This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
While I welcome the progress of the negotiations about the future of Hong Kong and the recent statements from the Chinese Government, may I ask my right hon. Friend whether she agrees that once an agreement has been reached between Her Majesty's Government and the Chinese Government the people of Hong Kong would have to accept responsibility if they were to seek in any way to reject the agreement reached between the two Governments?
As my hon. Friend knows, our aim is to agree with China, through negotiations, and to reach an arrangement which will maintain the stability and prosperity of Hong Kong in a way acceptable to the people of Hong Kong, to this Parliament and to the people of China. Yesterday I saw the Governor of Hong Kong together with all the unofficial members of EXCO, and repeated our commitment to Hong Kong.
As the Prime Minister justifies her decision to go ahead with the rate-capping Bill, which has been criticised extensively, on the basis that she pledged to do so to the electorate, how does she square that with a similar pledge that she gave to the electorate to abolish rates in October 1974, which she gave again to the electorate in 1979, and with her statement in the House in July 1983 that she would maintain rates?
I seem to remember that the Labour party, of which the right hon. Gentleman was a member, won the 1974 election, and that the Liberal party eventually kept the Labour Government in power for a longer period than it would otherwise have held office
I am grateful to my hon. Friend. The success of the Government in getting down inflation and in holding it down is quite outstanding. When we returned to power, a 5 per cent. rate of inflation was thought almost impossible. We now regard 5 per cent. as high and we must get it down further.
Will the right hon. Lady inform the House of the going rate that a company must donate to the Tory party so that its chairman stands a reasonably good chance of receiving a knighthood? Is it a coincidence that, since 1979, 60 per cent. of the industrialists who have received knighthoods have been associated with companies which have donated to her party?
As the hon. Gentleman knows, any recommendations that I make go to the Political Honours Scrutiny Committee, whose powers I have strengthened.
Is my right hon. Friend aware that no Labour or Lib/Lab Government ever guaranteed pensioners travel passes in London, and that the Greater London council is currently raising pensioners' rates by millions of pounds to fund its spurious campaign to save their travel passes after its abolition? Will my right hon. Friend underwrite the promises of Conservative London boroughs to continue pensioners' travel passes?
My hon. Friend is right. It has been the policy of successive Governments that local authorities are in the best position to judge the needs in this respect—[Interruption.]—
My hon. Friend is correct in saying that the GLC has been running a scurrilous campaign and frightening many elderly people by causing them to think that their passes will not continue. The London Boroughs Association has recommended that the London boroughs take over the responsibility for this. The Government stand ready to discuss with the London boroughs any financial effect upon them—including any equalisation effect—of this or any other service that is similarly transferred.
I am answerable in the House for my actions as Prime Minister and I do so answer. As part of my public duty, I make strenuous efforts to secure contracts for this country. I do not decide upon those contracts. The decisions are made by the Governments who award those contracts. I do not distinguish between companies in Britain. My job is to ensure that we get the contracts and the business here. As a result of the middle east tour, hundreds of millions of pounds worth of contracts came to this country.
Is my right hon. Friend aware that, had she taken the opposite course and not sought to assist the British company to gain an important contract with the middle east, she would have heard criticism from the Opposition and from the whole of the country, and such criticism would have been justified and genuine?
Will the Prime Minister explain to the House why she chose to visit the Drummadd barracks of the Ulster Defence Regiment when she visited Northern Ireland before Christmas? Is she aware of the deep feelings of outrage within the Catholic community that arose from that visit? Does she agree that she could have visited any barracks anywhere in Northern Ireland. and that in choosing to visit the Drummadd barracks in the same week in which eight members of the regiment were charged with sectarian murders of Catholics in Northern Ireland she thereby gave an unfortunate Christmas present to the forces of violence in Northern Ireland?
I visited the barracks, which are the headquarters of the resident unit of the Grenadier Guards. I am entitled to do that. There were some members of the Ulster Defence Regiment there. The UDR does a superlative job. I visited it because it was the headquarters of the Grenadier Guards. I hope that no one is criticising me for that. May I make it quite clear that I am the first to condemn violence or terrorism anywhere, and especially in Northern Ireland.
Will the Prime Minister announce a new year resolution to the House today, giving her commitment not only to support the campaign for freedom of information in 1984 but to allow local authorities the freedom which she has always proclaimed is the right of everybody in the land?
No, Sir. With regard to local authorities the House has, I believe, the overriding right to have taxation within its decision. Everyone has a vote for a Member of the House; not everyone has a vote for local authorities. Many who have to contribute to the rates of local authorities do not have a vote. It is fully in keeping with democracy and with the Chancellor of the Exchequer's duty of controlling public expenditure that we should have the right here to cap rates.
On the subject of information and, indeed, taxation, yesterday the Treasury published figures showing that £2·2 billion more will be taken out of wage packets this year than in 1979, despite the fact that there are 2 million fewer wage packets. How much of the higher stoppages by the Government, who are committed to reducing taxation, was due to the need to pay for much higher unemployment?
The total cost of unemployment is of the order of £5 billion. I have given the figure many times to the right hon. Gentleman. Unemployment under the national insurance scheme costs something like £1·6 billion and the rest is for social security. That is the amount that is paid out. Although there is an increasing amount of tax coming in, may I point out that that is more than accounted for by the increase in average earnings, because on the whole the standard of living of those who have been in work has gone up, after they have paid tax.
Is the Prime Minister aware that her figure of £5 billion is utterly implausible, even on the basis of straightforward multiplication? It would not be enough even to pay the benefits that have to go to the extra unemployed who have been created by the Government. Can she explain in real terms why, under her Government, £7 billion more is being paid in expenditure taxes and over £3 billion more in national insurance? How can she conclude, as she did on Sunday, that somehow this is not taxation.
The one main reason why a great deal more is being paid both in income tax and expenditure taxes is that wages, earnings and the standard of living have gone up under this Government.
Is my right hon. Friend aware that the total burden of national insurance surcharge and corporation tax on businesses is less than the amount paid in rates by commerce? Is she aware that this is why business and industry want the legislation that we will be considering today? Can she assure them that the legislation will go through both Houses with the utmost dispatch?
I share my hon. Friend's view. The heaviest tax paid by all those in business and commerce is what they pay in rates, which is in the order of £6 billion. They pay that tax regardless of whether or not they make any profits. Of course, that comes off the tax that they pay to Her Majesty's Government. They and the overwhelming majority of the people want legislation to restrain the increase in rates.
The Bill leaves enormous powers to levy rates. If some authorities had not overspent so much, last year's rate burden would have almost stood still. No, authorities still have considerable powers to levy rates but they do not have unlimited power to do so.
Yes. Some 60 per cent. of rates are paid by business and commerce. The overwhelming majority of rates are paid by people who do not necessarily have a vote in the election of the authority that imposes those rates.
Is the Prime Minister aware of the failure of an important building society in London a few days ago? Is she further aware that thousands of investors have been jeopardised in that they have been unable to withdraw their savings? Will she introduce legislation to reform building societies to afford real and effective protection for investors?
As the hon. Gentleman knows, the building society in question has been taken over by the Woolwich. I believe that all investors will be paid. The takeover was arranged extremely well and has protected the interests of investors in what was the New Cross building society.