This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.
Has my right hon. Friend had time in her busy day to note the return to work of Tilbury's grain and container divisions and, yesterday, of 12,500 National Union of Railwaymen staff? Does my right hon. Friend agree that that is an immense ratification of our policy of non-intervention in industrial matters? Will she look most closely at the release of British Rail from public ownership?
I agree with my hon. Friend and welcome the return of so many railwaymen and dockers to work. They realise, clearly, that serving the customer is the best way of serving their industries and their self-interest. I also agree with my hon. Friend that if there are disputes they are a matter for negotiation between management and workers in the industry and not for visits and meetings at No. 10. It is for management to solve them within the framework of rules and regulations that they have been given. I agree with my hon. Friend that privatisation in general is far better than nationalisation. As she knows, I did not want the two mixed up in this dispute. We shall, of course, look at privatisation in the future.
That combination of qualities succeeded in getting into an excellent Cabinet men of great experience in a wide range of Departments and a terrific team of younger Ministers—[Interruption.]—supported by a first-class team of younger Ministers at lower levels, whom we saw performing so excellently at the Dispatch Box earlier today.
That is absolute nonsense. We have the most excellent Cabinet for the future. I understand why the right hon. Gentleman is rattled—he knows that it is a winning Cabinet.
As the months go by, the right hon. Lady will come to learn that if she sacrifices the trust even of her senior colleagues, she will certainly sacrifice the trust of the nation. Does she realise that the Government are palpably and obviously a shambles and that this week's Cabinet reshuffle, which was intended to set them back on their feet, has merely left them as they began—in total disarray?
I shall have to disappoint the right hon. Gentleman by telling him that we had an excellent Cabinet meeting this morning. I remind him that in 10 years this Government have transformed Britain from the shambles that he and his Government left.
Is my right hon. Friend aware that of the two people who led the campaign to prevent Gloucester council from transferring its housing to a housing association, to the benefit of all tenants, one went on to incite people to break the law by not paying the community charge and both have been rewarded for their efforts by being given well-paid jobs funded by the Labour city council? Will my right hon. Friend resolutely condemn such examples of cynical disrespect for ratepayers and misallocation of ratepayers' funds?
I understand my hon. Friend's concern. That also shows cynical disrespect for the rule of law passed by this House which, if democracy means anything, must be obeyed. The community charge—[Interruption.]
The community charge will increase the accountability of councils to their electors. We understand why the Labour party does not like it. It will show up the extravagance of Labour councils with their ratepayers' money, and the economy of Conservative councils which look after the money raised from community charge payers.
Did not President Mitterrand say in public today what the right hon. Lady's ex-Foreign Secretary had been telling her in private for some time—that Britain is in danger of being left out and left behind in Europe? Is it not the case that the right hon. and learned Gentleman's pro-European views cost him his job but the right hon. Lady's anti-European views will cost Britain its future?
That is nonsense. I remind the right hon. Gentleman that we are ahead of France in implementing matters that have been agreed. We are ahead in having free capital movements. I look forward to France following our lead. We are ahead in having abolished foreign exchange controls. I look forward to France doing the same. We are ahead in having abolished many subsidies to industry. At the Madrid summit, France and not Britain was isolated. Nothing, least of all the right hon. Gentleman, will persuade me to surrender the sovereignty of this House to the European Parliament.
Did not yesterday's rail strike show that London and other cities are incapable of absorbing yet more road traffic, with the inexorable rise in pollution and congestion that it brings? During the recess will my right hon. Friend re-read the central London rail study produced by the Department of Transport, which calls urgently for the construction of new underground railway lines in London? Does my right hon. Friend recognise this urgent need and will she please discuss it with the Chancellor of the Exchequer and the Secretary of State for Transport. Finally, does she recognise that the only way to build those lines is to increase public investment?
I know my hon. Friend's keen interest in these matters. During the recess I shall be reading a number of heavy books. I confess that the one to which he referred had not occurred to me, but I hope that my right hon. Friend the Secretary of State for Transport will be reading the central and east London rail studies. I accept the importance of those studies. Decisions on the findings will be taken this autumn in the context of the Government's consideration of the competing claims for all forms of public expenditure. I remind my hon. Friend that investment in London railways is already at record levels and is set to increase, quite apart from implementing the new lines proposed. Investment in London railways is running at about £650 million in the current year.
Does my right hon. Friend accept that many of us share her concern that at a time when inflation is higher than we would wish it to be, it is important that wage demands are curbed? Will she agree that those who are leading industries and are giving themselves often vulgar increases in salaries have a duty to lead from the front and to curb their own excesses so that they can give responsible leadership in relation to the claims of those lower down the scale?
I am sure that my hon. Friend and I agree that higher performance and higher productivity at all levels merit higher rewards. The point of having higher productivity is to enable one to achieve lower unit costs, which enables one to give higher wages because of higher effort. That is why we have profit-sharing schemes and performance-related pay. I agree with my hon. Friend that when the priority is to control costs and get down inflation, business leaders have a particular responsibility to lead by example, and I hope that in future they will continue to do so.
As the hon. Gentleman will be aware, we had looked at the safety net provisions under which resources go from one area to another, and my right hon. Friend who is now the Secretary of State for Trade and Industry had indeed varied them to ensure that some of the gainers got their gains while those who were losers under that area safety net system did not have to bear more than some £25 per payer. That has eased the position a great deal. My right hon. Friend also gave extra money to those who had low rateable values and to those in ILEA. That has eased the position, but I have not the slightest shadow of doubt that my right hon. Friend who is now the Secretary of State for the Environment will consider the matter again.
When considering future legislation, will my right hon. Friend bear in mind the case of Barrow Borough Transport, which in the two years of its existence before going into liquidation lost £1½ million, which included a £½ million loan from Barrow council which was illegal and ultra vires? Will she consider introducing legislation to extend the powers of district auditors and speed up the process by which miscreants are brought to book?
I appreciate my hon. Friend's concern, but in the Local Government Act 1988 we have already significantly strengthened auditors' powers, enabling them to act pre-emptively in certain circumstances. We believe that when that is working sufficiently, it should be enough. At present we have no plans to strengthen auditors' powers further unless there are circumstances which clearly require further amendment.
Will the Prime Minister take action in relation to Westminster city council, and in particular Lady Porter, whose actions are bringing the whole of local government into disrepute, and the activities of the Conservative party in using public funds to try to return a discredited council at next year's local government elections?