Prime Minister
Engagements
Q1. Mr. Franks
asked the Prime Minister if she will list her official engagements for Thursday 16 July.
The Prime Minister (Mrs. Margaret Thatcher)
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, before departing for Washington this evening.
Mr. Franks
May I draw the Prime Minister's attention to the latest unemployment figures released today, which show that for the 12th consecutive month the number of people unemployed is dropping? Is it not the case that in relation to the north-west, which shows the second largest drop, in a free and open economy at last the north is showing what it is capable of doing?
The Prime Minister
Yes, I join my hon. Friend in welcoming that latest reduction in unemployment, which is the 12th successive reduction. The north-west is one of the areas that are reducing the level of unemployment fastest. The north-west is also doing very well under this Government's policies of faster growth, privatisation and Trident, which is being built in my hon. Friend's constituency. It is also benefiting from an excellent new hospital in Furness. The north-west is doing very well.
Mr. Kinnock
The Prime Minister said that she would not support any proposals to impose VAT on food, gas or electricity. Why can she not bring herself to give exactly the same precise undertaking on children's clothing and children's shoes?
The Prime Minister
I made it very clear during the election precisely what undertakings I would give. I also made it very clear that although there were certain people in the House, particularly right hon. and hon. Members on the Opposition Benches who wish to constrain Nigel Lawsonthe Chancellor of the Exchequer, it is not part of my duty to constrain him in his annual Budget. That takes place only once a year, unlike what happened under the previous Labour Government, when Budgets took place frequently.
Mr. Kinnock
I am sorry, but on the subject of children's clothing and shoes the Prime Minister was anything but clear during the general election. Why does [column 1275]she not say now, in exactly the precise terms that she has used when referring to other items, that she would not have such a proposal coming before the House? Or would she, like the Paymaster General, suggest that such proposals would be vetoed? That is precisely what the Paymaster General said this morning.
The Prime Minister
I have already answered the right hon. Gentleman. He will go on raising scares and we will be able to point out how, on a day when the unemployment figures were down, he tried to raise another scare. [Interruption.] Of course he did.
With regard to the veto, I think the right hon. Gentleman is referring to proposals that have come forward through the European Commission. They are not out in detail, but, as he knows, partly due to our very vigorous fight on the Single European Act, any tax changes can be made only by a unanimous vote. Not only would this Government vote against Lord Cockfield 's proposal, but a number of our European partners would do so as well.
Mr. Kinnock
The problem is the move to impose VAT on what are currently zero rated items of considerable importance to the family budget. Does the right hon. Lady agree with the words of the Paymaster General that the Government would “in fact veto VAT on food, fuel, children's clothing and shoes” Yes or no?
The Prime Minister
My hon. Friend Peter Brookethe Paymaster General specifically confirmed what I said during the general election campaign, and that was his precise purpose. I am well aware of the words that he used. I am amazed that the right hon. Gentleman does not welcome the fall in unemployment.
Sir Ian Lloyd
My right hon. Friend's chief scientific advisers will doubtless have drawn her attention to the immense significance of the facts reported recently by our embassy in Tokyo, that the Japanese are marketing a 1 megabit semiconductor, are about to market a 4 megabit semi conductor, are designing a 16 megabit semiconductor and are reaching out to 64. As the issue has now moved into the public domain with the publication in the United States of the defence science task force report on semiconductor dependency, will my right hon. Friend seek to place this issue on the agenda for her discussions with the President of the United States so that the joint response in the West—the Alvey programme and American efforts—can be co-ordinated?
The Prime Minister
I must confess to my hon. Friend that I do not think that that issue will be at the top of my agenda for this visit to the United States, which will be a short one. Other matters will be at the top. My hon. Friend is well aware of the substantial research and development budget that is paid for by the taxpayer, and I know that he is anxious to encourage more research and development expenditure from the private sector.
Q2. Mr. Cohen
asked the Prime Minister if she will list her official engagements for Thursday 16 July.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Cohen
Will the Prime Minister reconsider the introduction of a poll tax? Is she aware that in my constituency two adults will pay £1 a week more if it is [column 1276]introduced, that three adults will pay £8 a week more, that four adults will pay £15 a week more and that a single pensioner on supplementary benefit will have to find £1.50 a week more from his pension? For these people and millions of others is it not so much a poll tax as a pole axe?
The Prime Minister
The majority of widows, single people and single parents will pay a good deal less under a community charge. There will be an 80 per cent. rebate and an addition to supplementary benefit to help people pay. Those who will suffer most are those who are suffering most now under the rating system in areas where there are high-spending Labour councils, or those who are living in the London area.
York
Q3. Mr. Gregory
asked the Prime Minister when she next intends to make an official visit to York.
The Prime Minister
I have at present no plans to do so.
Mr. Gregory
While the citizens of York will be disappointed that my right hon. Friend has not yet decided on a date for a return visit, may I ask her to comment on the possibility of further profit-related pay, bearing in mind that in York and the rest of the country about 21,000 companies have decided already to obtain information from the Inland Revenue on how they can implement profit-related pay?
The Prime Minister
I believe that the innovations of my right hon. Friend Nigel Lawsonthe Chancellor of the Exchequer in the Finance Bill have been widely welcomed. As my hon. Friend has said, many companies are making inquiries about profit-related pay, realising that their work people could benefit substantially if they introduced the system. I hope that advantage will be taken of it.
Mr. Nellist
rose——
Mr. Speaker
Does the supplementary question of the hon. Member for Coventry, South-East (Mr. Nellist) relate to York?
Mr. Nellist
Yes, Mr. Speaker. Had the Prime Minister been making a trip to York, would she have taken the opportunity to explain to low-paid workers there and in other cities how it is that she has now withdrawn her opposition to a 20 per cent. rise in hon. Members' salaries that will take them from £370 a week to £450, while she maintains her opposition to the claim of hundreds of thousands of low-paid Government workers whose average take-home pay is only £3 a week more than the rise that she is prepared to accept for Members of Parliament?
The Prime Minister
The hon. Gentleman does not seem to be getting universal support from all those who heard his question.
Mr. David Shaw
As I returned from the United States last weekend I was wondering whether my right hon. Friend——
Mr. Speaker
Order. Did the hon. Gentleman return via York?
Engagements
Q4. Mr. Andrew F. Bennett
asked the Prime Minister if she will list her official engagements for Thursday 16 July.
[column 1277]The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Bennett
Will the Prime Minister confirm that some families on supplementary benefit will be worse off as a result of the introduction of the poll tax, which replaces rates and water charges?
The Prime Minister
Because the amount that will be added to supplementary benefit or family income support is an average amount, some will be worse off and some will be considerably better off. That is inevitable in an average—some worse, some better.
Sir John Farr
Will my right hon. Friend accept the congratulations of the House on the splendid unemployment figures announced today—[Interruption.]—which have already been referred to? However, will she also consult her colleagues as to the ways in which job creation can be improved in our manufacturing industries? New jobs are very important, but we also want to make a big impact in creating more new jobs in manufacturing industry.
The Prime Minister
I am grateful for my hon. Friend's remarks. Most of the new jobs are coming from economic growth, thanks to the policies of my right hon. Friend Nigel Lawsonthe Chancellor of the Exchequer. They are proving extremely good. Manufacturing industry is highly competitive. Its productivity is going up and investment is good. We get more jobs in manufacturing and in small businesses only by turning out goods at prices and with designs that people will buy, and by having highly competitive and efficient industries. Our policies are producing that.
Rev. Martin Smyth
Has the Prime Minister had time to consider the reply given by the Leader of the House to my hon. Friend the Member for Upper Bann (Mr. McCusker) last Thursday? If so, could she make a statement and, particularly, could she confirm that there is forensic evidence to suggest that the same weapon has been used, allegedly, in Loyalist and Republican paramilitary terrorism?
The Prime Minister
I do not think that it is for me to say anything about that kind of evidence. It is not within my responsibility.
Mr. Higgins
Does my right hon. Friend agree that the VAT structure, introduced when we abolished purchase tax and selective employment tax with a single positive rate and zero rating for essential items is better than anything else in Europe, and that if we are to harmonise at all it should be on our basis? As I steered the original legislation through the House, with some advice at official level from a Mr. Cockfield, does my right hon. Friend agree with me that the abolition of zero rating would not be acceptable to the House?
The Prime Minister
We have made that clear. We must be able to determine our own structure of VAT. A number of other countries also take the view that they must be free [column 1278]to determine their own structure, and they are just as much against the proposal as we are. The possibility of this going through is negligible.
Q5. Mr. Redmond
asked the Prime Minister if she will list her official engagements for Thursday 16 July.
The Prime Minister
I refer the hon. Gentleman to the reply that I gave some moments ago.
Mr. Redman
Will the Prime Minister explain why families who look after elderly parents, thus saving the state money, in line with the Victorian values that the Prime Minister supports, should be penalised by the poll tax?
The Prime Minister
As the hon. Member is aware, the poorest will be protected—[Interruption.] Oh, yes. The poorest will be protected by an 80 per cent. rebate and by an addition to supplementary benefit to enable them to pay the remaining 20 per cent. We believe that rates are levied on far too narrow a base. They are a grossly unfair tax. We believe that the services that are provided by local authorities are provided on a personal basis and that all people, save the poorest, should make a contribution to them. Most people accept that.
Q6. Mr. Stanbrook
asked the Prime Minister if she will list her official engagements for Thursday 16 July.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Stanbrook
Although we should retain local control over the rates of VAT and, indeed, on whether something should be VAT rated at all, does my right hon. Friend agree that the ultimate objective of the EEC Commission—the free internal market—is highly desirable and was probably the big prize that we expected to gain when we joined the Common Market?
The Prime Minister
Yes, the completion of the internal market is extremely important. There is a great deal to do in standardising and getting safety regulations across the Common Market with things such as television, electrical goods and services, which would genuinely enable us to get a full and complete internal market. We have never accepted the view that we need approximation of taxation to complete the internal market and we do not accept it now.
Mr. Steel
Does the Prime Minister recall the statement in the Government White Paper on the privatisation of British Airways, where the Government's objective was said to be the creation of a multi-choice system of airlines? Does that not sound a bit hollow in the light of today's takeover?
The Prime Minister
As the right hon. Gentleman will be aware, there is a private notice question on the matter later, which will be answered by my right hon. and learned Friend Kenneth Clarkethe Chancellor of the Duchy of Lancaster.