It would depend on his individual circumstances: whether he received income support, whether he had any state earnings-related pension supplement or a raft of other special payments.
Will my right hon. Friend give a pledge to the House that he and his Government will never increase funding for various aspects of Government by plundering the wage packet of the British working man and woman? Will he further compare his Government's spending—[Interruptioni]—spending policies with those alluded to by the Opposition, whose policies of spend, spend, spend —[HON. MEMBERS: "Spund, spund, spund."]—have no regard to how they will be paid for?
I believe that people in this country need only look at our record on cutting the direct rate of taxation to be clear about the fact that we would not be in favour of increasing it. The Labour party, by contrast, is in favour of much higher spending, which can be met only by much higher taxation, not just for the well-off, but for those on the standard rate of income tax. My right hon. and learned Friend the Chief Secretary has shown that vividly this morning.
That must be why we are 10 points ahead and are winning by-elections. Why will not the Prime Minister tell us? It is a straightforward question—is he closest to the last leader of the Conservative party or to the last but one leader, or is he just piggy in the middle?
I am surprised at the right hon. Gentleman's remarks. I can tell him that I have no intention of being distracted from the policy on Europe which I have set out clearly and repeatedly in the House. I shall continue to negotiate in Europe for an outcome that I can safely recommend to the House. It will then be for the House to decide on it.
Will my right hon. Friend take time today to consider what the implications for taxation and public spending would be if the privatisation programme were to come to an end? Furthermore, what would happen if British Telecom, the water industry and the electricity grid were to be renationalised?
The privatisation receipts are about £.5·5 billion a year. That is the equivalent of nearly 3p on the standard rate of income tax, so clearly to abandon those receipts would lead either to higher borrowing or to higher taxation. There can be no doubt about that.
The hon. Gentleman plumbs new triviality with each question that he asks. In the past decade, conservatism has delivered a far higher standard of living for the people of this country than ever before and so it will in the next decade.
When my right hon. Friend goes to the European Council, will he accept that he carries with him the good wishes of all Conservative Members and our gratitude for the constructive and responsible way in which he has tackled serious and important constitutional issues? Will he take the opportunity to point out to his colleagues in the other European countries that any rapid move to a single currency, before the economies of the various countries in Europe are very much closer in performance, would produce disastrous consequences which would be far more likely to blow the European Community apart than to lead to greater unity?
I entirely agree with every word that my right hon. Friend has said. I have made the point consistently over the past 15 months that until and unless there is proper convergence of the European economies, it would be utter folly even to contemplate a single currency.
Has my right hon. Friend had a chance to look at early-day motion 902, which is an all-party motion tabled by, among others, the hon. Member for Walsall, North (Mr. Winnick)? It concerns Guardsmen Povey, Hicks and Ray. Through no fault of theirs—whoever's fault it was, they were not on a holiday jaunt—they lost their legs in a tragic accident. With his well-known compassion and concern for individuals who have problems, will my right hon. Friend give the House an assurance that he will look at the problem with that compassion so that we can come to the right decision, which is to care for the individual who serves this state?
This is a very tragic accident. I am sure that the whole House feels that deeply and we offer our sympathy to the guardsmen concerned. The board of inquiry has examined the matter carefully and has reached the conclusion that it was a tragic accident and that no one was culpable for the dreadful affair. I am examining the matter, but I must do so on the basis of legal liability.
Does the Prime Minister agree with his predecessor when she said that joining the exchange rate mechanism relegated Ministers to the status of innocent bystanders at an accident? If he agrees, how would he describe himself—as the bystander or the accident?
We entered the exchange rate mechanism last year when my right hon. Friend the Member for Finchley (Mrs. Thatcher) was Prime Minister and I was Chancellor of the Exchequer. It was right to enter the mechanism then; it is right for us to be members of the mechanism now. I made it absolutely clear at the time that I felt that that was the best way in which to ensure that we not only got inflation on a downward trend, but kept it on a downward trend. We are in the exchange rate mechanism; we are staying in it. In due course, we shall move to the narrow bands.
In considering local government matters in the light of the appalling record of the past eight years of the Labour administration in Liverpool—the appalling inefficiency, massive debts and uncollected refuse there, and the impending gravediggers' strike—does my right hon. Friend agree with the statement made yesterday by the Leader of the Opposition that the Labour council there—
When considering the reform of local government, does my right hon. Friend agree that the appalling inefficiency of Liverpool should be rate-capped and in future should be avoided by local government reform, or is the statement of the Leader of the Opposition merely pie in the sky?
The whole country will observe what has happened in Liverpool over recent years and will be perfectly well aware where the blame for that lies. As the Labour Co-ordinating Committee has written about Labour councils:
They demonstrate as far as the public is concerned, what a Labour Government would be like".
Is the Prime Minister aware that when considering the future of Britain the volatility of a couple of Prime Ministers is a trivial sideshow compared with the potential volatility of £84 billion sterling hot money as a result of the Government's incompetence? How far can the Prime Minister say that he is confident that there will be no sterling crisis before the next general election?
Does my right hon. Friend agree that even marginal increases in taxation can have a serious effect on incentives and that even marginal increases in Government borrowing can have a serious effect on inflation and interest rates and that to increase borrowing and taxation by something like £35 billion would have catastrophic effects on the British economy?
There is absolutely no doubt about that. In practice it would mean either dramatically higher borrowing with consequentially much higher interest rates and mortgages, or it would mean up to an extra 15p on the standard rate of income tax to 40p in the pound. With a policy of adding national insurance contributions throughout the income scale, that would make us one of the highest-taxed countries in the industrial world.