborate on that answer. This is one of a long series of deficits: under the current Prime Minister, the national debt has almost doubled, from £155 billion to £285 billion. Are not the Government living on tick?

My reply to the hon. Gentleman is that people and parties living in glass houses should not throw stones—[HON. MEMBERS: "Oh!"] Let me remind him that under the last Labour Government the PSBR averaged 6.8 per cent. of GDP, reaching 9.4 per cent. at one stage. That was the moment at which the bailiffs had to be called in, in the shape of the International Monetary Fund. Under the present Government, the PSBR has averaged 2.75 per cent., and we are on track to eliminate it completely before the end of the decade. Our Government are a Government of good housekeeping, and they are doing well in reducing public borrowing.

As a believer in a balanced budget, my right hon. Friend will appreciate my pleasure in congratulating him on the speed with which the PSBR is falling. Does he agree, however, that the best way to bring it down in the future is to cut spending rather than increasing taxation? Will he launch a crusade against waste, overmanning and extravagance in the public sector at both local and national level?

I am certainly willing to join my hon. Friend in his admirable crusade. Indeed, we have already made progress. I remind my hon. Friend that in the last Budget my right hon. and learned Friend the Chancellor announced cuts in public spending which have reduced our spending plans for the next three years by £29.5 billion. That included a great deal of rooting out waste and cutting unnecessary bureaucracy: for example, Government running costs over the next three years have been reduced by 10 per cent. in real terms, and we now have the smallest civil service since 1939. We are progressing in the direction that my hon. Friend recommends.

If the Government's determination to reduce excessive borrowing is the reason why they are going ahead next week with tax rises equivalent to 1p on the basic rate, and if it is responsible and necessary to put taxes up next week, could it possibly be responsible to bring them down again in November?

The PSBR reduction has been a difficult process involving tax rises as well as spending cuts. The PSBR is now on a virtuous downward path. The Government would very much like to return to their core belief of reducing taxes and we shall do so as soon as it is prudent and right to do so.

May I congratulate my right hon. Friend on his success in reducing the PSBR and urge him to continue his efforts to reduce public spending, which is still too high? Does he agree that people—and not the state—know best how to spend their money?

I could not agree more with my hon. Friend. The crusade that has been announced by one Back Bencher this afternoon is gaining recruits fast. It is essential that we reduce public spending to allow more money to be kept in the pockets of our citizens and taxpayers.

Given the importance of the right hon. Gentleman's responsibilities for the PSBR, and the importance of his office, does he believe that he now has the confidence of the country?

Yes, I do, and I believe so because the facts are clear. I welcome this opportunity to reiterate them, since the hon. Gentleman has challenged me. Let me make it crystal clear that at no board meeting of the company that I was on the board of seven years ago, and in no board paper of that company, was I ever given the slightest indication or information which could suggest that the company's wholly legitimate contract with Singapore might subsequently result in components being shipped to Iran. My view of these matters has now been publicly supported by four former directors of the company, including General Isles, who was responsible for the contract, and the managing director, so the deposed and bitter chairman is now isolated on his own in making irresponsible comments. What we are seeing is an unholy alliance of a failed chairman and a failing newspaper: it is no reason to challenge my integrity or my position in the Government.

To ask the Chancellor of the Exchequer what progress Customs and Excise has made in the past 12 months in tackling cross-border smuggling of alcohol. [15279]

To ask the Chancellor of the Exchequer how many Customs and Excise staff are involved in front-line work to prevent the cross-border smuggling of alcohol. [15280]

Customs and Excise has some 250 staff employed directly to prevent cross-border smuggling of excise goods. There is no separation of their duties between alcohol and tobacco goods. They take vigorous action against those engaged in cross-border smuggling, and in the 12 months to 31 January 1995 they made 910 detections related to alcohol with a revenue value of £1,871,000.

I thank my hon. Friend for that reply. He will be aware of the adverse tax implications of that activity. I assure him that there are adverse implications for the brewing industry due to severe inroads into its turnover. Will he assure the House that, to deal with that activity, the number of front-line staff will be increased rather than reduced—as some people think may happen—and that there will still be enough of them?

Yes, I can give my hon. Friend that assurance. The fundamental expenditure review that we have completed shows that in some regions Customs and Excise can maintain or increase its output with fewer staff, but in the coming year there will be an increase in excise verification officers engaged in anti-smuggling activity. The matter will be kept under review to ensure that it is controlled.

Will my hon. Friend confirm that he and his European Union colleagues remain committed to the introduction of the harmonisation of duties, as well as of VAT, throughout the single market, which is the only long-term solution to the problem?

I would go halfway with what my hon. Friend says. We would certainly wish to retain our veto over unwelcome tax proposals, so we would resist compulsory harmonisation. Within that constraint, however, we are working to lift the minimum rates of duty, especially for wine and beer, in order to iron out the current distortions between member states in the single market.

There is a large modern brewery in my constituency and the company which owns it complains bitterly about this illicit trade. Does the Minister accept that it could eventually affect employment, and is he examining the problem from that angle?

Yes, we monitor closely the performance of the brewing industry and we are mindful of the employment consequences. I can therefore give the hon. Gentleman the welcome news that excise receipts from alcoholic drinks as a whole have kept up and are buoyant as against 12 months ago.

In view of the Minister's complacent answers, may I ask whether he is aware of the pressure being put on thousands of small businesses—the difficulties were initially in the south but have now spread to the north—which are having great problems holding themselves together because of smuggling? Is he satisfied with the number of customs officers? In view of the pressure on small businesses, will he announce moves to increase the number in an attempt to prevent smuggling and give a more forceful answer in respect of the equalisation of duty, which is the real long-term solution to the problem?

I have already dealt with harmonisation. We wish to see a measure of harmonisation, but it must be compatible with our ability to veto other unwelcome taxation measures. I assure the hon. Gentleman that we are not in the slightest bit complacent about smuggling. We keep the matter under review, and I am glad to say that the courts are taking an increasingly severe view of those caught smuggling. The law already allows for unlimited fines and up to seven years' imprisonment for those who are caught.

To ask the Chancellor of the Exchequer what representations he has received from Ministers and business men in the far east regarding the prospects for Britain's future economic success. [15281]

I regularly meet Ministers, officials and business men from the far east. Britain's good economic prospects always feature strongly in my discussions with them.

In little more than a decade, China will be the world's biggest economy. Is not the dramatic rise in Britain's exports to China in the past couple of years proof of the effectiveness, efficiency and competitiveness of our economy in the world?

I agree with my hon. Friend. I am extremely glad to say that exports to China rose by 70 per cent. in the last year for which we have full figures alone. China is now one of the most dynamic economies in the world. It is a sign of how much Britain has changed over the past 16 years that British business and industry is now competitive and so effective in taking part in the affairs of that part of the world which has the most dynamic economies.

Is the Chancellor aware of the flood of investment from this country to the far east? For example, Royal Doulton in my constituency has just announced its intention to build a factory and create 600 jobs in Indonesia. Is he concerned about this so-called out-sourcing? How is it in Britain's interests? Is it not just another example of the export of jobs?

The abolition of exchange controls and the opening up of investment from this country overseas and into this country by overseas investors is one of the most dramatic and beneficial changes that the British economy experienced in the 1980s. The hon. Gentleman epitomises just how old-fashioned the Labour party is in its approach to these matters. This country benefits from investment by Japanese, Korean, American and European companies. It also benefits from the flowing back into this country of what is earned from investment by British companies overseas. Indeed, we have now restored the old level of investment that Britain used to have before its past portfolio went during the wars, and the flows into this country are extremely valuable—as valuable as visible trade to the well-being of this country.

As an avid reader, has my right hon. and learned Friend read the very interesting article in today's edition of the Daily Mail by Mrs. Fukuda, vice-chairman of a major Japanese investment bank, Nikko Europe, in which she says that she suspects that Japanese investors would be happier if Britain stayed outside the single European currency? Is that a fit subject for discussion with his hon. Friends and, if so, is his door open?

I am sure that there is a range of opinion on these matters in Japan as there is in this country. I would be happier if the Japanese lady would wait until the single currency has been designed—[Interruption.]—until we have seen whether Britain is likely to join it and when we have an altogether better basis on which to make a decision on that event if and when it ever occurs. At the moment, I think that Japanese opinions are mixed. Certainly, our involvements with Europe and in south-east Asia are both essential to the continued success of this country in the world economy.

In his discussions with business men in the far east, does the Chancellor of the Exchequer ever raise the subject of the use of prison labour and child labour and of human rights abuses in the economic zones of China that he is so quick to praise? Will he link Britain's trade relations with China with the urgent need for a review and improvement of that country's abominable human rights record in those areas?

I have never been to the People's Republic of China, so I have never had an opportunity to raise the matters to which the hon. Gentleman refers. Every hon. Member is of course against slave labour, child labour, prison labour for export and the other things that the hon. Gentleman described. Our trade with China is extremely beneficial to this country—straightforward trade and investment, which is of great benefit to the people of this country. We look forward to China becoming a successful, free-market economy and a more liberal and democratic society, which increased prosperity there will tend to produce. Britain should be a close trading and investing partner with that country.

To ask the Chancellor of the Exchequer how much money would be raised by an increase in the top rate of income tax to 50 per cent. [15282]

In 1995–96, £2.9 billion and £4.6 billion in a full year.

Does my right hon. Friend agree that higher income tax rates reduce incentives to work hard and that they limit economic growth? Will he perhaps refresh my memory as I have forgotten what the top rates of income tax were when the Conservatives rescued this country from socialism in 1979?

I am happy to refresh my hon. Friend's memory. Some people were paying tax at 98p in the pound under the Labour Government. [Interruption.] I hear cries of "Not enough" from Opposition Members. We have reduced the top rate to 40 per cent. and we have increased incentives. The higher paid are now paying a higher percentage of the total income tax, so the lower paid have benefited from the reforms.

Will the Minister confirm that once the changes in taxation are implemented next week, additional tax under this Government will be the equivalent of 7p in the pound on the basic rate of income tax?

The average family is about £80 a week better off in real terms since the Conservative Government came into office in 1979, which is a dramatic contrast with the virtually stagnating rate of growth under the last Labour Government.

Far from suggesting an increase in the top rate or any other rate of income tax, will my right hon. Friend bear in mind that income tax produces only about a quarter of all Government revenue? The Chancellor of the Exchequer in the early 1950s, Mr. Butler, made it a Conservative target to double the standard of living in 25 years, which was achieved. Should we not make it our target, over 25 years, to abolish income tax lock, stock and barrel?

My hon. Friend invites me to subscribe to an ambitious target. He will understand that it would be wrong for me to prejudge my right hon. and learned Friend the Chancellor's Budget later this year.

To ask the Chancellor of the Exchequer if he will made a statement about the impact of the decline in the bond market and third-world stock markets on prospects for the United Kingdom economy. [15283]

The United Kingdom economy remains fundamentally healthy, with sound prospects. The decline in world bond markets last year and recent falls in some third-world countries' stock markets are unlikely to have a material effect on the United Kingdom economy.

Have the Government considered the fact that one of the reasons preventing the decline in third world stock markets from feeding through into the British economy, and ours from following them down, is that it is still easy to borrow cheaply in Japan to invest in the stock market here, which is sustaining stock market levels? As the money supply in Japan increases, inflation takes off and interest rates rise, that restraint will be cut out and our stock market will decline and precipitate another recession.

The hon. Gentleman seems to have omitted the subject of exchange rates, which certainly have some bearing on borrowing in one country and investing in another. I dare say that the proposal that he has just made would not have been profitable for anyone who had taken his advice. There is plenty of investment in this country from abroad. We take the lion's share of investment in Europe, and that is regenerating growth in our manufacturing industry and capability. Our prospects are sound. In decrying the prospects for this country, the hon. Gentleman fails to mention that in the last quarter of last year we had a current account surplus, for the first time in eight years, of £800 million. Surely he would do better to welcome statistics of that sort.

Following what my hon. Friend has said, does he agree that deregulation and the ability to invest internationally across the world has enabled this country's economy to grow significantly over the past 15 or 16 years? Are not the excellent trade figures published last Friday, which my hon. Friend has just mentioned, the result of much of the international overseas investment by British institutions and companies? Will he ensure that Government policy is to permit that to continue, and to have no truck with the Labour party, which would favour more regulation that would close down those investment opportunities?

My hon. Friend is spot on. Our healthy current account figures derive in large part from the investment return on substantial foreign investments made. One reason for that is the fact that the Government got rid of exchange controls early on. The consequences of what is proposed by the hon. Member for Brent, East (Mr. Livingstone), who speaks for old Labour, would be the reimposition of exchange controls, capital controls and, presumably, penal rates of taxation on investment income.

To ask the Chancellor of the Exchequer what is the extent of the Government's participation in the practical steps needed to create a single European currency. [15284]

As I have said before, we are playing a constructive part in the technical preparations, but that does not prejudge our decision on whether to participate, which is protected by the United Kingdom opt-out.

But which Minister speaks for the United Kingdom Government in the discussions? Is it the right hon. and learned Gentleman, the Euro-supporting Chancellor of the Exchequer, or is it his comrade in arms, the Euro-sceptical Chief Secretary to the Treasury? How can Britain's national interest be properly represented when members of the Cabinet are in such open disagreement over European policy?

I advise the hon. Gentleman to keep a straight face, even when asking frivolous questions. The last time that we debated the subject the Prime Minister made our position clear. We have negotiated an opt-out which means that the British are quite free from treaty obligations when deciding whether to join in economic and monetary union if the other member states ever decide to go ahead with it. Meanwhile we play a constructive part in the technical preparations, so that when we make our choice, if ever we have to, we have had some hand in designing what we are being asked to confront.

Will my right hon. and learned Friend accept my congratulations on the excellent improvement in our trade figures, and will he further accept that that improvement is largely due to his policy of maintaining a floating currency? Does he agree that such a marked improvement in our trade policy would not have been possible if we had remained in the exchange rate mechanism at DM2.90 to the pound, and that it certainly would not have been feasible under a single currency?

I agree with my hon. Friend in his praise of our trade performance—in 1994 we performed spectacularly well—but I disagree with him if he believes that devaluation of the currency is the only way in which this country's competitiveness has been restored. That happened because of the success of British industry and commerce in making itself competitive in world markets, and the Government's success in keeping down inflation at home and our business-friendly policies that support exports overseas. If my hon. Friend analyses the trade figures he will find that the myth that it all happened only because we left the ERM is no longer sustainable.

Does the Chancellor still reject a referendum ever being held on a single currency—yes or no?

If the question ever arises, it will be a matter for the Parliament of the day to decide how to take the decision.

May I refer the Chancellor to his remarks of 10 days ago, in which he said that the Euro-sceptics formerly in his party were undermining the value of the pound? If that is true, will he explain why it is important, or does he have some secret exchange rate target so as to bring us back into the ERM which he so much favoured?

My hon. Friend produces about the fifth or sixth version of what I said in a press conference in Brussels when I was asked why the pound at the time was declining when I was confident that the economic fundamentals in this country were going very well. One of the remarks that I made was that I accepted that the divisions in the governing party about Europe were not exactly helpful to market confidence. That has been turned into my personally blaming Lord Tebbit for the decline in the pound, which was not what I was saying. The political uncertainty gives rise to some weakness occasionally in the exchange markets because people fear the return of a Labour Government. The more the Conservative party looks like a strong and determined governing party, which I believe will last the course of this Parliament, and maintains the present improving economic climate, the stronger sterling and the stronger confidence overseas in this country's economy will be.

To ask the Chancellor of the Exchequer what consideration he is giving to the protection of the reputation of Customs and Excise officers named by the Scott inquiry; and if he will make a statement on the doctrine of ministerial responsibility. [15285]

We shall have to wait and see what conclusions Sir Richard Scott reaches and I do not propose to speculate in advance of the publication of his report.

Since, in a reference that I sent to the Minister, the late Nicholas Ridley—not exactly the most uncritical admirer of the British civil service—pointed out that the Customs and Excise was due great praise for what it had done on the super-gun, can we be told what has happened to the doctrine of ministerial responsibility?

Nothing has happened to the doctrine of ministerial responsibility. It is true, as the hon. Gentleman has reminded the House, that the late Nicholas Ridley complimented Customs and Excise on its performance in the Iraq super-gun case. That compliment was fully deserved. As for any blame or criticism that may accrue under the Scott inquiry, we must await the publication of the report. However, I remind the hon. Gentleman that I, as a Treasury Minister, am responsible for the overall conduct and performance of Customs and Excise. It is an independent prosecution service and Ministers are not consulted on whether to investigate or prosecute in individual cases.

Arising from that, does the Minister accept that the Maxwell Fyfe doctrine has been changed and undermined by the conduct of the Government in the past 16 years? Will he give an undertaking that if he or any other Minister is criticised in the Scott inquiry, he will accept the consequences and resign forthwith?

The answer to the hon. Gentleman's first question is no. In answer to his second question, I repeat that we must await the publication of the report.

To ask the Chancellor of the Exchequer what plans he has to pursue post-neo-classical endogenous growth theory; and if he will make a statement. [15286]

The post-neo-classical endogenous growth theory is receiving the study it deserves.

I thank my right hon. Friend for that reply. What conclusion does he think that the public should draw when even the Labour hon. Member for Great Grimsby (Mr. Mitchell) realises that the post-neo-classical endogenous growth theory is a load of claptrap, but it is nevertheless accepted as official Labour party policy by the hon. Member for Dunfermline, East (Mr. Brown)?

I always enjoy the sarcastic wit of the hon. Member of Great Grimsby (Mr. Mitchell), particularly when it is applied to his own Front Bench. The hon. Gentleman is a literary sort of bloke, and he will perhaps forgive me if I summarise his position by saying that the Labour party's endorsement of a growth theory is totally unnecessary. The Government do not need one because we have a growth reality of 4 per cent. last year. We have record exports and inward investment, and manufacturing investment is up by 4.4 per cent. Unemployment is falling by 1,000 a day. If that reality does not prove that there is no need for absurd academic theories, I do not know what does.

Does the Chief Secretary agree that the best contribution that he can make to the theory of honest and incorruptible government is to resign his seal of office now?

No.

To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15305]

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.

Does the Prime Minister agree that the greatest asset of the national health service is the loyalty and dedication of its staff? He will know that many NHS workers are greatly angered by the fact that they will receive pay increases of between 1 per cent. and 3 per cent. this year. It is within the Prime Minister's power to lift the morale of 1 million people by agreeing that no one will be paid less than 3 per cent. this year. He has the power to do that. Why does he lack the commitment?

Of course the greatest asset of the NHS is the skills of the doctors, surgeons, dentists and nurses who work in it. There is no doubt about that. The hon. Gentleman is concerned about the 3 per cent. figure, and it may be that many people get precisely that sum. He may also recall that the last Labour Government cut nurses' pay by exactly 3 per cent.

Did my right hon. Friend note that the question asked by many non-political speakers at yesterday's "Britain in the World" conference was how could we expect other countries to think much of us if we evidently think so little of ourselves? While some modesty and humility is always welcome, does my right hon. Friend think that it would help British exports, and thus British jobs and morale, if politicians from all parties and the media spent rather more time praising evident British successes and less time indulging in destructive recrimination and criticism?

My right hon. Friend may have spoken for millions of people in the country when he called for a more balanced presentation of the many virtues which exist in this country in industry and in our traditional aspects and institutions. I have no doubt that many people would wish to support them.

Stop whingeing.

I am sorry that the hon. Member for Bolsover (Mr. Skinner) regards saying anything good about this country as whingeing. That says rather a lot about the hon. Gentleman.

If, under the new nurses' pay scheme, substantial numbers of nurses get less than the 3 per cent. which other nurses get for effectively the same job, will he accept that such a system is unfair? Will he undertake to change it?

I cannot give that undertaking to the right hon. Gentleman. As I said a moment ago, nobody wishes to be unfair to nurses or anybody else in the health service—certainly no one in the Government. We gave nurses a review body of their own so that their interests could be looked at dispassionately, and we have scrupulously honoured the recommendations of that review body in full.

The Prime Minister will know that the review body has pointed out that it was acting on the prompting of the Government.

indicated dissent.

That is what the review body says in its own report. Is the Prime Minister prepared to accept a situation where substantial numbers of nurses who are doing the same job are paid substantially less than 3 per cent?

I am sorry, but the right hon. Gentleman still does not understand the point. I shall make it to him again so that it is clearer. We have accepted the recommendations of the review body in full this year, as we have done every year in the past. The right hon. Gentleman must look at the actual offers which are being made to nurses as a result of local pay determination. The majority of those are in the order of 3 per cent. or more, and I am confident that that trend will continue. We set up the review body—which was welcomed by nurses—and it has made recommendations which I think we should stick to.

The Prime Minister cannot have it both ways. Either he believes—[Interruption.]

Order.

Either the Prime Minister believes that the nurses deserve 3 per cent., in which case he should deliver it, or he is content for many of them to be paid less than that, in which case he should have the honesty to say so. May I put it to him this way: if some nurses turn out just to get a 1.5 per cent. pay increase, when they already face mortgage and tax rises and the rest, is not the danger not just of a sense of injustice among nurses, but of yet another damaging blow to the morale of the national health service?

It is the right hon. Gentleman who is seeking to have it both ways. He and every hon. Member of this House agreed that it was right for there to be an independent pay review body for the nurses. That is what there is and we have accepted the recommendations that it has made and provided increased funding to the national health service—some £1.3 billion—so that pay awards of that sort can be met. That is the right way to deal with it; it is the way that we are dealing with it; and it is scrupulously fair. I notice that it was this Government who provided an independent pay review body for the nurses and not previous Governments.

Has my right hon. Friend found time to read the report in The Daily Telegraph, which shows once again how Spanish fishermen are plundering stocks, especially by catching undersized fish? Taking into account the events off Canada and the report by his special advisers, under Sir Crispin Tickell, will my right hon. Friend take a personal lead in the matter and try to bring some sanity back into this whole question of conserving fish stocks and ensuring that our fishermen have a future to look forward to?

I certainly understand and share Canada's desire to preserve fish stocks. That is a perfectly legitimate concern and it is entirely right of Canada to seek to do so. The real issues here are allocation of the quota and enforcement—two separate, but related, issues. The allocation must clearly be resolved by negotiation. Good progress is being made and I see no reason why an accommodation cannot be struck.

To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15306]

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

Does the Prime Minister think that the director of a company that traded illegally with a foreign power is a fit and proper person to be in his Cabinet?

I believe that my right hon. Friend the Chief Secretary to the Treasury dealt with that matter very forcefully and to great acclaim from most of the House just a few moments ago. He has made his position absolutely clear. No evidence has been found to counter that, either by The Independent or anyone else.

Does my right hon. Friend recall Lord Tebbit's definition of loyalty and commitment to a country as the side that one supports in, for example, a cricket match? Will the Prime Minister join me and this House, therefore, in cheering enthusiastically for Canada in its forthcoming fixture against Spain?

I believe that I am right to say to my hon. Friend that, in 1868 or 1874, Canada beat England at cricket in Canada. As I said a moment or so ago, I think that Canada is right to take a tough line on enforcement. She has our support in doing that and we shall not support the imposition of trade sanctions. This is an area where a satisfactory accommodation between the sides can be achieved, and should be achieved speedily.

To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15307]

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

Has the Prime Minister seen from today's Audit Commission figures that spending on education in secondary schools in Northumberland is lower than in any other county? As it is not possible to explain that by how the council allocates its resources because it results from the Government's spending formula applied in a scattered rural area and the capping limit on council spending, will the Prime Minister stop pretending that there is no problem and try to do something about it?

I think that many interesting things are thrown out by the Audit Commission report; not all of them would be very well received by the right hon. Gentleman when he actually has the opportunity to study them. On the specific matter of education, I have made the point repeatedly to the House in the past and I reiterate it today: there is a question of priorities within the education budget. I do not believe that it is right for education authorities to look, as their first priority for making savings, at the classroom teacher. That is the last place to look, not the first.

To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15308]

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

May I welcome my right hon. Friend's reassertion yesterday of his absolute determination to continue to maintain Britain's role as a national power in international affairs? Will he give a commitment that, at the intergovernmental conference next year, he will veto any attempt to include the pillars of foreign and home affairs in the European Union in the supranational Rome treaty?

I am grateful to my hon. Friend for giving me advance notice that he planned to raise that detailed matter. I confirm that, at the IGC, what I wish to see is more effective intergovernmental co-operation between Europe's nation states to fight cross-border crime and promote joint policies internationally. But I shall make it absolutely clear on that occasion that Europe's foreign policy and home affairs pillars remain outside the treaty of Rome. The United Kingdom's right of veto on those matters is important to us. It is at the heart of national sovereignty and I shall protect it at the intergovernmental conference.

To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15309]

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

Does the Prime Minister agree that it is essential that, at the Berlin climate change conference, the need for significant reductions in greenhouse gas emissions after the year 2000 is explicitly stated and that we must have a decision to negotiate a reductions protocol to that effect? Does he further agree that, if current strong rumours that the UK and the European Union are prepared to compromise with the Americans and others on that fundamental principle, we shall all stand condemned by future generations?

The hon. Gentleman raises an important matter. My right hon. Friend the Secretary of State for the Environment will attend the Berlin conference and will call on all the developed countries to agree a figure of between 5 and 10 per cent. below 1990 levels for all greenhouse gas emissions by the year 2010. We believe that that represents both a credible and an achievable next step and demonstrates the commitment of the United Kingdom to the framework of the climate change convention. I should say to the House that the United Kingdom is on course to meet current commitments under the convention, and we have been at the forefront of international work over recent years. We were the first country to present our programme up to the year 2000, and my right hon. Friend is now leading the way in calling for agreement on a realistic target up to 2010.

Has my right hon. Friend seen reports in the papers this week that in the middle east seven drugs dealers were executed, but in Leeds a gang of drugs dealers burnt down the house of a black policeman? Is it not time that, in our war against drugs dealers, we treated them as the mass murderers that they are?

I believe everyone in this country shares the distaste for drug dealers to which my hon. Friend refers. As he will know, my right hon. Friend the Lord President has been preparing a comprehensive anti-drugs strategy, and the Government have already taken a number of initiatives in line with our European and other international partners. There is no doubt about the danger of that trade, and we will do all that we can, domestically and internationally, to help to stamp it out.

To ask the Prime Minister if he will list his official engagements for Thursday 30 March. [15310]

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

As we approach the 50th anniversary of the liberation of the Belsen concentration camp by British troops, will the Prime Minister express what I am sure is the wish of us all—that there shall never be such a tragedy again? Will he also consider whether we should not be dealing rather better with Hitler's heirs in our own country—not least the thugs of Combat 18 and their ilk, who have been sending through the post to constituents of mine, Asians in the city of Leicester and elsewhere, racist, threatening and abusive cards and razor blades? Will he ensure that the police have the resources and the determination to deal with those awful people?

I agree without qualification with the hon. and learned Gentleman about that. Combat 18 is a repellent organisation. The literature that it circulates is utterly disgusting, and there can be no place for its type of politics in the United Kingdom.