House of Commons Hansard Debates for 4 Mar 1993

Retail Sales

10. Mr. John Marshall : To ask the Chancellor of the Exchequer what plans he has to visit Hendon South to meet the Golders Green chamber of commerce to discuss the level of retail sales.

Mr. Lamont : I have no plans at present to visit the Golders Green chamber of commerce. To the best of my knowledge, I have received no such invitation. If I did so, however, I should be pleased to tell the chamber of commerce that the volume of retail sales in the three months to January has never been higher.

Mr. Marshall : Welcome as the increase in retail sales is, does my right hon. Friend accept that the level of consumer confidence is still a fragile plant which could be anaesthetised for some months if VAT were imposed on food?

Mr. Lamont : I have noted my hon. Friend's comment.

Value Added Tax

11. Mr. Kirkwood : To ask the Chancellor of the Exchequer what recent representations he has received on the imposition of VAT.

Mr. Nelson : Many representations have been received, and these will be considered in the run-up to the Budget.

Mr. Kirkwood : Has the Minister received any representations from the bloodstock industry about VAT? Is he aware of the absurdity of the situation in which it is profitable to take horses to Ireland, leave them on the tarmac for 30 minutes to complete the transaction at the lower rates of VAT there and then fly them back to this country? Is he further aware that the French Government have managed to get a derogation from the VAT regime to protect their bloodstock industry? When will the Government do the same for the United Kingdom industry?

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Mr. Nelson : I have taken careful note of what the hon. Gentleman says. He will be aware that negotiations are taking place between Customs and Excise and the Jockey Club. I hope that they will come to a satisfactory conclusion.

Mr. Alan Howarth : Does my hon. Friend accept that the Government have acted imaginatively over the years to ease the burden of tax on charities? Will he bear in mind, however, that the beneficial effects of those changes will be significantly undone if charities have to pay VAT on items that are currently zero rated? Will he listen sympathetically and respond positively to the calls to relieve charities of their existing burden of VAT?

Mr. Nelson : The Government always listen sympathetically on such matters.

12. Mr. Hall : To ask the Chancellor of the Exchequer what was the total yield from VAT in 1978-79 ; and what is the expected total yield for 1992-93 in cash and in 1992-93 prices.

Mr. Dorrell : The yield from VAT in 1978-79 was £4.8 billion, which is worth £13.2 billion at today's prices. The expected yield for the current year is £37.7 billion.

Mr. Hall : The House will be aware that since 1979 the Tory Government have put up VAT from 8 to 17.5 per cent. and have increased the number of goods covered by VAT 14 times. That has added to the increased tax burden. Will the Minister confirm that if VAT is put on books, periodicals and newspapers, it will be in breach of Tory party election pledges, but in line with Tory actions in government?

Mr. Dorrell : I do not intend to say anything about what might happen in my right hon. Friend's Budget, but it is passing strange that the Government should be under attack for pursuing precisely the policy that they always said they would pursue--that within a constant tax burden they would shift the burden from income to expenditure. That is what we said we would do, and that is what we have done.

Mr. Ian Taylor : Will my hon. Friend, although enjoying purdah at the moment, note that although special representations are being made about VAT, he and his right hon. Friend the Chancellor should maintain maximum flexibility? Many of us believe that broader-based VAT is the right way forward, with special categories, especially for the poor, which could be targeted in other ways. We want the maximum flexibility and we must bear in mind that tightening the tax regime at present is the right policy, given our much looser monetary conditions.

Mr. Dorrell : I will not put up a vigorous defence against my hon. Friend's suggestion that Front-Bench Members should retain room for flexibility.

Public Expenditure Reviews

13. Mr. Gordon Prentice : To ask the Chancellor of the Exchequer what criteria were used to select the four Government Departments to be included in the public expenditure reviews.

Mr. Portillo : The Government will be reviewing the expenditure of every Department before the end of this

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Parliament. The four Departments chosen to start the review process are among the largest and the fastest growing.

Mr. Prentice : Is there not a case, notwithstanding "Options for Change", for including defence in the public expenditure reviews, especially since the Financial Times tells us that this economically battered nation spends 4 per cent. of its gross domestic product on defence, compared with 3.4 per cent. by France and 2.2 per cent. by Germany? Is there not a case for the Government paying heed to the injunctions of the Financial Times?

Mr. Portillo : "Options for Change" was a very important review indeed, and I do not think that it is yet timely to go back over that. The hon. Gentleman would be making a reasonable point if he were to say that we should always keep our defence spending under review and in line with our world commitments. On the other hand, as the hon. Gentleman is a former leader of the Fulham and Hammersmith council, which doubled the rates overnight, I am loth to take lectures on public spending from him.

PRIME MINISTER

Engagements

Q1. Mrs. Helen Jackson : To ask the Prime Minister if he will list his official engagements for Thursday 4 March.

The Prime Minister (Mr. John Major) : This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mrs. Jackson : Does the Prime Minister recall telling Parliament in 1989 :

"I take my own share of responsibility It is not something I seek to heap upon my predecessor"?

Is he today going to blame Baroness Thatcher for the disastrous damage done to manufacturing industry while he was Chancellor of the Exchequer?

The Prime Minister : As it happens, my right hon. and noble Friend did more to help British industry than the Labour party has ever done. If the hon. Lady would like an illustration of that, in the 1980s the number of manufacturing companies rose from 144,000 to 165, 000. I will provide the hon. Lady with a long list of other improvements, should she wish to have it.

Q2. Mr. Rowe : To ask the Prime Minister if he will list his official engagements for Thursday 4 March.

The Prime Minister : I refer my hon. Friend to the answer I gave some moments ago.

Mr. Rowe : In every year of this Conservative Government the Home Office has paid for and researched very carefully experiments using voluntary organisations and others to rehabilitate young offenders. That research has consistently demonstrated a very much better rate of recovery than any other method used. [Interruption.] Every time these experiments have shown--

Madam Speaker : Order. I have not yet heard a question from the hon. Gentleman. I have heard statements, but no question. I now need a question.

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Mr. Rowe : Is my right hon. Friend aware that every time these experiments are shown to be a success the Home Office funding is withdrawn? Will he make certain that, when such experiments are shown to be successful, Government expenditure is maintained to enable them to continue?

The Prime Minister : The Home Office always monitors the performance of the projects that it funds to ensure the value for money and efficiency of those projects. Where the projects are efficient, there is a possibility of extending funding for longer than the three-year period.

Mr. John Smith : Will the Prime Minister explain what he meant when he said that he was a minority in his predecessor's Administration? Is it not deeply revealing about the Prime Minister that, having run out of excuses for the abject failure of his Government's economic policies, he is now trying to pin the blame on his predecessor, in whose Government he was responsible for economic policy both as Chief Secretary and as Chancellor of the Exchequer?

The Prime Minister : The right hon. and learned Gentleman is very predictable. He is also misled yet again by newspaper reports, having not read the transcript of the interview. He really should give up reading newspapers ; I recommend it to him. If he had read the source material, he would have read that the question put to me was that the idea got about in the 1980s that making things was not so important. It was not my view, not my right hon. and noble Friend's view, and not the view of the then Government.

Mr. John Smith : The Prime Minister surely cannot complain about being misrepresented in interviews that he himself gives. Is he aware that in that interview he complained about what he called an inheritance of 15 per cent. interest rates and 11 per cent. inflation? Who does he think was Chancellor of the Exchequer in the preceding years? If we are to make sense of the Prime Minister, does he not understand that he means that he inherited them from himself?

The Prime Minister : The right hon. and learned Gentleman is being very slow. I shall explain the whole matter to him again. I suggest that he reads the transcript of the interview. As I explained to him a moment ago, I disagreed with the view put to me by the interviewer, as would my right hon. and noble Friend have disagreed with it. So far as interest rates are concerned, I was referring to the legacy of the recession that we are curing and which has now hit every other nation in Europe.

Mr. John Smith : Can the right hon. Gentleman explain why a Chancellor of the Exchequer has nothing to do with a recession that occurs in his period of office? Since he has been Prime Minister for more than two years, and since the right hon. and noble Lady is no longer here, why are we still losing 25,000 jobs every month in manufacturing industry and £136 billion in investment under his Administration? It has nothing to do with anyone else.

The Prime Minister : What the right hon. and learned Gentleman utterly fails to realise--which is why he remains on the Opposition Benches --is that what needs to be done to put this country in the right position for growth is what we have done. The last time there was 1.7 per cent.

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inflation was more than 25 years ago. Interest rates are now lower than anywhere else in the European Community.

If the right hon. and learned Gentleman were more aware of the position of manufacturing, he would know that exports are up on manufacturing. Capital spending on manufacturing is up. Compared with 10 years ago, there is exceptional growth in engineering, chemicals and other manufacturing. When will the right hon. and learned Gentleman stop talking this country down and start talking it up?

Sir Dudley Smith : Is my right hon. Friend aware that his sensible policies on the Bosnia-Herzegovina civil war are amply confirmed by current events?

The Prime Minister : I believe that my hon. Friend is entirely right about that. The important matter in the Bosnian war is to give every support one can to the peace talks in New York. They are crucial. They are the only realistic way of achieving real peace, and I very much welcome the Muslim agreement to a document on the cessation of hostilities. There still remains great difficulty in getting agreement on the map, but it is essential that all parties remain at those negotiations and negotiate seriously until we have a satisfactory agreement and the end of this bitter and nasty conflict.

Q3. Mr. Leighton : To ask the Prime Minister if he will list his official engagements for Thursday 4 March.

The Prime Minister : I refer the hon. Member to the answer I gave some moments ago.

Mr. Leighton : No one has spoken more graphically and poignantly about the evils of unemployment than the Prime Minister. Does he recall talking about what he called his "dole hell", searching for work every day when he was unemployed for 12 months as a 19-year-old in Brixton? Is he aware that in 1962 there was one unemployed person for each vacancy but now there are hundreds? Does he agree that a full employment society is a good society, but that the mass unemployment society over which he is presiding is an evil society? Now that he is Prime Minister, what steps will he take to put the aim of full employment at the top of his agenda?

The Prime Minister : The first essentials for making sure that we have a society that has full employment are low inflation, low interest rates and the right supply side policy for growth. The right way to make sure that we have skills is to put in place the training programmes that we have put in place, each one of which has been opposed by the hon. Gentleman.

Mr. Heald : Does my right hon. Friend agree with Lord Prior's comments yesterday that the conditions are now in place for British manufacturing exporters to perform better? Will he join me in congratulating the firms in north Hertfordshire that are doing just that, in particular Lucas CEL of Hitchin which is launching its new export product today?

The Prime Minister : Yes, I entirely agree with my hon. Friend. I am certainly happy to give my support to those particular projects. We have remarkable opportunities in front of us at the present time, as we find that we are hugely competitive in terms of the cuts in costs that we have seen in the past few years. We need to ensure that on

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this occasion, even though we have captured export markets, we do not surrender those for the returning home market. We need to keep the domestic market and continue to press ahead with further export markets.

Q4. Mr. Matthew Taylor : To ask the Prime Minister if he will list his official engagements for Thursday 4 March.

The Prime Minister : I refer the hon. Member to the answer I gave some moments ago.

Mr. Matthew Taylor : Does the Prime Minister agree that the people and businesses of the south-west and especially Cornwall--the poorest county in the whole of the country--cannot be expected to pay the highest water and electricity prices? What hope can he offer those people of a fair deal, given that he has already told them that he will give them no special help?

The Prime Minister : I think that if the hon. Gentleman looks he will find that the water prices to which he refers are similar in other counties to those in the west country. There is a substantial need to improve the water quality and supply in the west country and also, not least because of the importance of the tourist industry, to improve the bathing waters and other tourist facilities. That is a significant reason for the present level of water charges.

Mrs. Ann Winterton : Is my right hon. Friend aware that more than 300 Members of this House and of the other place recently attended an exhibition of obscene material that had been seized under the Obscene Publications Act 1959? Is he aware that Members were deeply shocked by what they saw and believe that the Obscene Publications Act needs urgent review? Will he accept the invitation that I have written to him to view the material privately so that he may reach his own informed conclusion about what action needs to be taken to clean up this free market in filth?

The Prime Minister : I have had a report of the particular material to which my hon. Friend refers. I am aware of the nature of it and how offensive it will be to most Members of this House and most people in this country. I have asked my right hon. and learned Friend the Home Secretary and my right hon. Friend the Secretary of State for National Heritage to consider what options exist for taking action against it.

Q5. Mr. Purchase : To ask the Prime Minister if he will list his official engagements for Thursday 4 March.

The Prime Minister : I refer the hon. Member to the answer I gave some moments ago.

Mr. Purchase : Does the Prime Minister realise that the people of the west midlands, once the workshop of the

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world but where now more than a quarter of a million people have been made unemployed in the past 13 years, will take no comfort from the fact that he appears to have gone along with the loss of their jobs? Does he think that they will understand him a little less and condemn him a little more?

The Prime Minister : The hon. Gentleman will be aware of the historic importance of the west midlands to manufacturing. He has neglected to mention the assistance in the autumn statement on capital allowances, car tax--very important to the west midlands--and maintained capital expenditure. He has utterly overlooked the lead that this country has taken in seeking a solution to the general agreement on tariffs and trade round, which is vital to the west midlands. He has also overlooked the primary importance of the motor car industry, which was in disarray some years ago under his party's Government but is now a net exporter and increasingly profitable.

Sir Fergus Montgomery : Has my right hon. Friend noticed that new car registrations are up 16 per cent. compared with a year ago? Is that not good news? Does he not think it strange that every time the economic news is good, the faces opposite get longer? Is it not time the Opposition stopped talking this country down?

The Prime Minister : I entirely agree with my hon. Friend about that, and it is a point which I have made in recent days. The increase in car registration is welcome news. It is a continuing trend over recent months. The only people who benefit from talking Britain down are our competitors. I hope that that is understood by every right hon. and hon. Member.

Q6. Mr. Kirkwood : To ask the Prime Minister if he will list his official engagements for Thursday 4 March.

The Prime Minister : I refer the hon. Member to the answer I gave some moments ago.

Mr. Kirkwood : The Prime Minister is right to give priority to the manufacturing sector of business in Britain, particularly small businesses, but what does he have in mind? Is he prepared to reduce the burden of rates which apply particularly to small businesses? Is he prepared, for instance, to allow small businesses to add statutory interest to bills that are overdue for undue periods of time? There is a long list of tangible things that the Prime Minister could do to give real physical expression to the words that he uttered recently in his interview in the national press. What tangible, concrete things has he in mind?

The Prime Minister : If the hon. Gentleman had been listening a few moments ago, I listed a number of them to the hon. Member for Wolverhampton, North-East (Mr. Purchase). As to other matters, he must wait and see.

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