Inside Parliament: Republicans stir palace pot: Homing-in on cost of royal homes - Arts Council action call - Irish peace challenge

Not content with the imposition of income tax on the monarch, the true egalitarians on the Labour benches turned their sights yesterday on why one Royal Family should have so many subsidised palaces.

Raising the republican banner during questions to National Heritage ministers, Paul Flynn, Labour MP for Newport West and a former steelworker, pointed to a recent estimate that putting the royal palaces to full commercial use would yield an income of pounds 100m.

This year the taxpayer will fork out pounds 28.4m supporting and maintaining the occupied royal palaces - Buckingham Palace, Windsor Castle, St James's Palace, Clarence House and part of Kensington Palace. But, Mr Flynn wondered: 'Why, in these hard times of cuts in the meagre incomes of pensioners, the sick, the unemployed and the homeless, is it necessary to loot the public purse for this huge sum of money, in order to keep five palaces going in order to make sure that one single family can live in extravagant luxury?'

The Heritage under-secretary, Iain Sproat, said that he disagreed with 'just about everything Mr Flynn implied', adding that opening Buckingham Palace and charging to enter Windsor would net 70 per cent of the cost of the fire.

He agreed with loyal backbencher Toby Jessel, MP for Twickenham, who said the pounds 28.4m subsidy worked out at 50p per head of the population, which was 'extremely good value'. The Royal Family and their palaces were a vital part of the national heritage, attracting large numbers of foreign tourists whose spending in hotels, restaurants, shops and on travel generated jobs and tax revenue.

But Andrew MacKinlay, MP for Thurrock, drew support from his Labour colleagues, when he argued that, in a modern democracy, the cost of only one palace or home for the head of state should be met from the public purse. 'The rest of the palaces should either be handed over to other public agencies to promote tourism and interest or they are the sole financial responsibility of the wider Royal Family and should not be subsidised by the taxpayer.'

Heritage ministers spent most of their time fending off demands from both sides of the Commons to abolish - or at least get tough with - the Arts Council. Peter Brooke, the Secretary of State, twice said that he did not intend to abolish the council, stressing the importance of the 'arm's-length principle' that keeps ministers out of decisions on how aid is shared between individual orchestras, theatres and other artists.

Sir Tom Arnold, Conservative MP for Hazel Grove, spoke of 'widespread public dissatisfaction' with the council's behaviour over London orchestras and reminded Mr Brooke of the very public abolition call by Tim Renton, a former arts minister.

Robert Sheldon, Labour chairman of the Public Accounts Committee, picked up Mr Brooke's comment on the importance of the council in providing a 'stable framework' for arts funding. He said, 'That is exactly what it is not doing', either for orchestras or regional theatres. Mark Fisher, Opposition arts spokesman, said that there was a 'crisis of confidence and credibility' in the council and urged Mr Brooke to announce a successor to Lord Palumbo as chairman right away.

But another former arts minister, Paul Channon, said that, whatever the criticism, it would be 'sheer folly' to abolish the council and expose the Heritage department to chosing between individual artistic bodies. 'If Mr Brooke were to go down that course, it would be what Sir Humphrey would call a very brave decision.'

John Major had an easier time in an hour of exchanges on the weekend European Council meeting in Brussels. EU heads had agreed that the only road to economic recovery was the one on which his Government was already embarked, he claimed in a statement. 'Low inflation, low interest rates, a reduction in industry's burdens and a lifting of the dead hand of regulation: these are the signposts to investment and jobs.'

Asked by Labour's Giles Radice why, after 'systematically rubbishing' the Delors plan for jobs, the Government had agreed to it, the Prime Minister snapped back: 'Because we took out the bits we rubbished.' He estimated that a successful Gatt world trade deal, over time, would create 400,000 jobs in Britain.

No refererence was made initially to his talks with Albert Reynolds, the Irish Prime Minister. Pressed by John Smith, the Labour leader, on whether he was likely to be making a statement this week, Mr Major said he was not in a position to say. More work was in hand.

'We are both seeking a joint declaration. It is important that it is a balanced declaration. I am more concerned with getting the declaration right than necessarily getting it in a particularly short time.'

But he was challenged by Ian Paisley, leader of the Democratic Unionists, who said he had just come from the homes of the two policemen 'brutally and hellishly murdered' in Fivemiletown, Co Tyrone. 'Could I put to the Prime Minister what was put to me by one of the mourners - Is he really convinced that the IRA is really intending to cease their violence? The price the IRA will be asking for a cessation of their violence is too high a price to pay for the people of Northern Ireland,' he said.

Mr Major said that, in his discussions with Mr Reynolds, he was trying to 'find a circumstance that will end such murders in the future. I have never pretended to this House that that will be easy.'