To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

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. This evening I hope to have an audience of Her Majesty the Queen.

While continuing to implement the policies which have been approved by the electorate on three occasions, will my right hon. Friend confirm that successful Governments must always be responding and listening to the real aspirations of the people?

Yes. That is why under the 10-year policies of Conservative Governments we have created more wealth than ever before, have spread it more widely than ever before, have a higher standard of living than ever before, have higher standards of social services than ever before and have a higher reputation abroad than ever before. Yes, we have indeed been listening. I believe that those are the real aspirations of the British people.

Will the Prime Minister now explain why she did not do the one thing that would have kept her Chancellor—sack her adviser?

As I said last week, advisers are there to advise and must advise honestly and freely. Ministers are there to decide. That is the way this Government do things.

The Prime Minister is being less than frank with the House and the country—[Interruption.] Does she recall that she said that she did everything possible to dissuade the Chancellor? Is not the real truth that she deliberately refused to do the one thing that would have kept him in office, which was to sack the man who, with her concurrence, was constantly undermining the Chancellor and his policy position on managing the currency?

The Chancellor's position is unassailable—[Interruption.]

Order.

In this party, Ministers decide and advisers only advise.

If what the Prime Minister has said is really true, may I ask her to explain why the former Chancellor had to write: Recent events have confirmed that this essential requirement cannot be satisfied so long as Alan Walters remains your personal adviser. Did he make that up after he had spoken to the Prime Minister?

Nonsense. The position is precisely as I have set it out many times. Advisers are free to advise honestly. Ministers decide —[Interruption.] The right hon. Gentleman will remember that neither Mr. Kaldor nor Mr. Balogh were exactly shrinking violets.

Will my right hon. Friend find time today to confirm that although high interest rates are a temporary agony, to have savings destroyed and the financial working capital of every small company destroyed by inflation is a permanent and not a temporary destruction of their ability to live on trade reasonably?

Yes. My hon. Friend has put it perfectly. It was a destruction of savings and investment under the Labour Government that lost them the complete confidence of this country. Under us, savings have kept their value. That is why we put the diminution of inflation as our top priority and we shall continue to do so.

Does the Prime Minister realise that her lonely hostility to Europe has cost her four Cabinet Ministers and will cost Britain lost opportunities, lost wealth and lost prosperity in the future? How much more are we all going to have to pay for the triumph of a personal obsession over the national interest?

Perhaps the right hon. Gentleman will read the Bruges speech properly, when he will see that half the history of this country has been bound up with Europe. It is not hostility to Europe. We believe in Europe, but a Europe based on a free economy—a deregulated Europe with freedom under a rule of law, not a regulated bureaucracy dictating to this House from Brussels.

Has my right hon. Friend noticed the underlying confidence of the money markets in her Government's economic policy? Has she had time to contrast that with the best efforts of the Leader of the Opposition to talk sterling down?

Yes. The money markets have remained stable in spite of the efforts of the Leader of the Opposition to talk the pound down. He did not succeed. Confidence in this Government was sufficient to hold the markets.

To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Following the disclosure in the leaked documents about the devastating effects of the privatisation of the electricity industry on the mining industry, will the right hon. Lady reconsider her attitude and not use the payroll vote to force the Bill through?

The contracts between the electricity industry and the coal industry are still under negotiation. The hon. Gentleman is aware that in the past 10 years, we have spent about £2 million every working day on investment in the coal mines. That should enable many of them to be highly competitive in the coal that they produce and to supply highly competitive coal to the electricity industry. I am sure that the hon. Gentleman will not wish to pay more for electricity than necessary and will be keen for coal to be competitive.

Further to the point made by the right hon. Member for Yeovil (Mr. Ashdown), does my right hon. Friend agree that if Britain were prematurely to join the exchange rate mechanism at a time when German interest rates are 7 per cent. below our own, British borrowers might avoid the domestic constraints and borrow with impunity from Germany, thus increasing the money supply and frustrating the fight against inflation?

I am grateful to my hon. Friend. The conditions under which we shall join the exchange rate mechanism—we already belong to the European monetary system, of course—were laid down and agreed at Madrid. They are specified in stage I of the Delors report—[Interruption.] Of course the Opposition do not want the truth. It gets in their way. [Interruption.]

Order. The Prime Minister must have an opportunity to reply.

The conditions are specified in stage I of the Delors report which provides for completion of the internal market, abolition of all foreign exchange controls, full implementation of a free market in financial services and the strengthening of the Community's competition policy. In those circumstances and provided that inflation in Britain has been brought down significantly, as we intend, the conditions would clearly exist for sterling to join the exchange rate mechanism. That is precisely what was laid down at Madrid and agreed by everyone.

To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Despite the traumatic events of last week and the removal of her most formidable opponent from the Cabinet, the Prime Minister has declared business as usual. Can we take it therefore that she will not be recommending to her Cabinet the advice of Mayor Ed Koch of New York who said, "If you agree with me on nine out of 12 issues, support me, but if you agree with me on 12 out of 12 issues, see your psychiatrist"?

We do things rather differently this side of the Atlantic.

To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

I refer my hon. Friend to the reply that I gave some moments ago.

Can my right hon. Friend cast her mind back to 1979 when after five years of Socialism the Chrysler car business was sold to Peugeot-Talbot for 66p after 700 strikes in 1978? Is my right hon. Friend aware that after the past eight or nine years Peugeot is now making a profit of £100 million a year and producing more cars than ever? Does that not say more for Conservative Governments and nothing at all for Socialism?

Yes. As I said in reply to the first question this afternoon, under this Government wealth has been created and spread ever more widely. Under the last Labour Government, the Labour party took us to the IMF—bankrupt.

Does the Prime Minister agree with Lord Hailsham who said this weekend, speaking with all the authority of a former Lord Chancellor who had served for many years in the Prime Minister's Cabinet, that for the Prime Minister to use her press officers to undermine her colleagues was not only disloyal, but dishonourable? Will she now stop that?

This was a comment from my noble Friend. I was surprised at it and I was very surprised that he made it. It is totally untrue and in any case, I would never take it from the right hon. Member for Leeds, East (Mr. Healey), whose only adviser was the IMF.

To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

I refer my hon. Friend to the reply that I gave some moments ago.

Does my right hon. Friend agree that it would be a cruel deception to suggest that there is some painless way to bring down inflation and that if credit controls were introduced today, they would prove to be quite ineffective due to the international nature of the banking and financial markets?

I agree with my hon. Friend. The point was made effectively in the last debate on economic affairs when my right hon. Friend the Member for Worthing (Mr. Higgins) dealt very well with the issue of credit controls. They will not work in the modern world with a free and open banking system. In an earlier debate, a former Treasury Minister in a Labour Government said: The Labour Party idea that you can have credit controls is rubbish. There is no way you can control credit except by controlling the price of credit, and the price of credit is Bank Rate.

To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Is the Prime Minister aware that in a tragic car accident last week in Coventry, the firefighters cut the cars apart, the police directed the traffic and an ambulance worker was upside down for two hours in that car infusing blood to the victim? How then this morning can Duncan Nichol say that the ambulance workers do not deserve parity with the other services? When will the Prime Minister stop chasing ambulances down to places like Clapham and King's Cross and praising ambulance workers and then treating them like dirt as she does now?

We all praise ambulance workers for their work and do not use them cheaply as the hon. Gentleman has done. Their pay claim, as the hon. Gentleman is aware, is being negotiated and I most earnestly hope that they will keep emergency cover until the negotiations are complete.

To ask the Prime Minister if she will list her official engagements for Tuesday 31 October.

I refer my hon. Friend to the reply that I gave some moments ago.

Is my right hon. Friend aware of the valuable contribution that is made to environmental protection by recycling—[Interruption.] Will she ensure that, under the forthcoming environmental protection Bill the work of the recycler is not interrupted by misleading definitions of waste?

Yes. Recycling, in all its forms, makes a great contribution to the economy, and we at No. 10 Downing street have introduced recycled paper.