Without being derogatory to the Confederation of British Industry, which largely represents the bigger companies in the United Kingdom, is not it important to recieve from the Institute of Directors, which represents smaller and medium-sized businesses, this encouraging news? Just as important is the fact that it agrees with the step-by-step approach in lowering interest rates. Will my right hon. and learned Friend resist the siren voices of the Opposition who say that we should reduce interest rates every week?
When my right hon. and learned Friend meets the Institute of Directors, will he point out the hopeless inconsistency of those who, at every possible opportunity, call for a reduction in interest rates while claiming to support sterling's position within the exchange rate mechanism? Will he condemn the Labour party for that outrageous irresponsibility?
Yes. What the Labour party has never been able to explain is why it says that this recession is made in Downing street and why it blames the Government for the fact that interest rates were too low in 1988 when it was then calling, as it usually does, for them to be 1 per cent. lower. It is also clear that it is entirely inconsistent with our obligations within the ERM to pursue the interest rate policy that Labour suggests. Labour Members need to explain that and why their substitute for the Government's interest rate policy is credit controls, which would do nothing but seriously damage the British economy.
What overtures has the Minister made to the Institute of Directors and to other directors about the excessive salary increases that directors of certain establishments have given themselves? If the cure for inflation is a price worth paying, why is that price not being paid by those who are in charge of major British companies and corporations?
When the Chief Secretary meets representatives of the Institute of Directors, will he discuss with them their report "Continuing Tax Reform", in which they advocate the same tax policies as the Government—cuts in the rate of income and corporation tax and in capital taxes and increases in value added tax —and identify as the inevitable and logical consequence the disappearance of state pensions and benefits, the health service and the education service, apart from a fallback scheme for the destitute? Are they wrong, or just more honest than the Government?
I shall be happy to discuss a number of matters with representatives of the Institute of Directors including, certainly, any views that they may have on taxation. The Institute of Directors and a number of other responsible bodies believe that entrepreneurial activity will be best advanced in a society that has competitive tax rates. That is something which the Institute of Directors could well discuss with the hon. Lady, as is the view recently expressed by the director, Mr. Morgan, that Labour party policy amounts to fudge and that fudge is no solution.
Will my right hon. and learned Friend discuss with the IOD whether it is possible to square the continual pledges by the hon. Member for Derby, South (Mrs. Beckett) that a future Labour Government will be careful with public spending with the procession of pledges by Labour spokesmen that, under any future Labour Government, their Department will be a priority? Is not the truth of the matter that Labour Members are up to their old game of trying to be all things to all men and does not this illustrate that no amount of sharp suits or tacky red plastic roses can hide how little Labour has really changed?
It is certainly true that even the best tailor cannot cover the figure of £35 billion. There is absolutely no doubt that the Labour party will at some point have to answer the charge carefully levelled against it. Precise words are used in Labour's policy document—words plainly honed by the Labour party and intended to be words of commitment. It will have to tell us whether these are real commitments—and, if they are, what the tax implications will be—or whether they are just empty words designed to cajole interest groups into supporting the Labour party.
Will the Chief Secretary answer the question that my hon. Friend the Member for Derby, South (Mrs. Beckett) asked? If Tory policy is to cut taxes —we are told, by 5p in the pound—how will it be paid for? Does it mean that universities will close, schools will close [HON. MEMBERS: "No"], health centres will close [HON. MEMBERS: "No"], hospitals will close [HON. MEMBERS "No"], roads will not be built—
All the hon. Gentleman needs is a puff of green smoke. [HON. MEMBERS: "Answer"."] I will answer the hon. Gentleman's question by telling him that it will happen in the future precisely as it happened in the past.