To ask the Chancellor of the Exchequer what progress has been made with measures to help small business announced in his 1993 and 1994 Budgets. [27001]

My right hon. and learned Friend's Budget measures to help small firms are making good progress, particularly in regard to the enterprise investment scheme and venture capital trusts.

When Ministers consult small businesses with regard to the next Budget, will my right hon. Friend take on board the views of the vast majority of small businesses, which have no interest in a single European currency? Could that be because they experience the reality of doing business as small firms, and know that we export less than 8 per cent. of our gross domestic product in goods and services to the hard-core countries of the European Union which are likely to participate in a single currency? Will my right hon. Friend assure me that those firms will not be treated as right-wing xenophobes?

Like my hon. Friend, I have noted the views of the Federation of Small Businesses, which makes a great contribution to our domestic economy and our performance as not just a European but a world trading nation.

"the circumstances may not ever be right".—[Official Report, 8 June 1995; Vol. 261, c. 316.]

Is the Chief Secretary aware that very few people will take any notice of his answers about anything? When he went to a board meeting of BMARC—a small business—he sat there not even knowing what was being done. He was paid £10,000 a year for not asking questions; two of his mates got done £2,000 for asking questions. What kind of a show does the right hon. Gentleman think he is running?

I might as well retort that nowadays the hon. Gentleman does not seem to know what his own Front Benchers are doing. I am, however, glad to have a chance to repeat to the House that I stand by my statement on 30 March that I was given not the slightest indication or information, as a non-executive director, that any of the contracts that were going to Singapore would in any way be for onward shipment to Iran or anywhere else. I welcome the new inquiries that are taking place, and I am certain that at the end of the day they will clear my name completely.

Does my right hon. Friend agree that small businesses will provide an increasing number of jobs over the next decade and beyond? Is it not vital, therefore, to ensure that we continue to have low interest rates and low inflation to provide the right economic framework to enable those businesses to prosper?

My hon. Friend is right: small businesses are the life-blood of Britain's economy. There are some 3 million of them, and they create employment for some 50 per cent. of the work force. They depend, as much as any other part of the economy, on a stable economic framework in which there are sound public finances, low inflation and sustainable growth—all of which conditions have been put in place by my right hon. and learned Friend the Chancellor of the Exchequer.

To ask the Chancellor of the Exchequer what decisions were reached at the last meeting of ECOFIN. [27033]

At its last meeting, on 22 May, the Council reached political agreement on a proposed investor compensation directive. We agreed that the conditions were now met for the disbursement of the 85 mecu loan to Ukraine which was first agreed in December 1994 and we reached agreement in principle to a further loan of up to 200 mecu, subject to conditionality. Lastly, the Council adopted a regulation to delay revaluation of the Belgian franc within the agrimonetary system.

Have there been any discussions at all in ECOFIN about the political framework that would be necessary to operate a single currency?

ECOFIN has made quite a lot of progress talking about the technical issues that surround the proposal to move to economic and monetary union. Obviously, there are considerable political implications in that and ECOFIN is composed of Ministers of Finance who discuss the politics of it, but these are early days. It is when the framework becomes clearer, the timetable becomes clearer and the number of states that comply with the convergence criteria becomes clearer that the political debate will no doubt deepen.

As the mechanistic and regulatory impediments to a true, single, integrated market remain since the last meeting of ECOFIN, will my right hon. and learned Friend, when he goes to Brussels on Monday for its next meeting, say clearly to his counterparts on the Council that they really ought to get rid of the bottlenecks and impediments to free trade in the Community and pay less attention to harmonisation of exchange rates?

I agree with my hon. Friend that the completion of the single market with the removal of all regulatory and other impediments to free trade and fair competition between the member states is extremely important. As he knows, the British Government have taken the leading part in that, and it was really following the Single European Act and the actions we took after that that the British paved the way for the creation of the single market. We intend to complete it. Anything that improves the workings of the market and removes barriers to or distortions of trade is, in my opinion, welcome.

Given the Chief Secretary's stated opposition this afternoon to the principle of a single currency and given the Prime Minister's statement earlier this week on the principle of a single currency that he is persuadable—and persuadable against it by the very group the Chancellor of the Exchequer accused this morning of right-wing xenophobia—will the Chancellor now confirm his position on a single currency? Is he, as he always was, in favour of the principle of a single currency—yes or no?

I think the hon. Gentleman should consult an ear, nose and throat specialist, because he did not seem able to hear clearly what I said last night about my inflation target and I do not think he was quite able to hear what my right hon. Friend the Chief Secretary said a few moments ago, either. The position is that we negotiated an opt-out at Maastricht, which means that we were left free to decide for ourselves in due course, if and when the situation arose, whether to join an economic and monetary union.

To ask the Chancellor of the Exchequer for how long the underlying rate of inflation has been at or around its current level. [27034]

The retail prices index figures published this morning show that underlying inflation was 2.7 per cent. in May. Inflation has now been below 3 per cent. for 20 months, which is our best performance since 1961.

I congratulate my right hon. and learned Friend on his speech at the Mansion house last night. Does he agree that the careful control of inflation is absolutely essential for the promotion and protection of the prosperity of middle England, especially those on lower incomes?

I entirely agree with my hon. Friend. Anyone who aspires to govern this country and deliver the sustained recovery, without a return to boom and bust, that I think the population want must have a clear objective for inflation and must be capable of delivering it. We have a clear objective. We have been delivering low inflation. Those who criticise us appear to be incapable of making any useful contribution to the debate whatsoever.

Does the Chancellor accept that his 2.7 per cent. figure for underlying inflation is above his long-term target and that the Bank of England said last month that it would continue to be above his long-term target in two years' time? If that is the case next month, will he take action—yes or no? When he said that he was putting inflation back in the box, did he omit to tell us that there was no lid on the box?

If the Liberal party or the Labour party would give us any figures at all as a basis for their economic policy, we should be able to judge whether they were capable of getting within 0.2 per cent. of anything. The current position is that we have delivered the best record on inflation since the early 1960s. That is one of the principal reasons why our economy is growing and our prospects are looking so much better. Last night, I made it quite clear that I would set policy for the foreseeable future on the basis that we were aiming at inflation of 2½ per cent. or less. We aim to get there by the end of this Parliament and we shall aim to keep it there thereafter. That is a clear policy, and we are showing ourselves capable of delivering it.

I, too, congratulate my right hon. and learned Friend on the speech that he made last night, and especially on his statement that he wanted to follow the iron lady and become the iron Chancellor who is not for turning. Does he accept that I also welcome his warning to fellow Cabinet colleagues and, indeed, to Back-Bench colleagues, that he wants to cut taxes, but that he can do so only if he can cut spending?

My hon. Friend and I agree strongly on that point. The Government are showing that they are capable of controlling public spending in order to achieve our low taxation goal. We think that we shall have a more successful and competitive economy, with more prosperity and more secure jobs, if we can reduce the proportion of national resources taken by the state. It is yet another sphere in which, as far as I am aware, we do not have the slightest indication from the Opposition about what proportion of GDP they think should be taken by the state, what their objectives are for taxation or precisely what their views are on public spending, or at least how those of the Treasury relate to those of other Opposition spokesmen.

Will the Chancellor explain his extraordinary memorandum to Conservative Back Benchers last night? Why, having told the City that he would keep within his 4 per cent. inflation target all the time, did he say to his Back Benchers that he might meet it only most of the time? Why does he say one thing to the country and another in secret to the Conservative party?

The document to which the hon. Gentleman referred was not especially secret. The policy that it sets out is exactly the same as that about which I spoke last night. The inflation target is 2½ per cent. or less which will, in practice, deliver inflation within a range of 1 to 4 per cent. That is the policy that we have been pursuing successfully, and I projected it forward.

The Government have made known their inflation target. Will my right hon. and learned Friend the Chancellor confirm when he last asked the shadow Chancellor to make known his inflation target and say what response he received?

I think that we should take a leaf out of the Opposition's book and ask the Leader of the Opposition to hold an independent inquiry into whether the shadow Chancellor has an economic policy and, if he claims to have an economic policy, whether he is prepared to put a figure to it. At the moment, I find myself facing shadows, but invisible shadows who will not put forward any proposition of their own. The hon. Gentleman has lost his way on economic policy.

To ask the Chancellor of the Exchequer what meetings he has had in 1995 with the Trades Union Congress to discuss fiscal policy. [27035]

My right hon. and learned Friend has had no meetings so far this year with the TUC to discuss fiscal policy, but does expect to meet representatives of the TUC in the autumn before the Budget.

May I put it to the Minister that, if this country is to make any serious progress on its economic policy, discussion with the body that represents 7 million people in industry on a regular, not corporate, basis is necessary and would be useful and that, until there is a renewal of dialogue across the industrial divide, Britain cannot expect fully to prosper?

As I said, my right hon. and learned Friend looks forward to meeting the TUC against a background of the discussions leading up to his Budget. He had two meetings with the TUC last year, at the first of which there was very constructive dialogue about what the Government were doing on training, which received wide support from the TUC, and also what we were doing on the industrial finance initiative. When the TUC comes to discuss fiscal policy with my right hon. and learned Friend, at least there is a policy to discuss.

When my right hon. and learned Friend meets the TUC in the autumn, will he take that opportunity to explain to it the extraordinary damage that would be done to our economy were we to adopt a national minimum wage? It would create massive unemployment, particularly in the holiday industry, which is so important to my constituency.

I am sure that my right hon. and learned Friend would wish to make that point in a courteous but firm way. I was interested to see, in The Guardian on Monday, that the general secretary of Unison conceded that, were we to move towards a minimum wage, at the level at which he preferred, there would be job losses. There have been some estimates that there could be up to 800,000 job losses. My right hon. and learned Friend, who minds about unemployment, will indeed make that point to the TUC.

Will the Minister give me an assurance that the fiscal policy that he is going to follow is a United Kingdom fiscal policy and that the blandishments from Dublin to the effect that there should be 25 per cent. value added tax and 10 per cent. corporation tax in Northern Ireland will be resisted?

Yes, what my right hon. and learned Friend said at the Mansion house, the economic policy that he puts forward, is an economic policy for the United Kingdom.

To ask the Chancellor of the Exchequer what representations he has received concerning the control of inflation. [27036]

I have received many representations about the control of inflation. These reinforce my commitment to our objective of permanently low inflation.

Is my right hon. and learned Friend aware that consumers and business men in my constituency will welcome the long-term commitment to low inflation that he has given; but when he hears the hon. Member for Dunfermline, East (Mr. Brown), will he exercise just a little caution, bearing in mind not only that the hon. Gentleman will not say what his inflation target is but that the one policy he does have—the introduction of a minimum wage—would cause inflation of its own accord, and that the last time the Labour party held office, inflation moved within a range of between 7 per cent. and 27 per cent. per year?

My hon. Friend does well to remind us of the record. The fact is that the hon. Gentleman does not say whether he would have a higher inflation target for the next Parliament, thereby loosening policy, or whether he would have a lower target, thereby tightening policy. He does not say that he agrees with the Government—which I suspect is the case—because he cannot think of anything else to do. If he indicated anything else, he would have to answer my question about what his views are on interest rates.

Although the control of inflation must be a prime objective, in what he called his occasionally combative discussions with the Governor of Bank of England, will the Chancellor forcefully point out to him that there are other matters, such as investment and economic growth, that must be considered also?

I do not regard low inflation as an aim in itself, and nor does the right hon. Gentleman, but low inflation is an essential precondition to getting prosperity and secure jobs, and the economic success, which other countries, such as Germany and Japan, have enjoyed in the past because they have enjoyed stable economic conditions. That is why the Governor and I are agreed on pursuing the targets that I have set out. The Governor welcomed what I said last night, and I quote:

"The Chancellor has restated the Government's monetary policy objective—permanently low inflation—quite unambiguously this evening. I very much welcome that."

Does my right hon. and learned Friend agree that among the key groups who welcome low inflation and targeted low inflation are the elderly and the prudent? Does he recognise that in the year, for example, when my own father retired on a fixed income, inflation topped 27 per cent. under the previous Labour Government, and that retired and prudent people today will welcome a governing party that has a firm, precise and deliverable target for low inflation?

I agree with my hon. Friend. He echoes the views of what I call middle England, which, for the benefit of Scottish nationalists, is middle Scotland as well. Those people who wish to work and to be responsible for their families, to save and to feel secure in their family finances, need low inflation. The experience of high inflation is that it destroys savings and creates instability in society. It robs the elderly and gives money to the improvident and those who borrow. It is also very destructive for investment and long-term economic prospects. For the past 20 months, we have delivered the best record on inflation that this country has seen since the early 1960s. I set out last night the Government's determination to continue to deliver that.

I take it that it is in order to ask a question from the Government crib sheet which has been handed to Conservative Back Benchers and which my hon. Friend the Member for Hemsworth (Mr. Enright) found in a telephone box. Is the Chancellor aware that my constituents would prefer sound economics to soundbites on the management of the economy? Why does the Chancellor have to write down all these soundbites for all the people behind him?

The hon. Gentleman has made an extremely good point. I assume that those who are responsible for that are in Conservative central office, and I shall ask them next time to distribute a similar sheet to Opposition Members so that they can find some questions to ask, because the shadow Chancellor of the Exchequer does not have a policy that is worth leaving on a piece of paper in a telephone box and he is giving no guidance whatever to those behind him.

I preface my question by saying that I have not had a chance to visit a phone box. However, I have a question for my right hon. and learned Friend. Is he aware that his counter-inflation policies have a real test behind them—market credibility? The record shows that the markets believe in that credibility and in that of the Governor of the Bank of England and the aim of getting inflation down and keeping it down. Is not the real contrast between my right hon. and learned Friend's sound policies, which will add to future growth, and those of the Opposition, that his have the ring of clarity whereas those of the hon. Member for Dunfermline, East (Mr. Brown) are surrounded by a number of obscurities?

The Governor, in his speech last night, said that we seemed to be on course to see a peak of interest rates in this cycle of about half or less of the peak they reached in the previous cycle. My hon. Friend is right about market expectations on inflation and interest rates, which are coming down steadily as well. That is of real value to business, to investment and to people with mortgages who want to know what might happen to future interest rates. As we deliver, we are building confidence in a sustained recovery with low inflation, and it would be absolute folly to put all that at risk, certainly under pressure from a policy which is not represented by a figure on a piece of paper.

May I refer the Chancellor again to the private note that he sent to Conservative Members? It is printed on Treasury notepaper and the accompanying note is in the same type face as the Treasury press release. Therefore, it is not just a "piece of paper", as the Chancellor said. When he told Conservatives privately that the inflation target would be met only "most" of the time, was he giving Back Benchers a nod and a wink that he will take risks with inflation if that is needed to try to win the next election for the Conservative party?

If the hon. Gentleman is going to get our briefing notes, he might read them and quote them properly. He paraphrases in the most loose and untidy fashion and he got it wrong. The inflation target that is set out in that note is the same as the target set out in my speech—2½ per cent. or below. As I explained in my speech last night, in practice one does not deliver one figure every month: there is fluctuation, sometimes down and sometimes above, but setting policy every month at that target should deliver inflation of between 1 and 4 per cent. The target is 2½ per cent. or less and that is the basis on which I shall set policy month by month when I have discussions with the Governor. It could not be plainer, it is as plain as a pikestaff, and the briefing said nothing different from that. It is the only policy going in this country at the moment. Fortunately, it is delivering considerable success.

To ask the Chancellor of the Exchequer what assessment he has made of the economic benefits of falling unemployment. [27037]

Unemployment has fallen by 661,000 since December 1992. Our assessment is that this has made a major contribution towards the Government's aim of promoting rising prosperity for all.

As unemployment in Finchley has fallen by 16 per cent, over the past year, I am grateful to my right hon. Friend for his assessment of unemployment. Has he taken time to look at unemployment in France and Spain, and do not the very much worse figures in those countries exist because they have adopted just the sort of policies that the Labour party would impose on us?

My hon. Friend is right to highlight the fact that in Britain unemployment is falling faster than in any other major country in the European Union and that it is far lower than in France and Spain. Youth unemployment is 50 per cent. higher in France and 250 per cent. higher in Spain than in Britain. My hon. Friend asks why those differences, which are so much in our favour, have occurred. The answer is that those countries have the minimum wage; we do not. Those countries have a social chapter; we have opted out of a social chapter. Those countries have rigid labour markets; we have deregulation. We have Conservative free market, supply-side reforms and policies, whereas France and Spain have continued to cling to the same tired old socialist policies that the Labour party still espouses.

I am sure that the right hon. Gentleman recognises that many of the problems that he has identified have led in this country to job insecurity, which I know is a matter about which he himself is concerned. Has he noticed that a survey said yesterday that more people in work are increasingly insecure about the future and worried about losing their job? Does he not understand that that insecurity, coupled with the still far too high unemployment levels, mean that much of the Government's strategy for economic growth is put under threat?

That is a feeble retort to the case that I made in the supplementary answer to my hon. Friend the Member for Finchley (Mr. Booth). As he reminded us, unemployment in his constituency has come down by 16 per cent., so people are not feeling so insecure in Finchley. Since December 1992, unemployment in Durham, North-West, which the hon. Lady represents, has come down by nearly 1,000 people—a fall of 23.3 per cent., so she does not have much to complain about.

In response to the hon. Member for Durham, North-West (Ms Armstrong), does my right hon. Friend agree that the greatest threat to workers' jobs would come with the election of a Labour Government and that therein lies the greatest feeling of insecurity?

My hon. Friend is absolutely right. There are many Labour policies, such as a minimum wage, that will destroy jobs. He represents a constituency in Scotland and he will be well aware that the policies for a tax-raising Scottish Assembly are absolutely guaranteed to scare away the magnificent flow of inward investment projects that are coming into Scotland at a rate of two a week— they will go as soon as there is a tax-raising Scottish Parliament. All the extra policies, such as the minimum wage, and all the high expenditure will destroy jobs faster than anything else.

To ask the Chancellor of the Exchequer if he will make a statement on the financial implications of the state of the housing market. [27039]

For the average mortgage holder, housing costs are £1,600 per annum lower than in 1990.

The Minister's complacency about the housing crisis will appal millions of people. With cuts in tax relief on mortgages costing £20 a month and, from October, another £20 a month for people on income support, why is it that the Government keep on hurting home owners rather than helping them?

I am not the slightest bit complacent about people who find themselves with negative equity, but I am entitled to point out that, as a result of lower inflation and lower interest rates, since 1990 the average mortgage holder is £130 a month better off. The best long-term policy to help those existing householders and people who wish to own their houses is sustainable growth, with its consequence of rising earnings, combined with low inflation, which is what we are delivering.

Did my hon. Friend experience, as I did at the height of the housing boom, large numbers of constituents saying how extremely worried they were about the prospects of their children being able to get on the housing ladder? Do not steady and reduced house prices make it much easier for young people to get started?

My hon. Friend is right. The conditions of the housing boom—such as those that we experienced—are not the friend of householders, especially young people who wish to own their houses. Although there is a problem of negative equity at present, its extent has reduced. Indeed, we should remember that last year almost 500,000 people became house owners for the first time.

Did the Paymaster General hear the unfortunate comments by the Chancellor on the "Today" programme this morning when he ruled out any special measures to help home owners? Will he confirm that that complacent view will continue and that there is to be no assistance for home owners in the present housing crisis?

My right hon. and learned Friend is not the least bit complacent about this issue, but he is right to point out that the best long-term help that we can deliver to households, as to others sectors of the economy, is sustainable growth with low inflation, which is exactly what we are delivering.

What would be the impact on the housing market and interest rates if my hon. Friend were to follow the Labour party's policy on inflation—or does he not know?

My hon. Friend is right. High inflation, with the consequence of high interest rates, would crucify householders with outstanding mortgages. We must never allow the Labour party to be given a chance.

To ask the Chancellor of the Exchequer what is his policy on interest rates. [27040]

Interest rates are set to deliver permanently low inflation and ensure that the present healthy recovery is sustained.

Is not the truth somewhat different? Has not the Financial Times got it right when it says that the Chancellor has fudged policy on interest rates and that he is keeping interest rates down, stoking the economy and preparing for short-term tax cuts as his preferred solution?

The hon. Gentleman has just arrived in the Chamber out of breath and did not hear the rather lengthy exchanges that have already taken place about all this. The inflation target is 2½ per cent. or less. I set monetary policy to achieve that target. Given that there are always unpredictable things from month to month, that policy will keep inflation between 1 per cent. and 4 per cent. We have set that target for the end of this Parliament and we are well on course to deliver it. Now we are going to sustain it throughout the next Parliament as well.

Does my right hon. and learned Friend agree that one way to ensure that interest rates are higher than necessary is to have no policy on inflation, no policy on public expenditure and no policy on taxation, like the Labour party?

I rather imagine that if the hon. Member for Dunfermline, East (Mr. Brown) ever met the Governor of the Bank of England he would ask him for a quick little note on what monetary policy is for and how one ought to approach it. When the hon. Gentleman sets out his propositions and they are put alongside the spending promises of all his shadow colleagues, it is quite obvious that high inflation will be only one of the extremely bad consequences of having a Labour Government.

Is not it true that, on interest rates, the Chancellor pays more attention to the representations of Tory Back Benchers in marginal seats than to the Governor of the Bank of England? [Interruption.] Is not that more to do with his medium-term aspirations to be Leader of the Opposition than the long-term interests of British people?

I take first and foremost the advice of the Governor of the Bank of England. I listen to the advice of my Back-Bench colleagues who understand economic policy and specialise in it. I do not get any advice from the Labour party because it does not seem to have any opinion on the subject. My policies have delivered the best record of inflation that this country has seen since the early 1960s. We are well on course to deliver permanently low inflation for the rest of the decade.

To ask the Chancellor of the Exchequer if it is his policy to reduce public spending as a percentage of gross domestic product. [27042]

Yes. The Government's policy, unlike that of the Labour party, is to reduce the share of national income taken by the state.

I welcome my right hon. Friend's robust commitment to controlling state expenditure. Will he confirm that that is in marked contrast to new Labour, which apparently has no commitment to increase spending, taxation or borrowing, but which in reality can be relied upon to increase all three?

My hon. Friend is right. Scratch the soundbites of new Labour and we find old spending Labour in full swing. Let me list, for the benefit of my hon. Friend and of the House, the high spending to which the Labour party is committed. It includes income support for 16 and 17-year-olds, new regional assemblies and development agencies, an emergency employment programme, a defence conversion agency, a flexible decade of retirement, and above all, a national minimum wage. Labour is still the same old high-spending party, and it will be a high taxation party too.

After 16 years in power, is it not a demonstration of the Government's utter failure that GDP continues to rise because they are paying the cost of economic failure by keeping so many people on the dole, at a cost of £9,000 per person? When will the Government tackle the problems rather than the symptoms of their utter failure to adopt a decent economic policy?

As the hon. Lady is so interested in the public expenditure dimension of unemployment—I take it that that is what her question is about—she may like to know that the unemployment total is falling at a rate of 1,000 per day. Every time 100,000 people come off the unemployment register, £400 million or so is saved in public expenditure. That is good news for the taxpayer as well as for the unemployed people who become employed.

To ask the Chancellor of the Exchequer what study his Department has made of Brown's law of economics. [27043]

Brown's law is receiving the study that it deserves.

As my right hon. and learned Friend continues his study of Brown's law, does he agree that its contention that borrowing should not exceed investment is a useless guide to sound public finance, as it sets no level for investment or for borrowing and clearly avoids setting any inflation target, let alone one as low as 2.5 per cent.?

My hon. Friend is correct. That is one of the few specific statements that the hon. Member for Dunfermline, East put into Brown's law, but upon closer examination it turns out to be simply an excuse for having no limit on the amount of borrowing on which one can embark in any one year. That is one of the many examples of what the policy would mean, and it would represent a considerable loosening of present policy, although the hon. Gentleman claims that Labour could match the growth with low inflation that the Government have achieved.

Would not the costs of speculative and widespread currency exchange transactions be greatly reduced, indeed ended, if we had a single European currency? How long must British tourists throughout Europe continue to be ripped off by banks because politicians cannot face their responsibilities?

It is tautologous to say that economic and monetary union would get rid of wild fluctuations in currencies and transaction costs across the foreign exchanges. We have preserved the position that will allow us to choose whether to join in economic and monetary union with the other European member states once the details have been put in place and when we see the conditions for convergence. We shall then decide whether it will be in Britain's interests to join.

Does my right hon. and learned Friend agree that one of the true principles of Brown's law is to reverse the Government's trade union reforms? Would not one of those reversals mean that people such as Mr. Jack Dromey would not be able to challenge Mr. Bill Morris for the general secretaryship of the Transport and General Workers' Union? Would it not be a great pity if Mr. Dromey were prevented from earning income to support his family?

I am certainly not going to take a position on the internal battles of the Transport and General Workers Union. It is true that the Labour party is a little more precise in what it believes it will do so far as trade union law is concerned than it is on economic policy. If Brown's law sheds any light on the future control of the trade union movement over Labour policy, I suppose it has some value.

To ask the Chancellor ofthe Exchequer what steps he is taking to increase the influence of small investors in corporate governance. [27044]

I expect that the work of the Greenbury committee, and the successor to the Cadbury committee will continue to bring improvements in corporate governance.

Is the Minister aware that many small shareholders in middle England would have thought that the Chancellor was an iron Chancellor if he had used his speech last night at the Mansion House to tell the City's institutional barons that it is about time they cleaned up their act, and stopped using their block vote to deprive ordinary shareholders of a voice at the annual meetings of companies?

The average small shareholder has done well under a Conservative Government. Since 1979, the average small shareholder with a portfolio of UK shares will have seen a real rate of return of 10 per cent. per annum. The Government have extended the benefits of shareholding. There were 3 million shareholders when we started, while there are 10 million today.

To ask the Prime Minister if he will list his official engagements for Thursday 15 June. [27062]

I have been asked to reply.

Does my right hon. Friend agree that the release of the remaining members of the Welch Fusiliers and of the RAF flight lieutenant by the Bosnian Serbs shows clearly that the Government's robust response to the taking of the hostages was the right one? Does he further agree that we now have an opportunity to reassess how our diplomatic and military efforts in Bosnia can best be taken forward?

The whole House will want to join in my hon. Friend's welcome of the release of nearly all of the remaining hostages, including the British ones, and it is essential in our view that the other 26 are released immediately. My hon. Friend was right to say that the Government's policy has been vindicated. Indeed, by standing firm, the whole international community has shown that it will not submit to blackmail and terrorism of that kind. I share the view implicit in my hon. Friend's remarks that it is vital that we redouble our efforts to achieve a negotiated settlement.

Does the Leader of the House think that it is really wise for the Prime Minister to be out of the country at this time?

At a time when it is widely acknowledged throughout the international community that this country's economic performance in growth, increasing investment, improving our trade performance, keeping inflation down and reducing unemployment makes it a world leader in that respect, it is quite right that my right hon. Friend should be sharing our experience with our partners in the G7.

With Baroness Thatcher making it clear that the Prime Minister is not up to the job, the President of the Board of Trade professing loyalty while preparing to take over the Prime Minister's job and the Chancellor attacking his Tory critics as right-wing xenophobes, is not it obvious that the Tory party is in a state of civil war and, like the Prime Minister, is clearly unfit to govern this country?

If the right hon. Gentleman believes that—against the background of the account of our successful economic policies which I have just given—he will believe anything. He might also explain why his right hon. Friend the Leader of the Opposition took the risk of letting him ask questions from the Dispatch Box today. [Interruption.]

Order.

To ask the Prime Minister if he will list his official engagements for Thursday 15 June. [27063]

I have been asked to reply.

Does my right hon. Friend agree that the Government's trade union reforms reintroduced democracy into the Labour movement? Will he therefore ask the committee considering the Nolan report whether the 165 Members of the parliamentary Labour party who are sponsored by trade unions will resign if the long-overdue reform of the trade union block vote does not go ahead? In particular, if the Transport and General Workers Union gives that reform the order of the sharp elbow, will the Leader of the Opposition sever all his links with that union?

I am not quite in a position to give my hon. Friend the assurance that he seeks because the committee to which he refers has not yet met and, therefore, has not made a decision about who should be its chairman. In one way or another, however, I will ensure that my hon. Friend's request is drawn to the committee's attention. No doubt the right hon. Member for Kingston upon Hull, East (Mr. Prescott) will draw the second half of my hon. Friend's question to the attention of his right hon. Friend, the Leader of the Opposition.

Is not it absolutely clear from the Chancellor of the Exchequer's statement last night that, when it comes to a policy on inflation, the Government's policy is very clear—a target is a target, but only so long as it does not get in the way of a tax cut?

What is clear from my right hon. and learned Friend's speech last night is that the Government's commitment to low inflation remains absolutely unshakeable and clear and that the commitment to low inflation is part of a range of policies, which I have already described and which will make it possible for us to consider tax cuts in due course when it is appropriate and responsible to do so.

To ask the Prime Minister if he will list his official engagements for Thursday 15 June. [27064]

I have been asked to reply.

Will my right hon. Friend join me in welcoming this week's further fall in unemployment, which is down for the 21st month in a row and down 500,000 in the past two years? Does he agree that it is not coincidence, but the result of the Government's policies and that if we had a guaranteed minimum wage as the Labour party suggests—it is no good the right hon. Member for Kingston upon Hull, East (Mr. Prescott) looking glum as he has admitted this—there would be a shake-out of jobs and any silly fool knows that? Does my right hon. Friend agree that, in the interests of Britain, that policy must be reversed?

Although it is sometimes difficult to glean from the observations of the Opposition, I imagine that the whole House will welcome the fact that unemployment has fallen by 350,000 in the past year and, indeed, that employment has grown by more than 170,000 in the year to March. I see the hon. Member for Dunfermline, East (Mr. Brown) giggling in some way— it is especially ironic that, not so long ago, he forecast that unemployment would go on rising month in and month out. No doubt he will be reassessing his forecasting methods. At the same time, he might reassess policies such as the social chapter and the minimum wage, which would certainly push things in the other direction.

May I ask the Leader of the House a question, of which I gave the Prime Minister notice on Tuesday; will he comment on the tragic events in Bradford at the weekend? In condemning without reservation those who commit serious criminal damage, does the Leader of the House share my deep concern about the large number of very young people who are so deeply angry, disaffected and alienated, not only in Bradford but in many other inner cities throughout the country? Will he support an independent public inquiry to establish what happened in Bradford—[Interruption]. If the House—

Order. I hope that the hon. Gentleman will come to his point as I have other questioners to call.

But this is a serious matter to the majority of hon. Members on both sides of the House. Will the right hon. Gentleman support an independent public inquiry, which can identify the causes of the serious public disorder that took place in Bradford at the weekend and draw attention to the action that can be taken by all public agencies, including the Government, to bring back hope to young people, their parents and local communities?

First, I am grateful, as everyone in the House will be, for the hon. Gentleman's initial acknowledgement that, whatever arguments he or anyone else cares to adduce, we all agree that there can be no excuse for the kind of behaviour that we saw in Bradford at the weekend.

indicated assent.

I am glad to see the hon. Gentleman acknowledge that. I think that that is the appropriate action to take.

To ask the Prime Minister if he will list his official engagements for Thursday 15 June. [27065]

I have been asked to reply.

Has my right hon. Friend ever seen a shred of evidence that suggests that people in this country want more government rather than less? Is he aware that my constituents in High Peak would be horrified at the prospect of another tier of regional government based perhaps 100 miles away in Leicestershire? Is not it time for those people who advocate such a policy to admit that what they are really saying is that we should have more bureaucracy, more waste, more remoteness and more taxes?

Labour's plans for regional government would certainly end up simply sucking responsibility away from many existing councils that are closer to the people whom they represent. As one of Labour's think tanks made clear yesterday, English regions would be "essentially artificial constructs", which is true of more or less the whole of Labour's policy in that area.

Is the Leader of the House aware of the growing anger, not just in Britain but on the continent, about the plan to dump the Brent Spar oil platform at sea, at a spot not more than 150 miles from my constituency? Is not it a disgrace that Shell should have tried to hide the true costs of recycling the oil platform on land? Is not it time that the Government intervened to halt the tow of the Brent Spar and allow a proper examination of the true benefits of recycling on land, which would be better for the environment and for jobs?

The hon. Gentleman knows that the Government are following the principle of disposal on a case-by-case basis. In the Government's view, the deep-sea disposal of Brent Spar is consistent with the UK's international commitment, and all necessary approvals and consents have been obtained. It is also the Government's view that it is the best practicable environmental option available.

To ask the Prime Minister if he will list his official engagements for Thursday 15 June. [27067]

I have been asked to reply.

Will my right hon. Friend draw the Prime Minister's attention to last week's report by the Social Security Select Committee into the growth of social security, which vindicates the Government's view that the continuing growth of social security spending is a cause for concern? Is it not time that we tackled that problem? Is not the test of the Opposition whether they start to support those reforms, otherwise they betray the fact that they have no commitment to dealing with the growth of public expenditure?

My hon. Friend is right to draw attention to that matter. The increase in social security expenditure in its various forms, under various pressures including demographic trends, is a matter of concern throughout the western world and perhaps beyond. Against that background, it has been absolutely right for my right hon. Friend to look carefully at the social security system to ensure that the bill is constrained while at the same time meeting proper priorities. That is what he seeks to do and it deserves the support of hon. Members on both sides of the House.

To ask the Prime Minister if he will list his official engagements for Thursday 15 June. [27068]

I have been asked to reply.

Will the Leader of the House ask the Prime Minister whether, while considering what to do about the damage that his Government have caused to home owners with negative equity, he will consider the misery caused by the removal of mortgage interest relief to those who are unemployed and the damage caused to those who need social housing by the £600 million of cuts to housing associations?

I shall always draw the hon. Lady's questions to the attention of my right hon. Friends. However, she might have referred to the fact that negative equity and repossessions are sharply down since the 1991–92 peak, and that average mortgage payments have fallen by £130 a month since October 1990. On the hon. Lady's first point, a survey has shown that two thirds of lenders intend to buy block protection in the area to which she referred, and the majority of those, including the Skipton building society, to which my right hon. Friend referred last week, intend to make no charge.

Is my right hon. Friend aware that, in the county of Gloucestershire, under the profligate Lib-Lab pact local government, the schoolchildren are being cruelly misused? Is he aware that, as a result of the historic overspending in Gloucestershire, the county council has decided to cut spending on education? Is he further aware that some of us are tired of being a whipping boy for Lib-Lab extravagance, and that it is time that we considered lifting the cap on local authority expenditure?

I see that it has been reported in some parts of the press that the Leader of the Opposition has managed to persuade the Labour councillors of Mid-Glamorgan to reduce their demands for increased allowances from the exorbitant to the extortionate. I hope that he might now use his influence with some other Labour local authorities to persuade them to pursue sensible and proper policies.