Does my right hon. Friend share the widespread concern that in certain cases banks have not been fully passing on, particularly to smaller businesses, the full very recent and welcome reduction in bank base rate?
My hon. Friend raises an important point. I am very concerned about the growing level of complaints from small businesses that they are being harshly treated by their banks. I discussed that matter with the Governor of the Bank of England 10 days ago and my right hon. Friend the Chancellor of the Exchequer is taking this forward with the individual chairman of each of the clearing banks. The banks themselves can be in no doubt whatever about the strength of feeling on this, and they are as aware as anyone that their interests lie in having a sound base of small firms around for the future.
Does the Prime Minister think that recession, rising unemployment and increasing poverty will improve or make worse the health of the nation?
The health of the nation is improving. The policies that my right hon. Friend the Secretary of State for Health will be announcing in a few moments about preventive health medicine will also make further improvements. No one I know of with any experience or knowledge whatever doubts the improving quality, quantity or nature of health of the people in this country at the present time.
I hope that the forthcoming Green Paper will therefore include specific policies to combat unemployment and poverty, although I very much doubt it. The Government have brought us two recessions in 12 years. Unemployment is higher and poverty is more widespread. As there is a very definite link between low income and high rates of death and illness in poor families, will the Prime Minister now do something effective to combat unemployment and recession instead of saying that it is a price well worth paying?
As the right hon. Gentleman will soon learn, there are specific targets in the health proposals that my right hon. Friend the Secretary of State for Health will announce in a few moments. We set targets in other contexts a year or so ago, which have been met by doctors in terms of improving health care, and the targets will be met on this occasion as well.
As for unemployment, the right hon. Gentleman's comments were rich when every time his own party has been in government, when that Government left office unemployment was twice as high as it was when they entered government. The right hon. Gentleman's present policies would have the same effect. His minimum wage policy would destroy jobs, his penal tax proposals would destroy incentives, and Labour's tax on savings would destroy investment. What would then happen to jobs?
Clearly, when the Prime Minister cannot give a straight answer to a straight question, his last refuge is to try to sound like the right hon. Member for Finchley (Mrs. Thatcher)—no wonder she said at the weekend, "I chose him."
Does my right hon. Friend agree that not passing on the reduction in the base rate to small businesses is damaging to the economy? Would it not be a good idea for the British Bankers Association to make it mandatory for its members immediately to reflect any reduction in the base rate?
A large amount of lending is, of course, tied specifically to the base rate and is therefore amended automatically. It is those loans that are renegotiated that I think cause the particular problems. My right hon. Friend the Chancellor is examining that matter with the chairmen of the clearing banks.
In view of the horrific attacks by dangerous dogs that have taken place in the past two weeks or so, and the Government's dithering about what measures to implement to take account of those attacks, will the Prime Minister now agree that in the interests of responsible dog ownership a dog registration scheme should be introduced? Will he introduce such a scheme at the earliest possible opportunity?
So decisive have the Government been that my right hon. Friend the Home Secretary will be introducing a Bill later this week to deal with the problem of dangerous dogs. On the specific point of general dog registration, I continue to hold the view that such a scheme would be ineffective, bureaucratic, expensive to operate and difficult to enforce.
I have absolutely no doubt that my hon. Friend and the analysis that Nomura has made are right. Financial markets have no confidence whatever in Labour's ability to keep down inflation and no confidence in its capacity to protect our competitive position. By contrast, the major independent forecasters agree with us that we shall have inflation at 4 per cent. by the fourth quarter of this year. The other point about Nomura's analysis is very clear—it shows that Labour's first priority would not be pensions and child benefit, but an immediate and necessary hike in interest rates and mortgage rates.
Does the Prime Minister share the concern of many in the House about the events of last night in Vilnius? Will he take the opportunity both now and in July to impress upon Mr. Gorbachev and his generals that western economic co-operation and assistance depend upon a recognition of human rights and an acceptance of the right of self-determination for the people of Lithuania and of the other Baltic states?
May I draw my right hon. Friend's attention to early-day motion 776—about Grenadier guardsmen Povey, Hicks and Ray who, in 1989, had their legs blown off in Canada—which has now been signed by more than 200 right hon. and hon. Members on a cross-party basis, including the Secretary of State for Defence of 1989? It calls on my right hon. Friend the Prime Minister to look personally into the case with a view to granting an ex-gratia compensation payment, thus creating a good precedent. What progress has been made in the past month?
I am not yet in a position to tell my hon. Friend precisely what the outcome will be, but I am satisfied that the proper grounds for compensation should be on the basis of legal liability, and it is upon that basis that I shall examine the matter.
During the course of his busy day, has my right hon. Friend been able to read the comments of Mr. Gavin Laird about a minimum wage? Does he agree that a minimum wage would be cruel and heartless because it would lead to much higher prices and to an increase of 50 per cent. in the level of unemployment?
I have, of course, read them. I enjoyed them and I agree with them, as do many other people. The reality is that the Leader of the Opposition's plan for a minimum wage has very few friends left: the Fabian Society has said that there would be massive job losses; Mr. Laird thinks that the plan is nonsense; the engineers and electricians recognise that Labour's policy is nonsense; and the hon. Member for Birkenhead (Mr. Field) has said that himself in the past. Even the Sunday People, which is hardly a Conservative news sheet, stated in its editorial:
Labour's plan for a national minimum wage is not the answer. It would only cause more unemployment and deny jobs to those who need them"—[Interruption.] Opposition Members do not like that because they know that it is true.
The Prime Minister has rightly criticised the banks, but does he not accept that small business failures have increased by 68 per cent. with nearly 8,000 mainly small firms going to the wall in the first quarter of this year? The Prime Minister has criticised the banks, but does he feel any personal responsibility for this?
As the right hon. Gentleman knows, very many additional small firms have grown and thrived in recent years. All Conservative Members, including myself, regret the loss of small businesses in the past year or so. However, what is essential is to create the circumstances in which businesses can thrive and survive and in which fresh businesses can be created, as has happened so widely in the past 10 years. That requires reducing inflation to a low level and keeping it there. That is the policy we are pursuing, and every independent commentator now acknowledges that we are succeeding in that policy.
Will my right hon. Friend find an early opportunity to visit north-west Hertfordshire to see for himself the £40 million worth of new investment in the national health service that has been made under this Government? Will he contrast the fact that at this very moment a new maternity unit is being completed in which babies can be born in the 1990s with the fact that, under the last Labour Government, babies had to be born in the clapped-out facilities of the former workhouse?
My hon. Friend makes a valuable point. Capital expenditure on hospitals in England has grown in real terms in the past 12 years by 62 per cent. to £1·7 billion. In contrast, as the House well recalls, under the last Labour Government capital spending on hospitals in the national health service was cut by nearly 16 per cent. because the Labour Government lost control of the economy and inflation and would not take the necessary decisions to bring inflation down.
Did the Prime Minister see the recent "Panorama" programme entitled, "Scuppering British Shipbuilders", which demonstrated how the Government have killed off merchant shipbuilding in Britain? Is he aware that unless the right decision is made about Challenger 2, "Panorama" will soon be making another programme about the killing off of the British tank manufacturing industry? Will he ensure that the decision that we now understand is to be made before the end of this month is made not only in favour of the British Army but in favour of British manufacturing and British workers?
The answer to the first part of the hon. Gentleman's question is no, I did not see the programme to which he referred, but on his substantive point—the question of a new tank for the Army—I hope that a decision on equipment for our future main battle tank fleet will not be delayed too long. When the appropriate military conditions are right for us to make the decision, we shall do so.
Has my right hon. Friend had time to read the report of the Advisory, Conciliation and Arbitration Service, which shows that for the past year Britain's strike record has been at its lowest for 56 years? Does my right hon. Friend agree that if we were to legalise secondary strikes, unofficial strikes and flying pickets, that strike record would be undone? Is it not odd that that is precisely the policy of the Labour party?
My hon. Friend is correct. It is also the case that our employment legislation, which was opposed at every step by the Opposition has helped to transform industrial relations in Britain. But the Opposition do not care about industrial relations—they are obsessed with public relations.