To ask the Secretary of State for Defence if he will make a statement on his discussions with the German Defence Minister on the workshare and purchase of Eurofighter. [12026]

I met my counterpart, State Secretary SchŐnbohm, on 18 January of this year. I welcomed the announcement by the German Defence Minister of his country's intention to increase its commitment from 140 aircraft to 180, which has largely resolved the question of workshare in the production phase of the Eurofighter project and is excellent news for British industry.

I and my Lancashire Conservative colleagues thank my hon. Friend for responding to our lobbying on behalf of our constituents and for holding firm in the negotiations over workshare with his German counterpart. Can he confirm that the decision will mean many extra billions of pounds'-worth of work for my constituents and those of other hon. Members and that the production investment phase will move forward as rapidly as possible?

I am grateful to my right hon. Friend for his comments. I pay tribute to him and our right hon. and hon. Friends from the area for the vigour with which they support an industry that is important not only to their constituencies but to the country. I can confirm what my right hon. Friend says. The agreement that we have reached means that the production phase of Eurofighter will bring to the United Kingdom between 37 and 38 per cent. of the workshare—an increase of 4 per cent. over the development phase. That means that some £9 billion-worth of work will go to United Kingdom industry.

The Minister will know that what he just said will be welcome on both sides of the House. Does he agree that Eurofighter is a significant example of the European co-operation on defence procurement that was recently endorsed by the Trade and Industry Committee and the Defence Committee joint report? Does he further agree that if the European industrial defence base is to be maintained and the United Kingdom and others are not to become the compliant customers of the United States, common procurement in Europe will be essential?

It is an extremely valuable example of the way in which collaboration can work. I am delighted that the project is going ahead and that Eurofighter is now back on track to become the cornerstone of the Royal Air Force's capability into the next century. It is necessary for us to have collaborative links both with European partners and with the United States, where we have many industrial ties and where we can gain many benefits from collaboration.

Eurofighter is a most important defence industrial project but, last Thursday, in the debate on the Royal Navy, my hon. Friend referred to the review being carried out by his Department into our defence industrial base and announced his response to the Select Committees' joint report referred to by the hon. and learned Member for Fife, North-East (Mr. Campbell). Was that response his definitive statement following the completion of his review, or can we expect another document?

My hon. Friend is right to refer to that response. We found the Select Committees' joint report extremely constructive. We have given a continuing response that shows the closeness of our ties with British industry. We continue to discuss these important matters with British industry and with the National Defence Industries Council. A sub-group is working on precisely the industrial base questions that my hon. Friend raised.

To ask the Secretary of State for Defence what plans he has to change his policies concerning market testing; and if he will make a statement. [12027]

The Government remain committed to market testing. The "Competing for Quality" initiative seeks efficiencies and best value for money through competition and private sector involvement. Our aim is to deliver defence support at the high level that our armed forces deserve, and at a cost that the taxpayer can afford.

Surely the Government will abandon market testing as an instrument of policy, because it involves such a high risk. Will the Minister please receive a deputation from RAF Sealand in my constituency, whose 1,500 staff are now very uneasy about the implications of market testing? Does he agree that RAF Sealand played a magnificent part in the Gulf and Falklands wars? Surely the in-house team bid should be accepted. RAF Sealand is the finest maintenance unit of its kind in the world, and it is a British strategic asset. Surely the Minister agrees with me.

I agree that RAF Sealand has performed a magnificent job over the years, and I will of course accept a deputation from the hon. Gentleman; but I must discourage him from asking us to abandon our approach on market testing, which has proved extremely successful. Over the past three or four years, it has saved us some £250 million annually—money that can be spent on other equipment for the armed forces. It has also brought us private sector expertise and improved quality, response times and delivery times. I am afraid that we will not abandon it.

In implementing the "Competing for Quality" exercise, will my hon. Friend ensure that the armed forces retain a surge capability, so that maintenance facilities can be expanded at times of emergency or war? To that end, will he ensure that a fair number of the contractor personnel are members of the new sponsored reserves?

I can certainly reassure my hon. Friend on the first point: we are very conscious of its importance. As for the second point, it is a very interesting idea which I would like to pursue further.

Will the Minister take his mind back to RAF St. Athan? Can he guarantee that market testing will never again result in the fiasco that occurred there when the former Airwork company botched repairs to Tornado aircraft? When will he give the House the full details of that sorry affair—and will he tell us whether the market testing exercise cost British taxpayers £30 million, £120 million or, as some claim, as much as £300 million?

This is bizarre. I should like to know whether the hon. Gentleman would abandon market testing in the unlikely event of his ever gaining power. If so, he would abandon the huge savings that we have achieved through market testing.

Where did wealth creation, the United Kingdom's manufacturing base and jobs in the United Kingdom feature in the Minister's response to the hon. Member for Torfaen (Mr. Murphy)?

That is a difficult question to answer, because the hon. Member for Torfaen (Mr. Murphy) is clearly not interested in wealth creation. We know that, if a Labour Government came to power, they would want to cut defence spending. They cloak that intention with the suggestion that they want some sort of review, but we know that they are scared to reveal that they want to cut defence spending. That is why they have called for a fundamental spending review.

To ask the Secretary of State for Defence what plans his Department has to monitor the ammunition dump at Beaufort's dyke. [12028]

My Department will contribute to a follow-up survey of the Beaufort's dyke area by the Scottish Office Marine Laboratory.

I hope that the Minister had the opportunity to read yesterday's Western Mail because it contained a revelation that a distinguished bomber in the second world war, Mr. Robert Wannop, and many of his colleagues had disposed of large quantities of chemical and incendiary bombs in Cardigan bay. The British public want to know how many other dumps exist in seas around Britain, where they are and what their state is. Is it not time that the Minister's Department conducted a comprehensive survey and provided the public with the much-needed answers to those questions?

I did not have the great joy of reading the Western Mail yesterday—it passed me by—but I shall ensure that I receive a copy so that I may establish more carefully the basis of the hon. Gentleman's claim. As we have said throughout this matter, there is no marine, navigational, safety or other defence requirement to conduct further monitoring. We have already released a substantial amount of information—the most detailed information that has ever been released in a parliamentary answer—on all the dumping sites. Scientific opinion is that, if left undisturbed, such sites present no significant risk to human health or to the marine environment. I shall certainly read the article that the hon. Gentleman mentioned and report back to him.

Is my hon. Friend aware that the local authority in Dumfries and Galloway has been concerned at the washing ashore of incendiaries following the installation of the pipeline? Will he assure me that all Ministries concerned will come to a conclusion on the way forward before a decision must be made on the interconnector between Scotland and Northern Ireland?

I am grateful to my right hon. Friend. Of course we liaise closely with the Scottish Office on the matter. I am sure that he will wish to pay tribute to the remarkable work of members of the Royal Navy's Clyde submarine base clearance diving unit and the Scotland, northern England and Northern Ireland diving units, who have cleared approximately 4,500 devices from affected beaches. I take note of what he said.

As the House will be interested today in the change of personnel at British Gas, what direct contacts have been made with British Gas on the laying of the pipeline? What issues were discussed? On what dates were meetings held and what recommendations, if any, were made by the Ministry of Defence?

A contractor working for British Gas surveyed the proposed route north of Beaufort's dyke dump before the pipeline was laid and filmed metallic objects and other debris on the sea bed. The contractor notified the MOD on 29 September that it intended to clear the proposed route. The MOD advised against that, but following confirmation that the Health and Safety Executive had accepted the company's risk assessment, work was allowed to continue. Throughout this matter, the MOD has treated the problem extremely responsibly. Explosive ordnance disposal teams will, whenever necessary, continue to undertake any clearance work.

To ask the Secretary of State for Defence when he will publish his departmental report regarding homosexuality in the armed forces. [12030]

I expect to receive the homosexuality assessment team's report later this month and, when I have considered it, a copy will be placed in the Library of the House.

Will my hon. Friend confirm or deny the reports in today's Evening Standard?

Again, that is a pleasure that has passed me by. I assure my hon. Friend, however, that neither I nor my right hon. and hon. Friends have yet received the report. When we do, we will give it the most careful consideration. I am grateful for the sensible and realistic way in which my hon. Friend has approached these matters and for the helpful guidance that he has frequently given.

Is it not true that many homosexual service men were decorated for bravery, for gallantry in the field and for their courage during the second world war? Will the Minister confirm that from the Dispatch Box?

I am sure that, in the course of a number of global conflicts, a number of homosexuals have acted with the highest gallantry. The view of service chiefs and Ministers is based not in any way on moral judgment, but on the impracticality of homosexual behaviour, which is clearly not compatible with service life.

Will my hon. Friend give the House a clear undertaking that no changes will be effected in the armed forces against the wishes of those currently serving?

I know that my hon. Friend will accept from me the clear statement that I have just made, but he will also understand why we commissioned the report, the basis of which will form part of a paper that is to be submitted to the Select Committee on the Armed Forces Bill. A copy will placed in the Library. The House will have a full chance to discuss such important matters, but the view of service chiefs, of Ministers and, I have to say, of the great majority of the people in the armed forces, is exactly as I have outlined.

Is there not some inconsistency in Government policy towards homosexuals in the armed forces? Is it not technically possible for a Defence Minister to be homosexual, even though it is unlawful for someone in the armed forces to be homosexual? Is not that unfair and inconsistent?

I have rarely found inconsistencies in Government policy of any sort.

To ask the Secretary of State for Defence what proportion of expenditure is currently devoted to defence; and what is the current European average. [12032]

My Department expects to spend about 3 per cent. of gross domestic product in 1995–96 compared with the current NATO European average of 2.3 per cent. of GDP.

Have not successive Labour party conferences voted to reduce the proportion of our GDP devoted to defence expenditure to the European average? The question was avoided at the most recent Labour party conference only because it was not put to the conference. Will my right hon. Friend say what effect such a policy would have on our ability to meet our NATO commitments and to defend ourselves?

On the figures that I have given my hon. Friend, it would mean a reduction of more than £4.5 billion in Britain's defence budget. I can confirm that successive Labour party conferences have voted to reduce this country's spending to the European average. Indeed, I calculated the figure so as to give the most benefit to the Labour party, because I used the average of the NATO European countries. If a broader definition were drawn, the figures might have been even more divergent. The time has come for the Labour defence spokesmen to tell us whether the Opposition would increase or decrease defence spending, and whether they would follow the dictation of their party and satisfy their hon. Friends by reducing spending by £4.5 billion or more.

He is a beauty, is he not, Madam Speaker? That is all a scare story to cover up the Secretary of State's own incompetence and cuts. Does he remember that the same scare stories appeared in the 1992 manifesto, in which it was claimed that Labour

"would devastate our conventional forces by cuts of … 27 per cent."?

The hon. Gentleman has such contempt for his own party and its conference that he sums it up as a "scare story". I am not inventing things; I am talking about Labour party conferences year after year. What I want to know is whether the hon. Gentleman sticks with his party and his party conference. Would he increase defence spending or reduce it? The whole House will have noticed that he had nothing to say about what a Labour Government would actually do.

Does my right hon. Friend agree that it would be inconsistent for the Government to implement further defence cuts while their Back Benchers were calling for orders for factories in their constituencies and for the deployment of troops to all sorts of destinations in the third world, but that that is what we hear again and again from Opposition Members?

It is indeed. There are no more vociferous voices than those of Labour Members calling for orders for their constituencies—yet their party's policy is to reduce spending. In the debate on the Navy the other day, three Labour Members told us once again that they are active members of the Campaign for Nuclear Disarmament and that they want our nuclear deterrent to be abolished. What have the Front-Bench team to say about such things? Why do they not tell us the proper policy of the Labour party and, in the process, how they propose to deal with a Labour conference and Labour Back Benchers whose determination to cut this country's defences will not be silenced?

Is not it true, once we have cut all the cackle, that the Labour party conference regularly passes resolutions proposing a cut in defence expenditure, and the Tory Government carry them out?

If the hon. Gentleman is so uninfluential in his own party, I do not know why he does not give up and find something else to do.

Does my right hon. Friend recall that the Labour Government's major decision was to cancel the TSR2—the most magnificent aircraft at the time—which decimated jobs in Preston and lost a 10-year lead in electronics?

Hon. Members on both sides of the House who represent constituencies that depend on defence orders should remember that the contrast between a Conservative Government and a Labour Government is that a Conservative Government announce orders and a Labour Government announce cancellations.

To ask the Secretary of State for Defence how much money has been spent by his Department on the official service residences in the past five years. [12033]

Over the past two years, £2.61 million and £1.51 million respectively has been spent on maintenance, building work, furniture and fittings of official service residences. I have today placed in the Library of the House my Department's detailed response to Sir Peter Cazalet's recommendations, which includes a reduced list of posts that carry an entitlement to an official service residence. The list shows that we have reduced such posts from 75 to 48, with further reductions to 44 as other posts lapse. I understand that Sir Peter is very satisfied by the way in which my Department has implemented his recommendations.

Given last year's scandal about expenditure on official service residences, including £33,000 for a set of curtains, does the Minister agree that such a gross waste of taxpayers' money must stop or does he agree with the Daily Express that it makes the Secretary of State appear like

"a squalid little estate agent"?

No, I do not agree with the Daily Express. The hon. Lady has plainly not done her homework on the subject. In May 1995, the Government commissioned Sir Peter Cazalet, to whom we owe a great debt of gratitude for a very thorough piece of work, to report on representational entertainment in the armed forces. A copy of that report has been placed in the Library. Since then, and in the light of the Cazalet report, a great deal of work has been done and I am pleased to say that we have been able to implement Sir Peter's recommendations in full. I hope that the Labour party accepts that, in future, such matters will be managed more effectively and efficiently, and that, above all, there is no doubt that there is an important requirement for the services, which are a golden asset to this country, to entertain where they have a significant representational role.

Will my hon. Friend confirm that our senior officers—when they are not living cheek-by-jowl with service men while winning wars or keeping the peace— are often occupying their first permanent home after a career of moving their wives and families around the world? Do they not occupy houses that represent the dignity of the rank that they hold for a short period? Is not that very necessary in the armed forces? It would be entirely inappropriate for the Prime Minister to live in Lewisham, for example, just as it would be inappropriate for senior officers not to live in official service residences.

My hon. Friend, through his constituency interest, is well aware of the importance of the representational role of very senior officers in all three services. We can now account for these matters more effectively, and I hope that we will be able to go forward from here.

Is not the sale of Haymes Garth another example of the breathtaking incompetence of the MOD? When added to the sale of the married quarters estate, does not that comprise the giveaway of the century? Will the Minister confirm that the proceeds of the sales will go to the Treasury, but that future rents will come from the Defence budget? Is not that a defence cut by the back door?

That was as fine a display of soundbites as I have heard this year, and it displayed the politics of mediocrity and envy for which the Labour party is famous. Let us establish the facts—Haymes Garth is being sold and, very sadly, the officer who was previously concerned has left the service. The Cazalet report, which was commissioned by the Government, has been thoroughly examined and all of its recommendations carried out. The hon. Gentleman's question seems extraordinary in those circumstances.

To ask the Secretary of State for Defence what is his policy in reissuing lost medals for ex-service men. [12034]

Where evidence of genuine loss is produced, replacement medals can be supplied. Replacements are charged at cost.

Will my hon. Friend accept the grateful thanks of my constituent, Mr. Edwin Rymer, who lost his war medals but was able to regain them, although at a cost of £70—almost a week's pension? Will he also accept that Mr. Rymer and his generation of war heroes would be absolutely devastated if the freedom to run our country for which they fought were ever to be lost? Would not a Labour Government hand over that freedom lock, stock and barrel to Europe?

My hon. Friend does well to highlight again Labour's imperfect understanding of defence matters. I am grateful for her tribute to the work done by the medals office of the Ministry of Defence. We realise how distressing it is when treasured medals are lost or stolen. Claims for replacement take some time to process, as it is important that they are properly verified. As the years go past, such requests will increase, and we must make sure that they are properly satisfied by having an effective and efficient operation in place. As for her question about the Labour party, defence and Europe, the least said the better.

Will the Minister consider issuing medals to the service men who advised against the route of the gas pipeline across Beaufort's dyke? Will the Government examine the route of the proposed electricity interconnector with the same degree of care—

Order. The hon. Gentleman is abusing Question Time. He stood to ask a supplementary question on the subject of Beaufort's dyke, but was not called. He now seeks to ask his question, but he will not do so.

To ask the Secretary of State for Defence what recent discussions he has had with his American counterpart concerning leasing American F16 aircraft. [12035]

The question was discussed briefly during a meeting with him in October last year.

Will the Secretary of State confirm that the plan to lease American F16 aircraft was the brainchild of David Hart? Will he further confirm that the plan is bitterly opposed by the chief of the RAF, Air Chief Marshal Sir Michael Graydon? Does he agree that to proceed with the F16 will be a kick in the teeth for Lancashire aerospace workers who are working on the Eurofighter?

I do not agree with any of that. It is a perfectly simple matter of ensuring that the United Kingdom has the best equipment for its defence. In deciding whether to upgrade the Tornado F3, it is necessary for us to make a comparison with the other courses that we might follow, which include leasing the F16.

Will my right hon. Friend go a little further and confirm the Government's absolute commitment to the Eurofighter project? In the long run, will that not give the RAF the multi-role aircraft that it needs for the future?

Yes, my hon. Friend is right. The Government have on many occasions made clear their commitment to Eurofighter, and I am pleased to do so again today. Thanks to the good work of my hon. Friend the Minister of State for Defence Procurement, that project now has the green light. This discussion about the F3 and F16 is about how we fill the gap for that capability between now and the day that we have the Eurofighter. I am pleased to say that the latter will be an excellent aircraft for the RAF.

Does the Secretary of State recall grumbling to his American counterpart just two weeks ago that Britain had placed defence orders worth more than £5 billion with the United States and arguing that it ought to reciprocate with some orders for British defence equipment? In the light of that grumbling, will he drop his obsession with this one-way deal to lease F16s, which will cost thousands of British jobs and be very expensive, as we shall have to adapt the refuelling arrangements and the aircraft will require new support systems?

I went to Washington not to grumble, but to represent my country and to say that we demand a two-way street in defence procurement. It is true that, last year, we placed orders worth £5 billion with the United States and, therefore, we look to that country to buy defence equipment from us. I am pleased to say that it is buying at the rate of about £800 million a year, and I want to see more of that. The hon. Gentleman is the Opposition defence spokesman and he wants to hold my job. He cannot be so irresponsible as to say that, if he were in my position, he would not compare one project with another. If he is saying that, there will be no value for money and no way of ensuring that Britain has the defences that she requires.

To ask the Secretary of State for Defence what assessment he has made of the export potential of United Kingdom defence industries; and if he will make a statement. [12036]

British defence equipment manufacturers continue to enjoy success in the export market. In 1995, they won contracts worth about £5 billion. That achievement makes us the second largest exporter in the world.

Can my hon. Friend give any estimate of how many hundreds of thousands of jobs are dependent on our defence industries? Is it not the case that, if ever the Labour party were in a position to carry out its conference policies of reducing spending to the European average level, a large number of those jobs would be in jeopardy in Labour as well as Conservative constituencies?

My hon. Friend is right. Around 400,000 jobs throughout the United Kingdom depend on the defence industry. If we were to reduce spending on defence by £4.5 billion every year, it would be devastating to the British defence industry. That is why it is plain to the British people that we cannot trust Labour on defence, or even on industry for that matter.

Is the Minister aware of the large export potential for British arms in Europe, both in the European Union and the wider continent? Does he find helpful the continuing public hostility of the Secretary of State to European integration and co-operation? Does he find helpful the speech that the Minister of State made in Munich last week, in which he invited Germany, in effect, to re-arm? The last person to say in Munich, "Deutschland Erwache!" which means "Germany Arise, Germany Awake!", caused some little trouble in Europe. Is it not the case that, while we have a Defence Department that is so hostile to European integration and co-operation, the future for Britain's defence industry is poor indeed?

That question was total, unmitigated drivel. When British defence exports have risen from 15 per cent. of world market share in 1994 to 19 per cent. in 1995, we should feel proud of what the country has done and realise that that shows the strength of British industry and the support of the British Government and the armed forces. We should talk about, for example, the Red Arrows' recent tour, which was a fantastic aerial display. They are excellent ambassadors for British industry. For the hon. Gentleman to come up with a question such as that is pathetic.

Given the importance of the arms industry to the north-west, when my hon. Friend next speaks to his American counterpart, will he ensure that there is fairness in the export of arms to eastern Europe and that certain statements made by the Americans to the effect that eastern European countries will be more likely to be able to join NATO if they buy American combat planes are stopped?

I am grateful to my hon. Friend. I have some sympathy with what he says because whether countries join NATO does not depend on their buying high-tech US equipment. That is something that they need to be well aware of before they make their decisions

To ask the Secretary of State for Defence if he will evaluate the "Time Watch" programme on prisoners from the Korean war, a transcript of which has been sent to his Department; and if he will update the evidence produced by his Department during the meeting between a Minister of his Department and the hon. Member for Linlithgow on this subject. [12037]

I have great sympathy for the families of service men who remain unaccounted for following the Korean war. Nothing has been discovered since the hon. Gentleman's meeting which has altered our view that there is no evidence that British service men were improperly detained after the post-hostilities repatriations. We will, of course, follow up any evidence if it should emerge.

As it now seems not entirely inconceivable—I put it no higher—that national service contemporaries of mine in the Royal Armoured Corps could still be in remote Russian camps after 45 years, and as Russia is becoming more free, will the Government follow up any possibility that there are British people, all these years after the Korean and Vietnam wars, still in those camps?

I wholly understand and applaud the hon. Gentleman's honourable concern and sympathy for those who still remain unaccounted for. His words will, I am sure, have been recognised by those families that are affected. As he knows, most careful and detailed investigations were carried out by successive Governments and Administrations to resolve the cases of service men unaccounted for. No evidence has been found of any British service men being detained, but I assure him that we will, and are, taking advantage of greater openness in Russia. My Department has in recent years carried out detailed research and exchanged information with US and Russian experts to see whether any evidence could be found. No new evidence has emerged. I assure the hon. Gentleman that we shall continue to work hard where any leads emerge.

To ask the Secretary of State for Defence what recent additions to the effectiveness of the Royal Navy have been introduced. [12038]

The Government continue to maintain and enhance the operational effectiveness of the Royal Navy. Over the past year, the second Trident submarine, HMS Victorious, has entered service, the type 23 frigate HMS Richmond has been accepted and the helicopter carrier HMS Ocean has been launched. In addition, a further seven upgraded Sea Harrier aircraft have been delivered.

How many ships are currently on order or out to tender for the Royal Navy? Will my hon. Friend assure me that none of those orders will be cancelled, which is what used to happen under the last Labour Government, when Labour used to say one thing and do another?

I agree with my hon. Friend. At least our decisions are positive. As my right hon. Friend the Secretary of State said, Labour's decisions on, for example, the TSR2 were all cancellations. Labour would have cancelled Trident. Even the right hon. Member for Sedgefield (Mr. Blair) once said that he would like to ban all nuclear weapons from our soil. We know that Labour cannot be trusted on defence.

Will the Minister accept that the effectiveness of the Royal Navy would be improved by modernising its amphibious capability? Will he therefore tell the House and my constituents when he expects the delayed contract for the replacement of HMS Fearless and HMS Intrepid to be signed?

I accept that the amphibious capability is very important indeed, which is one of the reasons why on Tuesday last week I went to see HMS Fearless as it was being maintained and re-equipped. We believe that it will come out of dock on schedule, in time for its exercise in April. It is very important to maintain that important capability.

To ask the Secretary of State for Defence what assessment has been made of the effect on Britain's contribution to peacekeeping operations around the world of reducing United Kingdom defence spending to the European average. [12039]

If any Government were to reduce spending to the European average of 2.3 per cent. of gross domestic product, they would be forced to cut spending on defence by more than £4.5 billion. That would severely undermine our capacity to undertake operations of any kind.

Does my right hon. Friend agree that it is incredible hypocrisy for Opposition Members on one hand to support, by and large, peacekeeping operations and on the other to call for cuts that would be the equivalent of all 40 infantry battalions?

Every Labour Government increase taxes. Every Labour Government dream up new ways of spending public money and therefore every Labour Government are subject to intense pressure from their Back Benchers to cut defence spending. That is ultimately why we know we cannot trust the Labour party on defence.

To ask the Prime Minister if he will list his official engagements for Tuesday 6 February. [12055]

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Does my right hon. Friend agree that the considerable strength of the economy throughout the country, including Scotland, is based in large measure on reduced burdens on business? During his busy day yesterday, did he have the opportunity to—[Interruption.]

Order.

Did my right hon. Friend have the opportunity to read reports in Scottish newspapers that two different spokesmen had said diametrically different things about whether extra public spending would be required to carry out Labour's plans for Scotland?

I am not remotely surprised to hear that Opposition Members say different things about their devolution policy. They have not yet thought through that policy; it is full of holes and full of damage. We said from the outset that a Scottish Assembly would require increased taxation and increased public expenditure. The right hon. Member for Sedgefield (Mr. Blair) has, I think, referred to that as utter rubbish. The hon. Member for Dundee, East (Mr. McAllion) has confirmed that that is indeed the case and that taxes will go up—a tartan tax of £6 per week initially, but undoubtedly more later. Another instance of Labour saying one thing and doing another.

When customer complaints to British Gas have doubled and the company has been forced to split into two today because of huge losses on gas contracts, does the Prime Minister think that the leaving package of the chief executive—a £4 million pension fund, an annual income of £250,000 a year and £120,000 in consultancy fees—is justified?

As a matter of fact, the company has split into two to increase competition, which I should have thought the right hon. Gentleman would have liked. As for the package that the right hon. Gentleman mentioned, that, in the private sector, is a matter for the shareholders. As those shareholders include the National Union of Rail, Maritime and Transport Workers, I suggest that the right hon. Gentleman takes it up with the union. If the shareholders are unhappy with the arrangements, no doubt they will pursue the matter. If he does not know how to get the RMT on his side, he can ask the right hon. Member for Kingston upon Hull, East (Mr. Prescott), the deputy leader of the Labour party, who is sponsored by it.

Do we take it from that answer that the Prime Minister recognises no responsibility at all on the part of Government? [Interruption.]

Order.

Two years ago the Prime Minister told us that he found those excesses distasteful, and they have grown since then. He then told us to wait for the Greenbury committee, and the excesses continued to grow. We have had Greenbury and nothing has happened. When will the Prime Minister act in the public interest to make those privatised utilities serve the public and not a small group at the top?

A moment ago, I explained to the right hon. Gentleman that he and one of his hon. Friends were saying different things. We have it again here. I wonder whether the right hon. Gentleman agrees that the Government should not attempt to sit in the boardroom in a metaphysical sense. One of his hon. Friends said:

"We believe that people should be rewarded for a performance, whether in the form of salary or the granting of share options".

"It is not for me to spell out the benchmarks of success".

With all due respect to the Prime Minister, can he not see the difference between people operating within a highly competitive market and the privatised utilities operating monopoly services? Can there be any more telling expression of Conservative values than the Deputy Prime Minister yesterday condoning late payment to small companies while today condoning the excesses in the privatised utilities? One group of hard-working people is told to wait for its money and the other group is given by the Government a licence to print it.

Let me explain to the right hon. Gentleman the benefits of privatisation for millions of people who happen to be consumers. Gas prices have fallen by more than 20 per cent. since privatisation. Potential new suppliers are offering price reductions of 15 to 20 per cent. in the south-west. Personally, I believe that we need

"the enterprise of the market and the rigours of competition".

Will my right hon. Friend join me in paying tribute to the exceptional courage of 21-year-old Fleur Lombard who came from the High Peak and who lost her life at the weekend in the course of her work as a firefighter? Does my right hon. Friend agree that there is great scope for a scheme of rewards to recognise the contributions made by young people in all walks of life, whether they have shown great courage—as in Fleur's case—or they have made a contribution to others and to society? Will he consider whether such a scheme could be backed by the Government?

I will of course consider the matter. I am sure that the whole House will join me in expressing our sympathy to the family of Fleur and those of the other firefighters who have lost their lives in service. There is no doubt that such incidents underline the selfless bravery of the fire service. On this occasion, a young lady lost her life while seeking to save the lives of other people. I shall certainly consider what my hon. Friend has said.

Does the Prime Minister think that it is right to delay payment on other people's bills and to use their money to gain interest for oneself? Having done that, does he think it wise to then boast about it?

Let me say to the right hon. Gentleman—

Can't pay, won't pay.

That reminds me of what the trade unions say about their control over the Labour party. They say that unless they maintain that control, they will not pay for the Labour party, and I am grateful to the hon. Member for Bolsover (Mr. Skinner) for reminding me of that.

Has my right hon. Friend noticed the remarks of the Prime Minister of Belgium, delivered at Davos at the weekend, to the effect that, if the single currency does not proceed in 1999, the single market will collapse? Is it not the case that Belgium has not the slightest chance of meeting the Maastricht criteria as its general Government gross debt is more than twice the threshold level set down in the Maastricht treaty? Does my right hon. Friend believe that there is a secret agenda to proceed with the single currency despite the treaty of Maastricht? Do not Mr. Dehaene's remarks vindicate my right hon. Friend's decision to veto Mr. Dehaene as President of the European Commission?

I certainly do not believe that the single market would be at risk if the single currency did not proceed in 1999 or at any other time in the future. I do not think that anyone can seriously dispute that, at the moment, there are uncertainties about the timetable. No one can say with absolute certainty which countries might qualify for stage 3 if it goes ahead in 1999. What is relevant is that we must address the key issues about how stage 3 would work, and I have raised that point at successive European Councils. Were it to proceed without the right economic background, there is no doubt that it would be a disaster, not just for the countries taking part, but for all the countries of the European Union.

To ask the Prime Minister if he will list his official engagements for Tuesday 6 February. [12056]

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

Does the Prime Minister agree with the Chancellor of the Exchequer in his condemnation of late payment as a serious threat to the very survival of many small firms, or does he side with the Deputy Prime Minister, who advocates becoming skilful at keeping creditors away? Is not that latter approach a kick in the teeth for millions of honest small businesses? Which one does the Prime Minister support? May we have a straight answer?

I think that the hon. Gentleman must have been dozing, because a few moments ago I set out a range of measures that the Government have introduced to encourage prompt payment, some of them initiated by my right hon. Friend the Deputy Prime Minister.

As last week we all heard the German Chancellor say that integration would be a matter of war and peace in the 21st century, will the Prime Minister tell Herr Kohl that integration and federation forced on countries and peoples that are free, against their will, often result in civil war? Where is Yugoslavia now? Will my right hon. Friend tell Chancellor Kohl that this country takes it ill when we hear loose talk of war from Germany?

The whole House recognises the importance of examining very carefully what criteria there might be for any countries that decide to move ahead to stage 3. We need to look at what has been achieved in the European Union over the past 30 years or so and to ensure that that is not imperilled by moves to other advanced changes for which the European Union is not yet ready. That needs to be a pragmatic debate on whether the economic circumstances are right for movement and on what the implications would be, both in the short term and in the long term, for the countries that might be in a single currency and for those that might not be.

To ask the Prime Minister if he will list his official engagements for Tuesday 6 February. [12057]

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

Is the Prime Minister aware of the growing feeling that the country is being run for and by a narrow magic circle of privileged people? In that regard, will he tell the House how it is that former Eton toff Darius Guppy can negotiate his sentence and negotiate his way out of prison—a prison that he likened to his school, Eton? How is it that top rail managers can fail to pay rail ticket fares yet not suffer any penalty? How is it that Cedric Brown can have a massive windfall pay-off? Is it not a case of, "It's the rich what gets the pleasure and the poor what gets the blame"?

That was an exceedingly well worked pay-off line by the hon. Gentleman, but I am not sure that the build-up merited it. This is the first time in my life that I have been told that I am part of a magic circle, and I do not think that I like it.