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Mr. Hayes : Without in any way asking my hon. Friend to comment on the paper issued today by the Centre for Policy Studies on joining the ERM, as it has particularly said--and it is not exactly a nest of Left-wing vipers--that joining ERM would be the best anti-inflation policy that this country could have at present, will he ensure that that paper is widely disseminated among his colleagues?
Column 258Prime Minister agrees with him and with a wholly different point of view to the view the Chancellor has just stated on behalf of the Government?
Mr. Ryder : The hon. Gentleman obviously has not been listening to the replies that have been given. On several occasions today, and during questions on Tuesday to the Lord President, it was apparent that the Opposition were not listening to the answers. The answer is that the Prime Minister has set out on numerous occasions that Britain will enter the ERM when the conditions set out at Madrid have been met.
Mr. Bowis : Is it not a paradoxical fact, but a fact nevertheless, that under this Government as tax rates have come down the tax take has gone up, which has enabled us to increase in real terms spending on the services that are so necessary to this country? Is it not a fact that the public do not yet fully understand the relationship between lower tax rates and better public services? Is that not partly because Opposition Front- Bench spokesmen fail to understand that concept?
Mr. Lilley : My hon. Friend makes a good point. It is true that the higher the initial rate that we cut, the greater the response of revenue has been. Whereas under Labour, with tax rates of up to 98 per cent., the top 5 per cent. of taxpayers paid only 25 per cent. of income tax revenue, since we introduced those rates the top 5 per cent. of taxpayers pay nearer 30 per cent. of revenue.
Dr. Marek : When the Government tax the British people more heavily than they were taxed in the 1970s and when taxation as a percentage of gross domestic produced is still several per cent. higher than it was when the Labour Government left office in 1979, why does the Financial Secretary pile on the agony for home owners and insist on taxing them by making them pay twice as much for their mortgages as they would pay if they lived in Germany?
Mr. Lilley : I could answer that question more readily if I could explain why the Labour party has voted against every cut in the basic rate of income tax since this Government have been in office. Real standards of living, taking into account the rise in the retail price index, which includes mortgage interest payments, have risen for as long as I have been in Parliament under this Government.
Mr. Patrick Thompson : Is it not a fact that cannot be emphasised too much that tax reductions since 1979 for the top 5 per cent. of earners have led to increased revenue for the Exchequer? Does my hon. Friend agree that the economic policies of the Labour party would simply lead to less revenue for education and the Health Service?
Column 259lays the golden egg. Since we have reduced taxes, that goose has been laying fruitfully, and we have been harvesting it to the benefit of public services.
Mr. Lawson : As I said at the International Monetary Fund and World Bank's annual meetings in Washington, the case for a substantial quota increase has not been made, and the Government believe that a moderate increase in quotas is all that is needed.
Mr. Williams : Does the Chancellor recognise that since the last quota increase the growth in the world economy and the emergence of the international debt problem on their own justify a larger rate of increase than the Government are willing to support? Does he accept that historically important changes are taking place in eastern Europe, the success of which will depend on the economic progress of the countries concerned? Would it not be tragic if this unique opportunity, from which we have so much to gain in the West, were missed because we starved the IMF of the resources that it needs to play a constructive role?
Mr. Lawson : I can assure the right hon. Member that this historic opportunity, as he rightly calls it, will not be missed and the IMF will not be starved of the resources that it needs. The question is what does it need. The plain fact of the matter is that the IMF's liquidity today, before any quota increase, is larger than it was after the last quota increase, which my right hon. and learned Friend the Leader of the House played a large part in securing. But it is larger today before any further quota increase than it was immediately after the last quota increase, which itself was to some extent a response to the debt crisis which began with Mexico in 1982.
Sir William Clark : Is it not hypocritical for Labour Members to ask the Government to increase the quota to the IMF because, when they were in Government, they were taking money from the IMF? Is it not proof positive that the economy is sound that we can now consider increasing our quotas to the IMF when, under Labour, that would not happen?
Mr. Lawson : My hon. Friend makes a good point. As I said earlier, we contributed fully to the last quota increase, in 1983, and we shall contribute to the next quota increase whatever that may be. However, we shall not go cap in hand as beggars to the IMF, as the last Labour Government did in 1976.
Column 260problems with multiple debt? What measures does he propose to tackle this, bearing in mind that of the proceeds of the last child benefit freeze, two thirds went to his Department, and only a third on means-tested family benefit?
Mr. Lilley : The hon. Lady rightly points to measures that we have taken to target benefit better on those in need. As to those who are in debt, in my previous role, I took measures to urge the financial institutions to target their lending more effectively, because they, above all, have a vested interest in not lending to people who cannot repay.
Mr. Ian Taylor : Has not the reduction in income tax under this Government increased disposable income, which in turn has enabled more people to give to charitable causes, particularly those helping people in need? Does this not show the caring society that the Conservative Government have created?
Mr. Lilley : That is right, and giving to charity has roughly doubled in real terms under this Government. The fall in unemployment announced today, of some 50,000, is of the greatest benefit to those in need. I am surprised that there has been no welcome for it from the Labour party.
The Lord President of the Council and Leader of the House of Commons (Sir Geoffrey Howe) : I have been asked to reply I answer the hon. Lady for a second time this week by saying that my right hon. Friend the Prime Minister is attending the Commonwealth Heads of Government meeting in Kuala Lumpur.
Ms. Ruddock : What economies does the right hon. and learned Gentleman advise Londoners to make so that they can meet their mortgage repayments? The average repayment has increased by £161 a month in the past year, while average joint incomes have remained static.
Sir Geoffrey Howe : It is for householders and citizens to make up their own minds--[ Hon. Members :-- "Oh."] Would the Opposition have it any different? It is for such people to make up their own minds as to how they will react to the measures that are necessary to secure success in the battle against inflation. The House should notice that the measures that they will have to take are a great deal less burdensome than those that they would have to take if the Labour party were in office, because inflation would go through the roof.
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Baldry : Is my right hon. Friend aware that all those hon. Members who went to Ethiopia during the last drought will forever be haunted by what they saw? Is he further aware that because of crop failure, some 2 million people in Ethiopia face famine and starvation? While
Column 261Britain's response in food aid has been swift, the cycle of drought and famine in Ethiopia will never be broken while civil war and military conflict continue there. Is it not time for the international community to act to help to resolve that conflict, because next year, it may be too late for hundreds of thousands of people there?
Sir Geoffrey Howe : My hon. Friend is right to draw attention to the grave situation continuing in Ethiopia as a result of the combined effects of the harvest failure following famine and the continuation of the civil war. He is right to draw attention to the steps already taken by Her Majesty's Government to respond to this desperate human need. We have pledged two consignments of 5,000 tonnes of cereals this year. That makes a total of £4 million worth this year, and some £54 million worth since the beginning of 1987. Beyond that, the most pressing need must be to end the civil war. Therefore, it is a good thing that, a few weeks ago, direct preliminary talks between the Ethiopian Government and the Eritrean People's Liberation Front began. Further talks are due to take place in Nairobi on 18 November and the House will wish that they meet with some success in bringing this dreadful conflict to an end.
Mr. Kinnock : Now that the Chancellor of the Exchequer has repudiated Sir Alan Walters, who does the right hon. and learned Gentleman expect the Prime Minister to repudiate--her personal adviser or her Chancellor?
Sir Geoffrey Howe : The right hon. Gentleman should know perfectly well that throughout my time as Chancellor of the Exchequer Professor Alan Walters was the Prime Minister's economic adviser and in those circumstances, as today, his advice is one factor taken into account by the Prime Minister and the rest of the Government. The policy of the Government is as stated by people speaking on behalf of the Government. The Prime Minister and the Chancellor of the Exchequer have articulated policy in precisely the same terms and will continue to do so.
Mr. Kinnock : No answer was the stern reply. [Interruption.] I hear what the right hon. and learned Gentleman says. Is he also aware that Sir Alan says that the Prime Minister concurs with his view about British participation in the exchange rate mechanism? Is the right hon. and learned Gentleman saying that Sir Alan is not telling the truth about the Prime Minister's view?
Sir Geoffrey Howe : I am not required to answer for every nuance-- [Interruption.] --and it would be astonishing if I were. The Prime Minister's view is the one that I reiterated in the House on Tuesday and which my right hon. Friend the Chancellor of the Exchequer reiterated this afternoon. The views set out by the Prime Minister at the conclusion of the Madrid summit are well known to the House.
Mr. Ashby : Did my right hon. and learned Friend see the outcome of the proceedings in the Central Criminal Court today in respect of the Guildford Four? Is that not overwhelming proof that there should never be a return of capital punishment?
Column 262House that in the light of the outcome of the proceedings in the Court of Appeal this afternoon it is the intention of my right hon. Friend the Home Secretary to make a full statement to the House immediately after business questions. A serious miscarriage of justice which has led people to be wrongfully imprisoned for many years has been set right as a result of the police investigations and the Court of Appeal decision. It is right that the House should hear about it as soon as possible from the Home Secretary.
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. McAllion : Has the deputy Prime Minister had time to read the report published on Monday by the National Association of Citizens Advice Bureaux in which it recounts how it had to rescue a literally starving youngster from the streets? As there is growing concern about the plight of the young homeless who are denied benefit and forced on to the streets, often into crime, prostitution and drug abuse, is it not time that the Government, as well as preaching respect for human rights, began to practise it at home by restoring to 16 and 17-year-olds their right to income support?
Sir Geoffrey Howe : The whole House is bound to have sympathy with any such case. It is for that reason, apart from the wider implications of social policy, that we have maintained proper arrangements for the transition of those leaving school and going on to any form of further training, which will enable them to have their needs met in the most appropriate fashion.
Mr. Ian Bruce : Has my right hon. and learned Friend had the opportunity to look at the unemployment figures today and to reflect that the fall in unemployment is larger than the Labour party promised with billions of pounds of public subsidy? The economic policies of the Government and the high level of private investment have brought down unemployment yet again.
Sir Geoffrey Howe : I have, indeed, observed those figures and I am glad that they were drawn to the attention of the House during Treasury questions. The unemployment figures have fallen for the past 39 months and they fell by 50,000 last month. My hon. Friend underlines the point that the number of people in employment under this Government is at an all-time record. None of those things would have been remotely possible had this country been condemned to follow the policies recommended by the Labour party.
I refer the hon. Lady to the reply that I gave some moments ago.
Mrs. Clwyd : Given the assertion by the Prime Minister that Pol Pot and the Khmer Rouge should not be allowed to return to Cambodia and remembering that they were responsible for one of the worst cases of genocide this century, will the Government now challenge the seating at the United Nations of the Khmer Rouge-dominated coalition when Cambodia is debated on 15 November? Is
Column 263the deputy Prime Minister aware of the strength of public opinion in this country on that issue and the feeling that the Government should take a much more active and less hypocritical role in bringing an end to the bloodshed in Cambodia?
Sir Geoffrey Howe : The hon. Lady need be in no doubt about the Government's opposition to the prospect of a return of Pol Pot to effective Government in Cambodia. It has also been very important to secure the withdrawal, after years of illegal occupation, of the Vietnamese army. That at least has been achieved. The hon. Lady may rest assured that we will co- operate with our partners in the international community in maintaining our resistance to Pol Pot's return.
I refer my hon. Friend to the reply that I gave some moments ago.
Dr. Twinn : Has my right hon. and learned Friend seen the report that was published today which sets out the progress that has been made in developing the Health Service over the past 10 years including a record number of patients treated and a 20 per cent. increase in the number of family doctors? Will my right hon. and learned Friend ensure that those records, among others, are made known to the British Medical Association so that it can inject a little balance into its campaign against the Health Service reforms?
Sir Geoffrey Howe : I have seen the figures to which my hon. Friend refers so helpfully. Under this Government, the National Health Service has employed more doctors, nurses and dentists, and they are being paid much more in real terms, than when the Labour Government left office. The number of people being treated has risen sharply--both in-patients and out- patients. As my hon. Friend states, the BMA would do well to focus on that record of continuing progress and on the fact that the Government are wholly committed to ensuring even better levels of treatment for patients in future.
Mr. Salmond : With his long experience of high interest rates, can the deputy Prime Minister identify for the House the exact economic process whereby penal interest rates wrecking the finances of the fishing industry in the north-east of Scotland will contribute to the diminution of inflationary pressures in the south-east of England?
Sir Geoffrey Howe : The hon. Gentleman knows that interest rates apply throughout an economy. The level of interest rates is determined not only by what happens in this economy, but by interest rates around the world. That is why all countries seeking to challenge inflation effectively are relying on interest rates to play a substantial part in securing that reduction.
I refer my hon. Friend to the reply that I gave some moments ago.
Column 264progress has already been made--requires us to maintain effective and up-to-date conventional forces? Has my right hon. and learned Friend had a chance to assess this country's capacity to defend itself if £5 billion were cut from the United Kingdom's conventional force levels--the policy adopted by the recent Labour party conference?
Sir Geoffrey Howe : I have indeed. I endorse what my hon. Friend has said about the importance of achieving continued progress in nuclear and conventional arms negotiations. I also emphasise his points about the importance of maintaining our own independent deterrent capacity if we are to continue to play an effective role in that. I underline the fact that our ability to do that would be destroyed totally if we embraced the defence policy adopted at the last Labour party conference.
I refer the hon. Lady to the reply that I gave some moments ago.
Ms. Walley : Despite the right hon. and learned Gentleman's fine words a few moments ago, is he aware of the health profile report produced by Stoke-on-Trent city council which shows that the standard mortality rates in parts of the city are high and that life expectancy is as low as 62 for men and 70 for women in Chell and that our infant mortality and perinatal mortality rates are worse than the national average? Is he aware of the HMSO report produced today which shows that there has been a 6 per cent. reduction in the number of hospital beds? What comfort does the right hon. and learned Gentleman have for my constituents who now find that their special deprivation money has been taken away from the North Staffordshire district health authority?
Sir Geoffrey Howe : I am not able to comment on the relative level of infant mortality in that particular authority, but I am entitled to draw the hon. Lady's attention to the fact that over the past 10 years throughout the United Kingdom there has been a reduction in infant mortality to the extent of 30 per cent. per 1,000 live births. That is an important indicator of the extent to which the hon. Lady is wrong to judge progress in the Health Service simply by counting the number of beds. As a result of increased efficiency in the use of beds there has been a substantial increase in the number of patients treated both in and out of hospital, and so there has been an improvement in infant mortality.
Sir Hal Miller : Does my right hon. and learned Friend agree that the Jaguar motor company is a centre of excellence of design and product which we all wish to see expanded in this country and that the Government should not use their minority share to preclude consideration by all shareholders of whatever plans there may be for the expansion of that company?
Sir Geoffrey Howe : I understand my hon. Friend's emphasis on the importance of the continued prosperity of the Jaguar motor company. I am sure that the Government will bear in mind the point that he makes when considering how to handle their shareholding in the company.
I have nothing to add to the reply that I have already given.
Mr. Wardle : Does my right hon. and learned Friend agree that apartheid in South Africa will be brought to an end more quickly by quiet and persistent diplomacy than by extravagant and wild but empty rhetoric?
Sir Geoffrey Howe : I agree with my hon. Friend. The progress that is now being made in South Africa has undoubtedly been brought about by the sustained, effective, quiet diplomacy that this Government have deployed. That kind of policy has helped to bring about the most important changes involving the release of Walter Sisulu and the other long-term political detainees. We shall continue to press in the same way to secure the release of Nelson Mandela and the commencement of the discussions within South Africa for which the whole world is waiting.
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