PRIME MINISTER
Engagements
Q1. Mr. Malcolm Bruce
To ask the Prime Minister if she will list her official engagements for Thursday 22 February.
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, including one with the German Defence Minister and one with the National Pensioners Convention.
[column 1062]Mr. Bruce
Does the Prime Minister accept that there is growing anger and dismay in Scotland at the way in which the Scottish steel industry is being run down by British Steel? Does she accept that, on the ground of competition alone, the time is right for British Steel's monopoly to be ended and for an independent steel industry to be established, based in Scotland? Would not that best serve the interests of competition and of the Scottish steel industry? Has not the Secretary of State for Scotland already suggested that that may be a course to be considered? My party has been advocating it for the past two or three years and it has growing support within Scotland.
The Prime Minister
The best guarantee of a successful steel industry has been privatisation. Before it was privatised, it was losing about £3 million a day; it is now making more than £500 million profit a year. On Ravenscraig, the hon. Gentleman knows that the British Steel prospectus stated that, subject to market conditions, there would continue to be a need for production at Ravenscraig until 1994. The chairman of British Steel has recently reaffirmed that. British Steel also gave the assurance that if it did not need Ravenscraig at some future date it would be prepared to sell it to another buyer. That assurance stands and I wish Ravenscraig well.
Q2. Mr. Tim Smith
To ask the Prime Minister if she will list her official engagements for 22 February 1990.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Smith
Is my right hon. Friend aware that in the fourth quarter of last year exports rose by no less than 23 per cent. compared with the same period in 1988? Given the additional good news that Japanese investors are to create 400 new jobs in Barnsley and that German investor are to create reason to be optimistic about the prospects of British manufacturing?
The Prime Minister
I agree that British manufacturing industry can take justifiable pride in its success. Its production is at an all-time record this year and its investment is at an all-time record over and above the previous record set the year before. Growth has been good. Growth has been strongest in the highest technology industries. Production of electronic goods has increased by 50 per cent. since 1978, aerospace production has doubled and the computer industry has grown faster than that in any other country except Japan. That success has come about under Conservative economic policies. Japan and Germany know that and are anxious to put more investment here.
Mr. Kinnock
Is the Prime Minister ready to recognise that her high mortgage rate policies and her poll tax are bound to push up the rate of inflation?
The Prime Minister
As the right hon. Gentleman is aware, our top priority is to get inflation down. I hope that the right hon. Gentleman is aware that the best way to do that in the longer term must be to make the price of money more expensive. If the right hon. Gentleman does not know that, I am very surprised.
Mr. Kinnock
The Prime Minister talks about combating inflation, but she is causing it. Is not it [column 1063]absolutely clear that because of high interest rates, high mortgage rates and high poll tax levels, the level of inflation now faced by the British people is mainly made in Downing street?
The Prime Minister
No. The right hon. Gentleman rightly grumbles about an inflation level of 7.7 per cent., but under the Labour Government it was 26.7 per cent.—an all-time high this century. Our record is far, far better than anything that the Labour party would ever produce.
Mr. Kinnock
This time last year, when inflation was at 7.8 per cent., the Prime Minister said that it was “proceeding towards zero” . Now it is 7.7 per cent. Is that what she calls “proceeding” ?
The Prime Minister
It is because we have growth that is faster than we had thought that it is taking longer to turn round. Nevertheless, we have a record number of home owners and a high level of mortgage payers, 99 per cent. of whom are managing to pay their mortgages and know the fundamental truth that those who put their money in bricks and mortar have, in the longer run, done better than those who put their savings in building societies.
Q3. Mr. Neil Hamilton
To ask the Prime Minister if she will list her official engagements for Thursday 22 February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Hamilton
Has my right hon. Friend seen the new policy platform adopted by the Communist party of the Soviet Union, which extols the virtues of markets, stresses the importance of competition, and calls for the scrapping of indiscriminate subsidies and for the selling of shares in state enterprises, all of which are opposed by the Labour party—[Interruption.]
Mr. Speaker
Order. I am not certain that what goes on in the Soviet Union is the direct responsibility of the Prime Minister.
Mr. Hamilton
I am coming to the point of my question, Mr. Speaker. Is not it ironic that the Government of the Soviet Union, who are adopting the policies of Her Majesty's Government, are edging that country towards a free enterprise future, which is opposed by Labour Members whose minds are still sunk in the Socialist attitudes of the 1960s and 1970s?
The Prime Minister
As usual, my hon. Friend makes his point effectively. Those who have lived under Socialism know that it produces only poverty and oppression and they turn away from that to Conservative policies, as they are doing in eastern Europe.
Mr. Turner
Is the Prime Minister aware that for Wolverhampton to get down to the poll tax level projected by the Government it would need to cut £28 million from its spending, which is equivalent to the whole of our social services budget and almost the whole of our leisure services budget? Will she tell the people of Wolverhampton why they have to pay an additional surcharge of £47, which has nothing to do with their services but has been imposed by her Government? The people of Wolverhampton want to know, and they want that surcharge taken away.
The Prime Minister
If the local authority is finding it difficult to reduce its spending by £28 million, does it not [column 1064]realise—I doubt whether it does—that it is doing the worst possible thing by taking that money out of the pockets of its residents because that is what it is doing if it is setting a community charge that is higher than it need be?
Q4. Mr. Fishburn
To ask the Prime Minister if she will list her official engagements for Thursday 22 February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Fishburn
Will my right hon. Friend confirm that it is the Government's intention, once the community charge is in place, to ensure that private landlords who currently charge their tenants rent and rates combined should lower their charges by the amount of the rates and not just pocket the difference?
The Prime Minister
Yes, my hon. Friend is right. I hope that private landlords will lower their charges when they know that they do not have to pay rates and thus act in accordance with the terms of their tenancy agreements. Various remedies are available for tenants whose landlords do not agree to such a reduction. My right hon. Friend Chris Pattenthe Secretary of State for the Environment is setting those remedies out in a leaflet which will be widely available.
Mr. Winnick
Can the Prime Minister explain why, despite all the money and propaganda spent on it, the poll tax is the most detested and hated tax introduced for centuries? If she disputes what I say, could we have a referendum on the poll tax?
The Prime Minister
First, a rating revaluation of domestic properties, which some of us have been through before, would have been infinitely more detested than the community charge. The community charge will have more generous rebates than the rate rebate system ever gave and also a transitional relief scheme which does not depend on means testing. I understand why the Opposition do not like the community charge. It is because it will reveal that the highest spending councils are Labour councils. Labour has an even worse remedy in the roof tax, which would put a local tax on capital values regardless of whether the person living in the house owned it and would add to it a test of income tax.
Q5. Mr. Colin Shepherd
To ask the Prime Minister if she will list her official engagements for Thursday 22 February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Shepherd
Is my right hon. Friend aware that the United Kingdom agriculture industry grows some 75 per cent. of our indigenous foodstuffs and at the same time contributes, through exports, some £1,600 million to the balance of payments and the balance of trade? Will she recognise that, and help to sustain the confidence of that vibrant industry by maintaining pressure on the European Community to dismantle the green pound?
The Prime Minister
I gladly respond to my hon. Friend and pay tribute to the farmers who have put up production greatly and have also put up productivity. They have saved us a great deal on the balance of payments. We are very [column 1065]much aware of the difficulties caused by the green pound. We are seeking a substantial devaluation of the green pound in the current price negotiations.
Mr. Skinner
Has the Prime Minister considered the possibility suggested by some of her Back Benchers of reducing the poll tax by taking out of it education and perhaps teachers' salaries, fire services, the police or a combination of any of the three? Will she rule that out before the next election?
The Prime Minister
The revenue support grant already pays for a substantial part of education, teachers' salaries, polytechnics and, indeed, every part of education. The business rate already pays for another substantial part of education. Therefore, if we were to take education out and run it centrally—which I believe would be totally wrong. It is much better to do as we are doing and to take education away from the local authorities and put it out to the people so that they can run it themselves. That is true devolution. If education were taken out, a substantial part of the revenue support grant would have to come out with it, as well as some of the business rate.
Q6. Mr. Dover
To ask the Prime Minister if she will list her official engagements for Thursday 22 February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Dover
What encouragement can my right hon. Friend give to the people of Chorley who sensibly voted in the Conservative-controlled Chorley borough council, which is spending exactly in line with Government spending forecasts, but faces sky high community charges because of the high spending of the Labour-controlled Lancashire county council?
The Prime Minister
I hear what my hon. Friend says about Lancashire. There is no justification for extravagance on the part of any authority. My right hon. Friend Chris Pattenthe Secretary of State for the Environment has made it perfectly clear that where there is excessive spending he will not hesitate to charge-cap the authority.
Mr. Fraser
If the Prime Minister is right to suggest that the poll tax is another Government success, will she confirm that there will not be any poll tax capping between now and the end of March?
The Prime Minister
As the hon. Gentleman is aware, not all authorities have set their budgets. My right hon. Friend Chris Pattenthe Secretary of State will have to consider the criteria for charge-capping when all the budgets have been [column 1066]set. The matter will have to be considered carefully for each authority. Naturally, that will take time and my right hon. Friend will do it as soon as he can.
Q7. Mr. Bowis
To ask the Prime Minister if she will list her official engagements for Thursday 22 February.
The Prime Minister
I refer my hon. Friend to the reply that I gave some moments ago.
Mr. Bowis
Is my right hon. Friend aware that the last Stalinist regime in Europe has found a new role model and has renamed itself the Albanian Labour party? Will my right hon. Friend take time to send a message of support to the people of Albania in the hope that, some day, they will be relieved of the burden of Socialism in the same way as the people of this country?
The Prime Minister
My hon. Friend makes his point very well. I hope that the Albanian Labour party will be unable to inflict upon the people of its country the sort of damage that Socialist parties here inflicted upon ours.
European Bank for Reconstruction and Development
Q8. Dr. Godman
To ask the Prime Minister what recent discussions she has had with (a) Chancellor Kohl and (b) other European Community state leaders concerning the location of the European Bank for Reconstruction and Development.
The Prime Minister
The Government believe that London is the natural choice for the home of the bank. I have made that clear to all my Community colleagues.
Dr. Godman
Despite the undoubted banking expertise and skills to be found in the United Kingdom, in both London and Edinburgh, it is extremely unlikely that the bank will be sited in London. Should not the Government show some magnanimity and argue the case for the bank to be sited in an eastern European capital such as Prague?
Mr. Tony Banks
Or Newham.
The Prime Minister
No, Mr. Speaker. London is the largest centre for international banking in Europe and it houses more international banks than any other major European nation. Foreign banks enjoy more than 80 per cent. of the United Kingdom's international business and 520 foreign banks are represented in London. We have the largest equity market in Europe. I could go on to give many, many qualifications and justifications as to why the bank should be sited in London. London is quite the best position for that particular bank.