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Mr. Clarke : We shall continue to determine monetary policy following the guidelines that we set out as a necessary discipline upon ourselves after our withdrawal from the exchange rate mechanism. There has been a steady reduction in interest rates in this country for a considerable time--about two years. That has helped to boost the recovery here and we shall have to ensure that the right conditions are retained here. We continue to have some of the lowest interest rates in the European Community and we are sustaining the strongest level of growth of any major economy within the Community.
Mr. Williams : Will the Minister comment on figures that were quoted in the May 1993 issue of Economic Trends ? Those figures showed that as household disposable income decreases the proportion paid in VAT increases and that although the top 10 per cent. of the population pay 6.1 per cent. of their net income in value added tax, the bottom 10 per cent. pay 11.5 per cent. of their income. Does not that mean that any increase in VAT will hit the poor twice as hard as it hits the rich?
Sir John Cope : No, it does not necessarily mean that. It depends how it is done and what is done. In any case, it is well known that the Government's policy has been to shift some of the weight of taxation from direct to indirect taxation, and the hon. Gentlemen has enabled me to demonstrate how we have been doing that.
Sir Michael Neubert : What estimate does my right hon. Friend make of the VAT that is lost as a result of builders operating legally, and in a significant number of cases illegally, under the VAT exempt ceilling and, worse, those in the black economy evading tax altogether? In view of the critical need to reduce the current deficit, what action will he take to recover that revenue and restore fair competition to the building industry?
Sir John Cope : There has always been some argument about where we should fix the bottom level of VAT for that purpose--the turnover level. Those immediately above it tend to argue that it should be increased ; those who feel that it would not be increased sufficiently to include them would, on the whole, like it moved further down to ensure that the smallest firms and one-man businesses are within the net. We try to reach a balanced judgment between those two pressures to fix the bottom level of VAT so that there is not too much burden either on the Customs and Excise in collecting it or on industry in filling in the forms. However, at the same time, we collect as much VAT as possible.
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.
Mr. Evans : Does my right hon. Friend agree that the appropriate conditions and criteria for adoption policy should be common sense and the interests of children, not the curse of politically correct thinking? Will my right hon. Friend join me in congratulating the Secretary of State for Health on her statement yesterday that makes a clear preference in adoption policy for married couples?
The Prime Minister : I am certainly happy to congratulate my right hon. Friend on her statement yesterday. I agree with what my hon. Friend has to say about the importance of common sense in adoption policy. There is no place for ideology in adoption ; it is not about social engineering but about providing loving homes for children in need.
Mr. John Smith : Can the Prime Minister tell us whether, following the discussions in Belfast yesterday and the reported comments by the Secretary of State for Northern Ireland, there is unlikely to be an early resumption of all-party talks among the constitutional parties in Northern Ireland? After the tragic events of recent days, is not there an inescapable moral obligation on all the constitutional parties in Northern Ireland to co-operate in a new dialogue without hesitation or reservation, and for the Government to make that point clearly and firmly to them all?
The Prime Minister : I very much hope that it will be possible for the talks to resume, and I shall be meeting the leaders of all the constitutional parties over the next few days. My right hon. and learned Friend and I certainly hope to resume those talks as speedily as possible.
Mr. John Smith : While I appreciate the importance that was rightly attached to dialogue between the Governments and to a proper response to the initiative taken by the Irish Government recently, will the Prime Minister assure the House that he will take the lead at the
Column 512earliest opportunity to call together the constitutional parties so that what might be a window of opportunity is not lost?
The Prime Minister : As I said to the right hon. and learned Gentleman, I am seeing the leaders of the parties individually in the hope that we can map out a suitable ground so that the talks can resume. I very much hope that that will be possible. However, I do not want an artificially staged event where the talks are called together with no probability of making progress. In my private discussions with the leaders of the constitutional parties, I hope that we can find a way through that will enable talks to resume with a practical chance of proper progress.
Mr. Evans : Did my right hon. Friend see an article on social security fraud in the Daily Express last week, which estimated social security fraud to be somewhere in the region of £5 billion? It mentioned multiple applications using false identities, phantom children and minicab moonlighting. Will my right hon. Friend give an assurance to the House today that he will take whatever action is necessary to stamp out social security fraud, including the use of ID cards for claimants?
The Prime Minister : Like my hon. Friend, I am attracted to the principle of identity cards to combat social security fraud. Of course, there are some practical and serious issues that need to be resolved, but I assure my hon. Friend that we are examining the matter extremely carefully. We will certainly keep up the pressure on social security fraud. We refer to it as fraud, but in practice it is theft from the taxpayer.
Mr. Ashdown : Does the right hon. Gentleman realise how important it is that he should take personal charge of Britain's efforts to achieve peace in Northern Ireland? In the light of his remarks a moment ago, is that what he has decided to do?
The Prime Minister : I am certainly taking a very direct interest, together with my right hon. and learned Friend the Secretary of State for Northern Ireland, in the possibility of moving towards a proper peace in Northern Ireland. By that, I do not just mean a temporary ceasefire. What the people of Northern Ireland need and deserve is a permanent end to the hostilities and movement towards a proper constitutional structure for local government within Northern Ireland. On the question of negotiation, that is rather like poker--it is best to keep one's hand to oneself for as long as possible.
Mr. Milligan : Does my right hon. Friend agree that it is hardly surprising that football hooliganism is so prevalent in this country when Labour Members provide the role model that they did during last night's debate? They used lavatorial antics to divert attention away from some of the real issues that should have been debated--in particular, the future of the railway pension fund.
Will my right hon. Friend repeat the assurance that railway pensioners will continue to enjoy precisely the same benefits as they have hitherto and that on the one outstanding issue the Government will continue to seek the agreement of the railway trustees and report back to this House before orders introducing the new pension fund are laid?
The Prime Minister : There were some unusual scenes last night, but perhaps it is best not to dwell on them--not least because I wish to spare the embarrassment of the Opposition Chief Whip and his colleagues.
On my hon. Friend's substantive point, the Government remain committed to protecting the security of the pension rights of existing, deferred and future British Rail pensioners affected by our privatisation proposals. My right hon. Friend the Secretary of State for Transport has made that clear on innumerable occasions and I am happy to make it clear yet again this afternoon.
Mr. Mallon : Will the Prime Minister confirm that the objective of his talks with the Irish Prime Minister, Mr. Reynolds, is to facilitate an agreement among the divided people of Ireland that can command the respect of each sector of that diversity and command the support of everyone within the island of Ireland?
The Prime Minister : The Taoiseach and I have made clear our view of the direction in which the talks need to go and what needs to be achieved. It is helpful that the principle of consent has now been acknowledged for Northern Ireland. That is vital if progress is to be made. It is a noticeable advance--as, indeed, was the speech of the Tanaiste last week.
Mr. Duncan : Does my right hon. Friend agree that political correctness, so called, has become a pernicious exercise in social engineering that undermines traditional decencies and codes of conduct? Can he confirm that we are the party of "Mrs", "Miss" and "Chairman" and that we will have nothing to do with anyone who describes himself as "Chairperson", "Chairholder" or "Chair"?
Mr. Greenway : Does my hon. Friend agree that in the 10 years since British Telecom became a private company, it has become more efficient, offers greatly improved services and now, under the pressure of competition, is reducing its prices? Is not it a fact that that has been achieved because of privatisation? Does my right hon. Friend share my hope that one day those who opposed the privatisation will admit that they were wrong?
The Prime Minister : I live in hope, but perhaps not quite as much hope as that. There is no doubt that privatisation has produced better services from BT--prices have fallen dramatically, there are more payphones, in better condition and more speedily repaired when vandalised, and installations are carried out more efficiently. With the solitary exception of the Labour party, everyone recognises the improvements brought about by privatisation. Perhaps that is a little unfair to the Labour party ; I neglected to mention that the Liberal Democrats are another exception.
Mrs. Adams : Does the Prime Minister recall that the last time I asked him a question in Parliament, I asked him to give a guarantee that he would not increase value added tax? The Prime Minister gave me his word that he would not. He has since broken his promise and increased VAT by putting it on domestic fuel, which will undoubtedly cause great hardship to many pensioners and ordinary families. Why did the Prime Minister give me, and the country, his word and then not keep it?
The Prime Minister : From the innumerable times that this question has been answered, the hon. Lady knows that we will protect people who are vulnerable. She would be well advised to wait until she hears what those protection measures will be.
Mr. Greenway : Does my right hon. Friend remember the unlamented Greater London council, with its very high taxation on Londoners and its massive and damaging bureaucracy? Has he heard the calls for higher taxation for Londoners, on cinema seats, on videos, on tourists, on businesses, on jobs and on much else? Is he aware that calls for a mark 2 Greater London council, and a large number of taxes in a wide range of areas, are now being made by the ever-loony Labour party?
The Prime Minister : Over the last few weeks the hon. Member for Dunfermline, East (Mr. Brown), on a national level, has moved the Labour party's position from no more taxes, to some more taxes, to lots more taxes. It is hardly surprising that in London the Labour party wants more
Column 515layers of bureaucracy ; it also wants it in the regions, in Scotland and in Wales. It is not the way to produce efficient government, but it is their policy.
Mr. Tyler : Does the Prime Minister recall visiting north Cornwall exactly nine months ago to the day and promising my constituents that he would take action to halt the inexorable rise in water and sewage charges-- not this year or next year but as soon as he possibly could, and certainly not at the end of the century? How does the right hon. Gentleman reconcile that undertaking with the United Kingdom's £500 million contribution to the EC cohesion fund, which will be used to clean up the water and sewage problems of Portugal, Greece and Spain?
The Prime Minister : I begin to suspect that it must be 1 April. The hon. Gentleman should remember his party's remarks about the cohesion fund at the time that we debated the matter and the moral support that it gave the richer nations of Europe in providing a cohesion fund for the smaller nations. This is yet another example of the Liberals saying one thing in one place and something else in another.
Mr. Sykes : Will my right hon. Friend join me in congratulating my right hon. and learned Friend the Home Secretary on his announcement yesterday about sending squatters to gaol if they do not leave the premises in question within a specified time limit?
The Prime Minister : My right hon. and learned Friend has set out some proposals to deal with that problem, which has been a frustration for many people for far too long. Some time ago, we indicated that we would take firm action to deal with the problem. My right hon. and learned Friend has now set out our proposals.
Mr. Barron : Will the Prime Minister explain to the House and to the country how his Government got into a shambolic mess yesterday over the railways privatisation Bill? Despite those events, next week and the week after five sitting days will not be used.
The Prime Minister : I do not know where the hon. Gentleman was last night, but clearly he was not in the real world, in here. The leader of the Labour party speaks fine words about the need to improve standards in public life, but he let some of his colleagues below the Gangway behave in a way that disgraced Parliament.
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